SHIPPING NEWS UPDATED 17TH NOVEMBER 2016

Air Freight News :

Ancra receives FAA Certification for CRJ200 SF cargo loading systems.

·         Ancra International has received Federal Aviation Administration (FAA) certification in the US for the cargo loading system for the CRJ200 SF passenger to freighter (P2F) conversion by Aeronautical Engineers Inc’s (AEI).

The system is capable of carrying eight 61.5" x 88" ULDs OR eight 62" x 88" ULDs; Ancra also offers a kit to facilitate the rapid reconfiguring of the loading system between the two cargo transport options.

Ancra currently provides all of the cargo loading systems for AEI’s P2F aircraft conversions including the Boeing 737-300SF, 737-400SF, MD-80SF, CRJ200 SF and the 737-800 conversion currently in development.

Hactl ground handling certification first in Hong Kong.

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Hong Kong Air Cargo Terminals Limited (Hactl) has become the first handler in Hong Kong to be certified under the IATA Ground Operations Manual (IGOM), signifying its full compliance with the new standardised procedures.

Through IGOM, IATA is driving the adoption of a single industry ground operations manual, to replace the vast array of separate manuals and standards currently in use throughout airlines, ground handlers and airports around the world.

IGOM’s goal is to establish global standardisation of policies and procedures, a uniform minimum level of safety and a standard set of policies and procedures for use in IATA Safety Audit for Ground Operations (ISAGO).

Applying IGOM standards is expected to drive costs down by reducing the complexity associated with multiple airline ground operations manuals, standardise training requirements and reduce the incidence of aircraft damage by applying common and robust procedures.

Leaping at Oslo: ABC the latest to launch services targeting salmon demand.

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AirBridgeCargo Airlines (ABC) is the second airline within the last few weeks to launch a freighter services from Oslo that aims to capitalise on the seafood market.

The scheduled all-cargo airline will offer two services a week between the Norwegian city and Moscow Sheremetyevo utilising a Boeing 747 freighter, which can carry more than 100 tonnes per week. The service will also cater for the country’s oil and gas industry.

“Global demand for Norwegian seafood, and especially salmon, continues to make a significant and growing contribution to the country’s economy,” the airline said.

Norway now exports 220,000 tonnes of seafood a year, 600 tonnes a day, using air cargo services to Asia and North America.

Judge rules that ATSG dispute with pilots should go to arbitration.

·         A judge has ruled that the dispute between US freighter lessor Air Transport Services Group (ATSG) and its pilots should be resolved through a grievance and arbitration process.

Judge Timothy Black of the US District Court for the Southern District of Ohio said that the dispute is a minor dispute under the US Railway Labor Act and should be resolved through the current labour agreement between the two parties.

ATSG initiated court action in the US against two unions who want the company’s subsidiary cargo airlines, ABX Air (ABX) and Air Transport International (ATI), to be defined as a single system. The complaint was filed by ABX.

The pilots are represented by the International Brotherhood of Teamsters, Airline Division and the Airline Professionals Association of the International Brotherhood of Teamsters, Local 1224 (collectively, the IBT).

The two unions contend that ATSG has operated the two carriers “as a single transportation system while maintaining a facade of two separate carriers”.

Sea Freight News :

The shipping sector is gradually embracing renewable energy: Shipping secretary Infra Circle ndia’s shipping ministry initiated a slew of measures for the maritime sector in the past two years to increase the country’s port cargo traffic to 2.5 billion tonne (BT) from 1 BT at present. Shipping secretary Rajive Kumar, who took charge on 1 December 2014 and belongs to the 1981-batch of the Indian Administrative Service from the Uttar Pradesh cadre, in an emailed interview outlines the contours of the National Democratic Alliance government’s ambitious Sagarmala programme, inland waterways scheme and the push for green energy. It’s been a constant endeavour of the ministry of shipping to promote use of renewable energy. Earlier, most lighthouses under the Directorate General of Lighthouses and Lightships (DGLL) were operating on conventional sources of energy which consumed fossil fuels and emitted high amount of carbon dioxide increasing greenhouse effect and causing air pollution.

Centre aims at import substitution for all major minerals Business Standard In line with the coal ministry's move to increase domestic coal production aiming for import substitution, the union mining ministry is also aiming for the same and results have started reflecting on the iron ore production and sales trend this fiscal year. Compared to the production of 66.85 million tonne (mt) of iron ore in the first half of the last fiscal year, India surpassed the previous year's production by 18.15 mt or 25.85 per cent in the April-September period this year. "So far, we have clocked a production of 84 mt and aim to substitute import of all critical metals which are found in India", Balvinder Kumar, secretary at the union ministry of mines said here. As per Kumar, compared to the 7.09 mt import of iron ore in the last fiscal year, India imported only 1.59 mt of the ore in the April-August period. The aim of import substitution is in sync with the steel production in the country rising by 8.5 per cent during the April-September period at 7.8 per cent.

