MARITIME NEWS UPDATE WEEK 25/2020

BREAKING NEWS:

Ba Ria - Vung Tau: Many disadvantages for import and export activities
According to the Department of Industry and Trade of BR-VT province, in May 2020, total export turnover of BR-VT decreased 13.45% over the same period, reaching only US $ 767.69 million. In the first 5 months of the year, import-export turnover of the province to export markets has decreased. Typically, the Asian market continued to decline by 19.16% over the same period, in which, exports to some countries and territories plummeted due to the impact of the Covid-19 epidemic such as: Malaysia decreased by 65.68 %; Indonesia decreased by 62.1%; China decreased by 57.27%; Taiwan (China) decreased by 57.24%; Philippines decreased by 57.05%; Thailand decreased by 52.15%; South Korea decreased by 47.86%; Myanmar decreased by 35.42%.
Iron and steel products sharply decreased in the first 6 months of 2020 and continues to decline due to the shortage of raw materials. Expected revenue of this item in 2020 is only 3,675 billion VND, down 14% compared to 2019.
Regarding the activities of enterprises, the Management Board of Industrial Zones in BR-VT province updated that although the majority of enterprises in industrial zones are specialized in the electricity, gas, fertilizer, building materials industries. construction, steel, mechanical processing, shipbuilding still operate normally. However, the restriction on travel and immigration led to the shortage of foreign workers who are experts, managers and technical workers, causing difficulties for businesses due to the lack of operating personnel for production, business as well as project implementation. Some projects are re-scheduled because Chinese experts have not returned to work. A number of 2019 FDI projects from South Korea and China investing in Chau Duc Industrial Park are delayed and still in the stage of investment preparation because investors cannot pass through the epidemic zone.


MARKET NEWS:

Tianjin Port and SITC launching new shipping service to Southeast Asia
The north Chinese port of Tianjin and shipping logistics service provider SITC International Holdings (SITC) are jointly setting up a new service for Southeast Asia.
Four 1,800 teu containerships will be deployed on the service that will provide a direct shipping service from China to Ho Chi Minh/Qui Nhon in Vietnam and Bintulu in Malaysia.
With the improvement on Covid-19 control and prevention, the cargo volume for Tianjin-Southeast Asia is recovering, the shipping cost could be further reduced when the new shipping service started.
Tianjin Port and SITC also signed port and shipping strategic co-operation framework agreement to focus on the container shipping routes developing in Asia and promote sea-rail combined transportation.
Currently, Tianjin port is connected to over thirty container shipping routes to Southeast Asia. The port posted 17.3m teu container throughput in 2019.


300 Maersk vessels to help improve ocean and climate science
Danish container shipping major Maersk will be assisting global research efforts on weather patterns and climate change by committing its 300 owned vessels to participate in the global Voluntary Observing Ship (VOS) program.
While Maersk already has many vessels contributing to the VOS, the newly expanded commitment will see its entire fleet participating by the end of 2020.
As explained, the recorded data helps meteorologists create more accurate weather and storm forecasts – and will also be used in the creation of atmosphereocean models that will help scientists better understand climate change.
“As a global container logistics company, our vessels form a vital role in keeping supply chains moving safely and timely. Helping weather forecasting and climate science advance makes great sense to us, since both of these areas affect our operations in various ways,” Aslak Ross, Maersk’s Head of Marine Standards, commented.

Improving data accuracy and efficiency – digitally

While scientists have been collecting and sharing weather and ocean condition observations for over 150 years around the world, technological advances have significantly increased the amount of information that can be shared.
A typical VOS records and transmits observations manually, with a vessel crewmember reading data from instruments onboard the ship, or in some cases through automated weather stations (AWS). The data is then sent to the various national meteorological services for use in weather prediction models and to monitor actual conditions at sea.
To obtain more data with higher precision, the first five Maersk vessels participating in the VOS program are equipped with a more advanced type of AWS, called the European Common Automatic Weather Station (EUCAWS). The EUCAWS system automatically collects data on atmospheric pressure, air temperature and relative humidity and transmits them hourly to designated research stations.
By the end of 2020, a total of 50 such stations are planned to be operational on Maersk vessels, providing the largest fleet of AWS from a single company.
“If we can help create even marginal improvements to the quality of weather routing services, these will be important levers in our constant efforts to improve the safety of our crews and assets and ensure reliable arrival times for our customers’ supply chains,” Ross said.
 While over 3,000 ships are involved in the VOS program, overall participation has declined in recent years due to the reduction in the global commercial fleet’s financial and crew resources. New technologies such as AWS and electronic logbooks, however, have led to an increase in the quantity and quality of observations from each vessel.
As the world’s largest container ship fleet operator, Maersk is expected to make a significant contribution to improving the amount and quality of data available to the study. 
“Climate change is one of the biggest challenges facing the global community, impacting our business as well as the societies and customers we serve and partner with in enabling trade. We have an ambitious strategy to decarbonize our fleet of vessels by 2050 and as we execute this plan, we are proud to have our vessels and crews help researchers in gaining a better understanding of this key global challenge,” Ross added.
In the United States, Maersk has worked actively with the VOS partner organization and the U.S. National Oceanic and Atmospheric Administration (NOAA) on a variety of environmental programs. These have included testing air quality and vessel stack emissions and whale protection programs on both coasts. 
“We are pleased to be able to expand our long-term work with NOAA to help gather high quality data to improve understanding of global weather and climate conditions. This complements our work here in the US with NOAA on air quality, vessel emissions and protecting endangered whales,” Lee Kindberg, Maersk North America’s Director of Environment and Sustainability, noted.
As an integrated container and logistics company, Maersk operates in 130 countries and employs 70,000 people.


