Wednesday, 7 December 2016

Shipping Review & Outlook : Dry bulk

 This article is based on the earlier research works of Mr. Daejin Lee to explain the recent trend of the shipping market with a special focus on dry bulk.

Shipping is 'Pigs or Chickens'?

'Shipping is just like the country market. By the time the farmer arrives at market with his pig and finds that all the other farmers have bred pigs, it is too late. Price will fall, and the farmer, who has feed bills to pay must accept the price on offer. But this situation was created a year earlier when prices were high and everyone started breeding pigs. The smart farmers saw what other farmers were doing and switched to chickens. This has nothing to do with what the demand for pigs or chickens. It is a supply-side management. We conclude that, like the farmer, the successful shipping company must know when to steer clear of pigs!' *

The story of 'Chicken and Pigs' is one of the best parts I have read in 'Maritime economics'. Bad investments often flow from inadequate consideration of the facts. Also, many decisions have been made out of sentiments because following the crowd rather than facts gives a blind comports to decision makers. However, if everyone has the same idea, it usually does not work.
The general consensus is that market is at or near the floor and now focus on the shape of the downturn – namely how long will the downturn last and how fast market could recover? For now, there seems no confidence in the freight market.

Did Shipping industry learn from history this time?

'Despite the recession, Shipbuilding launches an all time record. Considering the level of freight rates, the newbuilding boom is difficult to explain. It may have been triggered by anticipation of a market upturn. Shipbuilders trying to maintain their business volume may also have contributed' **

(Shipping market in 1906)
Above comment is describing what happened in 1906, more than 100 years ago! Heavy ordering mega-ships in recent years proves history repeats itself.
Thankfully, there are a few positive signals in dry bulk market. However, there are still too many shipyards with huge orderbook remaining out there. If the freight recovers a little bit, what would investors decide this time? Could Shipowners control their greed ?

The Bigger, the Younger?

There was a notable shift away from some of traditional sectors in recent years, with relatively fewer mini Cape(150k), Panamax(70k) and Handymax(40k) sectors being delivered, in favor of a larger portion of Newcastlemax(200k), Kamsarmax(80k) and Ultramax(60k) delivery.

Interestingly, it looks like a battleship :) 
The shape of the cannon (VLOC, Size 200-300k/ Built 1985-1995) is likely disappeared over the course of the next four years by the implementation of IMO Ballast Water Management Convention. The bridge shape (Valemaxes and Newcastlemaxes) can replace them anyway, but large enough?

Scrapping age 

The trend of reduction in the scrapping age has continued, with total 10.8 Mdwt(53%) of the tonnage leaving the fleet aged less than 20 years. The average demolition age usually follows the state of market, and unsurprisingly it dropped to 23.5 years in 2016, almost two years younger than last year.

Coal prices got the moment, then how about the freight market?

According to updated coal trade data, recent dramatic rises in coal prices have indeed raised the prospect of increased longer haul shipment from American continents such US, Canada, or Colombia, which could well support Cape and Panamax freight market in coming months.

It is true that coal demand will drop as China shifts towards cleaner energy in the long term, However, in the short term, even though the NDRC allowed some mines to ramp up output last month, partially reversing efforts to close mines and curb pollution and overcapacity, coal's price is still strong. Maybe the current soaring coal price has no fundamental foundation and is not sustainable, but we should remember sentiments and speculation is also a kind of market

Spot rate improves a lot but FFA indicates that the current strength would be temporary. 

The Baltic Exchange Dry Index climbed by 5% over the course of the month (Oct 2016) in spite of a sharp drop in Capesize earnings during the latter part of the month. 

While the other two smaller vessel sizes were almost unchanged from a month ago, Panamax has been the strongest performer of the four main Baltic index classes, with the average earning rising by $1,166/day to $6,596/day: increased coal related chartering activity have supported Panamax freight rate. 

Interestingly seasonal strength in US grain season, together with strong commodity prices, have raised physical earnings but still failed to translate into the paper market. Even though nearby prices improves driven by short-term seasonal trend, the prices for deferred contracts (Cal 2017-19) have not changed much from a month ago. It seems that market judges the current strength would be temporary. 
Do you agree with the FFA consensus? It is true that if the spot market is really reflecting a supply-demand balance, then it is future prices which will have to catch up.

