Matson, Maersk Partner on Tsunami Detection

By Mark Edward Nero

Scientists from the University of Hawaii at Manoa School of Ocean and Earth Science and Technology (SOEST) are using commercial ships operating in the North Pacific Ocean to construct a network of low-cost tsunami sensors to augment existing detection systems.

The researchers, funded by the National Oceanic and Atmospheric Administration (NOAA), said Dec. 16 that they’re partnering with Matson, Maersk Line and the World Ocean Council to equip 10 ships with real-time geodetic GPS systems and satellite communications.

The newly built pilot network of GPS-equipped ships enables each vessel to act as an open-ocean tide gauge. Data from the new tsunami sensors are streamed, via satellite, to a land-based data center where they are processed and analyzed for tsunami signals.

“Our approach offers a new, cost-effective way of acquiring many more observations to augment the current detection networks,” said SOEST assistant specialist and co-investigator Todd Ericksen.

The researchers are working with the NOAA Tsunami Warning Centers to ensure that the network provides the most useful data products to help them with their predictions. They also plan to work with their industry collaborators to develop a new version of the shipboard package that can be deployed on a much greater number of ships.

“Our new ship-based detection network is the first step towards the creation of the dense global observing network needed to support the efforts of tsunami warning centers to provide the best possible predictions of tsunami hazard to coastal communities,” said James Foster, a SOEST associate researcher and the project’s lead investigator.

Maersk Annual Profits Up

The AP Moller-Maersk Group says it recorded a profit of $4.0 billion in calendar year 2012, higher than the most recent announced outlook of around $3.7 billion, which had been forecast in November 2012.

The company’s profit margin was negatively affected by a decline in Maersk Oil’s share of production and impairment losses of net $405 million, of which $268 million was related to Maersk Tankers in the third quarter.

But that loss was countered by an $899 million settlement of an Algerian tax dispute in the first quarter of the year, according to the company, combined with improved volumes, rates and unit costs for Maersk Line.

“After a difficult start, Maersk Line improved its performance and the Group achieved a result above last year’s, both in terms of net result and in underlying performance,” Maersk CEO Nils Andersen said in a statement.

Regarding subsidiary companies within the company, Maersk Line earned a profit of $461 million, which was down from 2011’s $553 million; however, Maersk Oil’s profit of $ 2.4 billion was up $300,000 from the previous year. APM Terminals turned a profit also, earning $723 million, up from $648 million in 2011.

Port of Seattle Presents Environmental Awards

For the second straight year, the Port of Seattle has presented Green Gateway Partners Awards to recognize the environmental achievements of its cruise and containership tenants.

The awards, which were announced Feb. 17, are based on a scoring system. Depending on the number of points earned, port tenants can achieve one of three recognition levels – gold, silver or bronze.

Eligibility for the awards begins with participation in the port’s At-Berth Clean Fuels program, or use of shore power as a minimum requirement. These and other environmental activities then assigned point values. The awards and scoring system are maintained by a third party.

This year’s gold award winners were APL Ltd., Royal Caribbean International, Hapag-Lloyd, Celebrity Cruise Lines, Norwegian Cruise Line and Maersk Line. All received high marks in such categories as innovative vessel design, environment protection programs and environmental pilot/test programs.

Receiving silver awards were Matson Navigation and Holland America Line. COSCO Container Lines was the sole bronze award recipient.

“These maritime operators demonstrate by their actions every day that you can be good environmental stewards while contributing to our economy,” Port of Seattle CEO Tay Yoshitani said.

The name of the awards – Green Gateway Partners – is a nod to the port’s branding of itself as the Green Gateway for maritime trade between Asia and the central US.

A 2009 study showed that for cargo originating in much of Asia and bound for a range of destinations across the United States, routes through Seattle resulted in lower carbon emissions than other routes.