KCCI opposes proposal from NMPT to develop berth 8 as container terminal on PPP mode Times of India Kanara Chamber of Commerce and Industry (KCCI) has raised objection to a move by New Mangalore Port Trust (NMPT) for development of container terminal at berth number 8. The chamber has shot off separate letters outlining its detailed objections to the same to the Tariff Authority for Major Ports (TAMP), union minister of road and transport, highway (MoRTH) and shipping Nitin Gadkari, and DK Member of Parliament Nalin Kumar Kateel. Jeevan Saldanha, president, KCCI told reporters that berth identified for the project is the old berth 14 (new berth 8), which is a premium berth of the port with a draft of 14 metre and length of 260 metres. Handing this berth to a PPP operator for handling containers is sheer waste of national resource, he said adding container vessels calling on NMP have draft of 10.5 metres. The 3.5 metres of available depth of water goes waste as vessel of higher deadweight can utilize the same, he contended adding that this berth has highest berth occupancy compared to all other dry bulk cargo berths at NMPT.

Adani Ports Adds Three RMGCs in Mundra Marine Link dani Ports & Special Economic Zone Ltd (APSEZ), India’s largest port developer, has recently made an addition of three new Rail Mounted Gantry Cranes (RMGC), for their container rail terminal in Mundra. The RMGCs, expected to be operational by this month end, was offloaded on October 7, as part of enhancing the handling capabilities of Inland Container Depot (ICD) bound containers in Mundra port. “Mundra is the only port in India having 21st century infrastructure. Adding these new RMG cranes will be a game changer for rail container operations, as this goes in line with the Chairman’s vision of supply driven infrastructure & automation for faster evacuation of containers and quick turnaround of container trains. The new added cranes also falls in line with APSEZ’s Green Port drive as they run on electricity and will reduce the carbon footprint of the rail handling facility” said Mr. Ennarasu Karunesan, CEO APSEZ – Mundra & Tuna Ports.

GST offers opportunity to ‘go digital’ Live Mint The countdown to the roll-out of the goods and services tax, or GST, has begun. The government, enterprises, regulators and consumers are gearing up to handle the tax implications of “one-country one-market structure”. A lot has already been written about how enterprises can prepare for GST. However, in my opinion, GST is not just a financial reform, but a broader business reform. It has the potential to relook at how enterprises conduct their business in India. With GST, enterprises have an opportunity to revamp systems, go beyond the physical constraints of supply chain, and focus on what matters the most for any business—customer experience! It doesn’t just stop there. With delinking of the physical footprint from direct tax implications, enterprises can use this opportunity to move beyond physical structures, ‘go digital’ and provide digital experiences.

Container terminal grabs export market The Hindu A year after its formal inception, the Kakinada Container Terminal Private Limited (KCTPL) has started making strides by sending commodities weighing about 26,000 tonnes a month to the African countries, West Asia and the United States via Colombo. As of now rice is the major commodity being exported from the terminal, while seafood and cashew are in the pipeline. From loading containers to one vessel in January this year, the facility is now stacking the loads to three ships a month. A joint venture of the Kakinada Seaports Limited (KSPL) and the Bothra Shipping Services Private Limited, the company waited for a couple of months to commence the operations after its formal launch. Since then, the exports graph has been surging with more and more small-time rice exporters from the region booking the containers. In the last 11 months, containers have been loaded to 26 ships, including the coastal (domestic) and international ones.

GST be made export friendly: EEPC India Web India In their pre-Budget memorandum to the Union Finance Ministry, exporters in India have urged the credit refunds under the impending Goods and Services Tax (GST) be made efficient to the extent that automatic system of tax credits be brought into operation. Besides, multiple Advance Ruling (AR) centres at the Central and state levels be set up to bring about certainty for exporters. "What credit can accrue, what cannot accrue, what is exporter's liability and what is due to him can be brought about by the AR, thus helping the export sector," according to former chairman of Engineering Export Promotion Council (EEPC) India P K Shah.He said the engineering sector also demand that all products made of steel should be compensated by higher drawback rates since the protection given to large steel manufacturers against imports has resulted into higher cost of production for exporters, particularly for the small and medium enterprises.

Throughput at Port of Hamburg Up Slightly Maritime Professional At 104.9 million tons, total seaborne cargo throughput for the first three quarters of 2016, covering general and bulk cargo segments, was up 0.3 percent on the previous year. “Seaborne cargo throughput in the Port of Hamburg has stabilized and for the first three quarters of 2016 again increased. Seen separately, the third quarter with a 2.7 percent upturn to 34.7 million tons underlines the upwards trend. Both general and bulk cargo volumes developed positively for Germany’s largest universal port,” said Axel Mattern, Joint CEO of Marketing. The trend for seaport-hinterland rail transport was also maintained. “By comparison with other leading European ports, in the first three quarters of 2016 Hamburg further expanded freight volumes transported by rail. Transporting 35.5 million tons of freight and 1.8 million TEU, representing gains of 3.1 percent and 1.9 percent, rail once again achieved a substantial advance,” reported Ingo Egloff, Joint CEO of Port of Marketing.

K Line faces criminal cartel charges by Australian authority Seatrade Maritime The Australian Competition and Consumer Commission (ACCC) has pressed criminal charges against Japan’s Kawasaki Kisen Kaisha (K Line) in relation to alleged cartel conduct over the shipping of cars, trucks and buses to Australia. The alleged period of cartel operations by K Line was between July 2009 and September 2012, according to ACCC. The matter was before Australia’s Downing Centre Local Court for a first mention on 15 November 2016. “This is the second matter in which criminal charges have been laid against a corporation under the criminal cartel provisions of the Competition and Consumer Act 2010,” ACCC said. Nippon Yusen Kaisha (NYK), another Japanese shipowner, pleaded guilty to similar charges brought by ACCC in July this year. NYK faces a maximum fine of which ever is greater of AUD10m ($7.6m), three times the benefit obtained, or if this cannot be determined 10% of its annual turnover in Australia.