Freight Model forecasts a slow recovery over the next 2-3 years

Recent forecast in BDI by the freight forecasting model for 2016 was 666p on 27th Jan 2016, and 629p on 28th Jun 2016. Its expected accuracy in 2016 is more than 95% considering figures of FFA Q4 2016 so far. Also, it forecasts slow recovery over the next 2-3 years, with upside potential remaining in 2nd half of 2017.***

Despite surprising rebound in Chinese coal imports, the demand side is not that hopeful in coming years. Therefore, the supply side management seems the only practical and proven solution.
The End.
* Martin Stopford, Maritime Economics (2009)
** Gould, Angier & Co. (1920)
*** The econometric excel model gives valuable ideas of what statistics indicates. Of course, as many of the variables in the model are highly unpredictable, it can not be always accurate, so the forecasting model should be seen as a tool to clarify risks rather than take a gamble.


My main focus is dry bulk commodities and freight, but I also cover tankers and oil/energy. Below is the link of my recent research works. If you would have any feedback or questions about them, I would like to learn from your expert views. Please feel free to comment and contact me anytime.

Daejin Lee


Friday, 25 November 2016

A Thanksgiving for shipping

The dry bulk market first experienced the worst ever freight market in recent memory but then tripled in a matter of months. Tankers have seen their rates halved, and limited interest for secondary market acquisitions and relatively weak prices. The containership market saw a government-blessed entity (Hanjin) go belly up, which pretty much by itself sums the state of the market; also, seven-year old panamax containerships these days are heading to the scrapyard. Finally, the offshore market has seen brand-new, top-tier drillships idling while another huge oil discovery in Texas has made offshore drilling an even more precarious proposition.

However, with the spirit of being thankful upon us, for the ‘harvest’ the industry has had this year and the overall results accomplished (mostly intangible results), one has to be hopeful and even thankful for the shipping industry’s prospects.

The drop of the market, especially in the dry bulk, has been the first time that people have gotten scared. Any other in the past, between 2009 to mid 2014, any dip in the market was considered a buying opportunity. Each time that rates would pull down asset prices, shipowners would generally use such an occurrence as an opportunity to buy vessels in the secondary market and also to order more newbuildings. The dismal state of the industry at present is partially the result of such an attitude. In 2016, for the first time, at least in our experience, one would see shipowners and operators being scared.

Dry bulk vessels burning cash day in and day out for more than a year has caused cash reserves to dwindle. On top of it, many owners had capital investment obligations due with their newbuildings. And, of course, no bank was in a mood to entertain new clients or lend to projects that didn’t perfectly fit their ‘box’. We are of the opinion that being scared (and possibly throwing in the proverbial towel) is medicine that the market had to taste some time ago in order for cooler decision-making to prevail. Still, now that the market has been improving, we have seen many generous souls (with mostly shallow pockets) buying vessels with all they can put together; in the stock market, this is called a ‘sucker’s rally’.

The continuously bad market has been forcing many shipping banks to get more active with their portfolios; some have been arresting vessels, some have been forcing their clients to consolidate, a lot more banks have been selling shipping loans to institutional investors and even more banks have stopped lending to shipping altogether. We think that we all have to be thankful for such activity; maybe not a perfect solution, but at least it curtails the extent of the ‘zombie-ness’ of the market, where ships and companies were being kept afloat by life support; at least now, some of the weaker hands start washing out. Private equity funds buying shipping loans will also be expected to be active and keep the pace of ‘natural selection’ on course. However, we all have to be thankful to shipping banks for stopping lending (this is the general truth, in spite of some banks claiming otherwise) as this has curtailed excessive enthusiasm in the market, and allow people to have a chance to let sink what’s really the state of the market – shipping banks are not and will not be what they used to be. Lack of debt financing has also brought up of the cost of financing for shipping, which we think is a healthy development; shipowners had gotten accustomed for too long to cheap and easy money at terms which were not commensurate with the industry’s risk profile.

