/ By tjchinafreight ivy / Shipping

Frontline and Belgian tanker owner Euronav announce merger

Frontline, the oil tanker subsidiary of Norwegian shipping king John Fredriksen, and Euronav, the Belgian tanker owner, announced the merger. The new owner with 146 tankers surpassed China's China Merchants Shipping to become the "Big Mac" in the global very large tanker (VLCC) market. .

If the merger materialises, the combined group will continue to operate under the Frontline name and will continue to operate in Belgium, Norway, the UK, Singapore, Greece and the US. The combined group will be headed by Mr. Hugo De Stoop as Chief Executive Officer, and the Board of Directors of the combined group is expected to consist of seven members, including three current members of the independent Euronav Supervisory Board, two nominated by Hemen Holding Limited (“Hemen”) and additional Two new independent directors. Frontline's largest shareholder, Hemen, and related companies with stakes in Euronav have pledged to back the potential deal.

The companies said the combination provides economies of scale that will facilitate improved fleet utilization and ease the transition to digitalisation of logistics and the adoption of low-carbon fuels for tankers.

"The merger will create the world's leading independent tanker operator," KBC Securities wrote in a note to clients, while warning that there was no guarantee that a final merger agreement would be reached.

The merger will create a world-leading independent tanker operator with a market capitalization of more than $4.2 billion, with a fleet of 69 VLCCs (including 9 newbuildings under construction) and 57 Suezmaxes, as well as 20 LR2/Afra type oil tanker. In the VLCC market, the combined fleet of the two companies accounts for about 8% of the market, which is enough to exceed the 54 ships (including 3 new ships under construction) of China Merchants Steamship, the world's largest VLCC shipowner.

The combined, expanded fleet will enable the new company to better serve customers globally. Furthermore, given rapid technological change, including digitization and the application of new low-carbon fuels, new companies will be able to mobilize more resources to address these challenges and energy transition opportunities.

Commenting on the merger, John Fredriksen said: "The combination of Frontline and Euronav will create a market leader in the tanker market, allowing the combined group to continue to deliver shareholder value in addition to substantial synergies. The new Frontline will be able to provide our of customers providing value-added services, increasing fleet utilization and revenue, which will benefit all stakeholders.”

It is understood that last year, John Fredriksen purchased a 5.5% stake in Euronav through a subsidiary company CK Limited, and bought 7.7 million shares through another subsidiary company FamatownFinance. After two rounds of operations, John Fredriksen held 19.8 million shares of Euronav, with a shareholding ratio of 9.8%, which immediately triggered market speculation about the merger.

The merger is still subject to transaction structure, confirmatory due diligence, the terms and conditions of the potential merger agreement, applicable board, shareholder, customer, lender and/or regulatory approvals, employee consultations and other customary closing conditions.

Frontline and Euronav are working to reach and finalize an appropriate transaction structure for a potential business combination. It is not yet ripe for the market to complete the merger, and there is no guarantee that the parties will reach a final agreement, and the completion of any transaction is subject to the satisfaction of many of the above conditions. Frontline and Euronav will keep all stakeholders informed of any future developments in accordance with applicable regulations.

/ By tjchinafreight ivy / Shipping

McKinsey heralds bad news for shippers

Shippers must prepare for events in which the tight container market may not normalize until 2024, according to a new analysis by McKinsey & Company. But the consultancy told ShippingWatch that shipping rates could end up being 50% higher than pre-pandemic figures.

The container market has been strained since mid-2020 due to the huge demand for goods in the United States, port closures due to the pandemic, container shortages and extreme congestion at the world's largest and most important container ports.

The result of the tight market is the soaring of container freight rates. The revenue and profit of container shipping companies in the past two years have experienced historic growth. Last year, the total revenue of the top ten shipping companies exceeded 100 billion US dollars. The punctuality rate has fallen to its lowest level in more than a decade.

Some shipper companies, which are customers of container shipping companies, have not stopped complaining about these situations for a long time, and they even believe that container shipping companies should be more strictly regulated.

But this recent McKinsey report throws cold water on shippers.