Korea Line to buy Hanjin Shipping assets in surprise court decision Sea News In a surprise decision, a South Korean court has awarded shipping operator Korea Line Corp. to acquire the assets of bankrupt Hanjin Shipping after outbidding Hyundai Merchant Marine Co. (HMM) by offering better terms, including retaining workers. The midsize bulk-shipping operator has been granted the first right to purchase the assets of Hanjin's Asia-US route, as well as its stake in a California terminal. The judge at the Seoul Central District Court, which is handling Hanjin's insolvency proceedings, said it chose Korea Line over Hyundai Merchant Marine Co., which had been expected to win. Hyundai Merchant was backed by senior government officials and its main creditors, which said they would promote the company as the country's largest ocean going carrier, The Wall Street Journal reported. "Korea Line proposed better terms, including higher prices," the judge said. "It also offered to take over more Hanjin employees."

Ship carrying no cargo entitled to loading capacity reduction of fairway dues Hellenic Shipping News According to Section 11 of the Fairway Dues Act, the amount of fairway dues will be reduced if a ship is not fully loaded according to the particular loading capacity utilisation rate, which is calculated by comparing the combined total of cargo imported into and exported out of Finland. According to the legislature, reducing fairway dues as a result of reduced loading capacity is based on established practice and is therefore necessary to include in the act. However, the established practice is not explained anywhere and Section 11 has therefore been subject to considerable interpretation. For example, there was some dispute over whether transit cargo (ie, cargo on a ship from outside Finland which is not unloaded in Finland) should be ignored or taken into consideration only once when calculating the loading capacity utilisation rate. This was clarified in 2014 when Section 11 stipulated that transit cargo is added to both imported and exported cargo.

Lloyd’s Register launches new decommissioning service Hellenic Shipping News In-depth technical knowledge, cost estimation and determining decommissioning risk liabilities make it easier for companies to plan and execute with confidence against a challenging low oil-price market. “Operators are faced with a huge challenge and conflict between maximising economic recovery, a low oil price and decommissioning on the horizon,” says Alasdair Buchanan, Energy Director at Lloyd’s Register. “We understand decommissioning requires an investment with little to no return for operators, accompanied by an element of ambiguity globally about the requirements set by regulators and uncertainty on long term liability. The onus is on operators to execute decommissioning in the most cost effective manner, especially in jurisdictions such as the UKCS where tax relief is available on decommissioning activities.”

Dry Bulk Shipping – The overweight on Dry Bulk is paying off handsomely in Dry Bulk Market Sea News We have earlier advocated that “ the normalisation process will lead to great opportunities even with incremental gains in the underlying markets as discount to Net Asset Values narrow. With the market bottoming out, we place our bets on the dry bulk names with high operating leverage and considerable exposure to the spot market. We expect the uptrend in freight rates to mirror in asset prices, which in turn, will have an amplified effect on stock prices. For existing players and asset markets, valuations have very little downside in our view. Bankruptcy risk which was being priced across stocks has significantly eased as key players raised equity and continue to restructure debt and balance sheets. We expect freight markets to recover gradually in the remaining months of the year as Chinese stimulus flows through the industrial economy, providing opportunities to add exposure to dry bulk on correction as we believe the worst is behind us.”

Shippers raise concerns over consolidation in global container shipping Seatrade Maritime The European Shippers’ Council (ESG) and the Global Shippers’ Forum (GSF) have joined forces to raise concerns over the impacts of new container shipping ‘alliances’ and their increasing use of 18,000 teu mega-ships. Shippers are fearing that the contraction or consolidation of the shipping market into a very small number of tightly knit alliances, and the use of much larger ships, will reduce their choice of carrier and the quality of the services delivered. The shippers argued that carriers operating within such arrangements cannot compete amongst themselves with regard to the agreed capacity, sailing frequency, transit times, ports of call and service level. The ESG has joined GSF to promote the findings of a new research and analysis, titled ‘The Implications of Mega-Ships and Alliances for Competition and Total Supply Chain Efficiency: An Economic Perspective’, commissioned by GSF.

Air Freight News :

So far so good for IAG’s new Critical service.

·         IAG Cargo’s new Critical product is doing everything expected of it in service performance terms since its launch in early October, says the carrier’s global products manager, Daniel Johnson.

The service had handled around 110 individual shipments by the start of November, ranging from oil rig and ship parts to Formula One car tyres and even an urgent consignment of tuna from Mauritius to Los Angeles, via London, he said.

Critical shipments get the highest priority in accessing available cargo space, non-offloadable status, dedicated monitoring teams and, unlike the existing Prioritise premium product, there is no upper limit to consignment size beyond the capabilities of the aircraft used.

Prioritise is limited to 300 kg whereas Critical consignments could be up to about 10 tonnes.

Customers using the service at Heathrow and Madrid also have the use of a dedicated check-in desk and, in the event of stated transit times not being achieved, there would be a 50% refund on a case by case basis, said Johnson.

