APL Christens Ship at Los Angeles Port

On Oct. 4, APL welcomed the latest addition to its global fleet with the naming of a 9,200 20-foot equivalent unit containership, the APL Savannah, at the Port of Los Angeles. It was the first time ever for a ship christening to take place at the port.

“This is the first time a mayor of Los Angeles has helped christen a ship,” LA Mayor Eric Garcetti, a lieutenant in the US Navy Reserve, said. “I’m not just here because I enjoy champagne; I want to make sure APL and shipping industry know that you are a priority for me and my administration because more than 900,000 regional jobs depend on this port working.”

The APL Savannah is the fifth in a series of twelve 9,200-TEU vessels to be delivered to APL, the container shipping arm of Singapore-based shipping and logistics company Neptune Orient Lines (NOL).

APL Savannah and her sister ships are the largest in the APL fleet to sail between Asia and the US on the South Asia Express (SAX) service, rotating ports in San Pedro, Busan, Kaohsiung, Chiwan, Yantian and Singapore.

APL says the new 9,200-TEU series of vessels is designed for greater operational efficiency and more environmentally sustainable operations. For example, an optimized hull form reduces hull resistance and results in less fuel consumed for propulsion.

The APL Savannah’s fuel efficiency, measured by the Energy Efficiency Design Index, is certified to be 30.54 percent better than guidelines set by the International Maritime Organization.

“We are upsizing and upgrading our ships calling here, and remain firmly committed to provide our customers a competitive product with comprehensive service coverage and leading customer service,” Ng Yat Chung, Group President and CEO of NOL, said.

A ceremonial champagne bottle was broken over the ship hull by Jeannie Lavers, Director of International Transportation for Kohl’s Department Stores.

MOL Orders New Vessels, Signs Charter Agreement for Others

Adding to the recent slew of box ship orders by major carriers, Tokyo-based ocean carrier Mitsui O.S.K. Lines announced Monday that it has ordered two 8,600-TEU container vessels from Japanese shipbuilder Mitsubishi Heavy Industries with delivery slated for 2013. The new vessels will join eight 8,100-TEU MOL vessels already in operation in the Asia-Europe routes.

MOL, which services all the major ports on the West Coast, also announced Monday that it had reached an agreement with Singapore-based Neptune Orient Lines Group for a three-year charter of five 14,000-TEU container vessels that NOL recently ordered. The five vessels in the agreement are set for delivery to MOL in 2013 and 2014. The chartered vessels will join five others operated by NOL-shipping arm APL on Asia-Europe routes.

“Expansion of the fleet will secure needed capacity on the East-West route, and allow us to provide high-quality, competitive services. MOL works continuously to further improve and optimize its service, and is reviewing the need for an expansion of the fleet on not only East-West trades but also all other routes for the benefit of our customers,” MOL Liner CEO Junichiro Ikeda said in a statement.

MOL is one of the largest shipping lines in the world and currently operates a fleet of just over 860 vessels.

Seattle Port Honors APL For Environmental Efforts

The 5,900-TEU container vessel APL Spain has become the latest milestone in a two-year-old environmental program at the Port of Seattle aimed at slashing ocean going vessel air emissions.

In a ceremony on June 28th, officials from the port recognized APL, the shipping arm of Singapore-based Neptune Orient Lines, for the carrier’s commitment to environmental protection and acknowledged the APL Spain as the 800th vessel to call at Seattle under the port's At-Berth Clean Fuels (ABC Fuels) program.

Implemented in 2009 as a means of addressing ocean-going vessel emissions, ABC Fuels requires vessels to switch to and burn low sulfur fuel while docked in Seattle.
"We are very pleased that our vessel is the port’s 800th At-Berth Clean Fuels vessel," APL Americas President Gene Seroka said at the ceremony.

"Under Tay Yoshitani's leadership, the Port of Seattle has made great strides in improving the quality of the environment for the residents of Seattle and the Puget Sound region. Reaching the 800th ship milestone is no small task and APL commends the port for its hard work and dedication.”

Speaking during the ceremony aboard the APL Spain bridge, Linda Styrk, Managing Seaport Director of the Port of Seattle said, “We want to acknowledge APL’s environmental leadership. APL voluntarily switched to low sulphur fuels at the Port of Seattle long before the ABC Fuels program was created. We count APL as one of the Port's key environmental partners, and thank APL for its long-standing partnership and unwavering commitment to reduce environmental impacts.”