We now see that shipowners have been adjusting their expectations that debt financing in shipping cannot be had for less than 6-9% for the majority of the shipowners, much higher than other lower tier owners and projects. Thus, we all have to be thankful for the shipping banks forcing a proper pricing of the market, which is a sign of a market sailing toward the right direction. (Incidentally, shipbrokers and other service providers are clearly not thrilled with the state of the financial markets as this has cut down on volume of transactions and commissions, but again, proper pricing and service have to be re-based anew for a functioning market.)

Investments in shipping by institutional investors have set a bad precedent, and at least on paper, losses from PE and public investments in the shipping industry of the few last years should be topping $15bn, again on paper. Some funds have lost big money, and they have been written about in the press.

However, there have been many more smaller funds with relatively short track records and marginal Assets Under Management (AUM), often in the $1-2bn range (yes, $1bn is a small amount of money in this world); for such funds, any losses in shipping, even small ones, can be ‘life threatening’. All in all, PEs have not been doing well as a low interest rate environment and hot stock markets have forced them to compete for same strategies and investments in a crowded market, thus allowing for paltry returns – often much lower than recent returns in liquid stock markets. However, the point that we all have to be thankful is that there is little appetite for newbuildings by institutional investors, which we think it’s a very crucial point. There is plenty of spare shipbuilding capacity, and in general good appetite by shipowners to order more vessels (but again, when owners didn’t like more vessels)? However, with institutional investors shying away from newbuildings, shipping banks shying away from shipping altogether, and export credit offered prudently to serious players, we find this point ) of no new money coming to the industry to expand supply) seriously worthy of being thankful about.

Despite the decent state of shipping at present, comparatively speaking to earlier in the year, we believe that there is still a long way until the light at the end of the tunnel. Certain factors have been developing favourably for the market, and we shortlisted three of them above to be thankful about; however, in many more respects, the market is in bad shape. There will be many more bankruptcies and defaults – whether for companies or projects, consolidations and merges, companies leaving the industry, professions and functions forced to change business models. Some people will be thankful but for many, it may be a thankless industry in the next few years in many ways.

But it will be a better industry serving the supply chain in a more thorough and efficient way based on economics and technology instead of gut feeling and speculation. Probably we ought to be thankful for that, too.

Thursday, 24 November 2016

Moving towards smart shipping

WISTA UK has said that smart ships are likely to be carrying cargoes within 10 years but all in the logistics chain need to adapt in order to make good use of the new technology and the huge amount of data that will be available as a result.

According to Sue Terpilowski, President of WISTA UK – the Women’s International Shipping & Trading Association UK – shipping will go from a “poor beginning” in terms of generating and using data to be at the forefront of new technology. All thanks to customer demand.
Ms Terpilowski, who is also Managing Director of Image Line Communications, said the change would see “talking” ships within 10 years.
“Even the paint will be able to tell you about the waves hitting the ship. These ships are going to be telling you about the weight and the stresses on deck when slow steaming would be appropriate and many more operational elements. There are many opportunities for the industry, but is it ready to take advantage?”
And she continued:
“Ship intelligence will be the driving force that will determine the future of the industry, the type of ships at sea and the competencies requires of tomorrow’s seafarers.”
Legislators, ship finance and service sectors will all need to make changes to cope with the advent of the smart ship and new skills will be required from operating companies. Technology is being developed that can be adapted to shipping operations and over the next five years Ms Terpilowski predicts that there will be machine to machine (M2M) and the internet of things (IoT) connectivity in logistics.
“The logistics sector wants transparency. As a smart ship to smart logistics means reduced inventory and production lines running at optimum levels. This allows two way planning – intelligent buying and customer services that combine articles from different sources.”
She sees the major benefits as:
  • Safety, security and quality of cargo
  • Cost effective utilisation of containers and equipment
  • More efficient logistics networks and infrastructure
  • Real time tracking, monitoring and control of intermodal shipments
  • Special benefits for reefer cargoes
In the case of reefer containers she explained that temperature control will be precise and visible to food standards authorities and customers alike. Shipper will be able to give a complete guarantee of the quality of food.
Furthermore, Shipping will be able to make fuel and environmental savings and illicit activities involving drugs, arms, people and wildlife, will all become more difficult.
Although the vessels will include a high level of automation, Ms Terpilowski doesn’t believe they will be without personnel onboard, although the smart ship will provide a safer working environment. The role of the seafarer may well be transferred ashore and the skills needed to operate vessels safely and efficiently will change.
Huge amounts of data will be available from smart ships and she predicts more opportunities for women in roles in the shipping industry.
“There will be a change in the way individuals work with much more highly skilled people. There will need to be planning for better training and the industry will have a different way of working. Where will these new thinkers come from? Who is good at this sort of thinking and at sciences – women. This is a golden opportunity for women to progress further in shipping.”