McKinsey, one of the world's largest management consulting firms, expressed its views on the current container shipping market in a report entitled "Navigating the current disruption in containerized logistics". A large number of new ships have been ordered to expand capacity, but the normalization of the container shipping industry may still be delayed until the first quarter. If the situation is worse, normalization of the market may take until after 2024.

McKinsey also noted that container freight rates will remain high for most of 2022, while disruptions to the container logistics supply chain will continue.

Steve Saxon, a McKinsey partner who is now a container market analyst based in McKinsey's Shenzhen office, said that if you asked us a few months ago for our views on the future of the container industry, we might also lean towards a positive (recovery) view. But right now, McKinsey is leaning more toward a pessimistic outlook -- bad news from a shipper's perspective.

McKinsey proposes four possibilities for the future development of the container shipping market.

In the most optimistic case, the container shipping market may return to normal in the third quarter of 2022. Normal freight volumes, normal capacity offers, and normal freight rates.

But McKinsey also said that the most optimistic scenario may not be possible.

/ By tjchinafreight ivy / International

Fifth round of EU sanctions on Russia

At the same time, the export of semiconductors, automobiles and transport equipment to Russia is banned, with a total export value of about 10 billion euros per year.
On April 5, local time, the European Commission issued a statement on its official website saying that the chairman of the European Commission, Ursula von der Leyen, proposed to impose a fifth round of sanctions on Russia.

According to the statement, the fifth round of EU sanctions against Russia includes the following six aspects:

1. An annual import ban worth 4 billion euros will be imposed on coal from Russia. That would cut into another important source of income for Russia.

2. A complete ban on transactions by four major Russian banks, including VTB, Russia’s second largest bank. These four banks, we are now completely cut off from the market, account for 23% of the Russian banking market share. This will further weaken Russia's financial system.

3. Prohibit Russian ships and Aeroflot ships from entering EU ports. Certain exemptions will cover necessities such as agricultural and food products, humanitarian aid, and energy. In addition, we will propose a ban on road transport operators in Russia and Belarus. The ban would greatly limit the options for Russian industry to obtain critical commodities.

4. Further export ban worth 10 billion euros in vulnerable regions of Russia. This includes, for example, quantum computers and advanced semiconductors, but also sensitive machinery and transport equipment.

5. A specific new import ban, worth 5.5 billion euros, to cut off the flow of capital to Russia and its oligarchs, from wood to cement, from seafood to wine.

6. Some very targeted measures have been taken, such as the EU's blanket ban on Russian companies from participating in public procurement in member states, or the exclusion of all financial support for Russian public institutions, both European and national. Because European taxes should not go to Russia in any form.

"We are also working on other sanctions, including sanctions on oil imports from Russia," added Von der Leyen, explaining that a fifth round of sanctions would further put financial pressure on Russia.

As of now, the effective date of the fifth round of sanctions has not been announced. According to EU rules, the European Commission's proposal must be unanimously agreed by the 27 member states before it can come into effect.

German Foreign Minister Annalena Baerbock said recently that Germany, as a member of the European Union, has agreed to completely end its dependence on Russia's fossil fuels, starting with coal, followed by oil and gas.

However, the Confederation of German Industry has previously said that giving up imports of natural gas and oil from Russia in the short term will cause huge damage to German industrial companies.

The president of the association, Ruswarm, said that the energy embargo will harm Germany and the European Union more than it will affect Russia. German industry, supply chains and security of supply will all face "extremely serious" consequences.

He further said: "Energy imports from Russia cannot be replaced overnight. One-third of the oil and more than half of the natural gas that Germany uses now comes from Russia."

It is understood that any sanctions on coal will seriously affect the trade volume of bulk carriers as the energy crisis engulfs Europe. At the same time, Europe relies heavily on Russia's oil and gas resources in the fields of transportation and energy.

Relevant data show that Russia is an important importer of EU natural gas, oil and coal. In 2021, 40% of the EU's natural gas imports, 25% of its oil imports and 45% of its coal consumption will come from Russia.

