IMB: Piracy Attacks More Than Double in Gulf of Guinea

Piracy increased on the world’s seas in 2018, with a marked rise in attacks against ships and crews around West Africa, according to a report from the International Maritime Bureau (IMB).

Worldwide, the IMB Piracy Reporting Centre (PRC) recorded 201 incidents of maritime piracy and armed robbery in 2018, up from 180 in 2017.

The Gulf of Guinea remained increasingly dangerous for seafarers as reports of attacks in waters between the Ivory Coast and the Democratic Republic of Congo more than doubled in 2018. The incidents included all six hijackings worldwide, 13 of the 18 ships fired upon, 130 of the 141 hostages taken globally, and 78 of 83 seafarers kidnapped for ransom.

The region saw a significant new spike in violence in the last quarter of 2018. Vessels have been boarded by pirates well outside territorial waters, with crew kidnapped and taken into Nigeria where they are held for ransom.

“There is an urgent need for increased cooperation and sharing of intelligence between the Gulf of Guinea’s littoral states so that effective action can be taken against pirates, both at sea and on-shore where their operations originate and end,” an IMB spokesman said.

Overview

In the last three months of 2018, 41 kidnappings were recorded in Nigerian waters alone. On October 27, 2018, 11 crew were kidnapped from a container vessel 70 nautical miles off Bonny Island, Nigeria. Two days later, Nigerian pirates in a speedboat hijacked a tanker underway 100 nautical miles off Point Noire, Congo. Eight of the 18 crew were kidnapped.

Although no ships were hijacked in the Somalia region, pirates fired upon a Suezmax tanker in the Gulf of Aden, as well as a product tanker and a capesize bulk carrier more than three hundred miles from the Somali coastline.

In Indonesia, patrols by the Marine Police have seen the number of incidents drop for the third successive year. The majority of the 36 Indonesian reports were low level opportunistic thefts. Six crew however were taken hostage and threatened, “indicating the need to be vigilant”.

Attacks off Sabah, eastern Malaysia, continue to be a cause of concern with five crew from two fishing boats reported as kidnapped. Separately four attackers in a speedboat fired on a tug, and the master was shot in the leg.

Ten incidents have been reported from the Philippine islands – down from 22 in 2017. Batangas anchorage accounts for five of these. In one attack, suspected militants fired upon a general cargo ship.

 

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Brokers: Hyundai Mipo Dockyard Wins Tanker Quartet Order

South Korean shipbuilder Hyundai Mipo Dockyard has reportedly won an order for the construction of four tankers from Evangelos Pistiolis – led Central Group from Greece.

According to Intermodal, the 50,000 dwt quartet is scheduled for delivery in 2020 and the newbuilds would be scrubber-fitted to comply with the new sulphur regulations.

The price details of the deal were not disclosed, however, market valuations indicate that the price could be approximately USD 36 million per vessel.

The order is in line with anticipated growing demand for medium range tankers, especially in the product tanker sector, in the upcoming period. The projection is based on the increased need for compliant bunker fuels across global ports required for the implementation of the 2020 sulphur cap.

Based on the data from VesselsValue, Hyundai Mipo has secured over 80 orders, dominated by MR2 chemical and product tankers.

As part of Hyundai Heavy Industries Group’s 2019 orderbook target of USD 15.9 billion, Hyundai Mipo Dockyard has vowed to obtain USD 3.5 billion worth of orders. HHI has set sights on attaining USD 8 billion in the shipbuilding segment, whereas Hyundai Samho Heavy Industries expects to secure USD 4.3 billion worth of orders, as reported by Yonhap.

World Maritime News Staff

 

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Port of Los Angeles Sets New All-Time Cargo Record in 2018

The US Port of Los Angeles moved more cargo in 2018 than any time in its 111-year history, racking up 9,458,749 TEUs, 1.2 percent more than 2017’s record-breaking year.

It is the third consecutive year of record volumes for the nation’s #1 gateway for containerized trade and the most cargo moved annually by a Western Hemisphere port.