APL’s Vice President for Environment Earl Agron said that the port's environmental focus meshes well with APL's commitment to the environment.

"The APL Spain's visit as the port's 800th ABC Fuels ship is tangible evidence of a program that is both robust and environmentally successful."

APL began its voluntary low sulfur fuel-switching program in Los Angeles and Seattle in 2007. The carrier has since extended the program to Hong Kong, New Jersey, New York and Vancouver. In April, APL became the first carrier calling at the Port of Singapore to switch to low-sulfur fuel.

APL To Adopt New Bunker Surcharge Formula in Transpac

Singapore-based ocean carrier APL announced Friday it would implement a new fuel surcharge formula in the transpacific trade reflecting cost savings and other financial impacts achieved by the carrier from slow steaming.

The new formula, which takes effect July 1, slightly lowers APL's current bunker surcharges from the current formula – which is based on a guideline from the Transpacific Stabilization Agreement.

APL offered two examples of bunker surcharges under the new formula:
The surcharge for a standard FEU shipped from Asia to the US West Coast drops from $568 to $538.

The surcharge for a standard FEU shipped from Asia to the US East Coast drops from $1,107 to $1,049.

APL also pointed out that under the current formula every $20-per-ton movement in fuel price resulted in a $20 surcharge adjustment for West Coast cargo. With the new formula, APL said the adjustment would only be $14. For East Coast cargo, the sensitivity is reduced from a $38 surcharge adjustment for every $20 per ton movement in fuel price to a $30 adjustment.

The carrier, which is the wholly-owned shipping arm of Singapore-based Neptune Orient Lines, said in a statement that the new formula was developed to reflect the cost savings as well as the added capital costs associated with slow-steaming – the practice of reducing vessel speed to reduce fuel consumption, control costs and reduce emissions.

As ships reduce speed, according to APL, additional vessels are generally required on each loop to maintain weekly arrival schedules.
“While not all our services are slow-steaming, many are,” Vice President of Pan-American Trades at APL Bob Sappio said.

“Considering the fuel consumption savings from slow-steaming, and the additional asset cost required, we have developed a more transparent approach, the result of which is some reduction in the cost but just as importantly, better visibility for our customers of the impact of slow-steaming.”

The carrier said that bunker surcharges will continue to rise and fall "in line with fuel price fluctuations."

NOL Orders 12 New Box Ships, Upgrades Order For 10 More

Officials from Neptune Orient Lines Group, the parent of ocean carrier APL and the seventh-largest shipping line in the world, announced Thursday that letters of intent had been signed with two South Korean shipbuilders for the construction of 12 new container vessels and that an existing order for 10 additional vessels had been upgraded in scope.

The new and upgraded orders are part of NOL's ongoing efforts to invest in new, larger vessels to reduce unit capital and operating costs, meet future growth needs and replace older and smaller chartered vessels that will be returned to their owners in the charter market.

The Singapore-based NOL Group said that the vessels, all to be built in South Korea, would include ten 14,000-TEU vessels to be constructed by Hyundai Samho Heavy Industries Co., Ltd and two 9,200-TEU vessels to be constructed by Daewoo Shipbuilding & Marine Engineering Co.

NOL officials said the carrier has also upgraded a December, 2010 order placed with Daewoo – originally for ten 8,400-TEU vessels – to ten 9,200-TEU vessels of a "new, more efficient design and technology."

The new vessels and upgrades will cost NOL about $1.54 billion with delivery set for 2013 and 2014. Earlier in June, NOL announced that it had secured $1.1 billion in loan agreements to cover the original order for the 8,400-TEU vessels from Daewoo, as well as two 10,700-TEU vessels the carrier ordered in 2007. 

According to NOL, the ten 14,000-TEU vessels – set for deployment in the Asia-Europe trade – will be NOL’s largest and most fuel efficient to date. The 9,200-TEU vessels in the upgraded order will likely be employed in the Trans-Pacific trade, NOL said.

The new vessels, according to NOL, will allow subsidiary shipping line APL to "provide more efficient, reliable service to customers."

The letters of intent are still subject to contract signing with the shipbuilders.

NOL Nails Down Loans for 14 New Vessels

Ocean carrier Neptune Orient Lines Ltd. has finalized $1.1 billion in loan agreements with financial institutions to cover the purchase of 14 on-order container vessels.

