/ By tjchinafreight ivy / Shipping

Huiyang Shipping’s first-quarter profit tripled year-on-year

The crisis in Russia and Ukraine pushed up the freight rate of bulk carriers, and the performance of Huiyang Shipping in March and the first quarter both hit record highs.

On April 6, Huiyang Shipping announced its financial report. The revenue in March was NT$2.203 billion (approximately RMB 486 million), and the self-settled operating profit was NT$1.139 billion (approximately RMB 251 million). The monthly pre-tax profit was NT$1.175 billion (approximately RMB 259 million).

The financial report shows that in the first quarter, Huiyang Shipping’s revenue was NT$5.754 billion (approximately RMB 1.269 billion), and its pre-tax profit was NT$2.777 billion (approximately RMB 612 million), three times that of the same period last year. , a record high for the same period of the previous year, with an average operating profit rate of 48%.

Huiyang Shipping said that the global dry bulk shipping market is still affected by the crisis in Russia and Ukraine. At present, due to the surge in oil prices and the transfer of raw material importing countries to other countries for procurement, the voyage has increased. These factors may increase the freight rate. However, whether the demand for raw materials is It can be fully supplemented by other regions, and the impact of subsequent economic sanctions by various countries still needs to be continuously observed.

On the other hand, the epidemic in mainland China heated up again in late March, and the first-tier cities along the coast were shut down due to epidemic prevention, resulting in a slight decline in the market volume. However, Huiyang Shipping believes that this is a short-term impact, and there is a possibility of demand recovery sex.

In terms of fleet planning, Huiyang Shipping received the 37,800-dwt handy-sized high-specification energy-saving and environmentally friendly bulk carrier "Bunun Treasure" delivered by Imabari Shipbuilding in Japan at the end of March, and has signed a stable charter. Up to now, the company's fleet operates 139 ships, with an average age of 7 years. The fleet size and the proportion of energy-saving ships are in a leading position in the industry.

Looking forward to 2022, Huiyang Shipping still maintains an optimistic attitude. Due to the rising freight market and raw material prices in recent years, the construction cost of bulk carriers has increased by about 30%-40% on average compared with the same period last year. The number of orders on hand for cargo ships is still low, and after the new environmental protection regulations hit the road in 2023, it is expected that the elimination of old ships will make the supply of capacity even tighter, and Huiyang Shipping maintains a consistent and stable ship purchase policy, which will give it a more competitive advantage.

/ 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 / 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

FOB Shipping Point vs. FOB Destination

Container ship in the harbor in Asia 

International business terms (incoterms) were designed by the International Chamber of Commerce (ICC) to simplify international trade by creating a common standard language, a globally recognized list of terms related to the international transport and transport of goods.
Importers and exporters need to be proficient and proficient in many terms. Some terms are more common than others, such as Free On Board (FOB), Free Carrier (FCA) and Ex Works (EXW). FOB, while common, is largely misunderstood.
Although their language is largely drafted in legal language, it is the responsibility of all parties involved in a shipment to ensure that they understand all Incoterms, otherwise a simple shipment can turn into a costly accident .

Incoterms are important for several reasons. If you find yourself wondering what FOB means in shipping, be sure to take the time to understand FOB shipping

Free shipping on board

The FOB point of dispatch, also known as the FOB origin, is when title and responsibility for the goods pass from the seller to the buyer when the goods are placed on the delivery vehicle.
Since the FOB shipping point transfers title to the shipment of the goods when they are placed at the shipping point, legal title to those goods passes to the buyer. Therefore, the seller is not responsible for the goods during delivery. FOB Shipping Point is a further limitation or condition of FOB as liability changes hands at the seller's shipping terminal.

For example, suppose that ABC Company in the United States purchases electronic equipment from its supplier in China, and the company has a FOB point-of-ship agreement. If the nominated carrier damages the package during delivery, ABC Company will be solely responsible and cannot claim compensation from the supplier for the loss or damage. Suppliers are solely responsible for bringing electronic equipment to the carrier.

Free destinations on board

Conversely, for FOB destinations, title transfers at the buyer's loading dock, PO box, or office building. Title to the goods passes from the seller to the buyer once the goods have been delivered to the place designated by the buyer. Therefore, the seller legally owns the goods and is responsible for the goods in transit.

Types of free destinations on board

  • FOB freight prepaid and allows the named seller to be obligated to pay the freight and have the goods in transit. The seller bears the risk of loss of or damage to the goods in transit. Title to the goods passes to the buyer at the buyer's place of business.
  • FOB shipping prepaid and adding the specified seller is obligated to pay shipping. However, the seller charges the buyer for shipping. The seller bears the risk of loss of or damage to the goods in transit because the seller owns the goods in transit. Title to the goods transfers to the buyer's place of business.
  • FOB freight collect specifies that the buyer must pay the freight upon receipt of the goods. However, the seller bears the risks associated with shipping the goods because the seller still owns the goods during the shipping process.
  • FOB freight collect specifies that the buyer must pay the freight. However, the buyer deducts the fee from the seller's invoice. The seller is responsible for the goods because the seller still owns the goods during shipping.

Main difference

Another key difference between the two terms is how they are calculated. Since the buyer is liable after the goods are shipped, the company can record an increase in its inventory at this time. Likewise, the seller records the sale at the same time. If the goods are damaged or lost in transit, the buyer can file a claim as the company holds title during delivery.

The accounting rules for FOB destinations have changed. In this case, the seller completes the sale on its records once the goods arrive at the receiving dock. That's when the buyer records the increase in their inventory.

There are also differences in the division of costs. For the FOB shipping point option, the seller bears the shipping costs and charges until the goods arrive at the port of origin.

Once the goods are loaded on the ship, the buyer is responsible for all costs associated with shipping, as well as customs, taxes and other charges. For FOB destinations, the seller bears all costs and expenses until the goods arrive at the destination. Once in port, all costs - including duties, taxes and other charges - are borne by the buyer.