Shipping Stock Rally Raises Interest (and Questions)

NEW YORK, Nov 16 (Reuters) – Shares of U.S. shipping companies shot higher again on Wednesday, causing volatility halts in a number of stocks and raising questions among investors and analysts over the extent of their sharp post-election rally.
The jump in share prices and unusually heavy trading volume even surprised analysts who follow the stocks, although some said the gains appeared to result in part from optimism that commodity demand would increase under President-elect Donald Trump.
At the center of the rally has been DryShips Inc, an $82.9 million market-capitalization company that has been halted for volatility in recent sessions and is up about 1,500 percent since its close on the Nov. 8 Election Day.
The stock was halted again on Wednesday, and Nasdaq requested additional information from the company.
Shares of Diana Containerships Inc, Globus Maritime Ltd and Pangaea Logistics Sol Ltd also were halted multiple times for volatility.
A stock’s outsized move in a short time triggers a volatility halt. To keep the price within a specified band, the stock is halted for a set period, usually a few minutes, before trading resumes.
Globus Maritime was last up 161 percent, while Diana Containerships gained 172 percent, both in heavy volume, while Pangaea shares were up 17.5 percent. Among other companies, Safe Bulkers Inc was up 24.2 percent, while Seanergy Maritime Holdings Corp rose 46.8 percent.
A spokeswoman from the U.S. Securities and Exchange Commission declined to comment, while a spokesman from Financial Industry Regulatory Authority had no immediate comment.


Trump, a Republican, has pushed for more infrastructure spending and promised to help the U.S. coal industry.
“The bigger bull-case scenario is that demand is actually improved, as indicated by the resurgence in commodity prices,” said Stifel Financial Corp Director Benjamin Nolan, who covers maritime sectors.
But “these are pretty astounding moves,” he said. “There may be a number of factors, but any one of them, you wouldn’t imagine it would have this kind of impact, and it shouldn’t extend itself to all sectors” of the shipping universe.
The industry has been struggling with global overcapacity and sluggish trade. In the most visible sign of weakness, South Korea’s Hanjin Shipping Co Ltd filed for bankruptcy earlier this year. Its collapse led ports around the world to deny service to its ships as vendors refused to unload cargo for fear they would not be paid.
Shipping stocks’ recent meteoric rise has attracted more interest from short sellers. The shares are more expensive to borrow as well, at 55.85 percent for DryShips, up 36.7 percentage points from Monday’s close, for example.
Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey, said the rally concerned him.
“It’s going on for days,” he said. “If there is something illegal going on here, where are the regulators?”
Saluzzi said some of the extreme trading was probably exacerbated by the fact that many of these companies do not have a big supply of shares.
DryShips, for instance, has a free float of 1.06 million shares. On Tuesday, trades totaled 10 million.
Diana, which has a float of 5.77 million shares, already had 10.6 million traded before midday on Wednesday, compared with 4.8 million on Tuesday. (Additional reporting by Sinead Carew and Chuck Mikolajczak; Editing by Lisa Von Ahn)

