takeroperator - tankeroperator

MARCH 2009 www.tankeroperator.com

Incorporating:

The TA�KEROperatorAnnual Shipping

Review

TA�KEROperator

Features:� Super ship efficiency� Product carrier champion� BWT coming to a head� Synthetic moorings� Annual Review top 30� Piracy issues discussed

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IFC:OBC.qxd 27/02/2009 12:49 Page 1

31 Ship to ShoreSynthetic moorings accepted

33 Latest technology news

March 2009 � TANKEROperator 01

Vol 8 No 4Tanker Operator Magazine

Ltd213 Marsh Wall

London E14 9FJ, UKwww.tankeroperator.com

PUBLISHER/EVENTS/SUBSCRIPTIONSKarl JefferyTel: +44 (0)20 7510 [email protected]

EDITORIan CochranTel: +44 (0)20 7510 [email protected]

ADVERTISING SALESMelissa SkinnerOnly Media LtdTel: +44 (0)20 8213 [email protected]

TANKEROperator

ContentsNews featureAsset prices falling

Markets Port delays affecting supply/demand

US Report� Local legislation tightens

� CMA as big as ever

Singapore ReportSea Asia to break records

Shipmanagement� Ship efficiency the answer

� V Ships in acquisitive mood

� NORDEN bullish on product tankers

Technology25 Ballast water� Convention conundrum

� RWO announces large order

� Hamann unveils super system

04

09

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Front cover photo Chemical tankers like Carl Buettner’s 13,200dwt Leander are the subject of intense debateover whether they should be fitted with inertgas systems. Although the initiative has beenagreed in principal, the debate is on the lowerdwt vessel limit.

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PRODUCTIONVivian CheeTel: +44 (0)20 8995 [email protected]

II TA�KEROperator’s top 30XI FFABA chairman sets his stall outXII Marine Insurance- a challenging futureXIV Piracy - Agreed corridors and

private protectionXVIII ISF celebrates centenary

ANNUAL REVIEW

12

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The prospect of installing inert gas systems onsmaller chemical tankers came that bit closerfollowing a meeting of an IMO sub-committee during the middle of February*. The IMO had previously decided that the proposals regarding inert gas

should be dealt with first in relation to new vessels and depending on

the outcome of those talks, the possibility of requirements for existing

vessels might be discussed.

A working group dealing with the issue at the recent FP 53 sub-

committee meeting concluded to the principle of requiring new oil

tankers of below 20,000 dwt and new chemical tankers to apply inert

gas systems.

Although the working group’s mandate was only to discuss the issue

in relation to new ships, Norway made it clear that they wished to

pursue what they referred to as the "product-based approach", in other

words that inert gas systems should be applied to all vessels carrying

low flash cargoes regardless of age or size. Vocal support was given to

this approach in the Plenary by a number of other delegations,

including Bahamas, Sweden, OCIMF and Intertanko.

While it was clear that, at least at this session, no reference could be

made to existing vessels, the proponents of this "product-based

approach" tried to get at least one principle of it enshrined, by pushing

for there to be no lower size limit for the fitting of inert gas equipment,

in other words that the requirement should apply to all new SOLAS

tankers (that is from 500 gt upward).

No justificationThis was strongly opposed by a number of delegations, most notably

Japan. Formal Safety Assessment (FSA) studies had been carried out

into the inert gas issue by both Japan and Norway, and while on most

issues these two studies reached completely different conclusions, both

demonstrated that according to the principles of FSA there was no

justification for requiring inert gas to be applied to vessels of less than

8,000 dwt.

Norway dismissed this conclusion, claiming that it had only been

reached as a result of under-reporting of casualties and continued to

press for inert gas to be applied to smaller vessels. Japan, however,

argued that there should be a lower limit of 8,000 dwt. No agreement

was reached on this and discussions will continue at the next session of

the sub-committee.

Raise awarenessThe International Parcel Tankers’ Association (IPTA)/International

Chamber of Shipping (ICS) submissions to the sub-committee had

sought to raise awareness of issues that need to be taken into

consideration in respect of the application of Nitrogen inert gas to

chemical tankers, such as the potential increased risk of in-tank

asphyxiation incidents; the complex operational demands placed on

chemical tankers, which are very different from those of oil tankers;

possible increases in vessels' port time and subsequent increases in port

congestion; and the increase in fuel use with associated increased

emissions.

While some argued that none of these issues were of any significance,

it was finally acknowledged that the benefits of inert gas need to be

weighed against the potential downsides. The sub-committee report also

recognised that it may not be appropriate simply to transpose the current

regulations for oil tankers over to chemical tankers and it might be

necessary to develop a separate SOLAS regulation.

OppositionThis was opposed by the Bahamas, Norway, Intertanko and OCIMF,

who supported the same carriage requirements for both oil and

chemical tankers.

There is still a lot more work to be done in hammering out the details

and it has been agreed that two more sessions of the FP sub-committee

will be needed to complete this work.

This issue is on the programme for the IPTA/Navigate conference

being held on 10-11th March, and we would expect to see a lively

debate.

*Tanker Operator is indebted to IPTA’s Janet Strode forsupplying this appraisal of the recent meeting. The prosand cons will be covered in a future issue of TankerOperator, following the conference.

COMMENT

Smaller gas tanker inert gas debate rumbles on

TO

TANKEROperator � March 200902

Where will chemical tankers like the 17,585 dwt Zanis Griva stand on the inert gas question?

p2-8:p2-7.qxd 27/02/2009 12:18 Page 1

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World trade has been negatively

affected by the deteriorating

financial conditions (lack of

trade finance, etc) and

deteriorating financial markets (declining

personal investment portfolios and impeding

consumer demand). Less trade demand has led

into a precipitous decline in freight rates for

certain vessel types, which has consequently

translated into a decline of vessel asset values.

For the serious observer, this decline has

not been a complete surprise. In the past year,

the markets got ahead of themselves (aided by

lenient financing terms) and eternal optimism

prevailed over prudent investment judgment.

The volume of vessel sales since the

beginning of the present turmoil about six

months ago has dropped significantly. Most of

the sales have been concentrated in the ‘vintage’

market, vessels of 15 years or older. The dearth

of numerous transactions of modern vessels in

the present market environment has rekindled

the debate as to what constitutes a ‘market sale’,

a ‘benchmark sale’ and for valuation purposes,

what constitutes a ‘fair market value’ (FMV).

The last definition is very important as it has

been extensively used in loan covenants

(Security Maintenance Clause ‘Loan-to-Value’

ratio), that can be triggered by recent

comparable sales.

For the purposes of this article, it is

assumed that widely reported vessel

transactions on a charter-free, prompt delivery

represent the new ‘market’; it is also assumed

that all such transactions are between

knowledgeable, willing players under no

extenuating circumstances to act.

Four tanker typesWe have taken the market values of five and

10-year old vessels in four asset classes in the

tanker market (VLCC, Suezmax, Aframax and

MR product tanker market). In most cases,

data has been assimilated since the beginning

of 1999, a fair representation of the shipping

markets, which includes a full market cycle.

In order to accentuate the volatility in asset

pricing, we have also drawn on the average

asset price for the five and 10-year old

vessels. In the following graphs, we attempted

to illustrate the magnitude of asset prices and

price changes, as these changes were taking

place in different vessel types since the

beginning of the correction.

In the tanker market, given the regulatory

changes taking place in the early 90’s, the time

series of 10-year old vessels were not available

until the beginning of the present decade. In

Graph 1, the VLCC asset prices fluctuated

between $40 mill and above $160 mill. The

five year average was around $90 mill, while a

10-year vessel was trading at around $80 mill

historically. Currently, both types trade at

about their 10 year historical average.

Similarly, in Graph 2, there is $10 mill

differential between a five and 10-year old

Suezmax. Both ages of vessels were trading

slightly above their historical averages.

However, it was worth noting that Suezmaxes

were rather static assets even under normal

market conditions and thus a certain degree

of leeway should be expected in recent

asset pricing.

Moving on to the ‘workhorse’ of the crude

oil tanker market and one of the most liquid

asset types, the Aframax depicted in Graph 3,

the price differential between a five and a 10-

year old vessel narrowed to about $5 mill.

Presently, both vintages were trading below

their historical average. Finally, in the product

tanker market as per Graph 4, in the last six

years a five-year old MR fluctuated in price

between $20 mill and about $55 mill, while

the price differential was a robust premium of

about $8 mill in favour of the newer vintage.

While asset prices in the tanker market

fluctuated enough to provide opportunities for

INDUSTRY - NEWS FEATURE


Graph 1: VLCC historical asset prices.

The case of thedeclining vessel prices

$0

$20

$40

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$140

$160

$180

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Ass

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VLCC D/H 300K DWT 5YR Price

VLCC D/H 300K DWT 10YR Price

AVG 5YR

AVG 10YR

Six months into the present financial turmoil, there is no doubt that the maritime

industry has taken a front and centre role among the industries that have most been

impacted by the economic and financial unraveling, writes Basil M Karatzas*.

Graph 2: Suezmax historical asset prices.

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Suezmax 150K DWT 5YR Suezmax 150K DWT 10YR AVG 5YRAVG 10YR

p2-8:p2-7.qxd 27/02/2009 12:18 Page 3

INDUSTRY – NEWS FEATURE


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asset play and capital gains, for several years

the drybulk market experienced such positive

bias prior to the current decline that investing

in drybulk vessels had been almost a sure

thing of asset appreciation that dwarfed the

generation of operating profits.

Tankers better than drybulkAsset prices in the tanker market, despite their

recent decline, have held up much better in

comparison to the drybulk market asset

pricing. And, the obvious question is why?

What’s so special with the tankers, and what

does that hold for the future?

It is an understatement to say that the

present financial turmoil has been a unique

event in the world history that has caused

many an investor (shipowner, charterer,

consumer, etc) to question not only the

consensus knowledge but to question the

viability of the financial system itself. In an

environment when ‘cash is king’, buyers have

to be convinced that any purchase is

justifiable under every level of ‘stress testing’.

And so far, it seems that the tanker market has

sustained all surprises thrown at it with much

better aplomb. For example:

a) Tanker market charter rates in the last six

months, not only met daily vessel

operating expenses and significantly

contributed to capital expense coverage,

but also have been among the best markets

ever; on the contrary, the freight market in

the drybulk market has fallen so low as to

force vessels into layup. In addition, since

traditionally the tanker charterers are

bigger and well established companies, the

lack of Lines of Credit (LCs) and trade

finance had a much smaller impact than in

the drybulk market, where there has been

a long and protracted paralysis due to

inability of buyers of cargo to secure lines

of credit for payments.

b) The quality of the tanker charterers has

proven a vital differentiation from the

drybulk market where the words ‘charter

rate re-negotiation’, ‘default’ and

‘bankruptcy’ have been used ever more

frequently.

c) Given that the ultimate tanker charterer is

an oil major with high standards (and

ultimately higher than many drybulk

operators), it is not surprising that overall

the quality of tanker owners is better than

drybulk owners in terms of capitalisation,

moderate level of leverage, quality

controls and safeguards.

d) Drybulk cargo is easier to store than oil

and oil derivatives and thus sizable

consumers of raw materials had plenty of

inventories at the dockside that lasted

longer in a declining market. On the other

hand, oil had been stored in tankers in

order to exploit the contango effect and

there are reports that as many as 45

VLCCs (about 9% of the world fleet) has

been used to store oil (and thus shift the

tonnage supply and demand closer to an

owner-friendly equilibrium).

e) The tonnage supply & demand equation,

though not ideal, is much rosier in the

tanker market where mandatory phase-

outs due to increased regulations are

scheduled to start next year. On the

tonnage supply front, in the tanker market

the orderbook is less than 50% in all types

of vessels, while in the drybulk fleet, the

nominal orderbook is at least 50% of the

present total, on top of an extremely

robust delivery schedule in the last few

years that has affected the age profile in

almost all drybulk types with a 30% share

of the fleet in each category being four

years old or newer.

Does all this mean that asset prices in the

tanker sector will be immune to further

declines?

Graph 3: Aframax historical asset prices.

$0

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Aframax 105K DWT 5YR Aframax 95K-97K DWT 10YR AVG 5YRAVG 10YR

p2-8:p2-7.qxd 27/02/2009 12:18 Page 4

We wish we had a clear and definitive

answer to this critical question, but given the

uncertainty and unpredictability of the

markets, it will be imprudent of us to try to

predict and quantify any changes.

Since shipping does not take place in a

vacuum, any attempt to predict asset prices

have to be correct on both the macro-level

(world economies and trade, financial

system, etc) and also on the micro-level

(consumer spending, oil demand and trade

patterns, etc). We are of the opinion that the

current turmoil will be rather sustainable

(more than a year, if not more) and its

impact on the psyche of the consumer will

be negative and possibly overhanging for a

prolonged period of time. This will lower

demand and consequently lower the demand

for oil and push tanker rates lower than

seen today.

A corollary of the financial turmoil has been

the lack of debt financing (commercial

mortgages for vessels) and therefore, any

potential buyer of tankers will need to be both

optimistic about the future and cash rich

(capable of financing acquisitions with

equity); thus, the lack of debt financing for

any extended periods of time will force tanker

asset prices to further correct.

Footnote - The data was derived fromthe Compass Maritime Services (CMS)database, from Clarksons ResearchServices and from the Baltic ExchangeSale and Purchase Assessment (BSPA)on which CMS is a panel member.

* Basil M Karatzas is managing directorfor projects & finance with CompassMaritime Services, based in �ew Jersey, US. CMS is a shipbrokerage and maritime financearranger concern. He can be contacted [email protected], +201-585-9999, or www.CompassMar.com.


TO

INDUSTRY - NEWS FEATURE

Graph 4: MR tankers’ historical asset prices.

$0

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Products 47K DWT 5YR Products 45K DWT 5YR AVG 5YR AVG 10YR

p2-8:p2-7.qxd 27/02/2009 12:18 Page 5

McQuilling’s model indicated that the port

delays’ effects significantly reduced tonnage

availability to answer the worldwide demand.

Port delays of 1.7 days across the VLCC fleet

in 2008 effectively reduced the supply by 17

tankers, versus the situation in 2007.

Obviously, port delays this year remain a

matter of conjecture, but a few pointers have

already emerged –

US – There will be another hurricane

season and fog will persist. For example

during the second week of February, fog

closed the Houston area. Another factor is that

since 23rd January, the US Coast Guard

(USCG) has said that any vessel calling at

Venezuela during her last five port calls will

be subject to US security boarding before

being allowed to enter a US port.

West Africa – Civil unrest continues

unabated at the time of writing and is forecast

to increase by companies involved in risk

evaluations.

Mediterranean – Rumours of French

protests echo all too familiarly as the deadline

nears to answer required measures consistent

with recently passed port reform legislation.

Worldwide – Port congestion will continue

to cause delays, as refiners and distributors

will presumably still lack shoreside tankage,

while bottlenecks caused by supply chain

restraints at underdeveloped ports are unlikely

to change in the current economic climate.

Cramming more tankers into the mix will

only serve to complicate things further.

An indication of a port delay increase

forecast came with the recent 15% rate hike

announced by The Strike Club, which covers a

vessel’s daily running cost or charter hire as a

result of port strikes or delays. This follows a

25% increase in claims last year.

Just how much of 2009’s huge orderbook

will be soaked up by port delays, storage

charters and other effects remain to be seen,

but if the current trend persists, the tonnage

oversupply may be mitigated to a certain

degree by tankers’ just waiting around’,

McQuilling concluded.

As from the total, those operating

in contango type storage

operations should be deducted,

while port delays can also absorb

a significant amount of tonnage.

Looking at the tanker market last year,

McQuilling Services found that high bunker

prices led to slow steaming, which in turn ate

into the number of vessels available for

charter. This year thus far, the effect has been

mitigated to some degree by the current lower

fuel costs.

McQuilling also noticed that port delays

played a part in supply and demand balances,

which has continued into 2009. Port delays

showed a significant rise in 2008, compared

with the year before, particularly for VLCCs

and Suezmaxes.

The consultancy studied over 1,800 fixtures

and found that the average time in port for a

VLCC increased to 4.3 days from 2.6 days

year-on-year. In the same time frame,

Suezmaxes spent an average of 5.3 days in

port last year, up from 3.6 days.

VLCC loadings in the Persian Gulf

indicated a 62% increase in port time and a

122% increase in cargo operations in Asia.

Demurrage claims were explained as ‘no

available berthing’ or ‘awaiting shoreside

readiness’ by the vessels’ masters.

The Far East discharge ports were hit by

bad weather, which might have led to

difficulty maintaining pace of the incoming

cargoes as shoreside constraints left vessels

waiting for berths.

In the US Gulf, VLCCs saw a 27% rise in

their length of stay, largely also stemming

from adverse weather conditions. Both

Hurricane ‘Ike’ and ‘Gustav’ each caused a

week’s worth of closures last year and fog

caused more delays and port shut downs

throughout the year in all the sectors analysed.

Suezmaxes were similarly affected but by the

larger margin of 35%.

Suezmaxes calling at West African ports

more than doubled their time in port,

averaging in excess of six days per visit in

2008 versus 2007. Given the level of political

unrest in the region, this increase came as no

surprise, McQuilling said. Shoreside

terminals, supply vessels and pipelines

became regular targets for militant groups.

Aframaxes also had their share of problems

with significant increases in port delays seen

in Europe and the Mediterranean, nearly

doubling their port time to an average of 4.9

days per call, according to the analysis.

French problemsA series of 24-hour strikes in French ports,

such as those in Fos Bay, caused as many as

50 vessels reportedly caught up with nowhere

to go in a laden condition. Political unrest in

the conflicts within Georgia and the Gaza

Strip also caused delays to tanker loadings.