Asian Shipping Lines Form Strategic Alliances

Five shipping lines, including Asia’s largest, announced Dec. 27 that they’ve formed an alliance to provide new weekly shipping routes around the world.

Evergreen Line, Hanjin Shipping, Kawasaki Kisen Kaisha and Yang Ming Line say they’re joining forces with Asia’s biggest shipping company, China Cosco, to offer 12 routes between Europe and the Mediterranean.

The cost and resource-sharing pact is expected to go forward during the second quarter of 2012. No West Coast lines are currently expected to be affected.

Last week, six Asia-based shipping lines revealed they’ve formed a pact to deploy new routes from the Far East; however, like this week’s newly-announced alliance, none of the routes is expected to involve the North American West Coast.

The so-called G6 Alliance, which would be among the largest such arrangements in the world, consists of APL, Hapag-Lloyd AG, Hyundai Merchant Marine, Mitsui OSK Lines, Nippon Yusen Kaisha and Orient Overseas Container Line.

The G6 says it expects to jointly deploy nine services from the Far East to northern Europe and the Mediterranean as a way to increase efficiency and become more competitive against industry giants like the world’s largest shipping company, Maersk Line.

“The nine joint services will offer more frequent departures with daily sailings and fast transit times,” the companies said in a Dec. 20 joint statement. “The schedule includes multiple weekly calls at Singapore, South China, Shanghai, Hong Kong, Rotterdam, Hamburg and Southampton.”

More than 90 ships are expected to cover over 40 ports starting in March or April of 2012, according to G6 member Hapag-Lloyd, and include deployment of the latest vessels with capacities of up to 14,000 TEU.

The new alliances come on the heels of another agreement forged earlier this month, when world’s second and third-largest shipping lines, Mediterranean Shipping and CMA-CGM, respectively, agreed to join forces on key global trade routes.

However, according to OOCL head of corporate planning Steven Ng, the G6 lines had been planning their alliance for some time, and its formation was not in response to the Mediterranean/CMA-CGM arrangement.

Maersk Orders 10 Additional Megaships

Danish shipping giant A.P. Moller-Maersk on Monday announced it has placed a $1.85 billion order for 10 additional megaships from South Korean firm Daewoo Shipbuilding and Marine Engineering Co.

The 18,000-TEU vessels, known as Triple-E class vessels, were ordered under an option on a deal inked in February. Under the terms of the deal, Maersk placed an initial $1.9 billion order for 10 Triple-E vessels with an option for 20 more.

The first of 10 Triple-E vessels are set for delivery in 2013 and 2014. Monday's order of 10 additional vessels are set for delivery in 2014 and 2015. The remaining 10 Triple-E vessels under the option arrangement have not yet been converted to an order, but must be exercised no later than the end of 2011.

The 30-ship Maersk order, with options, is the largest ever received by Daewoo.

When completed, the Triple-E class vessels will be the largest container vessels afloat at 1,312 feet long and 194 feet wide. The vessel's official reported capacity of 18,000 TEUs is more than 2,500 TEUs larger than the current cargo vessel record holder.

The Triple-E vessels are expected to enter Maersk's lucrative Asia-Europe trade.

Maersk Wins Major Maritime Commission Award for "Green" Attitude and Actions

Federal Maritime Commission Chairman Richard Lidinsky announced Thursday that Maersk Line is the recipient of the agency's second annual Chairman’s Earth Day Award for innovation and environmental leadership in vessel operation, vessel design, and efforts to increase carbon emissions transparency.

The FMC, which is charged with regulating the nation's international ocean transportation, created the Chairman's award to recognize members of the ocean transportation community for innovation, leadership, and success in developing and implementing sustainable shipping practices.

In presenting the award to J. Russell Bruner, Chairman and CEO of Maersk Inc., and Bill Woodhour, Senior Vice President of Maersk Line North America, FMC Chairman Lidinsky cited the carrier's efforts to reduce environmental impacts generated by the Maersk fleet.