“2018 was marked by a robust economy coupled with tariff-induced surges of cargo headed to US retail and manufacturing sectors,” Gene Seroka, Port of Los Angeles Executive Director, said.

“These extraordinary volumes highlight the need for continued stakeholder collaboration on methods to maximize supply chain efficiency. Through a number of initiatives, we are focused on both physical and digital infrastructure enhancements that continue to ensure the reliable, safe and efficient conveyance of cargo through our gateway,” he added.

In December, the port processed 903,258 TEUs, the busiest December in its 111-year history and a 15.9 percent jump compared to the previous year. It was the sixth consecutive month of volumes exceeding 800,000 TEUs.

December imports increased 21.6 percent to 468,906 TEUs. Exports decreased 3.2 percent to 147,965 TEUs. Along with an 18.9 percent rise in empty containers, overall December TEUs totaled 903,258, an increase of 15.9 percent compared to the previous year.

North America’s leading seaport by container volume and cargo value, the Port of Los Angeles facilitated USD 284 billion in trade during 2017.

 

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Denmark Unveils Cyber Security Strategy for Maritime Sector

Denmark has launched a new sectoral strategy for the shipping industry as part of the government’s cyber and information security strategy.

Launched by the Danish Ministry of Industry, Business and Financial Affairs, the strategy contains a number of initiatives aimed at strengthening IT security and preventing cyber threats in the maritime sector.

The objective is to ensure that navigational safety in Danish waters and safety on board Danish ships, including systems and software for operation, propulsion and navigation of the ship, is not compromised by cyber attacks.

In addition, services such as traffic monitoring, warning and information systems, as well as other systems with a connection to the ship’s safe navigation, are included.

The Danish Maritime Authority has established a dedicated Danish Maritime Cybersecurity Unit, which is to handle implementation of the strategy in practice.

 

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Seaspan Completes 2nd Tranche of Investment with Fairfax

Hong Kong-based containership owner and operator Seaspan Corporation revealed that Fairfax Financial Holdings Limited closed the second tranche of its USD 1 billion investment commitment in the company.

As with Fairfax’s initial USD 500 million investment in Seaspan, the second tranche of funding is structured as a USD 250 million issuance of 5.50% senior notes due 2026 and approximately 38.46 million warrants.

Pursuant to a deal entered into at the end of May 2018, Fairfax has agreed to immediately exercise the 2019 warrants at a price of USD 6.50 per warrant, for additional equity proceeds to Seaspan of USD 250 million. As a result, Seaspan’s aggregate proceeds from the Second Fairfax Investment will be USD 500 million, the company explained.

This brings Fairfax’s total investment in Seaspan to USD 1 billion, the proceeds of which will be used to fund future growth initiatives, repay debt and for general corporate purposes.

With the closing of the second investment, Fairfax’s aggregate shareholdings in Seaspan are 76.9 million Class A common shares or 36% of shares outstanding.

Fairfax continues to hold the 25 million seven year warrants, with an exercise price of USD 8.05, which were issued to it on July 16, 2018.

“This additional investment will enhance Seaspan’s ability to execute on our long-term goals of deleveraging, strengthening our balance sheet, and creating value through disciplined and thoughtful capital allocation,” David Sokol, Chairman of Seaspan Corporation, said.

 

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Canadian Gov’t to Assess Risks Posed by Wrecked, Abandoned Ships

The Canadian government has awarded a contract to London Offshore Consultants (LOC) for the development of a risk assessment methodology related to hundreds of abandoned, wrecked or dilapidated vessels in Canadian waters or on Crown land.

As explained, the risk assessment methodology, expected to be delivered by this summer, will help the Canadian Coast Guard assess the level of risk these vessels pose to the environment, the economy and public safety.

This contract, valued at CAD 551,554.95 (USD 416,252) would help improve the restoration and protection of marine ecosystems. It is part of the country’s CAD 1.5-billion Oceans Protection Plan.

“This contract award further enhances the Canadian Coast Guard’s ability to assess the risks posed by wrecked or abandoned vessels in our waterways and to help prioritize our operations,” Jonathan Wilkinson, Minister of Fisheries, Oceans and the Canadian Coast Guard, commented.