In the Panamax sector, the US Atlantic

coast only saw moderate increases in port

time, mostly due to insufficient berthing, or

shoreside tankage availability upon a vessel’s

arrival for discharge.


TO

INDUSTRY - MARKETS

When considering the market, tanker supply cannot be simply a matter of numbers.

Tanker supply affectedby port delays?

Sector Port delays Estimated Supply drop

(days) supply drop (2007-2008 port delays)

VLCC 1 10 17

Suezmax 1 11 20

Aframax 1 23 2

Panamax 1 7 3

Estimated Supply Reduction

Source: McQuilling Services.

p2-8:p2-7.qxd 27/02/2009 12:18 Page 6

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p2-8:p2-7.qxd 27/02/2009 12:18 Page 7

This is because to an outsider, the US

congressional law seems to be often

at odds with local state law. This is

certainly true of emission rulings.

The US recently ratified MARPOL Annex VI,

which could mean that penalties for air

pollution violations could be on a par with oil

pollution. The US Coast Guard (USCG) is

expected to enforce the IMO rules under the

Clean Air Act. Penalties could double, a

leading lawyer recently said at a seminar in

London.

California has led the way with its

California Environmental Quality Act, which

has quickly been taken up by ports in other

states as a benchmark. Apart from this, a

number of Californian resolutions have hit the

statute books with more to come.

The California Air Resources Board has

thus far adopted resolutions to ban

incineration on vessels, limit smoke emissions

and establish fuel standards for auxiliary

engines used in local waters.

Other initiatives have included low sulphur

fuel for main engines, cold ironing and

implementing vessel speed reductions off the

Californian coast. The lawyer explained that it

had the most controversial state laws as they

sought to regulate international sources of

pollution.

Low emissions One example was that the Californian Air

Resources Board decided to go ahead with

unilateral rules on the level of sulphur in

marine fuels in July last year, despite two

earlier legal defeats.

As of July 2009, ships within 24 miles of

the Californian coast will have to burn 1.5%

mgo, or 0.5% mdo. The rules apply to 2012,

at which time the maximum will be lowered

to 0.1% within the 24 mile radius.

Technically, this was superseded when the

US ratified MARPOL Annex VI.

Similar to California, various other US

coastal waters are expected to be designated

ECAs in the not too distant future.

Tanker incident responseIn another move, the USCG’s stricter

standards on tanker salvage contracts are to

enter force in June 2010.

Under the new rule, which took 16 years in

the making, tankers calling at US ports are

required to have a contract with a certified

salvage and firefighting response provider

capable of deploying services quickly

following an oil spill.

The rule changes, which come under OPA

90, actually took effect on 30th January. The

affected tanker operators have the customary

18-month leeway to 1st June next year for

compliance.

A Ships Vessel Response Plan (VRP), which

has to be lodged prior to the ship’s arrival at a

US port, will be expanded to include details of

resource providers contracted to provide the

services listed in the regulations.

These services have been expanded and

now include three categories – assessment and

survey, stabilisation and specialised salvage

operations.

Resolve Marine said that it was already

compliant and acted on the White Seagrounding near the Ambrose Light in July

2007. Resolve said in a recent interview that

the US salvage industry was rather thinly

spread and companies need to team up to

provide a proper service.

The new rules include 15 criteria that

clearly defined what is required to be

considered an "OPA-90 Primary Response

Provider". Resolve Marine outlined these

criteria as:

1) The resource provider is currently

working in the response service needed.

2) Has documentation history of

participation in successful salvage and/or

marine firefighting operations, including

equipment deployment.

3) Owns or has contracts for equipment

needed to perform response services.

4) Has personnel with documented training

certification and degree experience.

5) Has 24-hour availability of personnel and

equipment and history of response times

compatible with the time requirements in

the regulations.

6) Has on-going continuous training

programme. For marine firefighting

providers, show equivalent training, or

demonstrate qualification through

experience.

7) Has a successful record of participation in

drills and exercises.

8) Has salvage or marine firefighting plans

used and approved during real incidents.

9) Has membership in relevant national

and/or international organisations.

10) Has insurance that covers the salvage

and/or marine firefighting services which

they intend to provide.

11) Has sufficient up front capital to support

an operation.

12) Has equipment and experience to work in

the specific regional geographic

environments that the vessel operates in.

13) Has the logistical and transportation

support capability required to sustain

operations for extended periods of time

in arduous sea states and conditions.

14) Has the capability to implement

the necessary engineering,

administrative, and personal protective

equipment controls to safeguard the

health & safety of their workers when

providing salvage and marine

firefighting services.

15) The resource provider has familiarity with

the salvage and marine firefighting

protocol contained in the local ACP's

(area contingency plan) for each COTP

(Captain of the Port) area for which they

are contracted.


INDUSTRY - US REPORT

The US has always been seen to be a difficult place for a ship operator, either to be

domiciled in, or to be arriving or sailing from an American port.

US rules tighten

California has led the way with its

California Environmental Quality Act,

which has quickly been taken up by ports

in other states as a benchmark

“

” TO

p9-24:p8-23.qxd 27/02/2009 12:43 Page 1

Now in its 24th year and produced

as ever by Jim Lawrence’s

International Marketing

Strategies, the theme this year is

‘Back to Basics’.

Although 2009 is filled with uncertainty,

this year’s event has persuaded well over 100

separate companies to book a booth in an

area split into three sections outside the

conference hall.

The conference itself starts on Monday

afternoon with a ‘State of the Industry’ debate,

following CMA president Beth Wilson-

Jordan’s opening remarks.

Taking part in this debate, under the

watchful eye of moderator ABS’ Stewart

Wade, will be Elijah Cummings, who chairs

the House sub-committee on Coast Guard and

Maritime Transportation; Intertanko’s Peter

Swift, OCIMF’s Phil Davies; Kong-Gyun Oh,

chairman and ceo of Korean Register of

Shipping and council chairman of IACS and

BIMCO president Philip Embiricos.

Of particular interest will be Tuesday’s

morning session on the world economy

followed by the outlook for various

shipping sectors.

Taking part under moderator Oivind

Lorentzen of Northern Navigation America

will be DVB Bank’s Dagfinn Lund; Peter

Sandler of Louis Dreyfus Commodities and

Jack Buono of ExxonMobil.

Following a refreshment break, the Baltic

Exchange chairman Michael Drayton chairs

the next session in which six luminaries will

give their forecast. These are Jesper Bo

Hansen of TORM USA; Angelo Chan of

the Foremost Group; Jack Noonan of

Chembulk Tankers; Craig Stevenson of

Diamond S Management; Gary Vogel of

Clipper Bulk (USA) and Basil Mavroleon of

Charles R Weber.



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The lunchtime guest speaker will be BV’s

Bernard Anne.

In the afternoon, one session covers Piracy

and War Risks, which will be tackled with

Norwegian insurance expert Svein Ringbakken

taking the chair. Speakers will include

Professor Christopher Coker of the London

School of Economics; Simon Sole of Exclusive

Analysis; James Gosling of law firm Holman

Fenwick Willan; Pradeep Kale of Teekay and

Martin Baxendale of MTI network.

In another session entitled ‘dealing with a

distressed market’ under moderator Brad

Berman of the Liberian Registry, Jean

Richards of Quantum Shipping Services;

Roberto Giorgi of V Ships and president

InterManager; Keith Gottfried of Blank Rome

and Bernard Anne will discuss various

operations in a struggling market.

During the evening, the annual job fair will

take place, which this year should have an

added flavour, due to the downturn and the

perceived lack of experienced personnel both

ashore and on board ship.

Regulator’s summitOn Wednesday, there is the industry and

regulators summit chaired by Douglas

Stevenson of the Seamen’s Church Institute.

The panelists will be Ole Stene of Aboitiz

Jebsen Bulk Transport; Admiral James

Watson, or Admiral Brian Salerno of the US

Coast Guard; Rob Lomas of Intercargo; LR’s

Alan Gavin; John Witte of American Salvage

Association; the IRI’s Clay Maitland and V

Ships’ Bob Bishop.

During the afternoon, there will also be two

simultaneous sessions, one on the current

issues and developments in Admiralty Law in

which leading marine lawyers give their views

on various topics and the other on ‘thinking

outside the environmental box.’

The latter will be chaired by Rear Admiral

Robert North of North Star Maritime and will

include talks given by Leo Schnellmann of

Wartsila North America; Per Lothe of Knutsen

OAS Shipping and Colin Whybrow of

Greenwave International. The panelists will

also include DNV’s Tor Svensen; ICS’ Peter

Hinchcliffe and Inmarsat’s Frank August.

Later that evening the highlight of the three-

day event will take place – the Commodore

Gala Dinner – at which the new Commodore

will be presented. This will be followed by a

cocktail party, which effectively closes the

proceedings.

A Chinese CommodoreThis year’s CMA Commodore will be Captain

Wei Jiafu, president and ceo of China Ocean

Shipping Company (COSCO).

Capt Wei takes over from Norwegian

shipping entrepreneur John Fredriksen. Down

the years some of the industries most

influential names have worn the famous hat.

The Award will be presented to Capt Wei on

25th March at the Gala Dinner, which marks

the conclusion of the annual CMA conference

and trade show. It will be attended by more

than 800 guests.

It is given each year to a person in the

international maritime industry who has

contributed to its growth and development.

Capt Wei Jiafu, took

over as COSCO

president and ceo in

November 1998. Prior

to that, he had been

the senior executive in

many of the

conglomerate’s

subsidiaries both at

home and abroad.

During his time as

president of COSCO

(Singapore), in 1993

he turned it into a

public listed company,

marking COSCO’s

first involvement in

the international

capital markets.

With over 10 years of seafaring experience

including serving as a captain, Capt Wei has a

wide knowledge of international shipping

management and operation. He is a senior

engineer with a Doctorate in Ship and Ocean

Structural Design and Manufacture and also

has a Master’s Degree in Shipping.

Beth Wilson-Jordan, CMA president, said:

“Today, as the world deals with unprecedented

economic and trade challenges, the CMA is

delighted to have as our Commodore someone

actively involved in the growth and

development of world trade. With the Board’s

choice this year of Capt Wei, we continue the

tradition of recognising excellence. It will be

an honour to have the leader of one of the

world’s largest shipping companies accept the

CMA Award”.

Former CMA Commodores include Ole

Skaarup, Jacob Stolt-Nielsen, George Livanos,

Phil Loree, Thomas Moran, Gregory

Hadjieleftheriadis, Helmut Sohmen, Gerhard

Kurz, William O’Neil, Richard du Moulin, Per

Heidenreich, Mark Saverys, Frank Tsao,

Stelios Haji-Ioannou, Peter Georgiopoulos, C

Sean Day, Torben Jensen, Morten Arntzen and

latterly John Fredriksen. TO

Although 2009 is filled

with uncertainty, this year’s

event has persuaded well

over 100 separate companies

to book a booth in an area

split into three sections

outside the conference hall.

“

”

p9-24:p8-23.qxd 27/02/2009 12:43 Page 3

This is what the Chinese would say

in the challenging times we face

today: that there are opportunities

to be found in the crisis. And this

is exactly what Sea Asia 2009 aims to deliver:

a platform to discover the opportunities in this

current crisis.

Singapore’s premier maritime show will be

held at Suntec Singapore from 21st to 23rd

April. It features a major international

exhibition, which will encompass 4,500 net sq

m - some 60% larger in floor space than the

inaugural event in 2007.

With so many events downsizing, or

cancelling in the current economic climate,

organisers Seatrade and the Singapore

Maritime Foundation said that they were

pleased with the response in such tough times.

Singapore’s Deputy Prime Minister and co-

ordinating Minister for National Security - S

Jayakumar - has accepted an invitation to be

Guest of Honour at the show. Jayakumar will

officially open Sea Asia 2009 and tour the

exhibition on the morning of 21st April.

Maritime industry leaders and key players

from around the world will discuss the

importance of Asia and the opportunities

therein, in pulling the global shipping industry

out of the downturn, as well as discussing

shipping’s priorities in the new horizons brought

on by the onset of the global financial crisis.

“Sea Asia 2009 will be staged against the

backdrop of a difficult economic setting but

we are optimistic that Asia will play an even

more critical role in shipping once we have

tide over this challenging phase. Sea Asia

2009 is timely as it will serve as the platform

for global maritime leaders to congregate and

share insights about how to confront these

challenges and strategise on riding the next

wave,” said SS Teo, chairman, Singapore

Maritime Foundation (SMF).

Themed ‘The Asian Voice in World Shipping:

Clearer & Stronger’, the opening session of the

conference will concentrate on the major bulk

trades, both dry and liquid. Chairing the session

will be Andreas Sohmen-Pao, BW Maritime’s

ceo and joining him on the panel will be a list

of leading bulk players to expound the outlook

for the major bulk trades and how the forward

orderbook for newbuildings will affect the

relationship between ship supply and demand

for shipping services.

The Asian Voice theme will also be debated

from the container shipping & logistics angle.

The third area will focus on the offshore

markets and this session will be chaired by

Choo Chiau Beng, ceo Keppel Corp and

chairman, Keppel Offshore & Marine. A wide

range of topics will be discussed, such as the

current oil price volatility and its impact on

exploration in Asian waters, as well as the

orderbook for drill ships.

Other topics such as financing, emissions,

shipbuilding, chartering, crewing,

communications, LNG Shipping and marine

insurance, will be addressed by Asian industry

leaders like Zhang Jian Wei, executive director

and president, Sinotrans; Li Zhen, assistant

president, Sinotrans Shipping and Lionel Lee,

managing director, Ezra Holdings have recently

agreed to speak. They will join confirmed

speakers who include Hiroyuki Maekawa,

Sea Asia 2009:Discover opportunities

in the crisis Event bucks the economic trend with massive increase in show floor space

INDUSTRY - SINGAPORE REPORT


危机中的机会.

Despite thedownturn, Sea Asiaexpects to pull inexcess of 8,500participants.

p9-24:p8-23.qxd 27/02/2009 12:43 Page 4

INDUSTRY - SINGAPORE REPORT


president & ceo, Kawasaki Kisen Kaisha and

president, Japanese Shipowners’ Association

and Kenneth Khoo, group chairman & ceo, Tai

Chong Cheang Steamship Co (HK).

More than 8,500 people from Singapore and

around the world are expected to attend Sea

Asia 2009. Among the latest companies to

confirm their participation are international

players such as China’s China Classification

Society, South Korea’s Daeyang Shipping,

Netherland’s IHC Merwede and Vosta LMG,

Norway’s Sotra Anchor & Chain and US’

Sponge-Jet.

Country pavilions will be provided by

China, Japan, South Korea, Norway, Panama

and host country Singapore in dedicated areas

through representatives of equipment

suppliers, shipping companies and service

providers. For example, the China Pavilion is

returning to Sea Asia 2009 with a bigger and

stronger presence, stretching over 160 sq m of

net exhibition space.

A special networking highlight will be the

GAC Sea Asia 2009 Golf Classic, sponsored

by GAC, which will take place the day before

Sea Asia’s official opening and is a great

opportunity for players to test their skills in a

friendly tournament.

Participants can also look forward to a host

of maritime events organised by the Maritime

and Port Authority (MPA) of Singapore under

the banner of Singapore Maritime Week, from

18th to 24th April. For example, the

Singapore Maritime Lecture, the International

Chemical and Oil Pollution Conference

(ICOPCE) 2009 and the Singapore

International Maritime Awards (IMA) Gala

Dinner, together with Sea Asia 2009 and

others, make up the main events of the fourth

Singapore Maritime Week.

Foundation The Singapore Maritime Foundation is a

private sector-led organisation established to

develop and promote Singapore as an

International Maritime Centre (IMC).

Established in 2004, the Foundation aims to

work in partnership with the different sectors

of the maritime industry to advance the

maritime interests of Singapore through

collaborations and events. Some of the

notable projects include the inaugural

collaboration on Sea Asia, the MaritimeONE

(Outreach Network) an initiative that seeks to

heighten awareness of the maritime industry,

the maritime professionals, career

opportunities and boost recruitment. TO

2007 2009*

Conference Delegates: + 1,000 + 1,200

Conference Speakers: + 80 -

Participants: + 7,000 + 8,500

Countries represented: 42 + 45

Exhibitors: + 250 + 350

Gross Exhibition Space: 8,000 sq m 11,000 sq m

SEA ASIA

*Estimated.

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s e r v i c e & q u a l i t y a r e w i t h i n y o u r r e a c h

WASHINGTON, DC/RESTON

TEL: +1 703 620 4880FAX: +1 703 476 8522

[email protected]

BALTIMORE

DALIAN

FT. LAUDERDALE

GENEVA

HAMBURG

HONG KONG

LONDON

MUMBAI

NEW YORK

PIRAEUS

ROOSENDAAL

SEOUL

SHANGHAI

SINGAPORE

TOKYO

WASHINGTON, DC/RESTON

ZURICH

international registries, inc.THE M ARSHALL ISLANDS M ARITIME AND CORPORATE ADMINISTRATORS

we look forward to seeing you at cma

PLEASE VISIT US AT BOOTH 15

p9-24:p8-23.qxd 27/02/2009 12:43 Page 5

p9-24:p8-23.qxd 27/02/2009 12:43 Page 6

Today, the IMO’s focus is very much on what can be done to reduce carbon dioxide

emissions, one of the issues behind the so-called ‘greenhouse gases’

thought to be causing global warming, said Capt Peter Bond.*

Looking for supership efficiency

INDUSTRY - SHIPMANAGEMENT


Industry has been working on

developing the ‘ship efficiency

management plan’, a guidance

document to assist operators in trying to

reduce their ‘carbon footprint’, or their fuel

consumption. This initiative is being co-

ordinated by the International Chamber of

Shipping (ICS), with input from Intertanko,

Intercargo and BIMCO.

