Maritime News Update Week 46/2019

Higher Volumes, Better Rates Push Hapag-Lloyd’s Earnings Up

German shipping major Hapag-Lloyd said it doubled its operational result in the first nine months, accompanied by an increase in transport volumes and average freight rate.

For the period ended September 30, 2019, Hapag-Lloyd’s earnings before interest and taxes (EBIT) jumped to EUR 643 million, compared to EUR 299 million reported in the first nine months of 2018. The group net result surged to EUR 297 million from EUR 13 million seen a year earlier.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) surpassed EUR 1.5 billion, compared to EUR 812 million in the nine-month period of 2018, and includes a positive effect of EUR 341 million caused by the new reporting standards IFRS 16.

After the first nine months of the year, revenues rose to EUR 9.5 billion from EUR 8.5 billion a year before.

Furthermore, Hapag-Lloyd saw an increase of 1.2 percent in its transport volume which landed at 9,011 TTEU, up from 8,900 TTEU reported in the first nine months of 2018, while the average freight rate climbed by 4.2 percent to 1,075 USD/TEU from last year’s 1,032 USD/TEU.

Transport expenses increased by 3.5 percent, in particular due to a slightly higher average bunker consumption price of USD 425 per tonne and a stronger average US dollar exchange rate against the euro.

“Despite geopolitical tensions and trade restrictions, we benefitted from higher transport volumes and better freight rates and also kept a close eye on our costs. And the same holds true for our strategic goal of becoming number one for quality,” Rolf Habben Jansen, Chief Executive Officer (CEO) of Hapag-Lloyd, said.

Looking ahead, Hapag-Lloyd expects an EBITDA in the range of EUR 1.6 to 2 billion and an EBIT in the range of EUR 0.5 to 0.9 billion for the full financial year 2019.

China to take over Uganda’s main assets over unpaid rising huge debt

Ugandan government is now at risk of losing its main state assets to China over unpaid huge increasing loans from Chinese government.

But according to Ugandan government, the growing debt is sustainable, and the country is not at risk of losing state assets to China, the country’s finance minister, Matia Kasaija.

African Stand reported in December last year that Kenyan government risks losing the lucrative Mombasa port to China if the country fail to repay huge loans advanced by Chinese lenders, but both Chinese and Kenyan officials have dismissed that the port’s ownership is at risk.

Others think Chinese government are in some ways gangsters, taking over mines all over Africa, sending thousands of Chinese workers, destroy environment, bring the minerals such as copper, sink, gold, silver, diamonds etc home, and make deals with corrupt politicians to plunder the countries.

“The case is one of the examples of China’s ambitious use of loans and aid to gain influence around the world and of its willingness to play hardball to collect,” says the New York Times

RCL adds Guangdong – Cambodia connection

Thai-listed Regional Container Lines (RCL) has added a direct call between Guangdong, South China and Cambodia.

RCL is adding a call in Dongguan in Guangdong to its RSK service which now connect Taiwan, South China, Hong Kong, Cambodia and Southern Thailand. The first call in Dongguan will be from 16 November with the vessel Ratha Bhum.

“Dongguan will be the first direct call between Guangdong province and Cambodia.  Our customers in the Pearl River Delta area have encouraged us to call directly in Guangdong for faster connectivity on their time sensitive raw material shipments of garments and footwear to Cambodia,” an RCL spokesman said.

“At the same time, our wood product customers in Songhkla, Thailand will enjoy better connectivity via Dongguan to the Pearl River Delta with their comprehensive network of barge services”.

Transpacific trade set for annual drop in container volumes

The Transpacific container shipping trade is forecast to contract on an annual basis this year for the first time in a decade, according to analyst Alphaliner.

In its weekly newsletter Alphaliner said that the eastbound Transpacific trade was expected to record a 2% drop in annual volumes for in 2019, the first time the trade has contracted annually since 2009 at the height of the global economic crisis.

The trade had remained in marginally positive growth territory in the first three quarters of the year despite the ongoing trade ware between China and the US. However, unlike Q4 in 2018 when there was a surge in volumes driven by fears of a trade war and higher tariffs in 2019, this is not being repeated in the fourth quarter of this year.

In the first 10 months of 2019 the eastbound Transpacific trade has grown just 0.02% to 13.15m teu.

“Latest transpacific liftings data for the month of October showed a -3.9% drop, with even larger declines expected in November and December as the exceptional record volumes, recorded in the last two months of 2018, are not expected see a repeat this year,” Alphaliner said.

Underscoring the likelihood of an overall annual fall in volumes in October the US West Coast ports of  Los Angeles, Long Beach and Oakland recorded a combined 12% fall in volumes.

Maersk Invests in Return Logistics Start-Up ZigZag

Danish shipping giant Maersk has, through its corporate venture arm Maersk Growth, invested and became a strategic partner to a UK-based return logistics start-up ZigZag Global.

