Friday, July 3, 2020

Port of Melbourne Welcomes Largest Container Capacity Ship to Dock in Melbourne


 

The Port of Melbourne (PoM) on 25 June 2020 welcomed CMA CGM Ural, the largest container ship by maximum capacity to call at the port.

The 299-metre long vessel is one of six currently deployed on the South-East Asia - Australia trade route called the ‘AAX1’. It commenced its 42-day round-trip in Malaysia, calling at Singapore. It then made its way around Australia’s south-west coast and arrived into Melbourne’s Webb Dock for handling by terminal operator Victoria International Container Terminal (VICT).

Named after the Ural mountain range that runs from north to south through western Russia, the vessel can carry up to 10,662 TEU (Twenty foot equivalent unit), with containers stacked up to 12 high on-deck. Compared to the 4,500 TEU carried by the average container ship currently calling at PoM, this is a significant increase in load carrying capacity.

The CMA CGM Ural will spend 44 hours in Melbourne before departing for Sydney and Brisbane.

Brendan Bourke, CEO Port of Melbourne, said the arrival of CMA CGM Ural is an indicator of the durability of Australia-Asia trade, despite the challenges presented by COVID19 and recent natural disasters. It demonstrates the port’s ability to accommodate the next generation of global container vessels.

"The arrival of CMA CGM Ural shows Port of Melbourne’s capacity to service the growing number of bigger vessels we’ll see into the future. PoM’s operations have undergone significant change over the years including automation, changes to supply chains, and to the infrastructure that supports them.

"We’re always looking at ways to leverage the significant capability of our operations. We’ve developed a 30-year strategy that addresses PoM’s critical role as part of an interconnected network of physical infrastructure, commercial systems and land-uses," he said.

Anthony Orgill, General Manager Asia ANZ Lines, ANL, said the arrival of the vessel was significant for the shipping industry.

"By implementing larger container ships into our services, we can support clients operating between Australia, South East Asia and beyond. Today’s occasion marks a fantastic milestone as a business and as an industry, highlighting our ongoing evolution to accommodate increasing demand, population growth and productivity," he said.

Tim Vancampen, CEO, VICT, stressed the arrival of CMA CGM Ural highlights the growth of the shipping industry and brings further economies of scale to the Victorian market and supply chain.

"VICT welcomes the 10,622 TEU CMA CGM Ural as the largest capacity vessel to call at the Port of Melbourne and congratulates all parties involved," he said.

"VICT is well equipped to accommodate this class of vessels ranging from 10,500 – 13,000 TEU and plans to further invest in the Port of Melbourne to accommodate the next generation of vessel ranging from 15,000 to 18,000 TEU. We will ensure that Port of Melbourne will continue to fulfil its role as the main gateway to Victoria, and consolidate and expand its position in the global shipping network."

Credit: www.portwings.in


Monday, May 4, 2020

Three Out of Five Converted VLOCs s Are No Longer Operating, BIMCO Analysis Shows



Chennai:
Port Wings News Network:

Since June 2017, 43% of the VLOC fleet have been sent to the scrapyards, while 18% of the fleet is idled or damaged, a market analysis by Baltic and International Maritime Council (BIMCO) has revealed.
"The tragic Stellar Daisy accident brought the safety aspect of VLOCs into question. Now, three years on, three out of five VLOCs are no longer in operation as their long-term charters have now expired. Going forward, the obsolete VLOCs will be phased out of the market and replaced with technologically superior and more reliable ships," said BIMCO’s Chief Shipping Analyst, Peter Sand.
The VLOCs were converted from single-hull Very Large Crude Carriers (VLCC) towards the end of 2000 as an innovative result of the dry bulk super cycle and the IMO regulation which mandated that all single hull tankers should be phased out by 2010. With cheap and obsolete tanker tonnage in the market, investors eyed an opportunity to convert the ships into VLOCs and deploy them on long-term contracts of affreightment, often with a duration of 10 years.

THE ECONOMIC RATIONALE OF KEEPING THE OLD VLOC TONNAGE AFLOAT

In June 2017, BIMCO analyzed the VLOC fleet which at the time consisted of 51 ships with an average age of 23.8 years, not far from the average demolition age of 24.2 years. Back then, we argued that the ships on long-term contracts still made solid economic sense, given a second-hand price equal to the scrap value and stable earnings.
Arguably, the maintenance and repair costs are significantly higher than younger tonnage, but the statement from 2017 still holds true, granted the condition that the ships have employment under long-term contract. Once the VLOCs no longer have to fulfil obligations under long-term contracts, the economic incentive to keep the ships afloat evaporates.
At face value, during their time as ore carriers, these ships have provided a solid return on investment, even when accounting for higher maintenance cost. Although the conversion from tanker to dry bulker came at an estimated price of USD 12-15m, plus the cost of the actual ship, the freight revenue from the long-term contracts for carrying ore from Brazil to China have exceeded the cost by a fair margin.
Since the last analysis, the fleet has undergone a massive trimming with 28 ships remaining in the fleet, eight of which are lying idle in Labuan, a dedicated lay-up site. Since June 2017, 22 ships have been scrapped while one is damaged and not in service. Therefore, it seems likely that converted VLOCs will soon be a memory of the past.

CONVERTED VLOCS ARE PHASED OUT AS SUBSTITUTES ARE BROUGHT IN

The investment strategy of converting cheap tanker tonnage to dry bulk carriers seems unlikely to be replicated any time soon. With economic growth and prosperity comes opportunities. The VLOCs were acquired and contracted for conversion during the dry bulk bull run in 2007-2008, but many of the conversions were only complete after the financial crisis put an end to the bull market.  
The ships entered a market, which never recovered to previous highs, but nonetheless remained a profitable one in the initial years. In 2009 and 2010, the Baltic dry index (BDI) averaged 2,616 and 2,758 index points respectively, well below the 6,390 index points seen in 2008, but a substantial margin above the averages from 2011-2019, which never exceeded 1,600 index points.
Many of the ships are approaching the average age of demolition, and these ships are set to be phased out as soon as the long-term contracts under which they are employed expire. However, new VLOCs and even larger ships, such as the Valemaxes, have already been supplied to the market. For this reason, the scrapping of converted VLOCs will not create a shortage of tonnage in the market.
Perhaps even the contrary holds true. From June 2017 to April 2020, the Capesize (+100k DWT) fleet grew by 29.6m DWT (9.2%). From 2017 to 2019, seaborne trade of iron ore declined by 17m tonnes (-1.2%)
"A shortage of tonnage will not arise because the converted VLOCs are now phased out. New and even larger ships have already been delivered to the dry bulk market, more than covering the transportation needs," concluded Sand.
Source: http://portwings.in/three-out-of-five-converted-vlocs-s-are-no-longer-operating-bimco-analysis-shows/

ICTSI secures 25-year extension to operate Mindanao Container Terminal

Mindanao International Container Terminal Services Inc. (MICTSI), a subsidiary of International Container Terminal Services Inc. (ICTSI), ha...