At the moment this plan is under

development and will be put forward to the

IMO’s MEPC (Marine Environment

Protection Committee). A possible list of

contents includes an entry on ‘Guidance on

Best Practices for Fuel Efficient operation

of Ships’.

This encompasses fuel efficient operations;

optimised ship handling; propulsion systems;

improved fleet management; improved cargo

handling; energy management; fuel type; other

measures; compatibility of measures and an

efficiency management plan.

Bond said that he believed that there was

nothing new in this plan, nothing radical or

innovative, as it just involved putting together

all the current measures and ideas that are out

there in the industry and trying to show to

everybody else that the industry is conscious

and is doing its best to reduce CO2 emissions.

Efficiency reaches across the whole supply

chain and does not just effect the ship operator

themselves. Stakeholders have to have their

input into this process, as do charterers, port

agents, port authorities – every individual

organisation in the industry has to take part in

this process.

If the industry doesn’t do it, then measures

could be imposed by the EU and other

regulators. For example, there is already talk

about market-based measures being hoisted

upon the industry.

Improved voyage planning is just one of the

measures that the shipping industry can take.

The problem here is that this depends on

who is operating the vessel - the timecharterer,

or the voyage charterer who is paying for the

fuel and taking care of these issues. These are

fundamental things that have to be tackled by

the industry.

The IMO sub-committee on navigation is

developing an e-Navigation strategy. One of

the opportunities is efficiency improvement of

transport and logistics and having reduced

emissions by using optimum routes

and speeds.

Interorient asked all of the fleet to review

their own voyage plans to see what they could

save and as an example, one of our vessels, a

Mediterranean feeder vessel, was able to save

39 miles on one leg of her voyage. Although

this doesn’t sound a lot, it equates to 2.2

tonnes of fuel oil and 0.3 tonnes of diesel oil.

That was achieved just by introducing more

Interorient’s evaluation showed that operating under ideal (or optimum) parameters could save over 100 tonnes of fuel on a single voyage.

ARCTIC BAY Daily Bunker Consumption

07 apr 08 apr 09 apr 10 apr 11 apr 12 apr 13 apr 14 apr 15 apr 16 apr 17 apr 18 apr 19 apr 20 apr 21 apr 22 apr DISCHPORT

Actual

Ideal

40,0

35,0

30,0

25,0

20,0

15,0

10,0

5,0

0,0

p9-24:p8-23.qxd 27/02/2009 12:43 Page 7

legs into the voyage plan, with no sacrifice of

navigational safety in doing so.

There are lots of software providers that can

help the navigator to formulate his or her

voyage plans.

Another significant issue in helping the

operator to save fuel and time is weather

routing. Interorient has been using weather

routing for many years and there are probably

many vessel operators not using it. “I’d

recommend it to everybody. You can use

weather routing for all voyages, not just for

ocean passages”, Bond said.

For example, for one of the vessels on a

voyage from South Korea to India, which is

more or less a fixed route, by using the

weather routing system15 hours and 21 tonnes

of fuel were saved. Weather routing is

available to everybody. There are many

solutions already available for the mariner and

not involving the use of the radio, or

communications to shore.

Software is available that overlays the

weather charts on an ECDIS giving the

mariner live data enabling he of she to make

informed decisions on the routing.

‘Just in time’ operation is another issue the

industry needs to take on board. Good

communication with the next port must be an

aim, to give maximum notice of berth

availability. “Then you can use the

optimum speed to arrive at that next port”,

he explained.

The liner industry has been using this

strategy for many years with great effect and

this is where significant gains in fuel

efficiency can be made. It needs to be applied

to other sectors.

Speed optimisation goes hand in glove with

the just in time concept. Optimum speed is the

speed at which the fuel used per tonne/mile is

at a minimum level for that voyage. It doesn’t

mean going at the ship’s slowest speed. In

fact, today bunker prices have come down, but

last summer they were at very high levels,

thus people were focused on that issue. Maybe

that focus has gone away now, but it has to be

brought back into the spotlight so we can

optimise our fleets.

Interorient’s pool operator – Norient

Product Pool (NPP) - has been developing

some software called MOEPS (Master

Operations and Environmental Performance

System). This software is going to be used by



the commercial operators to gather data for

every ship’s voyage.

“From my point of view, we’re looking at

the voyage performance, where we can have

the greatest opportunities for optimising. This

is the software that’s going to capture all of

that data and with that data we can hopefully

prove to a lot of our charterers and brokers

and traders where we are inefficient”,

Bond said.

Real voyage exampleThis voyage took about seven days. The

vessel proceeded on the voyage at the charter

speed of 14.8 knots and consumed 272 tonnes

of fuel. On arrival, she spent a week at anchor

waiting for a berth. If she had carried out the

voyage at the optimum speed of 11 knots she

would have saved 122 tonnes of fuel and still

have about two days waiting for berthing. This

example, plus a few others, really made the

operator open up and say ‘what can we do

here to try and improve on this?’

MOEPS will capture all of this voyage data

and then hopefully it can be shown to the

charterers to prove just how much they are

wasting. Interorient analysed 13 voyages and

‘These are fundamental things that have to be tackled by theindustry’ – Peter Bond, Interorient Navigation.

p9-24:p8-23.qxd 27/02/2009 12:43 Page 8



they showed a gap of 26% between actual

bunker consumption and what could have

been achieved, which equated to 840 tonnes

of fuel. If the number of ships in the pool is

taken into account, plus all the voyages they

undertake, thousands and thousands of tonnes

of fuel is being wasted every year.

In looking at CO2 emissions, there’s also

the money – there is a great benefit to all

parties in the industry on the financial side.

Optimum trimShips are designed to work at their full load,

but they are not always fully loaded and they

often sail at intermediate loading conditions. So

the right trim is needed to achieve the

maximum efficiency. There is a lot of software

now available that can help operators and the

navigators to choose the optimum trim.

This software usually has to have a data

capture period of maybe three of four months,

taking in sister ships at various draughts and

load conditions and all of the ambient weather

conditions. The software can then start to

formulate for the bridge team, bearing in mind

the external conditions, how they need to

adjust their trim and get to optimum fuel

consumption. “It’s amazing what you can do

if you have the right trim,” he said.

Optimum ballast conditionAgain various external factors have to be

taken into account, as well as internal factors

like steering conditions, compliance with rules

and regulations and so on, to get the optimum

ballast. If sailing in good weather conditions

while carrying too much ballast, more fuel

will be needed to push that ballast around.

However, caution is needed as navigational

safety is, of course, paramount. This can be

achieved by ensuring that the right

information is available to the mariner so

safety is not compromised. But if the ballast

condition is not correct, problems can occur.

“I’ve seen ships at sea with propellers

splashing around out of the water and that

can’t be efficient”, Bond said.

Optimum use of the rudder, steering system,

heading control systems is important. A lot of

ships are following poor routes because they

don’t have the correct settings on their

autopilot. Or they don’t have the right

software for the autopilot, as it needs to be

intuitive to adjust correctly. It can make the

ship very inefficient, putting a lot more drag

on the hull thus using a lot more fuel for

the voyage.

On paper, the master may be happy, he’s

met his charterparty speed and everything’s

okay, but think about how inefficient it can be.

Again, the software solutions are available

“...we’re looking at the voyage performance,

where we can ...hopefully prove to a lot of

our charterers and brokers and traders

where we are inefficient”

Peter Bond, Interorient Navigation

“

”

Information extracted for the main processes for co-ordination purposes, should strictly be a

by-product of what the main stakeholders perceive as their primary work.

Any extra work to inform others is bureaucracy.

Information delivered for co-ordination purposes should be delivered in the relevant form and at

the time of need to the stakeholders needing to co-ordinate.

For example fleet managers need to be informed of items when the processes at risk require their

involvement.

A well thought out solution, such as Task Assistant, helps portray a company in the bestlight without adding needless bureaucracy.

Our target is to use information to support human performance and demonstrablecompetence without building bureaucracy

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p9-24:p8-23.qxd 27/02/2009 12:43 Page 9

and this needs to be promoted to people

so that they can make these savings.

Propulsion systemsThis might not be so significant for an

existing ship, but there are technologies

available now that can improve fuel

efficiency. Fuel cell technology is the obvious

one and wind sails experiments have taken

place on a few ships and ships coming out

with solar cells.

There are additional things that can be done

- fuel additives, scrape down analysis of

cylinder lube oil consumption, torque analysis,

engine monitoring systems – these are all

means of allowing the engineers to plan for

the ship to achieve optimum performance.

Improved fleet managementImproved fleet management must be looked at

these days. As mentioned, the liner operators

have been doing this and have very small

losses in their fleet optimisation. “We hope

with our own pool that we can optimise our

fleet better, so we can have less and less ballast

voyages, which is also a benefit to the owner,

who has more earning potential”, he said.

Energy management is something that every

manager can do individually, for example,

turning off the lights in the cabin when going

out. The electricity on the ship has to be paid

for. Computer-based training programs on

energy efficiency and energy management on

board ship can help the mariners to be more

conscious of these things.

Alternative fuels need to be thought about

for future newbuildings. Uranium, nuclear

powered ships - these will probably come

back on the agenda at some time in the future.

Bond said that he asked his own managed

fleet if they had any ideas for saving fuel and

they came up with a few general comments.

Increasing speed more slowly – when you

drop the pilot instead of going from slow

ahead to full ahead in one movement, do it

gradually, the same as driving a car. It doesn’t

take any longer on the voyage, particularly if

you have a week at anchor at the end, but you

could save fuel.

Harbour generators – that has to be a

possibility on many types of ships, where very

little power is being used while alongside. “If

a big generator is running on low load it’s

very inefficient”, he said.

A lot of these measures depend upon the

price of fuel oil – the more the price goes up,

the more people will look at saving it. “But

we should be thinking now about the

environment and not just the price,” he

explained.

Measuring efficiencies is the big problem to

be faced today and solutions need to be found.

If 10 of the measures are applied discussed on

a ship’s voyage, which ones are contributing

to which saving? This is very hard to

determine. Making these savings needs to be

proved. This can be achieved over a long

period by showing basic fuel consumption

figures, but on each voyage how are the

efficiencies of trim optimisation or weather

routing to be shown? “We’re looking for

solutions there”, Bond concluded.

*This is an extract from a papergiven by Interorient’s generalmanager Capt Peter Bond at therecent Digital Ship Cyprus event.

TO


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AIMING AT SAFETY, SECURITY, QUALITY, ENVIRONMENTAL PROTECTIONGoodwood Ship Management Pte. Ltd 20 Science Park Road #02-34/36 TeleTech Park Singapore 117674 Tel: +65 6500 4040 Fax: +65 6500 4050 Email: [email protected] www.goodwoodship.com

Established with a vision to be the forerunner in providing ship management solutions.

For employment prospects with us please contact our wholly owned subsidiary Goodwood Marine Services Pvt LtdGround Floor, Valecha Chambers, Andheri New Link Road, Andheri (W) Mumbai - 400053, Maharashtra, IndiaTel: +91 22 4031 0404 Fax: +91 22 4031 0405 Email: [email protected] www.goodwoodship.com

Mr N.B. Raghu, Cochin Representative Tel: 0484 2304171 (Res) Mobile: 9847243021

p9-24:p8-23.qxd 27/02/2009 12:43 Page 11

V Ships ceo Bob Bishop told

Tanker Operator that Dubai-

headquartered tanker specialist

ITM will retain its identity, but

that there will be obvious synergies within

both parties. “It’s a good name, why change

it?” he said.

Both concerns have affiliates in Hamburg,

Houston and Singapore, which will add to the

overall service side of the business by

increasing the size of the technical team able

to look after vessels operating in and around

their areas.

Dubai and Hamburg are the major ITM

strongholds, while smaller teams operate out

of Singapore and Houston.

V ships has subsidiaries worldwide and

with more than 240 superintendents, located

in various strategic locations, a vessel can be

attended in a very short space of time, which

is part of V Ships’ service philosophy.

Significantly, Bishop said that one of the

conditions of the purchase was that Lars

Modin would remain in charge of ITM

and would continue to concentrate on the

tanker sector.

Another major factor was that by buying

ITM, V Ships gained a foothold in Dubai,

about the only major shipping location where

the company did not have a significant

presence. The purchase also gave V Ships

further opportunity to specialise in the

chemical tanker market, which is another of

ITM’s fortes.

This move sees V Ships become

increasingly involved in wet tonnage at a time

when the drybulk market is going through

something of a crisis, although the

shipmanagement concern has almost every

type of vessel on its books, from VLCCs and

LNGCs through to luxury yachts.

Although difficult to quantify, it was

thought that the V Ships managed fleet

portfolio consisted of about 55% wet

tonnage. In all, the company handles around

1,000 vessels, including those on crewing

contracts and those under full technical

management.

Bishop would not be drawn on the

possibility of further consolidation in the

shipmanagement sector other to say that the

future “will be difficult for some, but will

present opportunities for others.”

The purchase of ITM adds 45 vessels, 65

staff and about 1,500 seafarers to V Ships

books. Bishop explained that the seafarers

would be retained as they were already

serving on ITM managed vessels.

This move also sees Wilhelmsen Ship

Management, formerly Barber Ship

Management, vacate the tanker sector. The

company is a subsidiary of Wilhelmsen

Maritime Services and kept ITM as a separate

entity to look after the wet side of its business.

In another move, last year three ITM

managed and Marshall Islands flagged vessels

became the first to be officially issued with

LRIT Conformance Test Reporting

Certification.

Following the successful shipborne

equipment conformance testing of the vessels’

Inmarsat C equipment, the tankers Port Louis,Altius and the bulker Port Melbourne became

the first vessels to gain a certificate.

ITM had been participating with the

Marshall Islands on the development of LRIT

and in particular with the development of the

LRIT shipborne equipment testing.

Lars Modin, ITM managing director said,

"We are extremely pleased to be the first

operator to be tested and certified under this

new legislation. We are now well placed to

respond to the demands of our clients and

their requirements for LRIT compliance.”

He was keen to stress the benefits of testing

early using Pole Star’s LRIT conformance

test. “Being able to test our equipment early

meant we were able to resolve any issues with

terminals early. The technical standards of this

test combined with the fact that Pole Star is an

approved tester for several maritime

administrations helped enormously with the

planning and management of our vessels, all

of which contributes to our commitment to

this regulation. With 100,000 terminals to be

tested to (the compliance date of last)

December, we knew we couldn't afford to

wait,” he stressed.

Julian Longson, Pole Star’s business

development director commented at the time;

“Pole Star has approached most

administrations requesting appointment as an

Authorised Testing ASP and has already been

appointed by a number of flags

administrations. Industry research estimates

that around 30% of the current 100,000

terminals will not be suitable for LRIT.

Shipowners and operators who are unable to

start testing very soon run the risk of leaving

it too late, and should the equipment fail, be

unable to source replacement terminals in time

for compliance.”

V Ships increasestanker portfolio



TO

V Ship’s Bob Bishop.

The world’s largest independent shipmanagement concern V Ships has further

strengthened its position with the takeover of Wilhelmsen Ship Management’s

subsidiary International Tanker Management (ITM).

p9-24:p8-23.qxd 27/02/2009 12:44 Page 12



Four years ago, the company has

joined together with Cyprus-based

Interorient to form the Norient

Product Pool (NPP) (see page 23)

on a 50:50 basis to commercially manage their

two tanker fleets.

NORDEN’s input into NPP involves two

LR1s, 13 MRs and 19 Handysize product

tankers. Similar to most of its compatriots, the

company has a strong orderbook consisting of

one LR1, 10 MRs and another Handysize

product tanker. All of the newbuildings will be

placed in pool once delivered.

As is to be expected, the company thought

that a good pool was of benefit to both

customers and owners in any market

environment, due to its flexibility and supply

security, explained Lars Bagge Christensen,

senior vice president and head of the tanker

department.

Much of the fleet is Ice Class 1A for areas

such as Baltic winter operations and like

other operators of Ice Class vessels,

NORDEN said that the company was very

diligent in hiring crew with Ice Class

experience and undertook continuous Ice

Class simulation training and education.

The company trains its Danish senior

officers in Denmark in co-operation with

various institutes, such as the Svendborg

International Maritime Academy (SIMAC)

and FORCE. Norden’s Philippine officers are

trained locally by the company’s crewing

partner, TSM, under the supervision of

resident company staff, explained Lars

Lundegaard, senior vice president and head of

the technical department.

Lundegaard stressed that the company’s

seafarer policy remained the same despite the

vagaries of the market. It is based upon the

competency assessment in the officers’ career

management programme. “We don’t

compromise on safety and quality”, he said

(see page 24).

The wholly owned vessels are technically

managed from the company’s headquarters

located in the Copenhagen suburb of Hellerup.

In addition to tankers, the technical

department also manages Norden’s drycargo

vessels, plus a few on behalf of other owners.

This particular department is also in charge of

the planning and supervision of the

newbuilding programme, as well as

everything to do with safety, working

conditions, welfare and environmental aspects,

Lundegaard explained.

Long term goalAs for the future, Christensen explained that

NORDEN’s goal was to establish a greater

presence in the product tanker market in the

coming years. In terms of the numbers of

vessels…”we are very close to where we want

to be in the Handysize segment with about 20

vessels”, he said, continuing that expansion

A positive take onproduct carriers

One of the major players in

the products market sector

is Copenhagen-based

�ORDE�.

Lars Lundegaard, senior vice president, head of technical department.

...the company’s seafarer policy [remains] the

same despite the vagaries of the market. It is

based upon the competency assessment in the

officers’ career management programme. “We

don’t compromise on safety and quality”

- Lars Lundegaard, NORDEN

“

”

p9-24:p8-23.qxd 27/02/2009 12:44 Page 13


would take place in the LR1 and MR sectors.

In the MR segment, NORDEN’s orderbook

comprises three newbuildings, plus another

seven long term charters with purchase

options.

