Wednesday, July 8, 2015

New Asian Deal, New Container Ship Order and More for Maersk This Week

Largest Shipping Line Changes Tactics from Mega Box Carriers
Shipping News Feature

DENMARK – HONG KONG – SOUTH KOREA – WORLDWIDE – Lots of news from Maersk this week as the largest container shipping line in the world signs an agreement with Dubai headquartered logistics group GAC to handle all the husbandry requirements of both Maersk and MCC vessels calling at Hong Kong. Under the two-year contract, which commenced on 1 July 2015, GAC will handle more than 1,000 calls annually at all the city’s ports and terminals. MCC is the Singapore based box carrier whose 80 vessels supply all Maersk’s intra-Asian shipping needs.

Hong Kong ranked as the world’s fourth largest container port with a throughput of 22.3 million TEUs in 2014. In 2015, however, container throughput year-on-year declined, dropping by double digits in March 2015. The port’s handling capacity has been impacted by a number of factors including greater deployment of mega container vessels, a substantial rise in river barge traffic (these are increasingly favoured over above ground transportation for the movement of cargo containers) and the port’s increasing reliance on international transhipments.

Thomas Okbo, GAC Hong Kong’s Managing Director, believes that this trend may yet be reversed and that container throughput will rebound meaning Hong Kong will see moderate growth in the near future, saying:

“Hong Kong will continue to be one of the world’s thriving container ports. With enhanced port handling capacity, I expect the throughput to turn around, which will in turn boost the demand for our shipping services. When Maersk Line wanted to outsource its husbandry operation in Hong Kong, we put together a dedicated team to handle the account, in close cooperation with four professionals from their husbandry team. With more than 40 years of agency experience in Hong Kong, we have what it takes to meet their needs.”

Maersk spokesman Danny Chen, Director Procurement, Far East Asia Liner Operations Cluster of Maersk Line (China) was clear as to why GAC has been selected to handle the husbandry contract saying:

“We chose GAC to handle our husbandry requirements in Hong Kong based on its established track record in ship agency, marine and crew transportation in South China, as well as our shared corporate ethos of delivering on promises of performance.”

Maersk has also been busy on ensuring its fleet of around 600 ships with a combined carrying capacity of 2.9 million TEU stays out in front of the competition, with the news that the company has just signed a new building contract with Hyundai Heavy Industries (HHI) for nine more vessels. These will be 14,000 TEU ships and there is also an option for eight more of the 353 metre long box carriers.

This is the third new-building order in Maersk Line’s investment programme announced in September 2014. The order follows the seven 3,600 TEU feeder vessels and eleven 19,630 TEU Triple-E vessels announced earlier this year as part of Maersk Line’s $15 billion investment in new-buildings, retrofitting, containers and other equipment. Maersk Line will thus be able to acquire the capacity it needs, replace less efficient tonnage and increase its share of owned vessels. The Maersk order book currently corresponds to 0.5 million TEU or approx. 16% of Maersk Line’s current fleet (excluding options).

The orders consist of 7 x Baltic Feeder vessels for delivery in 2017, 11 x 19,000 TEU vessels for delivery in 2017-18, 11 x 9.5-10,000 TEU chartered vessels 2015-16 and these 9 x 14,000 TEU vessels for delivery in 2017. This tranche of the programme has a value of $1.1 billion and was signed by Mr. Sam H. Ka, Chief Operating Officer (COO) of HHI and Mr. Søren Toft, COO of Maersk Line, at a ceremony at Maersk Line’s headquarters in Copenhagen. Søren Toft commented on the versatility of the ships saying:

“I am very pleased about this order for which we have taken a new approach. The vessels will be designed to operate in and perform efficiently across many trades and not just designed for one specific trade. They will help us stay competitive and make our fleet more flexible and efficient. We have a long and good relationship with HHI. The quality of the vessels has always been up to high standards and we look forward to receiving this new batch.”

Designing vessels with a flexible operational profile is somewhat of a first for Maersk Line. By moving away from hulls designed with a certain speed and draft in mind, Maersk Line is strengthening its fleet with vessels which can be deployed on East-West or North-South trades where requirements differ, with no impact on fuel consumption. The nine vessels will join Maersk Line’s fleet in 2017 and sail under Singaporean flag. Since 2002, HHI has delivered more than 50 container vessels to Maersk Line, including 22 WAFMAX vessels (4,500 TEU), which were delivered in 2011-13.

THe port managers having dredged the channels into the Port of Baltimore recently, Maersk has also announced its return to the east coast port. Maryland state officials say the company is to start providing three weekly services from Far Eastern and European ports carrying around 30,000 new shipments annually. The dredging was commissioned to ensure Baltimore was not left behind when larger vessels begin to transit the improved Panama Canal next year. Speaking of the move Michael White, president of Maersk Line North America observed:

“Today’s global supply chains require stable, smooth-running transportation services that enhance supply chain integrity and improve productivity.”

Over at Maersk Oil, Exova, the global testing, calibration and advisory services provider, has been awarded another contract to provide materials qualification testing for the company. The contract is an extension of the testing Exova has previously undertaken on down-hole tubulars for Maersk Oil’s North Sea Culzean Field Development Project in 2014.

In addition to bespoke materials qualification testing, the new contract also sees Exova provide two sets of electrochemical corrosion tests as well as a programme of Galvanically-induced Hydrogen Stress Cracking (GHSC) tests. Helene Jones, general manager at the Exova Corrosion Centre in Dudley, said:

“We are proud to extend our relationship with Maersk Oil. The company demands the highest standards of testing services and the capabilities we offer through our dedicated corrosion centre in Dudley mean we are well placed to meet its requirements.”

Photo: Søren Toft of Maersk and Sam H. Ka of Hyundai Heavy Industries seal the deal on the nine new ships.