The digital imperative in container shipping
The time has come for the container-shipping industry to join the digital revolution. Digital opens the door for carriers to strengthen their direct relationships with end customers, further reduce their costs (including for fuel, vessel operation, and customer service), and pursue new revenue streams beyond traditional shipping services.
Only a few leading carriers have applied digital technologies toward enhancing their commercial and operational activities. Box tracking, empty-container repositioning, document management, network design, and pricing are among the activities that these carriers have started to digitalize. Although the rewards of a digital transformation can be significant, so are the challenges to making it happen. To succeed, carriers must adopt a structured approach to defining a digital vision and integrating new technologies, capabilities, and mindsets into their traditional way of working.
Korean shipbuilding industry back on recovery path
This year, the Korean shipbuilding industry is continuing to land orders. It is said that the shipbuilding industry which has suffered from an order cliff since 2016 is clearly making a recovery thanks to new orders. Some experts expect a recovery in Korean shipbuilders’ business performances after the second half of 2018.
Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering surpassed one trillion won in cumulative orders, respectively, this year. Hyundai Heavy Industries expects to reach 50 percent of its order target by the end of the first quarter. A green light was given to Korea’s three biggest shipbuilders with respect to reaching their goals for the year which are to secure orders and reach their order targets.
Distillate demand boost from shipping sulfur rules to be brief: IEA
A sharp increase in demand for distillates following new shipping fuel rules will fade quickly, the International Energy Agency said last Monday. New rules implemented by the International Maritime Organization (IMO) will significantly cut the amount of sulfur that the world’s ships can burn in their engines from 2020, leading to a close to 1 million barrel per day (bpd) rise in gasoil consumption at the expense of high-sulfur fuel oil.
While ships can continue to burn higher sulfur fuel if they install scrubbers, and can also use liquefied natural gas- powered engines or new low-sulfur fuel oil blends, a lack of preparation has led most to expect a dramatic boost in marine gasoil consumption, as it is the easiest option available. But the IEA, in its five-year outlook, said that while gasoil consumption will rise by close to 1 million bpd, to 1.7 million bpd in 2020, it will fall back to just 773,000 bpd by 2023.
India redraws energy map with US gas cargo
India last Tuesday embarked on a voyage to redraw its energy map, with the first shipload of liquid gas from the US setting sail for Dabhol in Maharashtra from the US-based Cheniere Energy’s Sabine Pass LNG (liquefied natural gas) project in Louisiana.
This is the first time that gas will flow directly from the US mainland to India to truly open a new energy route, unlike state-run refiners who last October bought a few shipments of US crude from trading houses through spot market tenders. The commencement of US gas supplies under a 20-year deal signed by GAIL in December 2011 will strengthen New Delhi’s bargaining power with its predominantly West Asian energy suppliers and help the Narendra Modi government’s efforts at raising the share of clean-burning gas in India’s energy basket.
Asia’s loadings of W African oil to slip in March on tough competition
China’s loadings of West African crude oil are set to slip to an 8-month low in March as stiff competition and shaky demand have forced sellers to look to other regions, traders showed last Wednesday.
The loadings of just over 1.1 million barrels per day (bpd) are the lowest since July last year, when loadings hit 1.04 million bpd. It is also sharply lower than the peak this year in January, when loadings hit 1.59 million bpd. The decline pulled overall West African exports 11 percent lower on the month to 1.93 million bpd.
China VLCC freight rate falls close to 15-year low
The VLCC route from West Africa to China, basis 260,000 mt, was assessed at $8.08/mt on Wednesday, the lowest since September 3, 2003, when it was assessed at $7.80/mt, S&P Global Platts data showed, last week.
One of the root causes for such low freight rates has been the extraordinary growth in the VLCC fleet in the past two years along with the order book, which makes up 15 percent of the current fleet. The age profile of the fleet reflects the volume of new-builds. The average age in the VLCC sector is 9.5 years, the youngest of all the dirty tanker sectors, according to Affinity Tankers data.
Demolition prices lure more shipowners in, but not dry bulk ones
With the tanker freight market at its weakest state in years, it’s no wonder that more and more ships are candidates for scrapping.
In its latest weekly report, Clarkson Platou Hellas commented that “the flow of larger tanker units remains relentless as each week brings new names into the market. Can the amount of such units be absorbed is a big question on everyone’s minds, especially as several cash buyers still hold large tanker units in their hands from previously concluded deals and yet, these vessels remain unsold. The ‘Will it, Won’t it’ long running saga from Pakistan in relation to re-opening for importing tanker units is now becoming onerous and there does appear to be so much speculation from certain cash buyers on the back of indications that the decision is imminent”.