“Whereas the course is set for long term

growth, NORDEN will short term continue to

monitor the market conditions closely and act

according to our market outlook,” Christensen

explained.

“This may mean more vessel sales, this may

mean more further orders, or purchases if the

prices are deemed attractive, or this may lead

to additional short term charters. We are an

ongoing business and continue to assess our

market environment and adjust capacity and

fleet portfolio accordingly,” he stressed.

Government co-operativeTurning the Danish maritime environment,

Christensen said that the Danish Government

and maritime authorities generally supported

the creation of a positive political framework

for vessels to operate under the national flag.

“Maintaining the competitive edge of Danish

shipping operations without direct subsidies

and upholding commitment to the principle

freedom of the seas with free market access

are focal points of Denmark’s shipping

policy,“ he said.

He also commented that the Danish

maritime authorities had proved to be very

flexible. “As long as safety standards are very

high, they will bend over backwards to

accommodate any reasonable commercial

needs we have,” Christensen said.

The Danish International Shipping Registry

(DIS) is also competitive. There were a few

national requirements to the vessel’s

construction that are specific to the flag, while

the only manning requirements are for a

Danish master. However, compared to a

Philippine master, this means around a

doubling of the salary. Taken by itself

Lundegaard thought that was manageable.

One drawback was that the Danish collective

bargaining agreement was expensive when

compared with the Singapore equivalent.

“Strictly speaking, the flag costs are not a

problem, but the costs start to mount if the

additional costs of Danish officers DIS

collective bargaining agreement were added,”

Lundegaard said.

He thought that the upside remained

attractive, as there was still a loyal pool of

competent officers available in Denmark.

Salary increases have also been far below the

increases seen for other nationals during the

past couple of years.


Lars Bagge Christensen, senior vice president, head of tanker department.

TO

NORDEN – a potted tanker history 1871 - NORDEN is founded by Mads C

Holm, who continued as managing

director until his death in 1892.

1872 – The company takes delivery of its

first vessel, the Glasgow-built

�orden (1,400 dwt).

1884 - Dampskibsrederi-Foreningen (later

Danmarks Rederiforening ~

Danish Shipowners' Association)

is founded with Mads Holm as

co-founder.

1892 - Mads Holm dies at the age of

almost 65. Head office relocates

from Havnegade to Amaliegade.

1986 - �ordtramp, a 84,000 dwt product

tanker, is delivered by B&W to a

Difko K/S company with NORDEN

as bareboat charterer. From 1986 -

1992 the company is technical

manager of and participates in a

bareboat-chartering partnership with

four more large B&W product

tankers.

1990 - The company's tanker department is

established.

1992 - The first Aframax crude oil tanker,

Skaunord, is delivered.

1994 - The company expands its

Handymax activities by taking

delivery of �ordpol and �ordkapfrom Danyard.

1995 – Norden’s tanker department takes

over the charter of all EAC tankers.

At the same time the fleet is

expanded with the acquisition of

small product tankers, which were

sold between 1996-98.

2005 - Carsten Mortensen appointed new

president & ceo, following the

death of Steen Krabbe.

Establishment of Norient Product

Pool with pool-partner Interorient

Navigation Company, Cyprus.

At the end of the year, the

company controlled a fleet of 124

vessels. In addition, either directly/

indirectly, a further 50 vessels were

on order.

2008 – Norden moves its headquarters

from Amaliegade to new premises

at Hellerup.

p9-24:p8-23.qxd 27/02/2009 12:44 Page 14

Norient Product Pool (NPP) – a50:50 joint venture betweenNORDEN and Interorient, is in thethrows of expansion. At present,NPP commercially manages 62product tankers with another 22to come, giving a future total of84 tankers. NORDEN’s Christensen said the pool’s

optimum size is a moving target, dictated by

the demand from the customers for numbers

and sizes of vessels, which they require for

their transportation requirements. It was

NPP’s policy to continue to follow customers’

requests by trying to have the right fleet to

meet their demands.

He said that there were more cost savings

due to scale, allowing the pool to be more

attractive to the customers. The benefit of a

pool operation is for owners – being able to

offer a uniform service at competitive rates –

and for customers – having vessel supply

stability and receiving a known and customer

approved service level.

Speaking about the preference of the length

of charters, Christensen said that NPP wants

to be a stable and reliable counterpart for the

customers. Part of being stable and reliable

does involve prudent risk management to

ensure stable earnings for the pool owners,

allowing them to be a financially sound

counterparty.

Part of NPP’s risk management is a

portfolio consideration towards the

employment of the vessels, where a mix of

vessels on long term charters and vessels on

the spot market is sought, he explained.

“We think that we are a more attractive

business partner, as we can offer a vessel in

position for our customers than can a single

owner, as well as, if any part of NPP’s or the

customer’s programme changes, we are likely

to be in a position to offer a substitute vessel,

giving our customers a higher degree of

supply security” he said.

He also said that from the frequent dealings

with the customers, NPP is fully up-to-date

with the stringent requirements to comply

with the oil majors’ vetting schemes.

The bureaucrats of Brussels are not very far

away from the thoughts of any European pool

operator. Christensen confirmed that the

Brussels’ position had not changed. “All pools

have been and continue to be the subject of

EU Competition Law,” he said.

He further explained that the jurisdiction

had moved on from the national level to

Brussels, where the Commission had

undertaken a large and complicated task in

learning the merits of the tramp market in

co-operation with the shipping industry and

subsequently issued guidelines to the

compliance of pools within EU Competition

Law.

As for the future, Christensen said that the

two founding partners – NORDEN and

Interorient - were happy with NPP’s current

set up. However, as the market evolves so

will the pool and the partners will consider



Norient pool expands

Soeren Huscher, ceo Norient Products Pool.

“We think that we are a more attractive business partner, as we can

offer a vessel in position for our customers than can a single owner,

as well as, if any part of NPP’s or the customer’s programme changes,

we are likely to be in a position to offer a substitute vessel...”

NORDEN’s Lars Bagge Christensen

“

”

p9-24:p8-23.qxd 27/02/2009 12:44 Page 15

on a continuous basis, its best structure.

Greater demandSpeaking about the future influx of new

tonnage, Christensen said that the market was

able to absorb significant deliveries of new

tonnage in 2005 through 2008. The change in

transportation patterns due to the new

refineries’ location well away from the

consuming areas, as well as stricter

environmental requirements for petroleum

products, will lead to greater demand for

tankers.

“We do, however, always carefully assess

our position – including worrying about the

increase in the total fleet, which we have done

in previous years. This is the reason that we

apply our risk management strategy. We will

never get the future completely right, but try

to take prudent steps to secure our downside

and retain some market upside,” he explained.

He re-emphasised that NPP was firmly in

the belief that the new refining capacity will

come on stream in Asia, while consumption of

high grade refined products will remain in the

western world and the most economic and

environmentally friendly way of transporting

it is by sea. The product carrier trade’s

complexity has intensified dramatically during

the past three to four years and would

continue to do so.

NPP was formed in 2005 and today operates

from three major shipping centres –

Singapore, Copenhagen and Annapolis

(Maryland). Thus, the three most important

time zones are covered.

Each centre has its own chartering and

operations staff and in addition there are

support/control functions carried out in

Cyprus. In total, NPP employs 46 personnel,

of which 28 reside in the Copenhagen

headquarters.

Safety and Quality paramountNORDEN’s technical managementdepartment has been ISMcertified by DNV. The companyclaimed that its existingprocedures, such as computerbased training programmes andelectronic document handlingwere helpful in meetingregulatory requirements and toremain one of the best concernsamong its peers.The company measures its occupational health

and safety performance at sea using two

parameters – the number of lost time accidents

calculated per one million man hours (LTI

frequency rate) and reported near misses. The

LTI frequency rate gives an indication of

accidents that actually occurred, whereas

near misses are a measure of the safety focus

on board.

In 2007, the company launched a campaign

to increase on board safety by focusing on

near misses. This was undertaken so that

seafarers could learn from them immediately

and be more careful to avoid personal injury,

illnesses, accidents, or equipment damage.

This is supplemented by frequent on board

briefings and the company inspectors check

all safety aspects in connection with their

inspections.

“We are seeing a positive, dynamic

development in the various industry standards

and regulatory initiatives – notably from

OCIMF, including TMSA and EU legislation,

which is strengthening our competitiveness,”

NORDEN said. In addition to complying with

existing legislation, the company said that it

would strengthen its focus on meeting future

safety and environmental requirements in

terms of vessel design and operating

procedures.

Operating proceduresEverything is controlled through detailed

Standard Operating Procedures (SPOs) and

an active quality culture. Examples of

‘best practice’ include tightening the

requirements concerning ventilation,

protection against vapour and hot work on

board the tankers.

There are stringent rules and documentation

requirements concerning oil, chemicals,

sewage outflow, emissions and wash water

from tank cleaning. NORDEN claimed that it

had prepared detailed instructions in those

areas and they are closely supervised through

internal audits.

The company has also established a ‘hot

line’ whereby any member of the crew can

contact the company if they think that some of

the conditions, or actions on board cause

problems and are not in compliance with the

company’s rules and policies.

Internal auditsAs mentioned, NORDEN performs its own

regular internal audits on each vessel.

Company inspectors review the vessel’s

condition, procedures and actions, basing their

conclusions both on their own observations, as

well as interviews with the vessel’s

management, junior officers and other crew

members. These are in addition to the normal

external audits conducted by Port State

Control, oil company vetting inspections and

class society surveys.

In connection with recruitment, promotions,

internal audits and officer seminars, emphasis

is placed on the company’s expectations and

culture concerning safety, environment and

service. Simultaneously, the officer’s record is

reviewed with regard to requirements

compliance, standards and culture.

With the introduction of OCIMF’s TMSA,

KPIs have become an integral part of tanker

management. The company said that it fully

supports the TMSA initiative and applies it to

its tankers, as well as its drycargo fleet.

Before its introduction, NORDEN had already

defined its own KPI scheme, with indicators,

such as –

� Lost time injuries – working days lost due

to accidents and incidents.

� Number and nature of Port State Control

deficiencies.


TO

“We are seeing a positive, dynamic

development in the various industry standards

and regulatory initiatives – notably from

OCIMF, including TMSA and EU legislation,

which is strengthening our competitiveness”

“

”

TO


p9-24:p8-23.qxd 27/02/2009 12:44 Page 16


TECHNOLOGY - BALLAST WATER MANAGEMENT/TREATMENT

According to the Convention,

vessels constructed (that is keel

laid) from 1st January this year,

which have a ballast capacity of

less than 5,000 cu m, must be fitted with

ballast water treatment systems.

The next applicable date is 1st January

2012, when new vessels with a ballast

capacity of 5,000 cu m or more must be

equipped with such systems.

There has been a good deal of concern

among member states that the necessary

treatment systems are not yet available and

are unlikely to be available in sufficient

quantity to meet the requirements of all

those vessels that will be affected by the first

applicable date.

Taking this into account, at the 25th IMO

Assembly last November, the IMO secretary

general proposed a resolution allowing a

postponement of applicable dates for those

vessels constructed in 2009 and 2010.

After some considerable discussion it

was agreed that vessels constructed in 2009

will be allowed to sail until their second

survey before they have to fit approved

systems, providing they are fitted by 31st

December 2011.

Once the Convention enters into force

vessels granted this period of grace will be

required to perform ballast water exchange.

The Resolution recommends that states

ratifying the Convention accompany their

instrument of ratification with a declaration of

their intention to apply the Convention on this

basis and that states which have already

ratified make a similar declaration.

How to deal with vessels built in 2010 will

be considered further by the MEPC at its 59th

session to be held in July 2009.

Recently IRI, the managers of the Marshall

Islands flag state reported that the G2

Guidelines for Ballast Water Sampling had

been agreed.

To help ensure consistency of approach

among parties and to provide certainty to the

shipping industry, it was agreed that all

sampling protocols should be consistent with

these guidelines and the sampling protocol

should result in samples representative of the

whole ballast water discharge from any tank,

or any combination thereof.

Development of Port State Control (PSC)

guidelines regarding the possibilities of non-

compliant samples having been taken from

vessels fitted with type approved systems

were referred to the Flag State Implementation

(FSI) for consideration.

The G8 Guidelines for the type approval of

systems not using active substances were also

approved.

IRI said that the number of vessels

requiring ballast water management systems

was around 570 for this year, 1,100 vessels in

2010, rising to 1,740 in 2012.

The status of available ballast water

treatment systems for vessels to be built in

2010 was reviewed. There are three G8 type

approved systems – Alfa Laval PureBallast,

Hamann PeracleanOcean and NEI Treatment

Systems, which has been approved by the

Marshall Islands flag state. There are several

more to come.

Three more G9 units were also approved,

bringing the total to six. It was thought that

most of the systems under development would

be ready by 2010.

Guide publishedLast September, class society Lloyd’s Register

(LR) issued a guide called Ballast Water

Treatment Technology.

This follows the success of the first guide

issued in 2007. This updated version provides

The IMO Ballast Water Convention was adopted in 2004 and has

a number of applicable dates, the first of which was 1st January 2009.

Ballast WaterConventionconundrum

p25-34:p39-50.qxd 27/02/2009 12:58 Page 1


University, UK.

LR said that the treatment of ballast water

continues to be one of the most significant

environmental and operational challenges

facing the marine industry today. In the face

of new legislation, ship operators will need to

choose a ballast water management solution

that will work for them. This guide is intended

to provide an overview of the current status of

ballast water treatment technologies.

Dr Gillian Reynolds, LR’s principal

environment and sustainability advisor,

responsible for developing the guide, said:

“The intention is to help ship operators,

regulators and other stakeholders understand

the availability and development of

commercial solutions and the technologies

involved.”

The latest guide gives more information on

estimates of CAPEX (capital expenditure) and

OPEX (operating expenses) related to the

ballast water treatment systems and it outlines

the significant moves by manufacturers

towards obtaining system approval, active

substance approval as required and Type

Approval certification.

It is apparent that suitably approved ballast

water treatment systems meeting the

requirements of the International Convention

for the Control of Ships' Ballast Water and

Sediments are now available and in future

more will become available. Shipowners and

yards should now have a choice when

considering what treatment system to use.

Alfa Laval’s PureBallast was one of the systems type approved.

further independent and impartial descriptions

and appraisals of commercially available and

developing technologies for ballast water

treatment.

The publication was produced by LR in

conjunction with Dr Mark Scrimshaw at the

Institute for the Environment, Brunel TO


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RWO’s products encompass all

kinds of water treatment

technologies, from oily water,

ballast water, wastewater to

drinking and process water treatment.

One of the company’s main products is

CleanBallast, which is claimed to be a reliable

and compact system for the treatment of

ballast water.

CleanBallast is a compact modular system

for treating ballast water, which after a time-

and cost-intensive research and development

period has been brought to the market by

RWO and covers all ballast water capacities

and qualities. The system and process

technology has been designed and developed

over several years.

Twenty vessels managed by Bremen-based

Beluga are to be equipped with the

CleanBallast system and the shipping

company is thus taking on board the

environmental protection demanded by the

IMO Convention before its deadline.

The effectiveness of the pre-filtration and

the special inline disinfection system

EctoSys® mean efficient treatment of all

water qualities to be found worldwide,

including harbour waters having a high

sediment content, RWO claimed.

Prepared for the futureRWO started the development of CleanBallast

in 2003 as a public funded R&D project

before the IMO adopted the International

Convention for the Control and Management

of Ships' Ballast Water and Sediments in

February 2004.

First, RWO tested different treatment

devices, for example, filters and disinfection

processes simultaneously to enable their

direct performance comparison at naturally

changing inlet water quality. Based on the

results of this comparative testing, the best

technology was evaluated and consequently

the full-scale CleanBallast system was

developed.

A full-scale CleanBallast system has been

operating on a Bremerhaven container quay

since January 2007. From the beginning, great

importance was attached to testing at real

locations in harbours, where ballasting

operations are carried out. The focus was set

on high ballast water production even at high

sediment loads achieving the IMO

Performance Standard D-2 for the biological

efficiency.

The IMO granted the so-called Basic

Approval for Active Substance to RWO’s

EctoSys® disinfection in October 2006,

consequently the CleanBallast system

successfully ran the land-based type approval

trials in the summer of 2007 and the

installation for the shipboard type approval

started in 2008.

The CleanBallast system mainly consists

of newly designed ballast water disc filters,

as well as the EctoSys® electrolysis and the

system is operated inline during ballast water

uptake of the ship. The first treatment step,

the ballast water DiskFilter (Arkal inside),

was specially designed by RWO to achieve a

high flow rate at a low footprint and reliable

performance for realistic heavy duty

operation in harbours with a high sediment

load. The DiskFilter enables a far-reaching

Large order for newballast water

treatment system Bremen based RWO – Marine Water Technology has been a leading supplier of systems

for water and wastewater treatment on board ships for more than 30 years.



RWO GmbHMARINE WATER TECHNOLOGYThalenhorststrasse 15 A28307 Bremen/GermanyPhone: +49 421 53705 0Fax: +49 421 53705 [email protected]

CleanBallastBallast Water Treatment

SKIT/S-DEBOily Water Separator

> Oily water separator> Ballast water treatment> Sewage treatment> Seawater desalination> Water treatment

p25-34:p39-50.qxd 27/02/2009 12:58 Page 3



particle removal with filter fineness below 50

µm and guarantees an excellent performance

at high sediment loads existing in harbours

and tidal influenced coastal areas, where

most ballasting operations take place,

RWO said.

This advanced disc filtration prevents the

accumulation of sediments in the ballast

water tanks, which today causes high costs

due to reduced cargo capacity and for ballast

tank cleaning. The cleaned filtrate leaving

the DiskFilter section is subsequently treated

by EctoSys® electrolysis. The EctoSys®

produces different disinfectants, for

example, hydroxyl radicals and

chlorine/bromine directly from the water in

the main pipe, which gives this disinfection

a broad effectiveness range. Therefore, the

EctoSys® disinfection is more effective

against the great diversity of marine

organisms than a single disinfectant alone.