Alphaliner: Panamax Exodus Set to Continue

Over 100 more classic Panamaxes would need to be scrapped in the coming months to re-balance supply and demand, and reduce the total pool to less than 470 units, compared to 670 units four years ago, according to Alphaliner.
Only such a drastic reduction could elevate rates from their current all-time lows of USD 4,200 – USD 4,500 per day, with positive side effects on the 2,700 – 3,800 TEU size bracket as well.
Hard decisions have to be taken, such as scrapping ten-year-old ships on the eve of their second Classification Special Survey. Since many cash-short owners can’t afford the survey-related costs, such vessels are being laid up, sold for scrap, or sold to bargain buyers at distressed prices.
Since the opening of the new Panama Canal locks on 26 June, no fewer than 120 classic Panamax ships, referring to vessels of 4,000-5,300 TEU on a 13 row/32.30 m beam, have been displaced from trans-Panama routes.
“The exodus is set to continue, with a further 30-40 classic Panamaxes to be removed from the trade over the coming months,” Alphaliner said, adding that the total redundancies of vessels in this size range are expected to reach 150-160 units by the end of the first quarter of 2017.
Non operating owners (NOO) bear the brunt of these redundancies, as carriers keep re-delivering charter vessels at an unprecedented pace. As a result, NOO units form the bulk of the 4,000-5,300 TEU vessel idle pool. In spite of 50 sales for scrap so far this year, the count of unemployed classic Panamax ships currently reaches 96 units, 30 of which anchored at long term lay-up spots in Asia.

MSI: Dry Bulk Market Heading Into a Firm Festive Season

After a steady fall in average daily TCE spot earnings in October, November saw an inflection point for Capesizes as the dry bulk market is sailing into a firm festive season, swiftly followed by a New Year comedown, according to research and consultancy firm Maritime Strategies International (MSI).
With rates soaring to over USD 16,000 per day, the Capesizes saw their highest rates since mid-2015. Some of this strength has translated to the Panamax market, although Supramax and Handysize earnings have been broadly unaffected.
A basket of key commodity prices, including iron ore, coking and steam coal, have surged in recent weeks, with falls in domestic supplies in China a key driver. This trend is forecast to continue through the fourth quarter but weaker iron ore and coal trade will impact Capesize and Panamax demand in the near term.
“The Capesize market is demonstrating what might be termed ‘frothy’ characteristics with patches of strong chartering despite weak underlying fundamentals,” Will Fray, MSI Senior Analyst, said.
“On this basis it is difficult to build a reliable view on how long this freight rate uptick will last, but in any case we expect spot rates to fall back below operating costs in the New Year. This will be mainly as a result of weaker iron ore trade in Q1, but by Q2 we expect to see stronger Chinese coal production limiting coal import requirements,” Fray added.
The MSI outlook for the Panamax market will be impacted by weaker coal demand to India, an effect magnified by the significant proportion of imports carried in Panamax vessels. Some improvement is expected towards the end of this year, but spot earnings are forecast to drop back again in early 2017 to below USD 6,000 per day, with barely any improvement into the second quarter of the year.
The New Year is also likely to see rates fall in the Handysize sector, partly due to expectations of strong Ultramax deliveries in the first quarter. However, MSI’s forecast of USD 6,000 per day in January and USD 7,300 per day in April is broadly positive, particularly when compared with the MSI outlook for Capesize and Panamax markets.

Thursday, 10 November 2016

How to carry bulk cargoes safely?

When bulk cargoes shift, liquefy, catch fire or explode due to poor loading procedures, the consequences can be critical – ships could capsize, lose stability or sustain severe structural damage. Occasioned by this kind of incidents the UK P&I Club has offered some good advice regarding the safe carrying of bulk cargoes.

According to the Club, precautions need to be taken before accepting solid bulk cargoes for shipment. Crew members have to be warned of possible liquefaction properties of bauxite (which was considered until recently a cargo not liable to liquefaction) as well as be advised on the issue of cargo residues deemed harmful to the marine environment; the changes to the IMSBC Code’s structure; and SOLAS mandatory enclosed space entry and rescue drills.
IMO Resolution MSC.393(95) introduced amendments (03-15) to the International Maritime Solid Bulk Cargoes (IMSBC) Code enter into force on 1 January, 2017, and could be implemented voluntarily from 1 January, 2016.