The National Strategy to Address Abandoned and Wrecked vessels seeks to prevent the occurrence of new problem vessels and make progress in cleaning up existing problem vessels.

Bill C-64, the Wrecked, Abandoned or Hazardous Vessels Act, aims to strengthen owner responsibility and liability and address irresponsible vessel management, including vessel abandonment. It also provides the federal government, including the Canadian Coast Guard, with clear authority to take necessary measures to address hazards posed by these problem vessels.

 

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ABS, Fleet Management Partner on Cyber Security

ABS Advanced Solutions and Hong Kong-based Fleet Management Limited have reached an agreement to partner up on cyber security.

Under the deal, the ship manager would implement the ABS FCI Cyber Risk™ solution for its 220-vessel liquid cargo fleet, which would help the company comply with regulatory requirements.

“Working together, we will provide a comprehensive cyber security solution to assist in ensuring compliance with the International Maritime Organization (IMO), as well as additional cyber-security related guidelines and requirements—creating a safer fleet,” Russell Medeiros, Vice President, ABS Advanced Solutions, said.

“New digital technologies not only bring about considerable opportunities to the maritime industry, but also introduce potential new vulnerabilities. That’s why we are continually innovating and investing in technology to stay ahead of the curve and ensure our vessels operate to the highest safety and technical standards,” said Kishore Rajvanshy, Managing Director, Fleet Management Limited.

The IMO requires cyber security to be addressed in Safety Management Systems by January 2021; TMSA3, SIRE, BIMCO, IACS and Rightship have specified additional industry guidelines and commercial requirements. The ABS FCI Cyber Risk model supports compliance with all of these requirements.

 

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Courts Gives Nod to HHIC-Phil’s Rehabilitation Process

The Regional Trial Court in Olongapo City, the Philippines, has approved the petition for rehabilitation filed by Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), a Philippine-based shipbuilding brand of South Korea’s Hyundai Heavy Industries Corporation.

The decision to commence the rehabilitation process was received by both Hyundai Corporation and its debt-ridden subsidiary, a regulatory filing said.

The relief in rehabilitation was sought after the cash-strapped shipbuilder defaulted on a loan worth USD 400 million provided by five Philippine banks. In total, Hanjin has accrued a total of USD 1.3 billion outstanding loans from Philippine and South Korean lenders.

Impacted lenders
According to Moody’s, the banks’ exposure to troubled Hanjin will attract higher provisions as well as negative rating of their overall loan-portfolio. Rizal Commercial Banking Corp (RCBC) reportedly has the largest exposure of around USD145 million, equivalent to 2.0% of its gross loans, followed by the country’s three largest banks – BPI, BDO and Metrobank, whose exposure is more manageable relative to their loan books and pre-provision profits, as explained by Fitch Ratings.

“The parent company’s latest financial results show HHIC-Phil in a net asset position and there is reported interest in its shipyard from Chinese companies. Nevertheless, recoverability is uncertain. The parent company failed in an attempt to sell HHIC-Phil in 2018, and the amount and timing of any recoveries will depend on the rehabilitation plan, which may take time to negotiate and execute. We expect affected banks to incur additional provisioning on their exposures in the interim,” Fitch added.

“The sector- and company-specific causes suggest this case is unlikely to indicate broader stress across banks’ loan books, even if we expect some knock-on effects for HHIC-Phil’s employees and local service industries.”

Overall the bankruptcy case is not believed to be systemic and is unlikely to threaten financial stability in the country in the near-term, according to the rating agency.

Potential solutions
As World Maritime News reported earlier, two Chinese investors are said to be interested in taking over HHIC-Phil. The unnamed investors include a private and a state-owned company, whose identity remained secret.

However, Defense Secretary Delfin Lorenzana believes the shipyard should be acquired by a Filipino company as a way of supporting the country’s naval modernization efforts. A final decision on the proposal should, nevertheless, be made by the country’s economic team, Lorenzana is cited as saying by the Philippine News Agency (PNA).