Air France KLM completes freighter restructuring but operating losses deepen.

·         Air France KLM saw its cargo division's operating performance worsen during the third quarter of the year, while its freighter fleet restructuring was completed.

The Franco-Dutch airline group recorded an operating loss of €100m during the third quarter of the year, compared with a loss on €81m during the same period in 2015.

Third quarter revenues were also down, slipping to €487m compared with €584m last year.

Financial performance was effected by “structural industry overcapacity” and traffic decreased by 6.4% to 2.1bn cargo revenue tonne km (RTK).

MAS Kargo launches Guangzhou freighter.

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Malaysia’s MAS Kargo has launched a twice weekly Airbus A330 freighter service to Guangzhou from its Kuala Lumpur hub in order to strengthen its footprint in eastern China.

The new service by the airfreight arm of Malaysia Airlines will call at Guangzhou every Tuesday and Thursday with 60 tonnes of cargo capacity per flight.

MAS Kargo said that the service will “tap the increasing cargo movements between Guangzhou Baiyun airport and Kuala Lumpur” with key exports that include perishables, predominantly seafood, as well as general airfreight.

News of the Guangzhou expansion comes just four days after MAS Kargo launched twice weekly A330 freighter services to Chongqing Jiangbei International Airport (CKG) in China, adding to its rapidly growing network of 23 dedicated cargo routes.

Sea Freight News :

Shipping Lines Riled by Pakistan’s Move to Raise Port Tariffs Bloomberg Shipping companies are threatening to scrap their Pakistan services after the South Asian country increased tariffs at its largest port in a blow to an industry that is already grappling with global overcapacity and low freight rates. Hyundai Merchant Marine Co. is “seriously considering” dropping deployment of larger vessels in Pakistan, the South Korean company wrote in a letter to the Karachi Port Trust, a copy of which was obtained by Bloomberg and confirmed by the firm. Local agents, representing global sea carriers including Maersk Line, the world’s biggest container carrier and part of A.P. Moeller-Maersk A/S, and American President Lines Ltd., say the tariff increase has caused distress among members. Charges at Karachi have more than doubled for many types of vessels, according to Pakistan Ship’s Agents Association, after the operator on Aug. 29 removed a cap on tariffs for vessels heavier than 45,000 gross registered tonnage.

Global trade may pick up slightly from fourth quarter: WTO New Indian Express Global trade is likely to start picking up from last quarter of this year on account of modest gains in export orders and container shipping, the WTO has said. WTO's World Trade Outlook Indicator has said that the “air freight in particular has shown quite strong recent growth, while export orders and container shipping have recorded more modest gains.” Pick up in the trade would have positive implications for India as the country's exports have started recovering. The outbound shipments grew by 4.62 per cent to USD 22.9 billion in September. Since December 2014, exports fell for the straight 18 months till May due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year thereafter again entered into negative zone in July and August. It said that with a current reading of 100.9 for the month of August, the WTO's indicator has risen above trend, signalling accelerating trade growth in November-December.

Nepal bound traffic expected to boost cargo traffic at Kalughat terminal at Patna Infra Circle India’s ministry of shipping—which plans to offer competitive cargo transport rates compared with rail and road from the yet-to-be operational Kalughat terminal on the National Waterways 1 on river Ganga at Patna—expects Nepal-bound traffic to generate huge volume. According to the ministry, the transportation tariff from the terminal may be 26% and 13% cheaper than rail and road traffic, respectively. To boost inland cargo movement, the shipping ministry and the Inland Waterways Authority of India (IWAI) have identified Kolkata’s GR Jetty-I, GR Jetty-II and the British India Steam Navigation (BISN), and Patna’s Gaighat and Kalughat terminals on river Ganga to be developed under the public-private-partnership (PPP) model. “According to a report prepared by our consultants, the GR Jetty II terminal (Kolkata) is expected to handle 7.21 million tonne (MT) of cargo by 2020 and 18.51 MT by 2045.

Private Kattupalli port aims to capture cargo from public rival Chennai JOC Adani Ports and Special Economic Zone, India’s biggest private port developer, is striving to replicate the success it’s had at its flagship Mundra Port with its new southeastern gateway of Kattupalli, which directly competes with state-owned Chennai Port. To add further momentum to Kattupalli’s strong growth trends, APSEZ last week hosted a public session in Ambur, Tamil Nadu State, to highlight the private terminal’s emergence as an alternative hub for shippers in the region. The meeting was attended by more than 50 representatives from cargo interests, shipping lines, freight forwarders, and leading manufacturers, including officials from the Indian Footwear Manufacturers Association, according to a company announcement. The action follows a similar APSEZ conference in Rajkot, Gujarat State, to showcase Mundra’s capabilities and expansion plans.

EOW starts probe into Rs 50cr sugar export scam Times of India The economic offences wing (EOW) of the city police has begun investigation into the alleged fraudulent export of two lakh tonnes of sugar by 21 sugar factories in the state. The fraud was initially estimated at around Rs 22 crore, but the police believe it may go up to Rs 50 crore. Principally, sugar was exported in 2007-08 at rates lower than market prices, but the transport company was paid at rates higher than that prevalent at the time. Around 200 accused have been listed, including the chairmen, managing directors and directors of the 21 factories in Kolhapur, Sangli, Satara, Ahmednagar, Solapur and Pune. An advocate, Govind Patil, had filed the case with the police. "The modus operandi was that over two lakh tonnes of sugar were sold to Kenya, Tanzania and Sri Lanka at a much lower price than the market rate in India. Moreover, the transportation fees given to M/s Shakti Credit Limited were much higher than market rates.