"Maersk Line has shown real leadership in improving air quality surrounding ports by voluntarily switching to low-sulfur fuel, in pushing for efficient vessel designs, and in working to provide its customers with reliable tools to track and consider their shipments’ carbon emissions," Chairman Lidinsky said.

Lidinsky noted that in 2006, Maersk Line was the first ocean carrier to begin voluntarily switching its vessels to low-sulfur fuel when they called on the Port of Los Angeles. Since that time, Maersk Line switched to low-sulfur fuel for calls in Tacoma, Seattle, and Houston. This pioneering fuel-switching program has saved 4100 tons in air pollutant emissions in North America.

Lidinsky also cited the carrier's efforts to drive the efficient design of new vessels. Maersk Line’s newly ordered Triple-E class container ships, which will have a hull designed for fuel-saving slow speeds, will employ efficient engines that use exhaust gas to produce extra energy, and promise to reduce by 20 percent the carbon emissions per container shipped as compared to Maersk’s current best-performing vessels.

"The fact that moving goods by sea is the most environmentally friendly transport mode does not reduce our industry’s responsibility to strive for constant improvement," Maersk's Bruner said. "Earth Day is a fitting occasion to reaffirm Maersk Line’s commitment to the continuous improvement of our environmental performance. We accept this prestigious award with great appreciation."

Maersk's Woodhour said that one of the carrier's main goals is the move toward zero sulfur emissions.

"We are well on the way to realizing this goal. Maersk believes an effective environmental management system will bring about substantial benefits for the environment and for business," Woodhour said.

Maersk to Celebrate Five Years of Low Sulfur Running

Following on the heels of a major order for the largest and most fuel efficient ships in the industry, Maersk Line next week will celebrate the fifth anniversary of its switch to low-sulfur MGO distillate fuel in all its vessels calling at California ports.

Since the start of the program on March 31, 2006, the carrier giant has expanded the program to Houston, Seattle, Tacoma, and Vancouver, BC. Maersk estimates that the fuel program has eliminated 4,100 tons of pollutants that would have been generated by Maersk vessels at North American ports.

In California, the carrier has been using the MGO fuel in main engines when a vessel is within 24 miles of the port of call, and in auxiliary engines when within 24 miles of the coast.

In Seattle, Tacoma and Vancouver, Maersk vessels switch their auxiliary engines to the cleaner burning fuel while at dock – significantly reducing hotel emissions.

According to Maersk, the carrier's vessels have logged a 95 percent reduction of sulfur oxides, 6 percent reduction in nitrogen oxides and 86 percent reduction in particulate matter emissions at North American ports.

The program has not come without some cost.

The vessels have used 60,000 metric tons of the higher-priced MGO fuel in 1,970 vessel calls – at a cost to Maersk of $20 million.

Last week, Maersk placed a $1.9 billion order with Daewoo Shipbuilding & Marine Engineering for 10 vessels in the new Triple-E 18,000 TEU class. The 1,312-foot-long vessels, set to be delivered between 2013 and 2015, will be the largest container vessels in the world and will be 26 percent more fuel efficient per container moved than the industry's current largest vessels in the 14,000 TEU range.

New Build Orders Flying Fast and Furious

Unofficial reports continue to swirl about a major new vessel order by Orient Overseas Container Line. Officials with the carrier have yet to put their name to any announcement, but Lloyd's of London reported from an unnamed source that the Hong Kong-based carrier is very close to finalizing an order for as many as 10 new container vessels from Samsung Heavy Industries, each with a capacity of 13,000 TEUs.

In more concrete news, German carrier Hamburg Süd has officially placed an order for six 9,600 TEU vessels from South Korea-based Hyundai Heavy Industries. The contract, which is valued at $711 million and includes an option for four additional vessels of the same type, calls for scheduled delivery between May 2013 and January 2014.

The six vessels are part of 13 new orders, worth a total of $3.4 billion, won so far this year by Hyundai.