The Singapore-based parent of APL said in a statement Thursday to the Singapore Exchange that the recently secured financing covers the purchase of a dozen 8,400-TEU vessels which were ordered in December, as well as two 10,700-TEU vessels the carrier ordered in 2007.

The vessels are scheduled to be delivered in 2013 and 2014 for service with APL.
The most recent orders reflect the publicly-stated efforts of NOL, the seventh-largest shipping line in the world, to take advantage of vessel construction prices that have dropped significantly since the global economic meltdown that began in 2008.

Details of the loan terms, and the financial institutions involved, were not released.

NOL Sees Volumes Rise, Rates Drop

Singapore-based ocean carrier Neptune Orient Lines and its container shipping arm APL posted higher cargo volumes in its most recently reported four weeks period, while simultaneously reporting declining revenue per box moved.

In the four week April 9 to May 6 period, NOL carried 231,100 FEUs, up from 212,000 FEUs in the same period last year.

At the same time, the average revenue per FEU during the four-week period fell 4 percent to $2,549 per FEU, down from the $2,669 per FEU reported during the same period last year.

"The increase in volume was mainly due to higher volumes carried on the Intra-Asia and Asia-Europe trade lanes while the decline in average revenue per FEU was mainly due to lower rates in the Asia-Europe trade lane," said NOL in a statement.

Earlier in May, NOL released its first quarter 2011 results, posting a total net loss of $10 million compared to net loss of $98 million in first quarter 2010.

NOL subsidiary shipping arm APL reported first quarter 2011 revenue of $2.1 billion, a 15 percent increase over the same period a year ago. APL also posted $8 million in core EBIT loss compared to a $89 million core EBIT loss in the first quarter of 2010.

APL volume increased 764,000 FEUs during the first quarter, a 9 percent increase compared to the year-ago period.

While average APL revenue per FEU increased to $2,598 during the January to March first quarter 2011 – a 3 percent increase – the per FEU numbers remain well below the $2,669 per FEU reported during the April 9 to May 6 period last year.

“We lifted higher container volumes in the Asia-Europe and Intra-Asia trade lanes during the first quarter, and freight rates improved in the transpacific,” APL President Eng Aik Meng said in early May regarding the first quarter numbers. “But our emphasis must remain on operating efficiency, as well as slow-steaming our ships to conserve fuel and counteract the effect of rising fuel prices, which were 28 percent higher per metric ton in the first quarter of 2011 than they were in 2010.”

APL Parent to Partner on Major New China Box Terminal

Singapore-based Neptune Orient Lines, the world's seventh largest shipping line and the parent of ocean carrier APL, announced Thursday a joint venture to operate a two-berth container terminal at the Port of Qingdao. NOL will invest $25.8 million in the terminal, which when opened in the second half of this year, will be NOL’s first in mainland China.

“Today we’ve taken a significant step to strengthen our presence in China and participate fully in its unprecedented growth,” APL President for North Asia Kenneth Glenn said. “Terminal investment is a logical step for us after decades of supporting the nation’s trade on sea and land.”

The Qingdao joint venture will partner NOL with China-based logistics firm SITC International Holdings Company Limited and Qingdao Qianwan United Container Terminal Co., Ltd.

NOL said the fast-growing North China market is a strategic focal point for its liner shipping company, APL – a major reason for the terminal investment. Located on the Yellow Sea coast, Qingdao is China’s fifth-largest container port and the largest in the North China market.

According to NOL, its investment in the new terminal, where major construction is already complete, will ensure future access to terminal capacity as China’s trade growth accelerates. The NOL joint venture partnership has a 30-year concession at Qingdao.

NOL estimates that the new terminal will add 1.5 million TEUs of annual capacity at Qingdao, already the world's eighth busiest container port with just over 12 million TEUs handled in 2010.

The new terminal will be equipped with seven post-Panamax ship-to-shore cranes as well as 16 rail-mounted yard gantry cranes.

The terminal will primarily serve vessels operated by APL and SITC. APL said the dedicated container terminal will "help improve schedule reliability and guarantee high service levels to its customers."

APL currently operates marine terminals at Kaohsiung, Taiwan; Kobe and Yokohama in Japan; and in the U.S. at the ports of Los Angeles, Oakland, and Seattle, as well as Dutch Harbor in Alaska.