India one of the most cash intensive economies Live Mint The government’s demonetization move is likely to affect India’s growth in the short term as the informal sector, supported primarily through cash transactions, would slow down, cautioned a report by Deutsche Bank. India remains one of the most cash-intensive economies in the world, with currency/GDP at 12.2%, higher than Brazil, Mexico and South Africa, it said. The underlying growth momentum in manufacturing, trade, construction and transportation is already weak. These sectors constitute 73% of total informal employment in the economy and the demonetization move may see their growth slow further in the short term. Cargo traffic growth at major ports tops Feb high- Cargo handled at major ports grew by an impressive 13.2% in October, slightly above the high level of February, shows data from Emkay Global Financial Services Ltd. Petroleum, oil and iron ore trade saw healthy growth. The growth was partly aided by a favourable base.

Demonetization: With no cash on hand, 4 lakh trucks stranded on highways DNA Stating that around four lakh trucks are stranded in various parts of the country, the apex transporters body AIMTC demanded immediate increase in cash withdrawal limit from ATMs and banks to avoid crisis. All India Motor Transport Congress (AIMTC), claiming to have 93 lakh truckers, 50 lakh buses and tourist taxi and cab operators under its fold, said at least eight lakh drivers and conductors were severely impacted in the wake of delegalizing of Rs 500 and Rs 1,000 currency notes. "Our about 4 lakh trucks are stranded across India with about 8 lakh drivers and conductors severely hit. The sudden ban on higher denomination notes have made them stand in long queues before banks in different parts. The withdrawal limit is minuscule with ATMs at many places not working and paralysing the transport business," AIMTC president Bhim Wadhwa said.

Korea Line selected as preferred bidder for Hanjin's Asia - US business Seatrade Maritime KLC was selected as the preferred bidder for bankrupt Hanjin’s Asia to US business, Reuters reported citing a spokesman for the Seoul court overseeing Hanjin’s receivership. KLC is reported to have made a higher bid than HMM for the business, although the bid levels were not disclosed. Put up for tender last month Hanjin’s transpacific business comprises staff, five containerships and 10 overseas businesses, KLC itself filed for bankruptcy in January 2011, and currently does not have a presence in the container shipping space, unlike rival bidder HMM, which is now Korea’s largest container line following the collapse of Hanjin. KLC operates in the tanker, LNG and dry bulk sectors. Although Hanjin has until December to submit a restructuring plan to the Korean courts it is widely expected that the company will be liquidated.

The overweight on Dry Bulk is paying off handsomely Hellenic Shipping News We have earlier advocated that “ the normalisation process will lead to great opportunities even with incremental gains in the underlying markets as discount to Net Asset Values narrow. With the market bottoming out, we place our bets on the dry bulk names with high operating leverage and considerable exposure to the spot market. We expect the uptrend in freight rates to mirror in asset prices, which in turn, will have an amplified effect on stock prices. For existing players and asset markets, valuations have very little downside in our view. Bankruptcy risk which was being priced across stocks has significantly eased as key players raised equity and continue to restructure debt and balance sheets. We expect freight markets to recover gradually in the remaining months of the year as Chinese stimulus flows through the industrial economy, providing opportunities to add exposure to dry bulk on correction as we believe the worst is behind us.”

Alphaliner: Battle Lines on East-West Routes Being Drawn World Maritime News Although the new carrier alliances will only start operating from April 2017, battle lines on the main east-west routes are already being drawn, after the OCEAN Alliance and THE Alliance unveiled the respective service networks, according to Alphaliner. The OCEAN Alliance will start with an initial deployment of 331 ships with an aggregate capacity of 3.3 million TEUs. This figure is based on Alphaliner’s analysis of the 41 weekly services unveiled in early November by the four alliance members, comprising French shipping company CMA CGM (including APL), China’s COSCO Container Lines, Hong Kong-based Orient Overseas Container Line (OOCL) and Taiwanese Evergreen Line. Alphaliner said that “the carrier group is set to become the largest alliance in container shipping history,” with an initial plan to offer 20 weekly sailings from Asia to North America and 11 weekly sailings from Asia to Europe. OCEAN will also jointly operate three transatlantic strings and seven Far East – Middle East/Red Sea loops.

What is the future for small container ports? Port Economics As container ships grow ever larger to achieve greater economies of scale and hence cost savings, ports expand to be able to handle them. This expansion occurs both in terms of the physical size of berths and the speed and efficiency of handling the large drops of containers that must be moved in and out of the port gate and through the hinterland. Port systems evolve according to these trends, resulting in a concentration of container movements at a handful of hub ports within each range, and flows are then feedered to other ports according to a variety of schedules devised by carriers to balance their vessels and containers. Feeder ports generate enough cargo to require shipping services but not enough to require large vessels. They remain sufficiently distant from larger ports in the same range that under current market conditions the larger ports cannot serve this hinterland profitably overland.