/ By tjchinafreight ivy / Cargo • Shipping

Port Klang fire: 22 containers burned, 38 damaged

A severe fire broke out at the Westports terminal in Port Klang, Malaysia's main container port, with 22 containers burned and 38 damaged.

Port Klang Authority general manager K. Subramaniam said the fire started at 4.15pm (local time) on April 4. At around 4.45pm, the Port Police Control Centre (PPCC) received a call about a fire in the container yard.
After answering the call, the PPCC called the Fire and Rescue Department (FRD) from Port Klang, which deployed two fire trucks to extinguish the blaze shortly after.
It took firefighters 11 hours to put out the blaze, which was fully extinguished around 3 a.m. on April 5.

Subramaniam pointed out that the container holds general cargo and does not contain dangerous goods. Affected box contents include auto parts, cotton products, baby walkers, audio equipment and lubricants.

"At this time, we are unable to determine the extent of the damaged containers. All affected box operators will be notified in due course," Westports said in a statement.
"There was no damage to port equipment and infrastructure. We are also pleased to inform that there were no injuries or disruptions to our operations.
"We would like to thank everyone involved in helping us put out the fire, especially the FRDs from various stations."

While investigating the cause of the fire, Subramaniam said: "Other than the blockade of the fire area for investigation, the container cranes were not affected and other areas of the port were operating normally."

Selangor Fire and Rescue Department chief Norazam Khamis said the fire initially spread to eight containers, which were stacked in two rows by weight. Westports crews attempted to move other containers to prevent the fire from spreading.

/ By tjchinafreight ivy / Shipping

A container ship full of Chinese cargo explodes and catches fire

One wave has not settled, and another has risen. In the recent period of time, various maritime related accidents have continued, and accidents have followed one after another. …

According to foreign media reports, at about 12:00 on April 6, a container ship "CMA CGM RABELAIS" with a capacity of 6,500 TUE exploded in the western part of the Strait of Malacca between the Andaman Islands and Banda Aceh Sumatra, followed by a fire.

The vessel was en route from Tanjung Pelepas to Nhava Sheva, India when the incident occurred, and reports said the vessel's AIS was off and adrift since the explosion.

It is understood that the container ship "CMA CGM RABELAIS" has a capacity of 6570TEU. It was built in 2010 and flies the flag of Malta. At the time of the incident, the ship was serving the AS1 (Asia Subcontinent Express) route of CMA CGM, and the voyage was 0FF5HW1MA.

Also, according to the voyage information of CMA CGM RABELAIS provided by Shipxun.com for Xinde Maritime.com, this voyage has successively called at Qingdao, Shanghai, Ningbo, Guangzhou and other ports in China.

Therefore, it can be basically determined that this voyage is definitely loaded with goods from China.

CMA CGM RABELAIS is currently chartered and operated by CMA CGM, but its actual shipowner and manager company is DANAOS, an independent Greek shipowner company, which is a member of the Swedish Shipowners' Mutual Insurance Association.

The ship involves multiple shipping companies sharing cabins: ANL, APL, CMA CGM, CNC, COSCO SHIPPING, GOLD STAR LINE, OOCL, ZIM.

I would like to remind you that if there is a freight forwarding company carrying the ship, please pay attention to the dynamics of the ship and the cargo in time, keep in touch with the shipping company, and keep abreast of the latest situation of the ship and the cargo.

/ By tjchinafreight ivy / Shipping

Over 20 ships awaiting loading in Qatar port! Global LNG shortages worsen

The global LNG shortage has worsened, with the number of empty ships waiting to unload from Qatar, the world's top exporter, to the highest level in nearly a year.

As many as 21 LNG carriers are currently awaiting shipments off the coast of Qatar, according to data compiled by Bloomberg. Analysts at Bloomberg New Energy Finance (NEF) pointed to the recent surge in empty ships waiting to be loaded, raising concerns that in the past few more than 20 vessels were waiting to be loaded at Qatari ports.

Bloomberg analysts believe there could be several reasons for the surge in empty ships, such as a technical problem at an LNG processing plant or upstream facilities reducing production, or Qatargas changing its maintenance schedule, but in this case it should be There won't be so many ships lined up to load because buyers are notified in advance.