CMA CGM remains optimistic despite coronavirus
Despite challenges caused by the coronavirus pandemic, French container shipping major CMA CGM closed the first quarter of this year with a positive net result.
The company saw a net income of $48 million in Q1 2020, an increase of $91 million when compared to a net loss of $43 million suffered in the corresponding period a year earlier.
As explained, the result includes a $185 million gain from the disposal of port terminals to Terminal Link.
During the first quarter of 2020, in the context of a slowdown in world trade and a decline in carried volumes, CMA CGM Group revenues amounted to $7.19 billion, slightly down compared to the $7.41 billion recorded in the same period last year. 
Shipping revenue declined by 3.3 per cent compared to Q1 2019 to $5.52 billion. Volumes carried by CMA CGM decreased by 4.6 per cent compared to the first quarter of 2019 due to the impact of COVID-19 and more specifically the shutdown of factories, particularly in Asia in February and March. Nevertheless, revenue per carried container improved slightly, due mainly to the application of fuel surcharges.
The group’s operating performance improved significantly. Adjusted EBITDA for the group increased by 25 per cent to $973 million, equating to a margin of 13.5 per cent, up 3 percentage points relative to the first quarter of 2019.
During the quarter, CMA CGM strengthened its cash position with a syndicated loan of 1.05 billion euros ($1.1. billion). Signed with a consortium of three banks, the loan is 70 per cent guaranteed by the French State and is part of the scheme set up by the government in response to the COVID-19 crisis and validated by the European Commission.

Outlook and energy transition

Lockdown measures taken even more in Q2 2020 in response to the spread of COVID-19 around the world are weighing on global consumption and increase uncertainties. The group expects volumes to decline by about 10 per cent over the first half of the year. Operating performance for the second quarter, however, should show significant improvement thanks to the industry’s discipline and the group’s cost control policy, CMA CGM said.
CMA CGM said it has developed a range of commercial and digital solutions to adapt and protect its clients’ supply chains. Looking ahead, the group intends to maintain ‘a spirit of adaptation and innovation’ for the shipping and logistics of tomorrow with, in particular, the development of teleworking and the acceleration of digitalization in the industry.
The group intends to pursue and strengthen its strategy that relies on four major objectives — controlling every stage of the supply chain to offer end-to-end solutions to its customers; promoting the regionalisation of trade which accounts for a growing portion of the business; driving the digital transformation of shipping and logistics industry; and accelerating the industry’s energy transition.
In particular, the group is strengthening its commitment in favour of more balanced and environmentally friendly global trade. At a United Nations conference held on June 2, 2020, Rodolphe SaadéChairman and Chief Executive Officer of the CMA CGM Group, announced the group’s target to be carbon neutral by 2050.
Alternative fuels are expected to account for 10 per cent of the group’s fuel consumption by 2023. 2020 will mark a major step with the delivery of the first 23,000-TEU container ships powered by LNG, allowing to reduce CO2 emissions by about 20 per cet and eliminate nearly all sulphur and fine particle emissions.
The good results of the first quarter demonstrate the strength and the resilience of the group… Despite the uncertainty around global economy, we anticipate an improvement during the second quarter, thanks to our operational flexibility and our discipline in terms of cost control,” Rodolphe Saadé commented.
The current situation reinforces our conviction that it is essential to develop better balanced economic exchanges, whilst respecting the environment. We have set carbon neutrality by 2050 as our objective and we are ready to face future challenges “.  


China Merchants Port teams up with Alibaba and Ant
China Merchants Port Group, the biggest port operator in China, has signed a strategic cooperation agreement with e-commerce giant Alibaba, and its affiliate Ant Financial Group to create a new smart port platform.
The three parties plan to integrate port services, internet, big data, and financial services, by innovating service models with the goal of building an open and interconnected digital port logistics ecosystem.
The new platform would be based on blockchain technology with the aim of facilitating trade by allowing buyers and sellers of goods to carry out contactless digital export and import transactions.
Furthermore, the trio plans to jointly provide support and services for world trade facilitation, carry out comprehensive, multi-disciplinary and in-depth cooperation in the countries along the “Belt and Road Initiative”, and build a community of responsibilities, interests and shared future.
Digitalization and automation of operations in the port sector are gaining ground, especially in the wake of the coronavirus pandemic where remote operations are being viewed from a completely different perspective of health and safety.
Blockchain has the potential to boost port efficiency considerably as it would save time and money while cutting the red tape at the same time.
However, considerable processes and data streams are yet to be standardized and streamlined in order for this to be achieved.  
                                                            (Source: The Maritime Executive, VNCustomsNews, Seatrade Maritime)