Updates Shipping News 04.11.2016

Air Freight News :

Lufthansa's cargo business is in the red again.

 Lufthansa’s cargo and logistics division has slipped to its sixth quarterly operating loss in a row as market overcapacity and weak demand continued to blight financial performance.

The German airline group’s logistics division, which includes Lufthansa Cargo, time:matters and other cargo related businesses, recorded a third quarter earnings before interest and tax (ebit) loss of €17m, although this is an improvement on last year’s €22m loss.

The last time the airline group managed to record a quarterly ebit profit was in the first quarter of 2015, making this its sixth quarterly loss in a row.

Meanwhile, revenues for the period declined by 9% year on year to €506m.

Lufthansa reported market overcapacity and weak demand and said the revenue decline was also down to pricing pressure. Results were helped by a reduction in segment capital expenditure during the period, which declined by 50% to €5m.

Are conditions finally improving for the air cargo industry?.

·         The air cargo industry finally has reason to celebrate as market conditions strengthened in September and there are hopes of further improvements in October.

Analyst WorldACD's September market round-up shows that air cargo volume demand increased by 5% year on year in September — a level of increase not seen for two years. US dollar yields for September increased by 1.4% month-over-month.

“With such an increase in total weight transported, a further worldwide yield improvement over previous months, and industry sources claiming that October will be even better, one could be forgiven for thinking that the industry shows signs of improving health,” the analyst said.

Data from airlines in Europe and the US also improved in September.

At the recent Air Cargo Forum there was much speculation as to what had caused the improvements.

Heathrow adds second freighter operation as ABC launches Moscow service.

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AirBridgeCargo Airlines (ABC) has added a new freighter service connecting Heathrow Airport with Moscow's Sheremetyevo using one of its Boeing 747 freighters.

The service will fly every Thursday and Saturday and will offer a capacity of more than 100 tonnes of cargo per flight. It will utilise slots not popular with passenger airlines.

Heathrow said the new service will be welcomed by exporters that currently face a capacity shortage on long-haul destinations, especially Asia where consumer spending is expected to reach $32trn by 2030.

ABC added that the new operation was its 14th European destination and would leverage demand for British goods in mainland Europe and southeast Asia.

Investment fund buys ULD specialist CHEP.

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CHEP Aerospace Solutions, the Unit Load Device (ULD) management specialist, is being sold to EQT Infrastructure II of Sweden.

Brambles, the Australian-based parent company of CHEP Aerospace Solutions, said that the transaction with the infrastructure fund will complete during November 2016.

CHEP Aerospace Solutions offers pooling, management, maintenance and repair of ULDs used for luggage and cargo.

Today, the business owns and manages approximately 100,000 ULDs, and serves more than 90 airlines across a network of 48 global services centres and 420 airports, supported by over 550 team members.

Sea Freight News :

FLASH NEWS  :  APL Joins the World’s Largest Container Shipping Alliance

3 November 2016 APL Joins the World’s Largest Container Shipping Alliance Dear Valued Customer, I am pleased to announce that APL, as part of the CMA CGM group, will join the league of the world’s largest container shipping lines in the OCEAN Alliance from April 2017. OCEAN Alliance is poised to be the leading alliance in the industry, offering services across the seven key trades: Asia-North America (East Coast and West Coast), Asia-Europe, Asia-Mediterranean, Asia-Middle East, Asia-Red Sea and Trans-Atlantic. Such comprehensive coverage of the east-west trade is unparalleled in the history of shipping. As a start, APL will be offering 38 loops under the OCEAN Alliance scope. This complements and enhances our existing global network of more than 70 other service loops. Meanwhile, APL continues to maintain our key strengths in our own exclusive services, including our own-operated Eagle Express Service (EX1), APL’s premier flagship service calling the U.S. West Coast. What all these mean to you, our valued customer, is that APL is now bigger, stronger, and better-placed to meet the market demands and serve your shipping needs. What we bring to our customers is a greater portfolio of products and services, helping our customers expand their businesses into new markets with greater speed and predictability. This marks the start of an exciting journey for us. APL will continue to make a difference beyond the reliable transportation of cargo from origin to destination. We will continually innovate to create value and shipping solutions that facilitate our customers’ global connectivity and speed-to-market. I am eager to share more with you about the bigger, broader and better APL, and how we can help your business grow. In the meantime, we have prepared an information deck for your downloading. You can also find out more about the OCEAN Alliance service offerings on APL's website at http://www.apl.com/wps/portal/apl/apl-home/services/oceanalliance. As always, my team and I are at your service. Please do not hesitate to contact any one of us if you wish to discuss further. Yours sincerely, Nicolas Sartini Chief Executive Officer Email: nicolas.sartini@apl.com Mobile: (65) 8299 8132 APL Co. Pte Ltd 9 North Buona Vista Drive #14-01 The Metropolis Tower 1 Tel: (65) 6278 9000 www.apl.com Registration No. 199604017Z

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Time of reckoning for shipping as IMO sets road map to control emissions Live Mint Last week, the International Maritime Organization (IMO), the shipping industry’s global regulator, took two significant steps—one, to cut the sulphur content of fuel oil used by ships and, second, to introduce a new data collection system on fuel oil used by ships—in a clear road map to help shipping meet its environment obligations as it looks to align the industry with the global climate change goals. Shipping’s current share of the world’s carbon dioxide (CO2) emissions is a reflection of an industry that transports almost 10 billion tonnes of cargo a year. It may be out of sight, but cargo shipping (about 70,000 ships) keeps the world economy running. About 90% of global trade is moved by cargo ships, which are collectively responsible for about 2.2% of the world's total green house gas (GHG) emissions.