Qatar’s LNG exports in February were well below the average for the same period over the past five years, and total LNG exports in March were estimated at 6.5 million tonnes, also lower than the same period in the previous two years.

The LNG ships have sailed back to Qatar after unloading in China, Japan, India and Italy, according to data compiled by Bloomberg. Typically, Qatar ships most of its LNG to Asian markets at this time of year, so Pacific buyers will be more sensitive to any supply disruption than Atlantic buyers.

Qatargas has yet to comment. Energy data provider Kayrros said Qatar Gas' No. 6 LNG liquefaction and purification plant was closed for more than a month before reopening on March 20.

Global LNG shortages intensify as Qatar exports dwindle and buyers in Asia and Europe try to find alternative sources of LNG outside of Russia, tightening the market and any supply disruption or production cuts will push up spot LNG prices.

Qatar Energy Minister Saad al-Kaabi said Qatar will continue to supply LNG to Europe and will not transfer LNG to other customers. Still, he refused to impose sanctions on Russia, reiterating that a complete ban on Russian gas supplies to Europe was "practically impossible". Qatar supplies LNG to some European countries in the form of convertible contracts.

/ By tjchinafreight ivy / Shipping

The container shipping market is in short supply, and the price of second-hand ships has skyrocketed

Since the outbreak of the epidemic, the supply and demand of the container shipping market has been unbalanced, and the freight rate has skyrocketed. Shipping companies that are "not worried about money" have bought and leased them. The amount of scrap is almost zero.

According to Alphaliner data, container lines have gone on a spree to acquire more than 500 container ships in the second-hand ship market in the past 18 months. Among them, Mediterranean Shipping was the largest buyer, purchasing a total of 169 second-hand ships with a total capacity of 636,900 TEU; followed by CMA CGM, which purchased 62 ships with a total capacity of 207,000 TEU. Maersk Line only ranked third, purchasing 27 ships of 141,600 TEU. The fourth is Wan Hai Shipping, which purchased 23 ships of 139,700 TEU.

ALphaliner pointed out that at the beginning of the market recovery, the price of second-hand ships was still at a low level, which made it a better choice for container shipping companies to buy and lease. At the same time, many small non-operating ship owners (NOO) are struggling on the brink of bankruptcy due to years of low rental income, and it is difficult to resist the high prices offered by container shipping companies.

Currently in the second-hand ship market, container ship prices have soared to record highs. The hot sale situation has also made the scrapping of container ships almost zero, and the capacity in the charter market has plummeted by 1.6 million TEU.

At the same time, orders for new container ships also hit a record high last year. Clarkson's data shows that in 2021, the order volume of container ships will reach 569 ships of 4.3 million TEU, and the contract value is as high as 42.8 billion US dollars. This order level is even 29% higher than the previous record level of 3.3 million TEU in 2007. 3.5 times the average order volume in the 10 years ending in 2020.

Since 2022, there have been 124 new orders in the container ship market, with a total capacity of about 857,600 TEU. It is estimated that the order volume of container ships will remain at a high level after 2022.

/ By tjchinafreight ivy / Shipping

The epidemic will not bring down Shanghai Port and Ningbo Zhoushan Port

Recently, the epidemic prevention and control in Shanghai has been in a severe period, and the infection rate has continued to rise. Shanghai Port cannot survive alone, and is making every effort to coordinate resources from all parties to keep the port open. On the other hand, many truck drivers were diagnosed in Ningbo, and the local government immediately introduced a policy of one nucleic acid per day for truck drivers to further tighten the prevention and control policy. As the two largest ports in the world, Shanghai Port will complete a container throughput of 47.3 million TEU in 2021, and Ningbo Zhoushan Port will complete a cargo throughput of 31.08 million TEU. These two ports account for nearly 40% of the national port container throughput. In this regard, the normal operation of the two ports is related to the smooth global supply chain, and the sensitive market remains highly concerned about this.

Recently, a screenshot of densely crowded ships in the waters near Shanghai circulated on the Internet. The screenshot was accompanied by a caption saying, "Hundreds of ocean-going freighters have been stranded in the open seas of Shanghai, and the supply chain is broken here."