This enables flows of up to 500 cu m per

hour to be disinfected from organisms

and bacteria by using just one single

EctoSys® module of a footprint of around

one square metre.

While the ship is on voyage to the next

port of call, organism re-growth in the

ballast water tank could be possible. As the

IMO Performance Standard D-2 has to be

met by the ship discharging into the

environment, the filter unit is bypassed

during deballasting and the EctoSys®

disinfection is applied a second time to

guarantee compliance.

In contrast to conventional chlorine

electrolysis, where the addition of salt or a

brine solution is necessary in water with

lower conductivity, the EctoSys®

electrolysis functions in river water, similar

to seawater, without loss of disinfection

efficiency. Also this special electrolysis

needs no holding time to be effective and

therefore enables all deballasting operations

to be completed.

Comprehensive corrosion tests were also

carried out and by a well-known independent

third party corrosion institute in northern

Europe, which were supervised by

Germanischer Lloyd (GL). After evaluation,

GL issued a certificate for the CleanBallast

system’s shipboard use in September 2008,

recognising no increased risk for corrosion

and verifying compatibility with commonly

used ballast water tank coatings.

RWO is part of Veolia Water Solutions &

Technologies, a subsidiary of Veolia Water,

the leading builder of treatment plants and

supplier of technical solutions for water

treatment.EctoSys® electrolysis system.

CleanBallast’s DiskFilter section.

TO

p25-34:p39-50.qxd 27/02/2009 12:58 Page 4

First, hydrocyclones remove up to

99.8% of particles, such as

sediments, followed by a fine

filtration using a 50µm fine filter

and finally a dosage of 150 ppm of

PERACLEAN®Ocean is applied.

Similar formulations have already been

successfully applied as oxidisers in the food

and beverage industry. It comprises peracetic

acid and hydro peroxide, which on contact

with the ballast water forms acetic acid and

water.

Hamann said that the SEDNA® system has

three distinct advantages –

1) The hydrocyclones effectively remove

sediments so that there are ‘no places to

hide’ for micro-organisms surviving the

mechanical stress through the

hydrocyclones and through the fine filter.

In addition, the accumulation of unwanted

sediments in the ballast water tanks is

drastically reduced. The combination of

this treatment and and the 150 ppm dosage

of PERACLEAN®Ocean enables the unit

to treat the ballast water only once during

uptake.

2) The system is designed for minimum

power consumption.

3) It operates very reliably due to its simple

design and the use of high quality

components.

It is available in different configurations –

containerised, skid-mounted, or delivered as

modules to be installed in separate spaces. When

the latter is specified, Hamann can assist in the

installation within the engine room layout.

As for the additivies, Hamann said that a 150

ppm dose of PERACLEAN®Ocean meant a

0.15 litre per one cubic metre of ballast water.

For example, 150 litres would be needed to

treat 1,000 tonnes of ballast water.

Treatment costs per cubic metre were

expected to be about $0.2-0.3 with no further

hidden costs. The delivery time was stated as

20-25 weeks.

Test applicationSince May 2006, a SEDNA® C 2 x 250 plant

had operated without any problems on the

Hamann test ship OOCL Finland, according to

an inspection report filed in September, 2008.

The ship has a ballast water capacity of

about 4,300 cu m and operated mainly

between the North Sea and Baltic Sea ports.

The installed SEDNA® system consisted of

two plants. Each plant had a capacity of 250

cu m per hour. Both plants included a

PERACLEAN®Ocean storage tank, which

were installed in a 40 foot specially built

container classed by GL. The container was

located on the vessel’s weather deck and was

connected to the ballast water system.

Hamann inspected the system throughout on

completion of a 30-month service period in

continuous operation.

The total ballast water treated amounted to

120,000 cu m during the period in operation.

The amount of sediments in the ballast water

tanks showed significantly less quantity

compared with other times. Only particles

smaller than 50µm and with a less difference

in weight than the water passed through the

hydrocyclones and the fine filter.

Hydrocyclones are the first treatment step

of the SEDNA® plant. Their coatings were

found to be “as new", the company claimed.



System developed withfuture US rules in mind

German-based Hamann’s ballast water treatment plant SED�A® consists of a three-

stage process that only operates during the uptake of ballast water.

The SEDNA® system fitted on board OOCL Finland.

p25-34:p39-50.qxd 27/02/2009 12:58 Page 5

No abrasion, or damage were found. This was

deemed to be a good result, as inside the

cyclones forces interact up to 100g.

Following these results, Hamann contacted

the manufacturer of the coatings to extend the

guarantee for five years. Hydrocyclone

coating lifetime was thus expected to be 15

years, equalling the lifetime of epoxy ballast

tank coatings.

At the same time, the fine filter was

examined by the manufacturer’s

representative. All filter components, such as

filter cartridges, filter housing’s rubber lining

and the flushing shoe where found to be in

good working order.

The next inspection was recommended to

take place after an operational period of five

years. Upon this later inspection, the

inspection intervals could be extended to five

years. This will correspond to the vessels’

normal docking intervals.

Several piping sections were also inspected

and found free of damage or corrosion.

Approval status SEDNA® is an acronym for Safe Effective

Deactivation of Non-indigenous Aliens and is

denoted by a number, which defines a

system’s capacity, for example SEDNA®

S800 has a capacity of 800 cu m per hour.

It received basic IMO approval at MEPC 54

in March 2006, followed by final approval at

MEPC 57 in April, 2008. Its type approval

was attained in June last year through the

German BSH.

The company also said that SEDNA® could

well comply with any future US requirements,

which would be stricter than those laid down

by the IMO in terms of killing rates.

SummaryAccording to Hamann, SEDNA®’s selling

points are -

� Best efficacy proven, surpasses even

tougher requirements than IMO.

� Satisfies even the coming US and

Californian requirements.

� Skid-mounting reduces installation costs

significantly.

� Efficient ballast water cleaning leads to

approval of just a single treatment step

during ballast water intake only. No double

treatment.

� No extensive re-circulation piping to be

foreseen for treating the BW again, passing

through the BWT- system before discharge.

� Hydrocyclones efficiently removes

sediments (up to 99%) even in flooded

rivers like the Yangtse, Mississippi or

fluvial harbours like Rotterdam.

� No sediment removal costs (rumours are

going around that the IMO will pretend a

complete sediment removal twice a year).

� No loss of payload.

� Low heat emission in hot engine rooms, or

cramped pumping room due to low energy

consumption.

� Operation independent of water conditions.

� No electrolysis depending on BW salinity

and not functioning in rivers, or the Great

Lakes respectively with poor performance

in brackish water (big amounts of salt must

be carried on board, a huge tank needs to

be carried to mix a brine).

� No small cavitation nozzles subject to

rapid wear. One failing nozzle is sufficient

to pass non-treated BW.

� Minimum energy consumption (eg 4 KW

for the treatment of 250t/h) due to no

power consuming components.

� Minimum CO2 emissions. Emissions will

cost quotas in the future.

� No high-amps or high-voltage components.

� Single treatment during ballast water intake

only. Stand by during discharge, resulting

in huge time and money savings.

� No hot surfaces or UV bulbs.

� No other consumables than

PERACLEAN®Ocean, resulting in low

operating expenses and life-cycle costs.



1476

965

CG

CG

801

A schematic of the SEDNA® system.

TO

p25-34:p39-50.qxd 27/02/2009 12:58 Page 6


TECHNOLOGY - SHIP TO SHORE INTERFACE

Safety, the majorbenefit of synthetic

mooring lines There are several problems

associated with the use of

wire ropes for mooring

operations.

The weight of wire requires

extensive crewing for handling

and securing the lines. Easily

corroded by salt water, wire

requires periodic lubrication to keep rust and

corrosion at bay. The cost of maintenance,

which includes relubing, the hire of special

spooling trucks for end-for-ending of the lines

and the maintenance of deck hardware

abraded by the wire, is ongoing.

With these problems in mind, the benefits

of switching to high-performance synthetic

mooring lines are more appealing to both

owner/operators and seafarers, who are

finding dramatically shorter mooring times,

safer mooring operations, reduced

maintenance and cleanup and significant

cost savings.

Mooring time improvedNorthern Marine Management, the

shipmanagement arm of Stena Bulk,

recognised the benefits of switching from wire

rope to high-performance synthetic mooring

lines when they replaced the wire rope on the

‘P MAX’ Stena Performance with Samson’s

AmSteel®-Blue, which is made with

Dyneema®, a high-modulus polyethylene

(HMPE) fibre.

The installation took place over four days in

February 2008. For the crew, the results were

immediate: their first mooring took about 30

minutes where before it took as long as 2.5 to

three hours at the same port. Handling the

lightweight lines that are size for size 1/7th the

weight of wire was simple and safe. After the

ship was secured, clean up was nearly

eliminated because there was no grease to foul

the decks and hardware. To date, more than 10

Northern Marine vessels have been outfitted or

retrofitted with AmSteel®-Blue mooring lines.

With 15 new tankers under construction,

BW Shipping, who manages a worldwide fleet

of 53 vessels and Samson began a cost/benefit

analysis concerning the advantages of

switching from traditional wire mooring lines

to synthetic mooring lines in 2006–2007.

Possibly the greatest problem associated

with wire ropes is crew safety. Back injuries

caused by the extreme weight of wire are

common. Fishhooks, caused by broken

strands, are a frequent cause of severe hand

and other injuries. When heavy, hard to

manage wire breaks under a load, it recoils

with tremendous energy, causing potentially

life-threatening injuries.

The costs associated with crew safety add

up quickly. While it is difficult to anticipate

the cost of litigation as a result of worker

injury, many companies are seeing the benefit

of reducing their exposure to expensive claims

by using synthetic lines that are much lighter,

safer and easier to handle.

“The initial doubts were about the higher

costs involved and the actual quality of the

product, as we were unfamiliar with this type

of rope. The price issues were covered by an

in-depth cost-benefit analysis that looked at all

the costs involved with mooring wires, which

we had not previously considered in detail,”

said Captain Paul Jones, BW Shipping’s

marine department’s general manager.

First, the cost differences for maintenance

between wire and synthetics were examined.

According to Capt Jones, “There can be

significant savings in maintenance, greasing,

and crew time since there is almost no work

Mooring a vessel can be a messy business.

p25-34:p39-50.qxd 27/02/2009 12:58 Page 7


TECHNOLOGY - SHIP TO SHORE INTERFACE

to be done.” The company could expect to

save approximately $20,000 to $50,000 per

vessel every two years, since the synthetic

mooring lines do not need refurbishing like

the wire version.

Next, they looked at the savings of more

efficient mooring operations. Since the

synthetic lines are lighter and easier to handle,

they estimated that deckhands could cut port

deployment time by one hour. Over the course

of the year, this added up to an annual savings

of $81,000. It was calculated that BW

Shipping’s return on investment would be

reached in approximately four years.

This was a key finding considering the life

expectancy of wire is four to five years and

after the initial purchase there continues to be

ongoing costs associated with wire. Although

the life expectancy of synthetic mooring lines

is unknown at this point in time, in some

cases they have been in service for more than

11 years.

The overall cost benefits derived from

reduced mooring times and increased safety of

mooring operations that come from using

high-performance synthetic mooring lines

influenced BW Shipping’s decision to outfit

11 of the newbuilding tankers with Samson’s

AmSteel®-Blue.

“When you look at the whole picture and

the actual cost involved over time and couple

it with the personal safety issues, it makes it

worthwhile,” said Capt Jones.

The safety issue ranked highest with BW

Shipping. “With ships of all types and sizes,

there is one common factor — the crew

involved. We feel that we need to look at

how we can make life both easier and safer

for them when mooring. All feedback to date

has been very positive and the crew can see

the benefits of deploying these ropes in

terms of time saved and ease of handling,”

he added.

Samson’s AmSteel®-Blue on a test winch.

RETIRE THE WIRE AND SAVE ON MOORING COSTSSamson high-performance synthetic ropes replace wire mooring lines with a lighter, safer alternative that’s proven to reduce mooring times by as much as 2/3rds. With fewer crew required, reduced handling injuries, and a service life that’s at least 3 times that of wire ropes the savings are real. When you add up reduced maintenance, no damage to deck hardware, no grease or re-lubing, and the best service and support in the industry, it’s easy to see why crews are celebrating when Samson comes aboard.

For more information visit www.samsonrope.com/offshore

Faster Mooring + Fewer Crew + Longer Life = REAL $AVING$

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p25-34:p39-50.qxd 27/02/2009 12:58 Page 8

Two of the world’s leading international AdmiraltyChart agents, Lilley & Gillie and DPM (UK), havelaunched BridgeDirect!BridgeDirect! Is a new, fully automated on board chart management

system, which provides seafarers with a weekly transmission of

Notices to Mariners and tracings to enable on board charts to be

updated.

The service fully integrates with chart management systems and

ensures that both ship and shore records are synchronised. Users only

receive those updates that their vessel requires, keeping transmission

costs to a minimum. An audit trail records that all corrections are

received and applied.

Glenn Heathcote, managing director of both Lilley & Gillie and

DPM (UK) said: “BridgeDirect! has been developed jointly by Lilley &

Gillie and DPM (UK), both members of the Charente group of

companies and draws upon our unrivalled expertise in chart

management. Designed in collaboration with a leading UK oil major

and in response to customers’ requests, BridgeDirect! is the result of

two and a half years of research and development at the company’s

North Shields, Tyne and Wear, facilities.

“Although firmly aimed at the SOLAS market, BridgeDirect! is

suitable for any vessel fitted with an internet connection and a PC that

requires up-to-date navigational information,” he added.

Dave Addy, Lilley & Gillie’s IT manager, explained: “BridgeDirect!

data is delivered via compressed emails. The software, which is

provided free of charge, can be installed on any standard PC with a

printer, eliminating the need for costly hardware and expensive

installation.”

The BridgeDirect! service is provided on a weekly subscription basis,

paid quarterly in advance, without long notice periods. Both companies

are offering BridgeDirect! with a free trial period so that the product

can be fully assessed.

It is both UKHO and MCA approved.

closed gauging

The HERMetic UTImeter Gtex is a portable electronic level gauge for closed gas tight operation resulting in increased

safety and efficiency.

The unit is used for custody transfer, inventory control measurement and free water detection on marine vessels. Connected to a HERMetic vapour con-trol valve, the UTImeter Gtex avoids any gas release during operation and enables 3, optionally 4 measurements in one single operation, Ullage, Temperature, Oil-water interface level and Innage. By increasing safety and efficiency, Honeywell Enraf Tanksystem helps customers improve business performance.

For more information visit our website www.tanksystem.com or call +41 26 919 15 00

© 2008 Honeywell International, Inc. All rights reserved

TECHNOLOGY - NEWS

March 2009 � TANKEROperator

BridgeDirect! launched

Chris-Marine expands empireEngine maintenance concern Chris-Marine hasacquired IOP Marine effective from the beginning ofthis year. Chris-Marine provides high precision maintenance machines for marine

diesel engines while IOP-Marine provides fuel injector test equipment

and hydraulic power packs.

Both company’s products and services are used on low-speed and

medium speed marine diesel engines.

From the same date, Peter Lundgren was appointed Chris-Marine

group ceo.

Lundgren has extensive international experience of global, capital

investment business having served in the Netherlands, Switzerland and

Hong Kong for the last 20 years.

He has held executive management positions in companies such as

Alfa Laval and ABB.

Lundgren said; “The opportunity to work with two such

successful companies, in a very exciting market, poses the

ultimate challenge. Our ultimate goal is to utilise the combined

strength to enhance customer satisfaction and further strengthen

our market position.”

p25-34:p39-50.qxd 27/02/2009 12:59 Page 9


TECHNOLOGY - NEWS

Need anchors and chains?www.wortelboer.nl

producers. A handful of ECDIS producers

have activated the functionality in their

consoles and many more are on the way.

"Four project ships have been testing this

service now for over a year and the feedback has

been very positive," said Paul Elgar, Jeppesen

Marine’s OEM services’ product manager. "We

believe that each of the ECDIS producers we

work with will implement this in the coming

year. The market has become increasingly

familiar with the concept and they like it. Major

savings is the driver for this interest."

The SENC distribution format employed by

the service is a system of ENC compression and

decompression that was type approved by DNV

in 2003. Thus, ECDIS systems that use dynamic

licensing will operate from SENC-based C-MAP

CM-93/3 format chart data (S-57/3 compliant),

as opposed to native S-57 format data.

A growing list of ECDIS producershave decided to implementJeppesen Marine’s dynamiclicensing service as part of theiroverall offer to shipowners, thecompany claimed. Dynamic licensing allows ECDIS users to

acquire chart licenses as they need them,

bringing greater simplicity, cost control and

transparency to this process. The initiative has

been on trial since 2007 and now several

ECDIS producers are seeking type approval

from the IMO for consoles featuring the

Jeppesen Marine service.

"The electronic chart supplier who is able to

bring navigators the kind of information and

services that they want most from an ECDIS

will win an invaluable role as a partner in

maritime navigation." said Tor Svanes,

managing director, Jeppesen Norway.

The licensing service is claimed to be

unique in the market and allows ECDIS users

to acquire exactly those ENC licenses that

they need exactly when they need them.

Given a SENC chart catalogue, ECDIS users

need licenses to open up geographic cells of

navigational information on ENCs as they

sail, or when they plan the route.

Dynamic Licensing automates the process

of acquiring these licenses and simultaneously

employs subscription zones and credit limits

to control costs. Online updating and reporting

ensures that both users and back offices have

an accurate picture of the situation at sea and

in the accounts.