The argument is further supported by the yard’s proximity to the Philippine Navy’s major docking and anchorage area. As a result, the country’s Department of National Defense plans to keep a close eye on the potential investors into the bankrupt shipbuilder.

Affected workers
The Philippines’ largest shipbuilder was considerably impacted by the weakness of the global shipbuilding industry and financial troubles of its Korean parent that started back in 2016.

As a result, HHIC-Phil had to deal with dwindling orders and resorted to massive workforce cuts, laying off over 7,000 people back in December 2018.

Around 3,800 workers remain at the shipyard and could face loosing their jobs in case of the yard’s closure. Hence, the country’s government has been asked to provide assistance to the impacted workers.

On Tuesday, the Department of Labor and Employment (DOLE) promised to help thousands of impacted workers, PNA informed. The likely measures aimed at cushioning the impact of the bankruptcy on the shipyard’s workers include severance pay as well as potential re-employment of the affected workers in various projects of the government.

World Maritime News Staff

 

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Adams: Early Installers of Scrubbers Will Be Considered Visionary

There has been a lot of loose speculation about the environmental impact of open-loop scrubbers, according to Ian Adams, the newly appointed Executive Director of the Clean Shipping Alliance (CSA) 2020.

CSA 2020 was created last year as supporters of exhaust gas cleaning technology joined forces to advocate for the uptake of the technology ahead of the 2020 Sulphur Cap.

CSA 2020 says that its aim is to provide scientific-based information and research on the emissions abatement performance and environmental benefits of closed- and open-loop exhaust gas cleaning systems.

At the moment, the membership counts over 30 shipowning companies. CSA 2020 has contracted Maritime AMC (MAMCL), a UK-based association management company, to provide secretariat services. Led by Adams, MAMCL will work on growing the body’s membership and informing industry stakeholders on scrubbers technology as a solution for meeting the sulphur cap.

Commenting on the recent media reports on the potential downsides of the systems, Adams said these were conjectures that “obscure the fact that exhaust gas cleaning systems have a very positive net environmental impact on the maritime environment.”

Specifically, there has been a lot of public debate on the potential harmful effects from the discharge of wash water into the sea from open-loop scrubbers. One of the major concerns is that the contents of the released water include heavy metals and poly-aromatic hydrocarbons, which could pose a risk to marine life.

As a result, Singapore plans to ban the discharge of wash water from open loop scrubbers in its waters in 2020.

“We are deeply concerned that decisions are being made without the benefit of existing academic studies and research or any knowledge of the performance of these systems,” Adams continued.

“Exhaust gas cleaning systems can have a profoundly positive impact on the port and ocean environment, in terms of improving shipping’s environmental footprint and reducing the health impact from airborne sources. After all, this is what the 2020 regulation aims to do. I am sure the early installers of scrubber technologies will at some point be considered visionary.”

CSA 2020 will hold its first General Assembly in February where its leadership team and officers will be formally elected. The assembly will take place alongside the first CSA 2020 Conference on Marine Emissions Abatement.

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Euronav Sells Suezmax Tanker for Offshore Project

Belgium’s tanker shipping company Euronav has sold its Suezmax vessel Felicity to an undisclosed supplier and operator of offshore floating platforms.

As informed, the 157,667 dwt vessel has been delivered to its new owners and will be converted into an FPSO.

“Once again Euronav has demonstrated a capability to generate value for our stakeholders as part of our approach on fleet renewal. This is the eighth vessel we have successfully introduced into an offshore project,” Paddy Rodgers, CEO of Euronav, said.

Euronav said it will record a capital loss on the sale of approximately USD 3 million in Q4 2018. The company expects to generate the cash of USD 21.1 million on this transaction, after repayment of debt.

Built at Samsung Heavy Industries shipyard in South Korea in 2009, the ship has a market value of USD 31.83 million, according to data provided by VesselsValue.

Euronav’s owned and operated fleet currently comprises two ULCCs, 43 VLCCs, 25 Suezmaxes, one LR1 and two FSO vessels (both owned in 50%-50% joint venture).

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