“We are excited to support ZigZag’s ongoing growth. Returns are a huge, costly and often under-managed component of the e-commerce experience,” Oliver Finch, Investor at Maersk Growth, said.

Finch explained that ZigZag helps retailers to reduce the cost and complexity of managing returns with its software and functionality. The SaaS platform provides granular visibility of returns and drives seamless coordination of service providers. This simplifies the complex process of returns from the business and consumer perspective.

“Retailers and customers alike benefit from these improvements and efficiency gains – via increased speed and quality of return logistics, broader customer engagement and care options, and a clear reduction in the costs and waste associated with retail returns,” according to Finch.

“In addition to allowing us to reach more customers whilst remaining carrier agnostic, the funding and Maersk’s extensive reach and expertise will allow us to further develop our product offering to deliver even more value for retailers throughout the supply chain,” Al Gerrie, Founder of ZigZag, added.

Existing customer performance studies demonstrate that ZigZag’s platform can reduce costs and waste associated with retail returns by up to 57%. The company can also meaningfully reduce the environmental impact of returns and contribute to corporate sustainability goals.

Maersk to Pilot Battery System on 4,500 TEU Boxship

Danish shipping giant Maersk will install a containerized 600 kWh marine battery system on board the 4,500 TEU Maersk Cape Town in December 2019 to improve vessel performance and reliability while reducing CO2 emissions.

“This trial will provide a greater understanding of energy storage that will support Maersk in moving towards further electrification of its fleet and port terminals. Maersk will continue to facilitate, test, and develop low-carbon solutions on our journey to become carbon neutral by 2050,” Søren Toft, Maersk COO, said.

The company explained that propelling marine vessels with battery power alone “is still years away from being a technically- and economically viable option.”

However, marine battery systems can be used to improve the efficiency of a vessel’s onboard electrical systems such as the Maersk Cape Town’s generators. By maintaining the vessel’s auxiliary generators at a more optimal load, and avoiding running generators when not needed, overall fuel consumption can be reduced, Maersk noted.

Additionally, it will support the generators with up to 1,800 kVA of power during rapid changes in electrical load such as thruster operation, which can reduce generator maintenance requirements.

“This exciting pilot – the first of its kind in the industry – will show the potential of battery technologies to keep improving the performance of our vessels while also reducing fuel consumption in our non-propulsion electrical systems,” Ole Graa, Maersk Head of Fleet Technology, said.

The containerized battery energy storage system has been manufactured in Odense, Denmark by the system integrator and turnkey supplier Trident Maritime Systems. The battery system will be shortly transported to Singapore and installed on board the Maersk Cape Town.

The Singapore-flagged vessel sails between West Africa and East Asia. Its first full voyage with the new system in place will be undertaken next year and “will be closely monitored to evaluate the performance of the system against the trial’s ambitions,” according to Maersk.

Battery modules will be operating within the container in conjunction with other electrical and control components.

“The application of battery technology and the understandings gained can enable further innovation across A.P.Moller- Maersk. We have an interest in working with suppliers to grow these possibilities as the technology matures,” the company concluded.

Hamburg port readying to serve more mega boxships with three new cranes

Germany’s Hamburger Hafen und Logistik AG (HHLA) has taken delivery of three new container gantry cranes for its Container Terminal Burchardkai (CTB) in Hamburg, providing additional capacities for handling ultra large containerships with cargo volume of 23,000-teu and more.

The three state-of-the-art container gantry cranes manufactured by China’s ZPMC will replace three smaller units at CTB, which have already been dismantled.

HHLA is expecting delivery of another two large gantry cranes of the same type in the first quarter of 2020.

After the new handling equipment has gradually commenced operating, HHLA will add one more mega-ship berth at CTB from its existing two.

“By investing in five new container gantry cranes and creating another mega-ship berth, we are providing our shipping company customers with additional capacities and greater flexibility in handling ultra large container vessels with a transport capacity of more than 23,000 standard containers,” said Jens Hansen, executive board member of HHLA.

Last year, the number of calls at Hamburg port by boxships with a capacity of 18,000-22,000 teu increased by 47% to 150 calls. HHLA noted that this trend is continuing, with the figure going up by almost 40% in the first half of 2019.

HHLA observed that this development is a challenge for terminals worldwide. Up to 14,000 teu per ship call must be loaded and unloaded within the shortest of time frames.

Currently at HHLA CTB, over 30 container gantry cranes are in operation, including 18 suitable for mega-ships.

The investment in new container gantry cranes is part of an expansion programme at CTB. In addition to new cranes and other handling equipment, this includes the construction of new storage blocks and the expansion of the container railway station in 2019.

HHLA plans to invest EUR1bn ($1.1bn) throughout the group by 2022, approximately EUR450m of which will be spent on container handling.

(Source: World maritime news; Seatrade maritime; American Shipper)