Since 2007, dynamic licensing has been one

of several functionalities inherent to the

software provided by Jeppesen to ECDIS

Chart license service growingA Marine Software planned maintenance JobCard.

UK-based Marine Software haslaunched a vessel layupmaintenance system. This can be purchased, either as an additional

module for existing marine planned

maintenance equipped vessels, or as a stand

alone system for any other vessel.

The first system has already been delivered

to Bluewater Ship Management.

Typically, maintenance requirements for laid

up vessels with idle machinery differ from the

normal running maintenance and so special

layup JobCards can be created covering this.

These PM JobCards only become active

when the system is put into layup mode, when

they are automatically scheduled. All normal

completed maintenance is suspended but any

overdue maintenance remains active unless it

is completed during the lay-up period. Class

survey remains unaffected and live while the

vessel is laid-up.

Depending on the type of lay-up ‘Hot Ship’

or ‘Cold Ship’ and normal maintenance

covering running machinery such as diesel

alternators, boilers and so on can be tagged to

Layup maintenance scheme unveiledremain live during the layup period.

On reactivation of the vessel, the normal PM

system can be reactivated giving the operator

the option to continue with the suspended

calendar based maintenance schedule from the

date of suspension, or to shift it forward re-

commencing from the reactivation date.

The specific lay-up PM Cards are

deactivated on reactivation of the vessel. Once

again, class survey’s remain unaffected.

p25-34:p39-50.qxd 27/02/2009 12:59 Page 10

Thus far, the tanker sector has not

been hit as badly as the drybulk,

or containership sectors, where the

increased level of scrapping and a

plethora of layups are almost unprecedented.

This is despite a growing fleet in all the

tanker markets, including the gas side of the

business. Indeed, the fleet has been growing

steadily since the middle of this decade and if

there is no significant re-cycling, the growth

will increase well into the next decade.

We have seen and will continue to see

consolidation, not only the strong gobbling up

the weak, but also strategic alliances involving

major players.

As one leading tanker expert said recently -

those companies with strength in their balance

sheets and holding cash will be in a strong

position going forward. They will be able to

take advantage of opportunities to further

strengthen their fleets at a reasonable cost.

There are the doom merchants who point at

the huge orderbook and the OPEC production

cuts in an effort to talk the market down. It

just depends on who you listen to. As ever, the

slightest unpredictable change could and

normally does have an enormous effect on

the market.

For example, we could see an increase in

tanker scrapping (re-cycling to be politically

correct) as the IMO 2010 single hull phase-out

looms and more vessels move away from the

Gulf of Aden/West Africa area, thus increasing

tonne/miles. Slow steaming and port delays

have to be taken into account while the

chemical/product carrier operators are waiting

eagerly for the new refineries to come on

stream in and around the Middle East

and India.

Many thought that the single hull tankers

would find a home as converted bulk carriers,

or FPSOs. Sadly, this is no longer the case as

we are currently witnessing almost a cessation

of conversion contracts, both for drybulk and

for offshore purposes, due to the economic

downturn.

Various ongoing conflicts and disputes

could escalate affecting the price of oil and

boosting demand, or the reverse could be true.

Tanker folk must take a more pragmatic

view and try to gauge the future in the light of

the facts, rather than worry about events that

might not even occur. There is enough to

worry about with the tightening safety, quality

and environmental legislation and

recommendations.

Those companies whose managers, be they

in-house or third party, who can operate a

tanker cost effectively will be the winners.

However, those companies with high finance

costs amortised into their daily operating costs

may not fair so well in the next few years, as

timecharter equivalents (TCEs) could come

close, or even fall below, the bottom line daily

operating costs in some instances.

Raising cash is and will continue to be very

difficult and we have already seen some owners

and shipyards fail to raise the needed deposits

and part payments on newbuildings, leaving

both owners and yards without much hope of

completing an order. Here an opportunist with

cash could jump in and snap up contracts in a

resale at bargain basement prices.

Somewhat fortuitously for the market, due

to the economic climate, ordering has all but

stopped. However, the shipyards and the

equipment manufacturers will not see it that

way and several OEMs have already taken

action to curb falling profits and orderbooks.

We have reproduced a couple of tables –

one on TCE revenue forecasts and the other

fleet additions and deletions. Both were

compiled by McQuilling Services within the

consultants’ recent weekly reports.

As can be seen from Table 1 there is a

worrying amount of MR tonnage due to hit

the market this year. Forecast rate levels

(Table 2) for this sector are due to increase in

2009 before falling away again in line with

the other sectors.

Perhaps worrying for the VLCC owners is

that the forecast for the average TCE during

the period 2009-2013 will only just be at or

about breakeven point for those with high

finance costs attached to their vessels.

The other sector rates forecast look to be

‘liveable’ without yielding substantial profits.

Certainly, the next 18 months or so should tell

us a lot about which direction we will go in. TO

ANNUAL REVIEW COMMENT

It depends on whoyou listen to

It is a brave person who is

prepared to predict the next

few months, never mind the

next few years.

Additions Deletions Additions Deletions

(08) (08) (09) (09)

VLCCs 36 40 71 10

Suezmax 15 25 63 11

Aframax 76 49 112 7

Panamax 37 18 40 24

MR 123 46 193 65

*Estimated

Table 1 - Fleet Additions/Deletions 2008-2009*

2008 2009 2009-2013

(actual) (average)

VLCC 265 t (AG/East) 77.8 41.5 34.6

Suezmax 130 t (Wafr/USAC) TD5 59.5 38.2 32

Aframax 70 t (Caribs/USG) TD9 43.9 34 26.9

Panamax 55 t CPP (AG/Japan) TC5 36.9 29.3 21.7

MR 38 t CPP (Caribs/USAC) TC3 20.2 21.1 17.2

MR 30 t CPP (Sing/Japan) TC4 13.9 15.6 13.8

Table 2- TCE Revenue Forecast ($000 per day)


March 2009 � TANKEROperator Annual Review I


p35-52:p39-50.qxd 27/02/2009 13:13 Page 1

Frontline Management AS, a wholly-owned

subsidiary, is responsible for the commercial

management of Frontline's shipowning

subsidiaries, including chartering and

insurance.

Frontline has a strategy of extensive

outsourcing. For example, shipmanagement,

crewing and accounting services are

provided by a number of independent and

competing shipmanagement companies.

These include V Ships, both in Norway and

the UK; Wallem Shipmanagement;

International Tanker Management and

Thome Shipmanagement.

Frontline’s fleet list includes Suezmaxes

(29), Obos (8) and VLCCs (44). The

conglomerate also has eight Suezmaxes and

10 VLCCs on order. The numbers include

those owned by subsidiaries and others that

are long term chartered.

Although operating less tankers than Teekay

in number, the VLCC total pushes Frontline

into first place in terms of deadweight tonnage

under its control. �

Similar to structures commonly used by other shipping

companies, the John Fredriksen tanker vehicle

is responsible for the commercial operation of

the fleet whose vessels are all owned by, or

chartered to, separate subsidiaries or

associated companies.

Fredriksen’s shipping interests encompass

Frontline, Ship Finance International, Golden

Ocean, Golar LNG, Knightsbridge Tankers

and Independent Tankers Corp, not all of

which are involved in the tanker sector.

TANKEROperator Annual Review � March 2009II

TOP 30 TANKER COMPANIES

FRONTLINE(18.9 mill dwt, plus 4.4 mill dwt newbuildings)

TA�KEROperator’sTop 30 owners and operators

This list has been compiled in terms of deadweight tonnage and includes companies

owning or operating mainstream large crude carriers, chemical and products tankers

of over 10,000 dwt. We have not included FPSOs or gas ships. The information

has been taken from company websites, Equasis database and other sources,

also from the companies themselves where they have submitted fleet details.

1

p35-52:p39-50.qxd 27/02/2009 13:13 Page 2

Through various companies,at the end of December last year,

Teekay controlled a fleet totalling 149 vessels

and had another 16 either on order, or

newbuilding.

The affiliates include Teekay Offshore

Partners, Teekay Tankers and Teekay LNG

Partners and Teekay Corporation, all of which

own and/or operate tanker tonnage.

As at the end of last year, the total fleet

included Handysize, MR, Panamaxes,

Aframaxes, Suexmaxes, a VLCC, plus FSOs

and FPSOs.

Excluded from the figures was Teekay’s

fleet of one LPG carrier, plus five

newbuildings and 14 LNG carriers, plus one

newbuilding, all under the banner of Teekay

LNG Partners. �

Although the company figures have not been updated since

March 2008, they show that MOL’s tanker

sector is due to expand by 2010 aided by an

influx of newbuildings.

Last year, the company managed 35

VLCCs, two Suezmaxes, four Aframaxes,

three LR2s, eight LR1s, 32 MRs and 17

others. In addition the company was involved

with 10 LPG carriers.

According to the company’s schedule, four

VLCCs, one LR2, nine MRs and two others

were due to be delivered this year, plus

another five LPG carriers.

Another MOL subsidiary Tokyo Marine

accounted for a further 55 chemical tankers

MOL TankshipManagement’sVLCC Iwatesan.

March 2009 � TANKEROperator Annual Review III


2

Teekay Corporation(15.4 mill dwt, plus 1.9 mill dwt newbuildings)

Teekay’s Suezmax Algeciras Spirit often calls at the Algeciras SBM.

with an additional six due for delivery this year.

By 2010, MOL’s tanker sector will control

37 VLCCs, two Suezmaxes, five Aframaxes,

six LR2s, nine LR1s, 42 MRs and 22 other

types, according to the company’s master

plan.

In addition, Tokyo Marine’s total chemical

carrier fleet will have expanded to 65 vessels.�

MOL Tankship Management(13.7 mill dwt, plus at least 1.7 mill dwt newbuildings)

3

p35-52:p39-50.qxd 27/02/2009 13:13 Page 3

TANKEROperator Annual Review � March 2009IV

Similar to other tanker owners, OSG operates a mixed

fleet of long term chartered and owned

vessels. The company also has one vehicle

carrier and a fleet of ATBs (articulated

tug/barges).

Both OSG and Euronav (which see) are

unique in that they manage the only

remaining four 442,000 dwt ULCCs,

although OSG’s pair, owned 50:50 with

Euronav, are currently in Dubai being

converted for storage roles.

Of its 121 vessel fleet currently in

operation, two are ULCCs, 18 VLCCs, three

Suezmaxes, 24 Aframaxes, 15 Panamaxes, 44

MRs, 10 ATBs and four LNG carriers, plus

the rogue car carrier.

Of the 31 newbuildings, three are VLCCs,

two Suezmaxes, three Aframaxes, eight

Panamaxes and 15 MRs. In addition, there are

another six ATBs on order. �

Overseas Shipholding Group (OSG)(12.77 mill dwt, plus 3.1 mill dwt newbuildings)

4


The Iranian major has shotup the league table, due to the

deliveries of a series of VLCCs and

Suezmaxes last year with more to come.

At the end of last year, NITC’s fleet

consisted of 24 VLCCs, nine Suezmaxes, five

Aframaxes and three MRs.

There could be more orders for chemical

carriers in the pipeline, not to mention the

ongoing saga of the LNGCs.

National Iranian Tanker Co(NITC)(9.7 mill dwt, plus at least three VLCCs, chemicaltankers and Caspian Sea shuttles on order)

5

Its current fleet consists of 16 VLCCs and

16 Suezmaxes, plus another three VLCC

newbuildings and six Suezmaxes.

One of the VLCC newbuildings –

Antarctica – is due for delivery early this year,

following her sister Olympia, which was

delivered late last year. �

The Russian giant has rocketed from 18th to sixth place

on the back of the amalgamation of the

recently acquired Novoship and Marpetrol

fleets.

Sovcomflot’s fleet list now stands at 111

tankers, six LNGCs and two LPG carriers,

plus another 25 newbuilding tankers.

These are broken down into 12 Suezmaxes,

37 Aframaxes, 24 MRs, 22 handysize, eight

IMO IIs, three product carriers and three

smaller tankers.

The newbuildings include 10 Suezmaxes,

eight Aframaxes, three shuttle tankers and

four smaller tankers.

In addition there is another Suezmax,

two Aframaxes and two MRs on long

term charter. �

Euronav is a partner inTankers International (TI) pool and

also a joint owner of the two ULCCs currently

in Dubai for conversion.

The Antwerp-based owner/operator

specialises purely in ULCCs/VLCCs and

Suezmaxes.

Sovcomflot(9.3 mill dwt, plus 2.7mill dwt newbuildings)

Euronav(7.8 mill dwt, plus 1.9 mill dwt newbuildings)

Euronav/OSG’s ULCCTI Africa seen duringan earlier visit toDubai. Photo credit-International MarineCoatings.

6

7

p35-52:p39-50.qxd 27/02/2009 13:13 Page 4

March 2009 � TANKEROperator Annual Review V

Under subsidiary’s AETbanner, MISC owns 11 VLCCs, 28

Aframaxes, five MRs and one LR2 in a

grouping called Petroleum Tankers. A further

28 are chartered in and there are also 11

newbuildings.

In addition, in another grouping – Chemical

Tankers – MISC owns a further 13 chemical

tankers with another seven chartered, plus 16

newbuildings.

MISC is also big in LNG carriers owning

28 with another one to come. In addition, the

Petronas group company has six FPSOs with

another three under conversion. �

MISC ChemicalTankers’ Bunga

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Vela has also shot up therankings thanks to the deliveries of

five out of six newbuilding VLCCs.

These deliveries bring the total managed

by Vela to 24 VLCCs, four MRs and one

LR2. There is still another VLCC to come.

At any one time, the Saudi Aramco

subsidiary operates around 40 tankers as

Vela regularly plays the spot and period

charter market. �Due to the group’s sizeand complexity, for this survey we

have only taken the fleets of NYK Ship

Management, Singapore and TMM in Tokyo,

both of which manage most if not all of the

group’s VLCCs.

Between them, these two concerns account

for 22 VLCCs, one Aframax, 10 MRs and

three smaller tankers, plus six LPG carriers.

NYK is also involved in many LNG

projects.

Believed to be on order are five VLCCs,

including the soon to be delivered Tamba, one

Aframax and three MRs. �

Vela International Marine(7.7 mill dwt, plus 320,000 dwt newbuilding)

8

Nippon YusenKaisha (NYK)(6.77 mill dwt, plus about1.75 mill dwt newbuildings)

9

MISC Berhad (MISC)(6.75 mill dwt, plus 2.7 mill dwt newbuildings)

10

p35-52:p39-50.qxd 27/02/2009 13:13 Page 5

Tanker Pacific’s Aframax Barents Sea undergoing STS in Europoort’s Caland Canal.

TANKEROperator Annual Review � March 2009VI

Part of the Angelicoussisgroup, Kristen Navigation has 26

VLCCs, five Suezmaxes and six Aframaxes

in service with a further two VLCCs, seven

Suezmaxes and two Aframax newbuildings

to come.

One newbuilding, the 320,000 dwt AstroChloe, entered service at the beginning of


The managed fleet list shows

55 vessels, although charters increase

that figure considerably.

In the managed fleet are 10 VLCCs, seven

Suezmaxes, 18 Aframaxes, two LR1s, 16

clean MRs and two dirty MRs. In addition,

there are four Aframaxes and eight MRs

on order.

A subsidiary, Tanker Pacific Offshore

Terminals, manages a fleet of FSOs and

FPSOs, which have not been included in

the figures. �

Tanker Pacific Management (Singapore)(6.7 mill dwt, plus 847.6 mill dwt newbuildings)

11

Kristen Navigation (Angelicoussis Group)(6 mill dwt, plus 3 mill dwt newbuildings)

12

BW Maritime is the new style of BW Shipping Management

based in Singapore.

The technical management arm BW

Fleet Management looks after 17 VLCCs,

plus two newbuildings, 11 LR1s, plus

one newbuilding and a couple of

chemical carriers. �

BW Maritime(5.94 mill dwt, plus676,000 dwtnewbuildings)

13

BW has restyled its shipping arm to BW Maritime.

January this year.

Another subsidiary, Maran Gas, looks

after a fleet of LNGCs and LPG

carriers. �

p35-52:p39-50.qxd 27/02/2009 13:13 Page 6

When adding up owned,managed, chartered and tankers

operating in the various managed pools, plus the

soon to be amalgamated Broström fleet, Maersk

Tankers will control around 320 vessels.

The figures quoted concern the owned

vessels with the exception of eight LNGCs

and 21 LPG carriers, including newbuildings.

In the conventional crude oil tanker sector,

Maersk has 10 VLCCs, plus eight VLCCs and

two Aframaxes on order; 14 LR2s, plus three

newbuildings; four MRs in service, plus

another 14 on order; 28 handysize tankers,

plus seven on order and 13 small tankers, plus

eight on order.

Maersk operates three pools – LR2,

Handytankers and Swift Tankers. It is

expected that much of the Broström’s fleet,

including chartered tonnage, will soon join at

least two of the pools. �


MaerskTanker (5.94 mill dwt, plus 4.1mill dwt newbuildings)

14

Univan manages 15 VLCCs,plus several chemical carriers ranging

from 3,000-47,000 dwt.

Among the tankers under management

are VLCCs for Cido (South Korea),

CS & Partners (Denmark), Shinyo (Hong

Kong), TMT (Taiwan) and Van-Clipper

(Hong Kong).

Univan is also supervising 15 vessels in

various shipyards, including two 298,000

dwt VLCCs. �

March 2009 � TANKEROperator Annual Review VII

Univan Ship Management(5.09 mill dwt)

15

The VLCC Shinyo Landes is one of 15managed by Univan.

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TANKEROperator Annual Review � March 2009VIII


Tsakos Energy Navigation (TEN)(4.7 mill dwt, plus 525,000 dwt newbuildings)

TEN is the Tsakos Grouppublicly quoted tanker company,

which as three VLCCs, 10 Suezmaxes, seven

Aframaxes, three LR2s, seven Panamaxes, 14

MRs, plus an LNGC on its books.

