World Maritime Market – September 2009
* In the latest consolidation of liner services CKYH Alliance (Coscon, “K” Line, Yang Ming, Hanjin Shipping) is to cut capacity on its Asia – North Europe/Mediterranean Service by about a fifth in October. A CKYH statement says: “This rationalization of service eliminates overlapping of similar service loops and reduces duplicate calling ports thereby improves efficiency of the service and reduces service capacity of CKYH Alliance by approximately 20% in response to demand conditions in the market. The rationalized service enables the Alliance members to continue to offer comprehensive port coverage and competitive transit time to their customers.
* EVERGREEN Line and CKYH Alliance (COSCON, K line, Yang Ming & Hanjin shipping) are merging existing Atlantic services and launching a new joint Trans Atlantic Express service (TAE), in September. The new service is a combination of two CKYH's TAS1 (Trans Atlantic Service Loop 1) and Evergreen's NUE (North Asia – U.S. East Coast – European Pendulum). The TAE service will operate with a total of four 2,400 TEU vessels. Evergreen and CKYH will each deploy two vessels. The port rotation is: Antwerp – Bremerhaven – Rotterdam – Le Havre – New York – Norfolk – Charleston – Antwerp CKYH believes combining these two services will bring more the opportunity to assure our customers have quality service.
* CMA CGM, MAERSK and HYUNDAI will suspend their China, Korea, US East Coast service via Panama after the departure on September 27th, 2009 of the last eastbound vessel from Ningbo.
This joint decision allows CMA CGM, MAERSK and HYUNDAI to rationalize existing services and capacity to meet market needs. This loop operated by 8 x 5100 TEU vessels, named HUDSON Service by CMA CGM, was calling ports such as Ningbo, Shanghai, Qingdao, Pusan, Balboa, Savannah, New York and Miami.The future coverage of these ports will be done through existing services already operated either independently by CMA CGM or in a venture with partner such as COLUMBUS Service.
«This rationalization of port coverage and slot supply corresponds to the actual trend demand observed on the Asia / US market since beginning 2009. Suspension of services is in our mind a temporary move. We are fairly confident that the North America trade will rebound in the near future» explains Jean-Philippe Thénoz, CMA CGM Vice President North America Lines.
* JAPANESE carrier Mitsui OSK Lines (MOL) is increasing rates on its Europe – Southern Africa trade and says it has no choice. “We are committed to maintaining high service levels even during these difficult economic times,” says Colin de Souza, MOL General Manager, North South Trade. “However, the cost of maintaining these levels is no longer sustainable at the present freight rates.” Mr de Souza says that MOL has already undertaken as many measures as possible to become more efficient and cost-effective within its own organisation. “So, like many of our customers, we know what it is like to face difficult times. MOL has informed customers that a general rate increase of US$200 per TEU will apply from the beginning of October on both north and southbound legs. MOL’s weekly SRX Europe North Continent – Southern Africa service calls Rotterdam, Tilbury, Bremerhaven, Las Palmas, Cape Town, Pt. Elizabeth and Durban
* DANISH shipping giant A.P. Moller - Maersk Group is to close its subsidiary Odense Steel Shipyard at Lindo, Denmark. In a statement the company says it has decided to “discontinue the shipbuilding activities, when the contracted orders have been fulfilled”. The company says that “regardless of the even huge effort to improve the yard’s competitiveness with investments in new technology and streamlining of the production” the yard has run up very considerable annual deficits and must today realise that it is impossible to attract orders, which are commercially sound.
* MALAYSIAN shipping company MISC increased sale by 6.7% to (US$1.1bn) in Q2 compared to a year earlier but saw its profit before tax drop 49.6%. The major contribution came from MISC's tanker and LNG carrier operations The drop in profit was mainly due to its smaller margins achieved by its petroleum business and higher losses from liner and chemical shipping.
* LNG carrier company Golar LNG that its subsidiary Golar LNG Energy Limited has completed its recently announced equity offering. A total of 55m shares, worth $110m in total will be issued “mainly to international and Norwegian institutional investors”. The company says: “Attached to the offering is a 'green shoe' option. The managers have therefore been granted an over allotment option, exercisable for 30 days for an additional 5m shares ($10m). The Company will initially be listed in the Oslo OTC market, but will immediately progress with full listing application for Oslo Stock Exchange.
* JOHN Fredriksen-linked shipowning company Ship Finance International made a Q2 net profit of US$53.5m, down from $71.3in Q2 2008. Total operating revenues were $88.2m down from $120.9m. During the quarter Ole Hjertaker was appointed CEO of Ship Finance Management AS. Also the jack-up drilling rig West Ceres was sold to Seadrill with a net cash effect of $40m. The company sold the single-hull VLCC Front Duchess to a third party with delivery due next month with a net cash effect of about $2.5m after repayment of associated bank debt.
* JAPANESE shipowner Kawasaki Kisen Kaisha (“K” Line) is to transport Australian iron ore in capesize bulk carriers under a recently concluded agreement with China's Anshan Iron and Steel Group. The contract covers the carriage of about 1.5m tonnes annually and is for “approximately 10 years”. K Line's 170,000 dwt bulk carriers are to start on the Australia – China run next month. “K” Line says that expanding into the growing Chinese market is one of the most important targets in its business expansion plan. It is looking for further similar contracts.
* Danish shipping giant AP Moller Maersk reported net loss of US$540m, compared to a profit of $2.5bn in Q2 2008, as revenue for the period fell by 25% to$22.8bn. An company statement says that the global economic crisis had a severe negative impact. Freight rates and volumes for the group’s container shipping activities were 30% and 7%, respectively, below the same period of 2008, and average rates for the tanker activities were considerably lower than in the first half of 2008. The average crude oil price (Brent) was 52% lower than in the first half of 2008. This had a negative impact on the oil and gas activities, which was partly offset by an 8% increase in the group’s share of oil and gas production. The group’s other business areas were also negatively affected by the global economic crisis, but to varying degrees. The company says: “The result for the second quarter was slightly better than announced, as the result, excluding impairment losses and write-downs of $200m was positive by USD 33 million.