The impact of this round of Shanghai epidemic on international shipping has also aroused high public attention.

On April 2, SIPG also responded to the news of "severe congestion in Shanghai Port": "We have noticed that some media have published false reports on the serious congestion in Shanghai Port, which mentioned that 'Shanghai's port is delayed. The situation is getting more and more serious', 'the number of ships waiting to be loaded and unloaded in Shanghai port has soared to more than 300 this week' and other unverified remarks and pictures, according to the internal data monitoring of Shanghai port, since February, Shanghai port terminal production and operation As usual, there is no congestion of container ships." SIPG further stated that there is absolutely no "congestion comparable to the port congestion in West America" ​​in Shanghai Port. The number of waiting ships is in single digits, and the average number of waiting days is normal.

Previously, it was believed that due to the severe epidemic situation in Shanghai, the transportation of import and export goods was also affected, and some ships calling at Shanghai Port may be diverted to Ningbo Zhoushan Port or Nanjing Port.

On April 6, the "Daily Economic News" reporter asked the relevant person in charge of Ningbo Port (601018.SH) to verify the above situation. The person in charge responded: "The company is now doing a good job of epidemic prevention and control in accordance with the requirements of the superior and the actual situation of the enterprise to ensure the continuous, stable and healthy development of port production. As for the ships that previously berthed at Shanghai Port, they will be moved to Ningbo Zhoushan Port. The situation is not obvious at the moment and we are monitoring it.”

On the same day, a person in charge of a shipping agency in charge of Ningbo also told reporters that from what he knew, Shanghai's port calls are relatively normal, and there has not been a large number of changes to Ningbo port.

At the same time, Ningbo Zhoushan Port had to face the problem of epidemic spillover. From April 4th to 5th, 6 of the 7 cases found in Ningbo City were road freight-related drivers and express service area staff, and one of them was in Beilun District; as a model of anti-epidemic, Ningbo Zhoushan The port quickly made a decision to close some container shipping bases in Beilun District, and organized truck drivers to conduct nucleic acid tests every 24 hours. For example, Ningbo Meidong Container Terminal Co., Ltd. issued a notice on April 3 that truck drivers entering the port area. A free nucleic acid test needs to be completed immediately before entering the port area; at the same time, for foreign vehicles, Ningbo City requires drivers to actively cooperate with nucleic acid testing and antigen testing at the high-speed bayonet. In addition, Ningbo has implemented closed management of staff in the city's expressway service areas, strictly implemented daily nucleic acid testing measures, and suspended refueling operations.

At present, Ningbo Zhoushan Port is still in normal operation as a whole, and the warehouses that were temporarily closed due to the detection of tight connections will also be unsealed from tomorrow. In addition to Ningbo City, two freight drivers in Shaoxing City were also found to be infected with the new crown. The freight drivers and passengers outside the city are required to perform nucleic acid tests every two days on the basis of implementing nucleic acid tests every two days, and each time they return to Shaoxing Expressway.

The port circle (ID: gangkouquan) believes that if the impact of the epidemic expands, the impact of the collection and distribution problem continues to expand, and the ports in the Yangtze River Delta region cannot handle the problem of transportation route configuration, which will be a heavy blow to the global supply chain. of. On the premise of "preventing imports from outside and preventing exports from inside", Shanghai should increase the capacity of waterway barges as soon as possible to transfer the pressure of road collection and distribution, while Ningbo Zhoushan Port must learn lessons and give priority to preventing the spread of the epidemic. The two ports will not be dragged down as the outside world fears, but for a period of time in the future, whether it is the cargo owner, the shipping company, or the port, it will be under the pressure of repeated epidemics.

/ By tjchinafreight ivy / Shipping

Evergreen’s container ship ‘Ever Forward’ has declared general average

After the ship left Baltimore on March 13, the Ever Forward ran aground. For the common interests of cargo owners and the safety of all involved, Evergreen Shipping has been making every effort to refloat the stranded ship. Evergreen declared general average on April 17, given the increased cost of continued attempts to re-float the vessel. There have been no reports of injuries or contamination.