In addition, there are five Aframaxes on order. �16

TEN’s Panamax Socrates seen in Rotterdam’s Botlek complex.

Dynacom has seven VLCCson its books, having sold a couple of

single hull tankers for conversion to FPSOs.

The company also manages seven Suezmaxes,

several of which are ice class and one

Aframax.

Also in the fleet are 11 Panamaxes, some of

which are also ice class.

There will probably be more sales

sooner rather than later, as some of the

older fleet is of single hull construction.

These will be replaced by a programme

of newbuilding VLCCs and

Suezmaxes. �

Most of the tanker fleetis operated by Dalian Ocean Shipping

(COSCO Dalian) and includes eight VLCCs,

two Suezmaxes, 11 Panamaxes and three

Handysize tankers.

In addition, there are six small LPG carriers

operated by the Chinese conglomerate.

There are others, including VLCCs, listed

as under construction or on order, but it is not

clear who will operate them. �

Dynacom TankersManagement(4.58 mill dwt, plus 3 mill dwt newbuildings)

17

Cosco Group(4.43 mill dwt)

18

p35-52:p39-50.qxd 03/03/2009 10:59 Page 8


March 2009 � TANKEROperator Annual Review IX

BP Shipping (4.3 mill dwt)

BP Shipping operates 56vessels, ranging from MRs to LNGCs.

The oil major also has around 100 on

timecharter at any one time.

Included in the current fleet are four

VLCCs, 20 Aframaxes in two classes and 17

MRs in two classes, plus a shuttle carrier.

In addition BP has seven LNGCs and four

VLGCs, plus another LNGC operating in the

Northwest Shelf project. �

The shipping arm of the USoil major operates nine VLCCs, some

of which are on long term charter from

Kristen Navigation, four Suezmaxes, five

Aframaxes and five MRs.

TORM is the world’s largestoperator of MRs at 30 since the

takeover of OMI Corp.

The Danish concern also manages 14

LR2s, 11 LR1s and 10 handysize tankers.

TORM’s newbuilding portfolio is also

impressive and includes another six LR1s,

18 MRs and one Handysize.

In total, including the various pools,

TORM commercially manages over 115

product carriers. �

19

Chevron Shipping(4.13 mill dwt)

20

21

TORM(4.1 mill dwt, plus 1.33mill dwt newbuildings)

ShippingCorp ofindia (SCI)(4.06 mill dwt, plus 1.35mill dwt newbuildings)

SCI now has three VLCCswith another due for delivery in the

near future.

The Indian conglomerate also has series of

Suezmaxes, Aframaxes, Panamaxes and a

combination carrier, plus product and

chemical carriers. �

22

In addition, Chevron operates one LNGC

with another two on order with various

partners, two LPG carriers, one LPGFSO, one

FSO and two FPSOs. �

TORM is big in LR2s.

NSCSA has 11 VLCCs inservice, plus another six on order.

In addition, there are 14 chemical carriers

through the company’s majority shareholding

National Shipping Corp ofSaudi Arabia (NSCSA)(3.95 mill dwt, plus 2.67 mill dwt newbuildings)

23in National Chemical Carriers (NCC), plus

another 18 on order. �

p35-52:p39-50.qxd 27/02/2009 13:13 Page 9


TANKEROperator Annual Review � March 2009X

Thenamaris manages twoVLCCs, eight Suezmaxes, 14

Aframaxes/LR2s, plus eight MRs.

China Shipping Development’stanker arm has at least 40 deepsea

tankers, ranging from VLCCs to small

chemical and product carriers.

In addition, the conglomerate also owns a

plethora of coastal vessels and has a

substantial orderbook. �

The South Korean concernoperates nine VLCCs, four LR2s and

five MRs.

In addition, there are several more VLCCs

on order, plus four MRs.

SK also has interests in six LNGCs and a

further six LPG carriers. �

Ocean Tankers Pte(3.74 mill dwt, plus at least 1,695 dwt newbuildings)

Singapore-based OceanTankers manages over 80 vessels

ranging from small bunker vessels to VLCCs.

The company is affiliated to Hin Leong.

Included in these figures are one VLCC, the

first of a series of six; six Suezmaxes; 11

Aframaxes; seven Panamaxes; 16 MRs and 14

smaller tankers down to about 7,000 dwt of

which there are several more on coastal trades.

There is also a considerable newbuilding

programme, including five VLCCs and an

Aframax. �

24

The first in a series of six VLCCs under Ocean Tankers’ management.

Thenamaris(3.69 mill dwt, plus 540,000 dwt newbuildings)

25

KOTC owns eight VLCCs,three LR2s, two LR1s, four handysize

product carriers, plus four LPG carriers and

four bunker tankers. �

Last year the company tookdelivery of its first VLCC Andromeda.

In addition, Minerva manages three

Suezmaxes, 17 Aframaxes and 10 MRs. �

This Hong Kong-basedconcern has six VLCCs,

one Suezmax and nine Aframaxes on

its books. �

China ShippingDevelopment(3.42 mill dwt, plus a number of newbuildings)

26

27

SK Shipping(3.27 mill dwt, plusseveral newbuildings)

Kuwait OilTanker Co(KOTC)(3.1 mill dwt)

MinervaMarine(3.1 mill dwt)

AssociatedMaritime Co(2.8 mill dwt)

28

29

30

In addition, the company has two

Suezmaxes and two Aframaxes on

order. �

Thenamaris’ Aframax Seasong seen unberthing at Europoort.

p35-52:p39-50.qxd 27/02/2009 13:13 Page 10

ANNUAL REVIEW – FFABA PROFILE

March 2009 � TANKEROperator Annual Review XI

�ew wet FFABAchairman sets his

stall outAndre Berry has certainly got his work cut out as the new chairman of the

Forward Freight Agreement Brokers’ Association (FFABA), representing the wet trades,

especially in today’s rather unpredictable market.

Then there is the little matter of the

day job as director, tanker

derivatives, SSY Futures. Berry

started his year as chairman on

2nd January 2009 taking over from Ben

Goggin who is also a director of SSY Futures.

Talking with Tanker Operator, he saw his

main task this year as further developing the

tanker derivatives market and getting more

shipowners and others to see the bigger

picture. “Critical mass is important. We need

to continue to build market awareness”, he

explained, adding that owners were now

understanding the futures market better.

Banks’ energy departments have also now

realised that the freight futures’are an integral

part of their models. This has given rise to

more counterparties coming into the wet

sector, which has lagged behind its dry

counterpart in volume for some years.

Another innovation Berry would like to see

is the introduction of timecharters to join the

already established spot voyages quoted. He is

also looking to create another spot trade for an

MR between North Asia and the South China

region. “We’ve got people interested in it (the

new trade) and there might be enough critical

mass to support it”, he said.

One of the major differences between dry

and wet futures trading is that there are more

players in the dry sector, by way of more

operators taking vessels on long term charters.

In the tanker sector, there are very few

independent oil traders. Another obstacle to be

overcome is getting more of the majors to

increase focus on the tanker FFAs. For

example, some aspire to have a pure

downstream model that does not use

derivatives at all.

A factor, which could help the wet futures

market, is that as oil prices have fallen the

tanker freight value has become a higher

percentage of the over all CIF delivered

equation

He praised the attitude of the Baltic

Exchange in promoting futures’ activities. In

particular, he singled out the Baltic’s ceo

Jeremy Penn, who he said had a strong

understanding of what the futures’ market was

trying to achieve and was one of the main

drivers behind the various initiatives.

Oslo futures exchange Imarex is also an

active member of the Baltic and a major player

in the market, which goes some way to prove

that London is the centre of the tanker freight

forward market with Geneva and Singapore

probably coming second and third.

Andre Berry started as atrainee dry cargo shipbrokerwith Anderson Hughes basedin London for 3.5 years beforemoving to help set up thebroker’s Hong Kongchartering desk .He then worked at Clarkson Asia in HK

for three years specialising in Panamax

bulk carriers. Deciding to return to

London, he joined Channoil a small

boutique oil house specialising in

physical crude oil.

Berry then decided to join SSY to

develop Tanker FFAs, as they became an

integral part of the equation. After setting

up the Singapore desk to service the

company’s clients he returned to London

after three years.

He is a Fellow of the Institute of

Chartered Shipbrokers (FICS) and FSA

registered.

Shipbroking experience

�o of trades (07) Volumes in MT (07) $ bill value of trades (07)

OTC 4,756 (7,139) 124.9 (200.9) 2.6 (3.4)

Cleared 17,840 (6,212) 302.3 (174) 6.2 (3.3)

Total 22,596 (13,351) 427.1 (374.9) 8.8 (6.7)

% cleared 79 (46.5) 71 (46.4) 70 (49.7)

Tanker trades, volumes and values 2008 (2007)

Source: Baltic Exchange

To give some idea of thevolumes being traded, figurescompiled by the BalticExchange revealed that thevolume of Forward FreightAgreement (FFA) tradesincreased last year. Dry trading volumes grew by 15% on the

previous year, while tanker FFA volumes

were up 14%. In the tanker market, FFA

volumes were estimated to be 427,121,494

tonnes traded. Cleared business was thought

to represent 71% of all volume.

Bucking the trend and in line with the

physical market, trading volumes in the last

quarter of 2008 were down in both the dry

and wet sectors. In Q1-Q3 of last year, an

average of 476 trades was transacted per

week in the tanker sector of which 77%

were cleared. However, in Q4 tanker trades

dropped to an average of 311 per week, of

which 87% were cleared.

Tanker volumes up last yearTO

p35-52:p39-50.qxd 27/02/2009 13:13 Page 11

She said that marine insurance is

inextricably tied to the state of the

global economy and to world

trade, so there will be a

challenging marine environment going

forward.

While the insurance industry may be more

insulated from failure than others in the

financial sector, it will not entirely escape the

damage done by the current crisis and it will

see winners and losers over the next two

years. “We will have to run hard to stay

in place over the next 18-24 months”,

Littlefield warned.

For several years, shipowners, cargo

interests and offshore energy operators have

enjoyed marine insurance protection often at

bargain prices. This occurred during a period

of record growth in global trade, the rapid

expansion of the world fleet and

unfortunately a rise in claims as vessels and

their crews were worked hard to keep pace

with growing demand.

She continued: "Not surprisingly, even in

boom times, this combination of escalating

exposures, increased claims and flat or

decreasing premium rates has resulted in a

technical loss for marine underwriting

globally."

Littlefield said that while cargo volumes

will be down around the world, some trade

routes are likely to fare better than others.

She continued: “Strong investment returns

in the past were able to shore up results for

most of the major players, but with the

results of the last several months my

colleagues throughout the industry will now

have to rely on pure underwriting results to

demonstrate their ability to survive and

thrive in the period of economic uncertainty

that lies ahead.”

Bottom lineThe IUMI president went on to say that the

slump in trade volumes is coinciding with a

sharp increase in capacity. Littlefield

continued: “Top-line growth will be

challenging as consumer and corporate

spending continues to slow, factories which

sprung up in the boom times scale back

production or close, newbuild order books

shrink and global trade and shipping struggle

to adjust to a new global economy.

“With less ability to control top-line growth,

underwriters will be far more focused on the

bottom line – their technical underwriting

results. This means more focus on risk

selection, policy wordings, deductible levels

and risk pricing.

“It will also require underwriters to review

their internal and external cost of doing

business and reducing expenses where

appropriate. Loss prevention and claims

management are proven methods of

positively impacting the bottom line and

companies with strong claims and loss

control service teams will have a competitive

advantage in the market.”

She thought that despite the ongoing

newbuilding cancellations and deferments,

shipowners and charterers were scrambling to

reduce costs and increase efficiencies.

“Inevitably, we expect that many ship

repairs and on board unit replacements, which

were deferred or ignored during sky high

profit years, will start to surface, along with

the results of skimped maintenance, leading to

a further escalation of claims. And adding to

the financial pressure on insurers, we will see

spiralling requests for return of premiums

applying to ships going into ‘cold’ or long-

term lay-up.”

She also said that some positives could be

taken from the current situation as there

should be a sharp increase in the number of

elderly vessels being recycled, thus greatly

reducing the number of sub-standard ships,

which should not be afloat.

Littlefield also added that the marine

reinsurance market appears to be leading the

way to achieving stronger bottom-line

results. By the third quarter of last year,

renewals had risen by between 10% and 15%

on average (risk adjusted) for marine covers

and offshore energy pricing (particularly in

the Gulf of Mexico) saw substantially higher

rates, according to a report by broker

Guy Carpenter.

She reiterated that it was clear that both

insurance and reinsurance companies’ senior

management would look to underwriting, not

investments, as the key to profitability in the

future and would allocate scarce capital to

those lines that promised above average

returns. She warned that to attract corporate

capital, insurers would need to be focused,

highly selective and disciplined in their

underwriting and pricing of business this year

and next.

Client relationshipLittlefield also urged underwriters facing the

current turmoil to build a strong working

relationship with their major clients. The more

underwriters knew about their clients’

business and the challenges and opportunities

ahead, the better equipped they would be to

design products and services to meet changing

and emerging needs.

She also said that IUMI was firmly

focused on its education initiatives and ways

to attract the next generation of marine

underwriters. “The current global economic

situation offers the insurance industry a

unique chance to attract the best and

brightest people. Financial institutions are no

longer the undisputed employers of choice

and so the insurance business, for the first

time in nearly two decades, has an excellent

opportunity to showcase the exciting and

rewarding career prospects available to

young people.

“This is an excellent time to bring new

talent into insurance and reinsurance,”

she said.

IUMI is planning to hold a Spring meeting

in Miami, followed by its annual conference,

which is to be held in Bruges between 13th to

16th September, this year.

TANKEROperator Annual Review � March 2009XII

TO

IUMI outlines atough future

Deirdre Littlefield, the

International Union of

Marine Insurance’s (IUMI)

president recently gave her

assessment of the marine

insurance market.

ANNUAL REVIEW - INSURANCE

p35-52:p39-50.qxd 27/02/2009 13:13 Page 12

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www.arcticshippingsummit.com

Lloyd’s and the Lloyd’s Crest are the registered trademarks of the Societyincorporated by the Lloyd’s Act 1871 by the name of “Lloyd’s”.

Organised by:

VIPCode:

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To register for this industry acclaimed event, visit www.arcticshippingsummit.com;

alternatively contact Yuliya Lapkovich on telephone +44 (0)20 7017 7469or email [email protected].

For sponsorship and exhibiting opportunities, please contact Paul Skinner on telephone

+44 (0)20 7017 4402 or email [email protected]

p35-52:p39-50.qxd 27/02/2009 13:13 Page 13

This concerned the repression of

piracy and armed robbery against

vessels in the Western Indian

Ocean and the Gulf of Aden.

It was convened by the IMO in Djibouti to

help address the problem of piracy and armed

robbery off the coast of Somalia and in the

Gulf of Aden.

The meeting opened on 26th January and

was attended by Ministers, Ambassadors,

senior officials and legal experts from

Comoros, Djibouti, Egypt, Ethiopia, France,

Jordan, Kenya, Madagascar, Maldives, Oman,

Saudi Arabia, Seychelles, Somalia, South

Africa, Sudan, Tanzania and Yemen.

In addition, observers from other IMO

member states; United Nations specialised

agencies and bodies and international and

regional inter-governmental and non-

governmental organisations, also attended.

The code recognised the extent of the

problem of piracy and armed robbery in the

region. Its signatories declared their intention

to co- operate to the fullest possible extent and

in a manner consistent with international law,

in the repression of acts of piracy and armed

robbery.

The signatories agreed to share and report

relevant information through a system of

national focal points and information centres;

interdicting ships suspected of engaging in

acts of piracy, or armed robbery; ensuring that

persons committing or attempting to commit

such acts are apprehended and prosecuted;

plus facilitating proper care, treatment and

repatriation for seafarers and others that were

the victims of such acts, particularly those

who have been subjected to violence.

Participants said that they intended to fully

co-operate in the arrest, investigation and

prosecution of persons who have committed

or are reasonably suspected of having

committed piracy; seize suspect ships and the

property on board; and rescue ships, persons,

and property subject to acts of piracy.

The Code also covers the possibilities of

shared operations, such as nominating law

enforcement or other authorised officials to

patrol ships or aircraft of another signatory.

It further called for the setting up of

national focal points for piracy and armed

robbery and the sharing of information related

to reported incidents.

Centres to be set upAs a result, piracy information exchange

centres will be set up in Kenya, Tanzania and

Yemen, to be located, respectively, in the

regional Maritime Rescue Co-ordination

Centre (MRCC) in Mombasa, the sub-regional

co-ordination centre in Dar es Salaam and a

regional maritime information centre, which is

being established in Sana’a.

The meeting also recommended the

establishment of a regional training centre

and, by means of a resolution, accepted the

offer of Djibouti to host it.

Each signatory said that it intended to

review its national legislation aimed at

ensuring that there are laws in place to

criminalise piracy and armed robbery, plus

adequate guidelines for the overall

jurisdiction, conduct of investigations and

prosecution of alleged offenders.

The Code is open for signature by the 21

countries in the region, of which nine signed it

during the closing ceremony and as a result, it

became effective on 29th January.

Contact group meetingsSubsequently on 24th February, the IMO

Secretary-General Efthimios Mitropoulos,

opened the first meeting of an anti-piracy

working group.

This group was charged with considering

modalities for operational co-ordination and

information-sharing, the possible

establishment of a regional co-ordination

centre and regional capability development, in

the context of the on-going naval efforts to

protect shipping off the coast of Somalia and

in the Gulf of Aden.

It was set up by the Contact Group on

Piracy off the Coast of Somalia (CGPCS)

established in January 2009, as mentioned

above, following the adoption of United

Nations Security Council resolution 1851 on

16th December 2008.