GST Council finalises peak rate at 28% Business Standard The Goods and Services Tax (GST) Council on Thursday decided upon a 4-slab tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent, with lower rates for essential items and the highest for luxury and de-merits goods, many of which would also attract an additional cess. A proposal by some states, including Kerala, to have special GST rates on luxury and sin goods was not accepted. On Friday, the Council will take up the prickly issue of administrative control over assessees. The Centre has proposed “cross-empowerment” whereby both the Centre and states will have powers to scrutinise and audit all assessees. Finance Minister Arun Jaitley told reporters after Thursday’s meeting that about 50 per cent of the consumer price index basket will be taxed at zero rate, with a view to keep inflation under control.

Global situation not to blame for fall in exports The Hindu While India’s share in global exports is declining, those of Bangladesh, Vietnam and China are still rising despite the adverse environment, according to the report. India’s merchandise exports had shrunk in 20 of the last 21 months. Pointing out that many obstacles lie in India’s path to raise its export competitiveness, Crisil said to harness its full potential, India needs to remove bottlenecks, capture the space vacated by China, integrate faster with the world and improve international competitiveness of its key exports. However, in the paper titled ‘Bifocal, please: ‘Make in India’ needs to lean on both exports and domestic demand,’ Crisil also said that “while India needs to bend over backwards to find export avenues, its domestic market is on the cusp of an expenditure boom.”

Odisha officer's killing may hit FDI in maritime sector, warns MANSA Business Standard The Mumbai and Nhava Sheva Ship Agents Association (MANSA) on Wednesday cautioned that the blatant killing of a high-ranking port official in Paradip, Odisha, could hit international trade, commercial activities and foreign direct investment in the maritime sector. In a letter, MANSA drew the attention of Prime Minister Narendra Modi, the shipping and law ministries to the presence of mafia elements in Paradip Port who needed to be booked. The letter came in the wake of the broad daylight gunning down of 45-year-old Mahendra Kumar Swain (Babul), the General Manager of Seaways Group in Paradip, when he was driving to office on October 26. The murder sent shockwaves in the shipping fraternity across India. Condemning the incident, MANSA urged the central and Odisha governments to act sternly and book the culprits to send a strong message to the mafia and rogue elements active in Odisha port.

Five global container companies write to Modi over FCL dues Economic Times A group of five global container lessors have written to Prime Minister Narendra Modi seeking help to recover dues from Forbes Container Line (FCL), a defunct Singapore-based Non Vessel Operating Common Carrier (NVOCC) and subsidiary of the India-listed Forbes & Co, owned by Indian conglomerate Shapoorji Pallonji group. FCL shut down earlier this year with unpaid dues of $20 million to the lessors, according to Bijoy Paulose, managing director of VS&B Containers Llc, a UAE-based lessor and one of the petitioners to Modi. The amount includes unpaid lease rentals and value of the containers leased to FCL, which are now unrecoverable, he added. A spokesman at Forbes & Co said it would "refrain from responding to any queries in the matter," FCL operated a fleet of 10,000 containers, of which 9,000 were leased from international leasing companies.

Maersk keen on Sri Lanka port container terminal Economy Next Denmark’s Maersk Group, which operates the world’s biggest container shipping line, is interested in developing a deep water terminal in Colombo’s new south port, a senior official said. The group already has a stake in the island, having a stake in a private container terminal and its shipping line making regular calls at Colombo, said Julian Michael Bevis, senior director, group relations, South Asia, Maersk Group. “The geographical position of this country is second to none with its location at the heart of the Indian Ocean,” he told a forum for visiting Danish investors interested in Sri Lanka. “Provided the regulatory environment will allow it an unrivalled opportunity for businesses to work with the government to develop logistics and hub services in and around the India Ocean.”

Nepal eager to develop water connectivity with India The Dollar Business Nepal on Wednesday expressed its eagerness to develop water connectivity with India through the rivers Ganga and Kosi that will link the Himalayan nation with the ports in West Bengal. The matter was raised by Vice President of Nepal, Nanda Bahadur Pun, during his meet with President of India, Pranab Mukherjee. Earlier, Mukherjee also held a meeting with the President of Nepal, Bidya Devi Bhandari. Mukherjee is on a three-day visit to Nepal, the first visit in 18 years by an Indian President. “All aspects of connectivity were discussed but one interesting thing that came up during this time and this was raised by the Vice President and that was connectivity by water. He was talking about connectivity from Kolkata through Hubli, the Ganga and the Kosi and this can come about if Kosi project develops,” Indian Ambassador to Nepal Ranjit Rae told journalists after the meeting.