Ever Forward, a 12,000 TEU container ship owned by Evergreen Shipping (Hong Kong) Co., Ltd., a subsidiary of Evergreen Shipping Group, ran aground in Chesapeake Bay after leaving Baltimore on the evening of March 13. No casualties have been reported to the ship or its cargo. , and there are no signs of fuel leaks or contamination.

Dredgers have been digging around the stranded container ship, and groups of tugboats made two unsuccessful attempts to pull the 1,095-foot vessel out of the silt last week.

Under new plans announced by the Coast Guard, cranes will be used to remove some of the containers from the "long haul" to reduce their weight before the next rescue effort. The lifting operation will start as soon as a crane with the right lifting height is installed. Meanwhile, the dredger will continue to dig to a depth of 43 feet around the vessel. During these operations, the fairway will remain one-way traffic and a 500-yard safety zone will remain around the vessel.

Salvage experts determined that in their current state of loading, they would not be able to overcome the gravity of the "long-range wheel". The new program offers the best chance of successfully relaunching the long haul. ' said the Coast Guard.

Containers will be unloaded from the port and starboard sides of the 12,000TEU container ship and placed on a barge, which will transport the containers to the Seagrit Marine Terminal in the Port of Baltimore and unload them. The ship is currently carrying 4,964 general dry cargo containers, according to the Coast Guard. The Coast Guard said that for safety reasons, lifting operations can only be carried out during the day.

Once the required number of containers has been removed, another re-float attempt will be made using tugboats and pulling barges.

According to the Baltimore Sun, the plan calls for the removal of several hundred of the 4,964 containers on the long-haul ship, with most of the cargo remaining on board. Since the shipowner Evergreen Shipping has declared general average, the shipper needs to provide the necessary guarantees and documents to the general average adjustment company before the container cargo shipped to the Seagirt terminal can be recovered.

/ By tjchinafreight ivy / Shipping

Vietnam accelerates container production to compete with China

Chinese factories now account for more than 96% of the world's dry container and 100% of the reefer container market, and Vietnam is joining the fray and is providing the world with a new container export destination.

Vietnam's Hoa Phat Group, Southeast Asia's largest steelmaker, is making a foray into container manufacturing.
It sees potential synergies with its core steel production business.
Hoa Phat started construction of its plant Hoa Phat Container Manufacturing in Vung Tau province in December and is expected to be operational by the end of this year with an annual production capacity of 500,000 TEUs, all using steel produced in-house.
Two South Korean companies - Seojin Systems and Ace Engineering - have also built container factories in northern Vietnam, which are expected to be operational later this year.

Hefa Group: Plans to supply containers to the market in the fourth quarter

Nguyen Manh Tuan, vice chairman of Hoa Phat Group, said: "Shipping containers are part of the Hoa Phat company ecosystem, and Hoa Phat started building the container manufacturing plant amid a global shortage of shipping containers."

Hefa Group planned to start construction of the factory in June 2021, but due to the impact of the fourth wave of the new crown epidemic, the project was officially launched in November 2021, five months later than planned.

But after 3 months of construction, 5 workshops, with a total construction area of ​​nearly 7 hectares, began to erect columns. On February 22, 2022, the construction of the first truss of workshop 5 was completed.

Vu Duc Sinh, head of the container manufacturing division of Hoa Fatt Group, said the first machines and equipment at the plant are expected to arrive this month and construction will be fully completed by April. The construction of the factory is accelerating. There are 3-5 contractors on the construction site, who distribute the projects equally and strive to complete the capital construction within 6 months from the date of commencement of construction. We want to build factories as soon as possible to take advantage of the shortage.

In Vietnam, Hoa Phat was the first container manufacturer. Tuan explained that the high price of weathering hot rolled coil steel used to make containers would cost the company if imported, and we at Hoa Phat can produce this steel.

The Hefa Group's container factory will be commissioned in the third quarter of 2022, and products will be brought to market from the fourth quarter of this year. The plant is expected to have a capacity of 200,000 TEU per year by the end of 2023.