The orders fall on the heels of last month's announcement of a ten-build order placed by Maersk with South Korea-based Daewoo Shipbuilding & Marine Engineering. The new builds are reportedly 18,000 TEU vessels. The contract, worth an estimated $6 billion, also provides Maersk the option to purchase 20 more of the same class.

At more than 1,300 feet long and nearly 200 feet wide, the new Maersk ships, when delivered, will easily be the largest container ships afloat in the world.

Maersk to Add ‘One-Time’ Charge for Damaged Containers

You break it, you buy it. Or, at least, under a new Maersk Line container damage policy, you will pay a bit more to fix it.

Starting May 1, Maersk Line will begin charging an ‘out-of-service’ fee of $150 per dry container and $350 per reefer to cover additional costs associated with the repair of damaged containers.

Maersk had been absorbing these additional costs, which include lifting, transporting, repairing and various administration costs related to repairing a damaged container. 

Beginning in May, parties responsible for damaging containers will be billed for the ‘out-of-service’ costs, as well as for the actual costs or repairing the container. 

"We sincerely believe the ‘out-of-service’ charge is the fairest way to cover the costs of damaged containers -- as it means that only parties who are responsible for damage will have to shoulder the costs," said a spokesman for the shipping line.

‘Out-of-service’ charges were calculated to be as close as possible to the actual costs incurred by the company, said Maersk. Terms and timing of the new policy may differ slightly from country to country based on regional pricing schedules already in place. 

The new policy is expected to improve overall service, the shipping line said, by increasing equipment availability and reliability.

CEO: Maersk May Sell some Units, Buy other Firms in 2010

After suffering its first annual loss since World War II, Transportation giant A.P. Moeller-Maersk, may be looking toward selling off some less profitable business units while acquiring others during 2010, according to Chief Executive Nils Smedegaard Andersen, quoted in Monday’s Maersk Post, the company’s company newsletter.

Andersen made it clear that the Danish firm, parent to the world's largest container carrier Maersk Line, has moved well away from "survival mode" and is now looking at becoming more competitive. "I hope we will be able to make an interesting acquisition or buy some distressed assets," Andersen said through the newsletter. Anderson favors acquisitions for the firm's oil and gas exploration division and its port operations unit. 

However, the firm is still planning to cut another $500 million in costs this year, bringing total announced spending reductions by the firm since last year to $2.5 billion. The firm reported a $1.29 billion net loss in 2009, the first in more than 60 years for the 105-year-old conglomerate. Andersen said the firm may sell off some of its less profitable assets as part of the overall cost cutting plan. 

Despite the cost cutting, Andersen said he believes that A.P. Moeller-Maersk is poised to have a "reasonable result" by year's end due to the firm's ability to turn a "far better profit" in 2010 than its competitors.

Andersen said that following the already extensive cost-cutting measures already taken, the firm will have to look at "fruits that hang higher" and for "smaller items and areas" to achieve the needed cuts this year.

Grand Alliance, Maersk Boost Transpac Capacity

The Grand Alliance and shipping line Maersk have announced they will add at least six additional vessels to their transpacific routes over the next two months, boosting the total per-steaming transpacific capacity by more than 32,000 TEUs.

The moves, along with additional indicators such as three months of across the board cargo volume growth at most United States West Coast ports, have lent credence to the argument that the transpacific lanes are beginning to recover from the global economic meltdown.

Last week, Grand Alliance partners Hapag-Lloyd, Nippon Yusen Kaisha and Orient Overseas Container Line announced that starting in May they will add a direct call at the deepwater Vietnamese port of Cai Mep to their South China Sea Japan Express, or SCX, service. This will boost the service to eight 6,000 TEU vessels.

The eastbound SCX service port rotation will be: Cai Mep, Vietnam; Laem Chabang, Thailand; Singapore; Kobe; Nagoya; Tokyo; Sendai; and Los Angeles. The westbound rotation will be Oakland; Tokyo; Nagoya; Kobe; Kaohsiung, Taiwan; Shekou, China; and, Cai Mep.