“Carrying solid bulk cargoes safely: Guidance for crews on the International Maritime Solid Bulk Cargoes (IMSBC) Code” guide jointly produced by Lloyd’s Register, UK P&I Club, and Intercargo provides details on the IMSBC Code’s key requirements and gives crew members greater confidence in managing the risks of carrying solid bulk cargoes and achieving compliance with SOLAS.
Sam James, Lloyd’s Register’s Head of Regulatory Affairs, said the guide is extremely useful to crew members as an aide memoire:
“Since the release of the original guide in 2013, it has heightened the awareness of seafarers, managers, charterers and shippers to the hazards associated with carrying solid bulk cargoes.
Stuart Edmonston, Loss Prevention Director at UK P&I Club, added:
“The main purpose of the guide is to provide on-the-spot references to help in practical situations.”

Improving your ships and operations is the key driving force of our business.

It is a goal stemming from a special dedication to our work and a deep understanding of our customers' needs.

We have achieved five important competitive advantages, leading to a more efficient and profitable ship operation.

We provide the widest range of services, including initiatives exclusively found at SMM (UK) Ltd..
We make sure that our products stay up to date and of superior quality.
We develop innovative products based on the latest marine and information technology.
We have a superior infrastructure to better serve our customers.
We develop and maintain a relationship with our customer based on trust and loyalty.
Our Purpose

Improvement with excellence of your ships and operations based on Multiyear Experience and Commitment.

Our Vision

To materialize “Fair Winds and Following Seas” for the global shipping industry via friendly, innovative and reliable software-products and services.

Code Of Ethics

The Company’s foundation are lying on alloys of integrity and excellence harmonized with the spirit and letter of all laws and regulations, as well as a devotion to the highest standards of professional and personal conduct.

Initiative and Innovation

 Our objective is to develop initiatives that focus on facilitating everyday ship management. This means flexible, easy-to-use software that will help our customers in their day-to-day work.

Our innovative Multiload© Ship Loading Software program is a very successful example of such software. It is the only loading program in the world covering seven ship types simultaneously. Following abovementioned software, our Ship Performance, Crew Rest Hours, Oil Record Book Trainer, SQUAT/Tide Calculation, Deflection and DWT Gain/Loss, Clean Hull Savings Calculator, Multiload Advanced Cargo Securing Software (MACS) , Bunkers Survey Software, Steel Coils Loading (Maximum Allowable and Actual Loading), are all designed to assist day-to-day ship management and operation. Furthermore, we provide coverage of your vessels and effective response in times of crisis via our Emergency Response Service (on a 24 hour basis). Also, our Multitask© Ship Management Software is designed to assist in easier day-to-day ship management. Importantly, this program can be tailored to individual company needs.

Last but not least, SMM (UK) Ltd. provides Services and Studies related to International Regulation Requirements and DESIGN WORK along with PLAN APPROVAL. In particular, STABILITY & STRENGTH MANUALS, Conversions, Ship Management Consultancy, Manuals - Studies & Plans as per SOLAS / MARPOL / IACS / Port State Control Requirements and ISM-related studies/manuals and other Naval Architectural and Marine Engineering projects.


Kindly note that we are a London based Marine Software Company with a subsidiary production facility in Piraeus since 1986, with clients almost all the Greek shipping companies and many others from the rest E.U., U.S.A. and Asia.
Our objective is to develop initiatives that focus on facilitating everyday ship management and operation materializing into user friendly, innovative and reliable software-products that assist our customers in their day-to-day work.

Potentially, some of your crew member may be well aware of our software products that were trusted by almost 3,350 vessels, an achievement, which proves the quality of our work over time.

The perpetual production of software-products throughout these years were proved of assistance in the demanding day-to-day operations of numerous shipping companies, constituting the brand name of our company along with our products highly recognizable worldwide.

Hereby, we wish to kindly draw your attention on the following range of software products that happened to be particularly popular amongst shipping companies with profile similar to yours esteemed side:
1. Multiload and Options (Loading Software)
2. SMM Emergency Response Service
3. SMM Ship Performance
4. Crew Work Rest Hours Software
5. Steel Coils
6. Ship Squat + Tide Calculations
7. Bunker Survey
8. Deflection and DWT Gain/Loss
9. Oil Record Book Trainer
10. Clean Hull Savings Calculator
11. Multiload Advanced Cargo Securing Manual
12. Draft Survey Online Software
Further, please consider that all the required studies for increasing the operational flexibility of your good vessels can be, also, undertaken:
- Addendum to Loading Manual for Carriage of Steel Products
- Mooring/Towing Modifications as per new PCA Requirements
- Study for Deck Cargo Loading
Relying on our expectation that SMM (UK) products can be proved of your assistance in your demanding day-to-day operations, we are at your disposal if any of the above software would be of your further interest in order to discuss more extensively relevant description of abovementioned products and how the promising benefits can be materialized.

