Page 74: of Maritime Reporter Magazine (June 2, 2010)

74 Maritime Reporter & Engineering News

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When it comes to financial results, the world’s con- tainer lines sure know how to take shareholders on a wild, wild ride. Anyone who ever questioned the cyclic nature of the global container shipping busi- ness should take a look at some of the latest liner re- sults. Even Maersk, the market leading, market-share chasing giant has managed to stack up some impres- sive revenue growth in the last quarter as the market improved. Although “improved” doesn’t really do justice to what the market has done compared to the first quarter last year. “Spectacularly rebounded” would be a better description. And that rebound has seen Maersk go from a $581 million loss in the first quarter last year to a $168 million net profit. Nice re- bound if you can get it. Maersk carried more than 20 percent more boxes in the three months, too.

Over at troubled Hapag-Lloyd the troubles are no more. In the first quarter last year, the German line managed to lose euro 222 million and had to be bailed out . This year it is euro 13 million in the black. The rapid change in fortunes has extended to other carriers, even CMA CGM. We say “even” be- cause the French line was deep in a financial hole not too long ago. The carrier predicts it will post an

EBITDA of around $380 million and carry 22 per- cent more containers in Q1. Hanjin Shipping and

Hyundai Merchant marine, Korea’s two major carri- ers, also made it back into the black in terms of op- erating profits in the first quarter.

Also rebounding majestically all over the balance sheet was Neptune Orient Lines, parent of APL. NOL was close enough to smudge the black ink with a fat finger but fell just $98 million short. Still, it is a far better position to be in than the red drenched $245 million loss posted in last year’s Q1. So it appears that the container lines are bulletproof and there is plenty of business to go around at the moment.

But this is traditionally the moment when caution gets folded up into a neat little aeroplane and then tossed into the wind. Container shipping executives need to fight their instinctive need to chase market share and keep their hands in their pockets. It might also be a good idea to get them to switch off their

Blackberries so they aren’t tempted to call up a ship- yard newbuilding manager and put in an order for 150 27,000 TEU ships. The market has improved but there are still too many container lines in business, too much idle capacity and rates at too low levels to break out the bubbly. We are still deep inside “any- thing can happen” territory.

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Bharati Shipyard in Control of Great Offshore

One of the significant acquisitions in recent times in the Indian maritime sector ended recently with

Bharati Shipyard taking over Great Offshore

The battle for Great Offshore, country’s largest in- tegrated offshore services firm, has finally ended with

Bharati Shipyard in total control and ABS shipyard left trying to dilute its share holding in the company.

Last week Bharati Shipyard informed the Securities and Exchange Board of India (SEBI) of being in total control of the management of the company and the

Board of Directors.

Mr P. C. Kapoor, Managing Director of Bharati

Shipyard Ltd (BSL) informed that as on date his group companies owns 49.73 per cent shares in Great

Offshore and has been represented on the Board of

Director of Great Offshore through three member, viz

Vijay Kumar, himself (both promoters of BSL) and

Chetan Mehra. Their appointment was confirmed by the shareholders on 29th April, 2010. There after last week two more representatives came on the Board of

Great Offshore thus bringing the number to five rep- resentatives of BSL. For the two shipyards involved in the construction of a large array of specialized so- phisticated vessels for diverse offshore, coastal, and the marine market sectors Great Offshore, the inte- grated offshore oilfield services provider is consid- ered a value fit for their operation.

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Tier 3 and the Demise of HFO

Dr Herman Klein, of Germanischer Lloyd ex- pressed his belief that the forthcoming IMO Tier 3

NOx rules will make the continued use of heavy fuel oil impractical, forcing commercial shipping fleets to switch permanently to distillate fuel from 2016. Using SCR catalysts is not an alternative as they quickly become clogged using HFO. Dual fuel HFO/distillate is impractical – hence his pre- diction of the demise of after 2016. A possible al- ternative is the Ecospec CSNOx system of exhaust gas scrubbing. A solution is passed through an ex- haust scrubber to remove CO2, SO2 and NOx by absorption. Normal HFO can continue to be used, meeting the 0.1 percent sulfur 2010 EU Directive,

Tier 1 and 2 emission regulations and Tier 3 emis- sion requirements. In a recent address Dr Herman

Klein, Member of the Executive Board of Ger- manischer Lloyd expressed his belief that the forth- coming IMO Tier 3 NOx rules will make the contin- ued use of heavy fuel oil impractical, forcing com- mercial shipping fleets to switch permanently to dis- tillate fuel from 2016. At- tempting to meet Tier 3 using SCR catalysts is not an alternative as they quickly become clogged using HFO. According to Klein, the dual fuel HFO / distillate option is impractical and therefore does not provide a viable alternative – hence his pre- diction of the demise of HFO as a fuel for mer- chant ships and their obliged exclusive use of distillate after 2016. Klein did however concede, that a possible alternative (that was verified by rival ABS in Feb 2010) is the Ecospec CSNOx system of exhaust gas scrubbing. Using fresh or sea water treated to become alkaline by an on board electrolysis process, the solution is passed through an exhaust scrubber to remove CO2, SO2 and NOx by absorption and converted into harm- less substances found in water. The scrubbed water may pass through a filter to remove solids and may undergo a treatment to comply with discharge water standards. According to Ecospec, normal

HFO can continue to be used with the CSNOx sys- tem while meeting the 0.1 per cent sulfur 2010 EU

Directive. The present Tier 1 and 2 emission reg- ulations are surpassed and the stricter Tier 3 emis- sion requirements are fulfilled, eliminating the need for a duel fuel solution.

Posted by Keith Henderson on

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Container Carriers Comeback

Dr. Herman Klein

But this is traditionally the moment when caution gets folded up into a neat little aeroplane and then tossed into the wind. Container shipping ex- ecutives need to fight their instinc- tive need to chase market share and keep their hands in their pockets.