India needs to focus on domestic market to boost mfg: Crisil Echo India Stressing on the need to focus on the domestic market to boost manufacturing, rating agency Crisil Thursday said the country needs to do a lot more to encourage the high-employment sector. "India can nurture growth in its manufacturing sector only if it strikes a balance between export-led and domestic demand-led growth. And that will require relentless efforts on improving the competitiveness of our manufacturing sector," it said in a report. The report, which comes days after India was ranked low in the global ease of doing business rankings, said manufacturing sector cannot be competitive in face of difficulties. These include inadequate physical infrastructure like reliable power and water, inflexible labour laws and an "opaque" land acquisition system, it said. Even after the goods are produced, they face problems because of the inefficiencies in the system like logistical bottlenecks which results in higher costs, the report said.

India keeps strong trading position with UK: Maersk Line Money Control India has maintained its strong trading position with the UK, registering a 6 percent year on year growth in exim container trade volumes for the first half of this year, container shipping company Maersk Line said today. "As UK's third-largest trading partner, India's exim (export-import) container witnessed 6 percent growth in first half of 2016, which is three times the growth we saw in H1 2015," it said in a statement. This growth happened despite a 2 percent decline in the UK's exim container trade volumes with the rest of the world during the same period, it added. In terms of exports, India's top containerised commodity categories of garments, stones and tiles, kitchenware and appliances, and metal all registered stronger growth this year as against the last, it said. "Mundra emerged as the number one port in terms of export volume traffic to the UK," said Franck Dedenis, Managing Director, India, Sri Lanka & Bangladesh Cluster, Maersk Line.

Revised drawback rates to boost textile exports The Hindu Textile exporters and manufacturers here have welcomed the revised duty drawback rates announced by the Union Government recently. According to a press release from Southern India Mills’ Association, the textile and clothing sector which was under stress in the global market will now be able to improve exports. “The revised duty drawback rates encourage value addition,” said M. Senthil Kumar, chairman of the association. He appealed to the Government to extend two per cent MEIS and three per cent IES export benefits for cotton yarn as the spinning sector is facing under utilisation of production capacity. The State levies should be refunded for all products of textiles and clothing, as done now for garments, he said. Chairman of Cotton Textiles Export Promotion Council R.K. Dalmia said in a press release that the drawback rates and caps have been increased for made ups (cotton and blended).

GST likely to hit silk fabrics, garments exports Business Line According to Rajendra Kumar Kapoor, President of the Silk Association of India, most of the manufacturers and exporters in this sector belong are most micro, small and medium enterprises (or MSMEs) and unless necessary exemptions are introduced, exports would suffer. Kapoor, during an interactive session organised by the Bharat Chamber of Commerce, pointed out that exports shall be treated as ‘zero rated’ supply and hence there will be refund of input tax credit. But, the refund requires submission of at least 37 returns annually; it will be a cumbersome process that will lead to blockage of funds and impact working capital flows. Similarly, he maintained that the silk industry and sometimes the job workers are required to buy accessories like specific threads and miscellaneous items for value addition.

Ocean Alliance Announces Day One Network Maritime Executive The members of the new Ocean Alliance, CMA CGM, COSCO Container Lines, Evergreen Line and Orient Overseas Container Line, have announced their proposed “day one” trading network. The Alliance is the largest shipping alliance in the world, and the partners will operate 40 services on the East-West trades with around 100 ports of call and almost 500 port pairs. Supported by a fleet of nearly 350 vessels with about 3.5 million TEUs in total capacity, the Alliance says it will comply with the requirements of global supply chains while providing higher sailing frequencies, better transit times and greater coverage in terms of loops, ports of call and port pairs. Members of the Alliance are working with authorities internationally to secure the necessary regulatory approvals to commence operation in April 2017. As the main contributor to the Alliance, CMA CGM will be deploying a fleet of 119 vessels with a 35 percent capacity share.

CMA CGM upgrades its offers with 6 unmatched seasonal services from Morocco to Russia, Europe and the Middle East Hellenic Shipping News MA CGM, a leading worldwide shipping Group, is pleased to announce the deployment of its upgraded transportation offer to Morocco. It is specifically designed for the export of citrus fruits and vegetables. 6 maritime services will provide Moroccan producers unparalleled export solutions with ten weekly calls in Moroccan ports In conjunction with the beginning of the export season in Morocco for citrus fruits and vegetables, CMA CGM and its subsidiary OPDR place a unique offer on the market. ·Six maritime services allow linking of Morocco directly with the main areas of consumption ·10 departures a week are offered from Morocco ·With 3 direct weekly lines, CMA CGM offers the best service to Northern Europe ·CMA CGM offers the best service to Russia with a direct weekly call on AGAX service ·With AGAPOV and NADOR MED EXPRESS, CMA CGM offer a unique service to the market, connecting Morocco directly with Southern Europe

S. Africa Becoming Preferred Destination for Ship Arrests Maritime Professional At the recent annual Maritime Law Conference (MLA) held at Arabella in the Western Cape, various prominent government and international speakers took to the floor to debate and discuss national global maritime phenomena including inter alia; the progress in handling international oil spillages, port congestion, salvage and vessel arrests. Progress and unity was evident amongst the highly respected panel of speakers including Captain Rufus Lekala (TNPA Chief Harbour Master), Captain Alan Reid, representing P&I interests, Sobantu Tilayi (South African Maritime Safety Authority) and Dumisani Ntuli (Department of Transport) who spoke of enhanced engagement amongst each department and coordinated efforts to increase efficiencies.