Saturday, 5 November 2016

Canada to Implement Northern B.C. Tanker Ban This Year -Report

TORONTO, Nov 4 (Reuters) – Canada’s Liberal government will this year deliver on its pledge for a moratorium on oil tanker traffic along the northern coast of British Columbia, CBC News reported on Friday.

Transport Minister Marc Garneau confirmed the plan in an interview with CBC Radio’s “The House,” the broadcaster said on its website.

Canadian Prime Minister Justin Trudeau last year instructed Garneau to formalize the ban on oil tanker traffic, effectively slamming the door on a pipeline project that was already facing massive development hurdles.

The ban is one of several obstacles to the building of Enbridge Inc’s Northern Gateway pipeline, which would carry oil sands crude from near Edmonton, Alberta, to a deepwater port at Kitimat, British Columbia, for export to Asian markets.

Separately, Garneau said the government was looking at a recommendation that it privatize airports, but that “it’s not a front-burner exercise” and people should not jump to any conclusions, CBC said.

(Reporting by Jeffrey Hodgson; Editing by Leslie Adler)
(c) Copyright Thomson Reuters 2016.

Some of the latest SMM eNews

Some of the latest SMM eNews:

Dry Bulk: Average Speed

VLOC: Slow steaming for laden fleet continues, but the average speed reached 11.5 knots in October. Unladen fleet moves much faster, at a speed higher than 13.5 knots last month.

Capesize: The average speed has been relatively flat and low for laden ships of this size band, moving close to 11 knots since the beginning of the year, despite low bunker prices.

Panamax: Seasonality’s path has been followed so far, with last month’s average speed for laden vessels close to 11.3 knots.

Supramax: After marginally declining in February, the average speed for laden vessels was increasing till May, but started decreasing since early June, following seasonality’s trend, but staying rather flat last month.

Handysize: The average speed for laden vessels was higher than 11.5 knots between March and October.

Infographic: Shipping Alliances

As of 18 July 2016, the world’s shipping alliances include the 2M alliance (Maersk and MSC), the Ocean Three alliance (CMA CGM, UASC, COSCO Shipping), the G6 alliance (NYK Line, OOCL, APL, MOL, Hapag-Lloyd and HMM) and the CKYHE alliance (K Line, COSCO, HANJIN (now bankrupt), Evergreen, Yang Ming).

How Does Shipping's Accumulator Look Now?

Eight years ago, the onset of the financial crisis following the demise of Lehman Brothers heralded a generally highly challenging time for many of the shipping markets, which today remain under severe pressure.

Ports Support North Sea, Baltic Sea Designation as NECA

The port authorities of Antwerp, Hamburg, Rotterdam, Le Havre and Bremen/Bremerhaven have voiced their support of the North sea and the Baltic countries’ submissions to designate the North Sea and the Baltic Sea as Nitrogen Emission Control Areas (NECA) by 2021.

Friday, 4 November 2016


It goes without saying that vessels consist the most cost efficient way of transportation.
However, is that enough for such option of goods transportation for a company?
How safe are the transported commodities and by which tools, such safety of cargoes transportation is ensured?
We have met Mr. Spiros Malliaroudakis, Managing Director of S.A. Malliaroudakis Maritime (UK) Ltd., with whom we have discussed about the Loading Instrument "Multiload© for Windows", which contributes to more efficient, quicker but also safer loading/unloading operations.


As Mr. Malliaroudakis explained to us, the loading/unloading operation of a vessel is particularly crucial for the safety not only of the cargo but also of the ship herself. Therefore, there is strict regulation for stability and strength aspects. The impression generated around the vessels’ strength given their considerable volume, is as outlined by Mr. Malliaroudakis, false, considering the fact that the thickness of plate is about 22 mm while their length is about 220 meters and their breadth about 19 meters, which surprisingly proves that in ratio the hull is much thinner than the shell of an egg.