Grand Alliance members Hapag-Lloyd, NYK and OOCL announced this week that they will revert their CCX service, which had been turned into an inter-Asia loop as part of the Alliance's winter program, back into a transpacific service.

Since December the CCX service's single 4,600-TEU vessel has been confined to inter-Asia service at five Asian ports. Starting May 4, the service will expand to a transpacific rotation utilizing five 6,000-TEU vessels. Along with Grand Alliance members, APL will also utilize slots on the service.

The eastbound CCX rotation will be: Qingdao; Ningbo; Shanghai; Busan; and, Los Angeles. The westbound rotation will be: Oakland; Busan; Qingdao; Ningbo; and, Shanghai.

Ocean carrier Maersk also announced this week that it will add the Vietnamese port of Cai Mep as an additional call on its TP6 eastbound service rotation and begin using at least one 9,000-TEU vessel as part of the 14 vessel fleet allotted to the service.

The reconfigured TP6 eastbound service, utilizing a slow-steaming schedule, will increase from a 16-day whole rotation transit to 22 days. The TP6 westbound rotation, also utilizing a slow-steaming schedule, will tighten from a 28-day full transit to a 25-day full transit.

The TP6 eastbound rotation will include: Tanjung Pelepas, Malaysia; Cai Mep, Vietnam; Yantian, China; Hong Kong; and, Los Angeles. The TP6 westbound service will include: Los Angeles; Yokohama; Nagoya; Shanghai; Ningbo; Xiamen; Hong Kong; Yantian; and, Tanjung Pelepas.

On the TP6 westbound rotation, Vietnam will be served via feeder service following transshipment at Hong Kong.

A.P. Moller-Maersk Posts First Yearly Loss in Six Decades

In yet another sign of the endemic contraction of the shipping industry, the owner of the world’s largest container-shipping line reported this week its first annual loss in nearly 60 years.

A.P. Moller-Maersk, the Danish parent of global ocean carrier Maersk, also said that while it expects overall rates and cargo volumes to tick slightly positive this year it does not expects these increases to boost the firm past more than a "modest" profit in 2010.

The firm reported a net loss of $1.29 billion in 2009 on sales of $48.5 billion, compared to a $3.46 billion profit on $58.7 billion in sales posted in 2008.

A.P. Moller-Maersk, founded in 1904, told Bloomberg that the firm has not suffered an annual loss since World War II.

Container shipping, which accounts for about 40 percent of the firm's revenue, experienced it worst industry-wide downturn last year with massive cargo volume declines and rates falling dramatically across the board. Despite posting a container volume drop of only 1 percent in 2009 – as opposed to the industry-wide 13 percent – Maersk saw per container revenue fall 28 percent.

A severe downturn in the bulk freight market, particularly the market for oil tankers, has also been hard on A.P. Moller-Maersk – the world's largest fleet of oil tankers. The Maersk tanker business posted a $275 million profit on $5.52 billion in sales for 2009, compared to a $1.15 billion profit on nearly identical sales in 2008.

Beyond the container and tanker business, the firm's remaining core business of oil and gas production saw profits fall by more than 50 percent in 2009. The oil and gas division posted $1.16 billion in profits on $9.02 billion in sales for 2009, compared to $2.35 billion in profits on just under $12 billion in sales for 2008.

Maersk Names New Global IT Head

Danish ocean carrier Maersk Line announced Wednesday that it has appointed Stephen Fraser as the head of the firm's Group IT business unit.

In his new position, effective Feb. 1, Fraser will coordinate with other Maersk business units "to optimize the IT backbone of the company," according to a Maersk release.

Fraser has been serving as the chief officer in Maersk's North American operations, with overall responsibility for information technology, process and customer service functions. Prior to joining the carrier five years ago, Fraser worked for the Accenture predecessor Anderson Consulting and CP Ships.