The working group was convened and co-

ordinated by the UK and is chaired by Chris

Holtby of the UK’s Foreign and

Commonwealth Office.

The working group first met at the IMO

headquarters in London (24th to 25th

February) and was followed by the first

meeting of another CGPCS working group a

couple of days later.

The second meeting was convened and co-

ordinated by the US, which addressed the

strengthening of shipping’s self-awareness and

other capabilities. It was chaired by Jeff Lantz

of the US Coast Guard.

Both Working Groups will report to the

second session of the CGPCS, which is

scheduled to be held in Egypt during March. TO

ANNUAL REVIEW - PIRACY

TANKEROperator Annual Review � March 2009XIV

Piracy code ofconduct agreed

A meeting of 17 states from the Western Indian Ocean, Gulf of Aden

and Red Sea areas has adopted a ‘Code of Conduct’.

Participants... intended to fully co-operate

in the arrest, investigation and prosecution of

persons who have committed or are reasonably

suspected of having committed piracy...and

rescue ships, persons, and property subject

to acts of piracy.

“

”

p35-52:p39-50.qxd 27/02/2009 13:13 Page 14


March 2009 � TANKEROperator Annual Review XV

Owners and unionsagree on corridorsThe situation in the Gulf of Aden was reviewed at the Joint �egotiating Group/

ITF inter-secretariat meeting on 13th January 2009.

This meeting was in accordance

with the agreement between the

JNG and the ITF on the revision

of the International Bargaining

Forum (IBF) High Risk Area.

Due to a change to the position and size of

the UKMTO Transit Corridor, which came

into effect on 1st February 2009, as well as

repositioning of warships patrolling the

region, the second revision of the IBF High

Risk Area in the Gulf of Aden was agreed

between JNG and ITF on 26th January, as

follows:

1) On 1st February, the revised UKMTO

Transit Corridor was adopted to replace

the Maritime Security Patrol Area

(MSPA). This revision involved the

creation of separate, five mile wide, east

bound and west bound transit lanes,

separated by a two mile buffer zone. The

co-ordinates of these two lanes were as

follows:

a) East bound lane: It will begin at 045

East between 11 48 North and 11 53

North, be oriented along a straight line

course of 072 degrees and terminate at

053 degrees East between 14 18 North

and 14 23 North.

b)West bound lane: It will begin at 053

degrees East between 14 25 North and

14 30 North, be oriented along a course

of 252 and terminate at 045 degrees

East between 11 55 North and 12 00

North.

2) Accordingly, the eastern and western

boundaries of the IBF High Risk Area

were adjusted to meet the mouth of the

revised UKMTO Transit Corridor on each

side, as follows:

“The western border of the High Risk

Area, therefore runs from the coastline at

the border of Djibouti and Somalia to

position 11 48 N, 45 E; from 12 00 N, 45

E to Mayyun Island in the Bab El Mandeb

Straits. The Eastern Border runs from

Rhiy di-Irisal on Suqutra Island to

position 14 18 N, 53 E; from 14 30 N, 53

E to the coastline at the border between

Yemen and Oman.”

3) During the period of transit of the area,

each seafarer will receive a bonus equal to

100% of the basic wage.

4) During the period of the transit, the

compensation payable in case of death and

disability is doubled.

5) In the case of vessels that transit the IBF

High Risk Area outside of the east bound

and west bound transit lanes, seafarers

have the right not to proceed with the

passage. In such an event, the seafarer

concerned will be repatriated at the

company’s cost with benefits accrued until

the date of return to the port of

engagement.

6) However, the bonus and other benefits

outlined in paragraphs 3 and 4 above will

not apply while ships are alongside a

berth, at anchor in secure anchorages off

Yemeni ports, or attached to a Yemeni

SBM facility. It is understood that vessels

will have to transit the high risk area in

order to proceed to Yemeni ports and as

such the bonuses mentioned should cease

when a vessel is either all secure

alongside, brought up to her anchor, or

fully coupled to a SBM. Likewise when

sailing the bonuses should commence

when the vessel “all gone”, that is - the

last line is let go from a berth, when the

anchor is aweigh, or a vessel has de-

coupled from a SBM.

7) It was agreed that this second revision

would remain in force until 2400Z on 28th

February 2009, while the situation will be

reviewed between JNG and ITF before

that date.

It was also thought that the two lanes created

would also help reduce the possibility of

collisions.

All parties said that they recognised the

effectiveness of designated channels through

the Gulf and that the continued intervention of

armed naval forces in the region was

welcomed. It was therefore agreed that

seafarers on ships that used these corridors for

the transit should continue to be expected to

serve on their vessels during transits. However,

seafarers that served on ships that chose not to

use the designated corridors should have the

right to refuse to make the transit and to be

repatriated at owners’ expense.

Giles Heimann, IMEC deputy secretary

general said following the agreement: "While

we are pleased that continuing attention is

being given to the very serious problem of

piracy in the Gulf of Aden and hope that with

the increase in number of warships in the

region and the introduction of the new transit

lanes, vessels will be more protected from

aggression, we continue to monitor the

situation very closely. We will likewise

continue to respond to any further

developments as they arise and have already

agreed to a review of the ‘High Risk Area’ at

the end of February by which time the

effectiveness of the new channels will be

much clearer."TO

All parties...recognised the effectiveness of

designated channels through the Gulf and

welcomed the continued intervention of armed

naval forces in the region.

“

”

p35-52:p39-50.qxd 27/02/2009 13:13 Page 15


TANKEROperator Annual Review � March 2009XVI

Today’s pirates appear to be one

jump ahead of everybody else,

well informed, well armed and

well financed, certainly off the

coast of Somalia/Gulf of Aden region, where

most of the recent publicised attacks have

occurred.

Although many attacks and attempted

attacks go unreported, government and non-

government intelligence agencies are

gradually building up a picture of what and

who are behind the operations.

One leading body is the UK-based

International Maritime Bureau (IMB) with its

piracy reporting centre located in Kuala

Lumpur. The reporting centre was opened in

1992 and has since created a number of

private and public programmes to combat

piracy.

A programme about to be launched is the

‘Rapid Response Investigation Service’

whereby teams of anti-piracy investigation

experts will be able to move within hours to

conduct criminal investigations, which often

require many days for poorly trained port

officials. This programme is aimed at bringing

more pirates to justice and might also address

the problem of under-reporting.

Returning to the West African coast/Gulf

of Aden problem, most of the pirates come

from Puntland, a region in northeastern

Somalia. They are between 20-35 years of

age and are members of at least five or six

gangs. It is thought that they could number

between 4,000 to 6,000, or around 1,000 per

gang, or ‘clan’.

Clan members are now thought to also

involve Kenyan, Sudanese, Eritrean, Yemeni

and even Omani people. And it is spreading,

due to the lucrative ransoms that are normally

paid to free vessels.

The UN is reluctant to declare an outright

war on an exceedingly poor country, such as

Somalia, where it is estimated that the per

capita GDP is only $600 per year and

according to a World Bank report, some 73%

of the population live on a daily income of

less that $2. The country is a recipient of

World Food Programme aid, most of which,

around 90%, arrives by sea.

According to the Kenyan government,

Somali pirates received around more than

$150 mill in ransom during the 12 months up

to November last year and even more since.

Some of the ransom money is used to

benefit the local communities, which endears

them to the clan leaders and encourages more

people to join the pirate gangs.

Pirate categoriesThere are three main categories of pirates

identified in the area, all of who interact.

These are:-

1) Local fisherman, considered the eyes and

ears of pirate operations, due to their skill

and knowledge of the area at sea.

2) Former militiamen who used to fight for

the local clan warlords and are considered

to be the muscle of the operation.

3) Technical experts who operate high tech

equipment, such as the GPS systems.

The combined task force, which numbers

vessels from around 15 countries, has been a

deterrent to some attacks by escorting

shipping through the area, but in general, the

pirates are wise to the naval vessels’ positions

and can act, or abort an attempted attack,

before a naval vessel comes in range. Another

problem is that the use of task forces can only

be a temporary measure, as the vessels cannot

stay permanently on patrol, or on escort

duties.

This leaves the owners/operators with the

option of using private security firms of which

there are a number, all offering different types

of services.

One such concern is Sea Force, which

offers a number of services to both

governments, public and private companies.

Naval escortsIn the case of oil and gas carriers, the oil

majors tend to get government help in the

form of naval escorts through the area.

However, more and more independents are

turning to private security companies, such as

Sea Force, to help with a safe passage through

the area.

According to Sea Force managing director

US Commander (retired) Daniel Correa,

there are many deterrents available from

hiring fully armed patrol vessels and RIBs

crewed by experienced combatants to day-

to-day actions that can be taken by the

ships’ crew.

For example, the use of high powered

hoses, flares fired at assailants, or fired as

warnings and loud alarm signals might put a

potential aggressor off. Zig-zagging to create a

wash could also slow high speed craft

approaching a vessel.

Other deterrents include razor wire and/or

electrical netting placed along the vessel’s hull

and handrails covered to stop grappling hooks

catching on the rails. The use of paint ball

guns, crossbows and other means of defence

could be used, but as with most organisations,

Sea Force is against the use of firearms on

board ship for various reasons, not least of

starting a shoot out with disastrous

consequences for an untrained crew.

Those wishing to ‘brave it out’ can lock

themselves in the engine room and still be

able to control and navigate the vessel on

modern vessels fitted with fully integrated

systems.

Correa said that it was important that Sea

Force did not act as the aggressor in a

threatening situation, due to legal and liability

reasons plus of course the threat of retaliation,

rather recommending that those in command

on the patrol boats should issue warnings that

the boat contains armed personnel before

taking any action.

He suggested that to help further combat the

threat of piracy, communications personnel on

patrol vessels should scan their vhfs for any

sign of co-ordination with a mother ship, or

operatives on land and any incident should be

video-taped for the sake of transparency.

Thus far, Sea Force has carried out nearly

80 successful operations without any major

incidents and is currently working closely

with several leading ship operators, including

tanker owners.

The company also offers security audits,

risk management training and can negotiate

with hostage takers. To help with this process,

Arabic speakers can be made available if

needed, Correa said. TO

What’s the answer?There is an increasing concern among the shipping fraternity that neither the IMO nor

the United �ations (U�) realise how sophisticated today’s pirates have become.

p35-52:p39-50.qxd 27/02/2009 13:13 Page 16


March 2009 � TANKEROperator Annual Review XVII

Don’t arm the crew Maritime security specialist, Securewest International urged caution

and considered action in the wake of the increase in pirate attacks.

While in full agreement with the

view that security companies

had a role to play, Securewest

believed that it was vital that

action against pirates was undertaken by those

who had experience in commercial maritime

security and that it was very important that

crews were not simply handed weapons, thus

putting themselves at risk, as some people

have advocated.

The arming of crews placed undue strain

and responsibility on seafarers, Securewest

said. Business development vice president

Stuart Flynn warned; “It may appear an

obvious point, but allowing anyone to take up

arms without instruction (or providing

incorrect instruction) will at best render the

whole exercise useless when it comes to the

moment of truth and in the worst case

scenario result in a fatality.

“Firing over the bow of a ship is one thing,

but effectively using weapons inside the close

confines of a vessel is the last thing anyone

wants to see, and only those skilled in this

kind of combat should ever be called upon in

such tense situations.

“The accidental discharge of a weapon,

poorly trained and inexperienced personnel,

high liability and deployment costs are all

strong reasons to seek, where possible,

alternative solutions to armed guarding”, he

said.

Securewest advised owners and operators to

use preventative methods to deter pirates.

These include non-lethal sonic devices, better

use of radar, video cameras, thermal imagery,

plus high intensity directional lighting.

Offering crews increased wages does not

influence the chances of a vessel being

hijacked. The cost of hiring responsible and

experienced maritime security is small in

comparison to the huge sums of money

currently being paid out in ransoms to pirate

groups for the release of vessels and crew.

Securewest also thought that the overall impact

of international security efforts, such as the US

led Coalition Task Force (CTF 151) remained

debatable as it would require many more

warships to effectively patrol the Gulf of Aden.

Coalition forces now operate a maritime

security patrol area (MSPA), a moveable,

protected seaway through which vessels were

being encouraged to transit. While the IMO

can do little to defend the sector against

attacks, NATO has effectively declared war on

pirates by drawing up plans to redirect

significant naval resources off the coast of

Somalia. But costs come into play and the

resources may only be used to protect oil and

gas shipments.

Part of the NATO plan is to supply a

‘sophisticated intelligence network’.

Intelligence is a useful weapon for vessels,

which Securewest can provide through a 24-

hour, manned assistance centre. However, many

pirate attacks and incidents go unreported, due

partly to rising insurance cost risks.

The pirates are probably obtaining tracking

information, or tapping into AIS frequencies,

partly proven by the grabbing of the VLCC

Sirius Star some 500 miles offshore. The

importance of LRIT technology is significant

as it can only be tracked by satellite. TO

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p35-52:p39-50.qxd 27/02/2009 13:13 Page 17

The International ShippingFederation (ISF), in its capacityas shipowner grouprepresentative body at theInternational Labour Organisation(ILO) Geneva, recentlyparticipated in talks with theInternational Transport Workers’Federation (ITF).These talks were aimed at reviewing the

figure of the ILO minimum wage for able

seafarers. They had been scheduled following

previous discussions, which took place in

February 2006.

The ISF outlined that given the current

global economic crisis they were extremely

concerned about the consequences for the

shipping industry in the near future.

Therefore, the industry was unable to agree

upon any changes in the present level of the

minimum wages at this point of time, or in the

short term, if circumstances remained poor.

However, shipowners were willing to reconsider

at any given time if the contours of the

economic situation showed any improvements.

Both parties recognised the difficulties

posed by the current economic situation and

the need for safeguarding jobs for seafarers,

but unfortunately failed to agree on a way

forward in the near future. The ISF maintained

that they were willing to reopen discussions as

and when the global economic situation

stabilises, or otherwise to meet again in

February next year.

The ISF said that it remained committed

towards the principle of the ILO minimum

wage for able seafarers as embedded in ILO

Recommendation 109 and within the Maritime

Labour Convention 2006. In the meantime,

the figure of $545, which came into effect on

31st December 2008, remained in place.

100 not outThe ISF is celebrating its 100th anniversary

throughout this year, having been established

as the principal international employers’

organisation for shipowners in 1909.

To launch its Centenary, ISF has produced

a brochure highlighting the organisation’s

achievements and identifying immediate

priorities in the year ahead.

These include: the promotion and

implementation of the ILO Maritime Labour

Convention, expected to enter into force in the

next two years; the completion of the current

IMO review of the STCW (seafarers’ training)

Convention; as well as measures to increase

the worldwide recruitment and training of the

next generation of seafarers, in support of

IMO’s ‘Go to Sea!’ campaign.

At a special event at the ISF offices, in

London on 30th January, to start off the

celebrations, ISF president, Spyros Polemis, said:

"The membership of ISF today comprises

national shipowners’ associations from over

30 countries, which represent all sectors and

trades of the shipping industry and about 75%

of the world merchant fleet. The primary

interests of ISF remain labour affairs and

industrial relations, manpower and training

and seafarers’ welfare.

“Since the early 1920s, ISF has been proud

to be the official ‘social partner’ of the

International Labour Organisation, where

shipping enjoys the unique ILO ‘maritime

machinery’ for developing international

employment standards. ISF co-ordinated the

representation of maritime employers at the

first special Maritime Labour Conference in

1920 and still continues in this role, similarly

co-ordinating shipowner representation at the

ground breaking ILO Maritime Labour

Conference of 2006.

“ISF was also among the very first industry

organisations to gain consultative status with

the IMO in 1961. In more recent years, ISF

has also been very closely engaged with

training standards and has represented

maritime employers at the major diplomatic

conferences which adopted and then radically

revised, the IMO’s STCW convention. Indeed,

ISF was back at IMO leading the employers’

input into the latest review of the STCW

convention," he concluded.

He also thought that the ILO convention

would be ratified in the next two years as thus

far, three states had ratified it amounting to 19%

of the world’s tonnage. It needs 30 states with

33% of the world’s tonnage to be ratified.

At the launch of the centenary celebrations,

ISF also gave a preview of a new international

careers promotion film aimed at young people

and endorsed by IMO as part of its ‘Go to

Sea!’ campaign. The DVD film, which will

be translated into several languages, will be

distributed free of charge via ISF's member

national shipowners' associations in March.

The DVD was produced by Videotel and an

internet version will be available in due course.

The ISF’s Tony Mason said that there were

three major obstacles to a career at sea –

1) Public perception of seafaring.

2) Greater knowledge by youngsters.

3) Marked shift of quality at sea.

He thought that there was little evidence of

thus far of shipping cutting back on

recruitment. The more important criteria was –

right seafarers in the right place at the right

time. A new campaign was being prepared to

put more cadet berths on vessels. The ISF is

urging shipping companies to provide

properly trained teachers to join vessels

specifically to train cadets at sea.

ILO minimum wage discussions 2009

ANNUAL REVIEW - ISF REPORT

TANKEROperator Annual Review � March 2009XVIII

ISF’s Tony Mason (left) with the ITF’s David Cockroft (right) at an earlier meeting.

TO

p35-52:p39-50.qxd 27/02/2009 13:13 Page 18

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CONFERENCE TOPICSTuesday 21 April 2009The Asian Voice in World Shipping: The Major Bulk TradesThe Asian Voice in World Shipping: Container Shipping & Logistics

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Thursday 23 April 2009Charterers’ ForumThe Crewing ChallengeThe Power of CommunicationLNG ShippingMarine Insurance

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IBC:OBC.qxd 27/02/2009 13:17 Page 1

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IFC:OBC.qxd 27/02/2009 11:53 Page 1

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