If on the above, we take into consideration the bad weather conditions under which the ships are sailing, as well as the operational restrictions of the ports (ie: Draught Restrictions), then the proper loading/unloading operation is of utmost importance. Moreover, as particularly mentioned by Mr. Malliaroudakis, when a vessel is at port, a certain loading/unloading sequence shall be followed, and not necessary from aft to forward, while if a vessel of 170 meter length load only on the aft and forward part, it is very likely to suffer from damage, before her leave from harbor.

From the above, it is conceived that the triptych, strength, cost of construction/operation and trading pattern, is elementary for the choice of a vessel and the management of her potential cargoes.

Multiload© for Windows

This system is a program that pre-calculates the loading of a ship ensuring the maximum allowable cargo intake in correlation with International Conventions and Regulations in terms of Stability and Strength. This product is tuned as per ship specific aspects, adjusting their loading to the potential port restrictions of several port calls worldwide.

Multiload for Windows covers all ship types amongst bulk carriers, tanker ships, general cargo vessels, container ships, vessels with dangerous cargoes, LPG, LNG, Ro-Ro, passenger vessels, motorships from 2.000 to 500.000 tons etc.

The superiority of "Multiload for Windows" is attributed to its simplicity and to its easy-to-use philosophy, considering, as mentioned by Mr. Malliaroudakis, that this software has been designed from Naval Architects & Marine Engineers oriented to Mariners and not from Naval Architects & Marine Engineers oriented to Naval Architects & Marine Engineers, outlining in that way its practical orientation.

During Mr. Malliaroudakis presentation, it was explained that the program is based on simple question on every screen and the only thing that requires is the input of cargo details (ie. Stowage Factor, Type) as well as possible restrictions (ie. port draft restrictions, transit from Panama Canal (maximum allowable draught is 12.04m (tropical fresh water) and maximum allowable breadth is 32.20m)) avoiding in that way considerable delays.

In particular, the parameters that are taken into account are distinguished into operational and technical ones. To begin with, "load line" is defined and the allowable strength limits in harbor and at sea are calculated. Then, any check concerning port draught restriction is effected, based on which the maximum DWT of the vessel is calculated. Besides the loading operation, it is possible to assess the F.O./D.O. quantities required for the several stages of a voyage, along with time and bunkering call depending on the covered miles and consumption figures.

Further, concerning the technical parameters, according to Mr. Malliaroudakis quote, “the shipowner is not well aware in full depth of all the vessel’s capabilities and technical aspects, as being mentioned analytically in the Loading Manual and Trim & Stability Booklet.

During development of "Multiload for Windows", the Naval Architects and Marine Engineers of the company, insert all the info included in these Manuals along with additional documentation for a flawless ship specific onboard and office use.

Referring, specifically to the container ships, Mr. Malliaroudakis outlines that “Multiload” offers the possibility of perpetual tracking of cargo during the voyage from Far East to Europe, considering that the loading plan is being altered continuously. 
Operational Flexibility

The concept of operational flexibility is linked closely to the technical vessel’s aspects along with the loading instrument that assist in improvement of her flexibility capability. Mr. Malliaroudakis outlines that it is common fact the order of a vessel is exclusively based on her DWT, which corresponds to the Cargo that can be carried.

However, many times, it might be proved more beneficial a vessel to carry a cargo, having certain cargo holds empty and some fully loaded, especially if it concerns heavy cargo, as the loading/unloading operation of such distributed cargo is more efficient.

An equally important parameter is the local strength, which commonly differs from one point to another. For instance, in some vessels, the plate is thinner locally, while somewhere else, the plate is found to be thicker.

From the above, it is sensible that the choice of a vessel requires the consideration of numerous parameters, which drastically affect her operational flexibility. The contribution of advanced tools such as “Multiload” to the maximization of operational capability is rendered of fundamental value, as that software incorporates and calculates easily and simply all the essential parameters facilitating considerably the Operators and ensuring simultaneously Fair Winds and Calm Seas during the whole voyage.

Spiros A. Malliaroudakis, Managing Director
of S.A. Malliaroudakis Maritime (UK) Ltd.