Fraser will replace current Group IT head Flemming Steen who assumed the role last February.

Based in Denmark, Maersk Line is a division of the A.P. Moller-Maersk Group.

Maersk Parent Sees $1 Billion In Losses By Year's End

Danish shipping giant A.P. Moller-Maersk, parent of shipping line Maersk, pointed to a 31.7 percent drop in container shipping revenues and falling cargo rates for a $706 million loss in the first nine months of the year and said it projects losing more than $1 billion by year's end.

CEO Nils Smedegaard told analysts that the main problem in the industry remains rates, which while edging up slightly in recent months, are still well below rates at the start of the year. He also said that rates are not recovering as quickly as bunker fuel prices are increasing and when fuel prices are factored out, rates still remain below levels at the start of the year.

Despite seeing volumes and rates increase in the third quarter, A.P. Moller-Maersk reported a $163 million loss in its container shipping operations during the first nine months of the year, with container volumes off 5.6 percent compared to the first nine months of last year.

Revenue from container shipping operations fell to $15 billion for the first nine months of the year and total A.P. Moller-Maersk revenues were off 25 percent from the year-ago period to $35.5 billion.

TTI Wins Maersk Loops for Oakland

Beating out a group of seven other competitors, terminal operator Total Terminals International has won two Maersk Line loops for the TTI terminal at the Port of Oakland.

TTI, which also has West Coast facilities in Long Beach and Seattle, will welcome the Maersk trans-Pacific TP5 and TP7 loops to Oakland beginning in January 2010.

The eastbound TP5 service begins in Korea, heads to China and Japan, then crosses to Long Beach and Oakland before ending at Dutch Harbor, Alaska. The westbound TP5 service runs from Long Beach to Oakland to Dutch Harbor, then crosses to Japan and Korea before ending in China.

The eastbound TP7 loop, which begins in Taiwan and ends in Newark, New Jersey, does not stop on the US West Coast. The westbound TP7, which begins in Halifax, Nova Scotia, moves down the East Coast, through the Panama Canal to Long Beach and then to Oakland before crossing to Taiwan, mainland China and Korea.

The new services are expected to add 60,000 lifts to TTI's 120-acre terminal at Berth 55-66 in Oakland.

In related service news, starting Nov. 22, the Maersk westbound trans-Pacific TP9 service will change several of its call times. The service begins in Seattle before heading to Vancouver, Canada, then crosses to Yokohama, Japan, and then calls at four ports in Mainland China before ending in Malaysia. The service change will see a one day reduction in call time at Seattle, reduce the Vancouver call by half a day, add an extra day to the trans-Pacific transit and increase the call time in Tanjung Pelepas, Malaysia by two hours.

Maersk Seeks to Rejoin Trans-Pac Pact

Ocean carrier Maersk plans to rejoin the Trans-Pacific Stabilization Agreement, an industry discussion group of ocean carriers covering the majority of trans-Pacific cargo volume.

Maersk, the world's largest ocean carrier, left the group in 2004 over disagreements with TSA decisions regarding rates and stabilization in the trans-Pacific routes. The TSA has been trying to woo the carrier back since. Since a reorganization of the group in 2007 under Neptune Orient Lines CEO Ron Widdows, the TSA has attracted or lured back the world's three largest carriers, including Maersk, MSC and CMA CGM.

Maersk's membership would bring the TSA roster to 15 carrier members and boost the TSA's coverage to more than 90 percent of trans-pacific cargo.

The TSA, which is allowed under the auspices of federal maritime law to provide a legal forum for carriers to discuss such things as cost-savings measures and rates, cannot formally set rates or assign capacity.

The move by Maersk, which supporters believe will help bring more stability to the trans-pacific, comes at a time when trans-Pacific carriers have suffered losses on the order of $3 billion.