Thursday, 30 April 2009

No shipping recovery before 2012

Singapore, April 26: The Sea Asia conference and exhibition 2009 held in Singapore a few days ago saw major maritime industry players and savvy shipping executives being electronically polled on questions related to the industry. This poll threw up some interesting opinions and sentiment, more so since these professionals have their hand on the pulse of the industry on a daily basis. About 500 business leaders were canvassed. The most startling statistic to emerge was that almost 70 percent of delegates polled felt that a balance between dry bulk ship supply and demand would not be restored before 2012, clearly indicating that the recession is seen as a long duration one by many.

Shipbuilding is a segment that is particularly hit because of shrinking volumes and cancellations due to the unavailability of credit for falling asset prices. Interestingly, the consensus was that the Chinese would keep freight rates low in their own self interest by maintaining oversupply. They would, many felt, even complete many ships that may have been cancelled at their yards. Additionally, delegates pointed out that even with the huge decline in container traffic worldwide, some ports in Europe seemed to be going ahead with boom time expansion plans. This twin phenomenon of oversupply in tonnage and in handling facilities would keep shipping costs down for the next few years, most felt.

The tenor of the questions asked said it all: Can the industry bounce back to previous levels and when? Is the ‘green shoots of recovery’ theory valid? Or, is this likely to be a slow and draining contraction that will see the industry remain hamstrung by low demand and oversupply? Is Asia better off than the rest of the world because of the China and India story?

The consensus amongst business leaders seemed to be that things would get worse before they got any better. Those polled included a wide cross section from the industry: ship owners, government and industry trade bodies, the Baltic Exchange, Port Authorities and logistics providers from across the world.

Some interesting opinions and poll results from the conference:

· On the question, “Where the Baltic Dry Index will be at the end of 2009”, 63% said between 2000 and 4000, 21% said between 4000 and 6000, 13% said under 2000, and 3% said over 6000.
· When will dry bulk shipping capacity reach equilibrium? 41% said 2012, 27% said after 2013, 26% said 2011, 41% said 2012, and 5% said 2010. The most pessimistic statistic of all, with just a twentieth of those polled expecting a recovery until 2011, and a staggering 67% not before 2012.
· Where will crude oil prices be at the end of 2009? 52% said between $60 and $80, 40% said less the $60, 7% said above $80. Most felt that demand for oil would fall faster than supply reduced. They also thought that Asia would not consume oil at Western levels and that Western oil consumption patterns would change, resulting in even lower demand.
· $350 billion of new build finance is required in the next two years. The consensus was that new construction plans should be cancelled wherever possible. However, Chinese interests mentioned earlier may throw a spanner in the works here. As much as 39 percent of those polled said that 20 to 30 per cent of the bulk carriers on order would be cancelled.
· An asset value crisis plagues the industry, with resale values of ships seen at around two thirds of the value of a new build. Shipowners believe that this situation will worsen. Most delegates also believed that with increasing surplus tonnage, this crisis could hit banks and ship owners hard down the line.
· A major economic shift is on the horizon, many felt. Blind consumerism will decrease, leading to even lower demand for many goods. Almost nobody polled said that the United States would return to its history of high consumerism.
· Chinese consumption is low since there is hardly any middle class to speak of while there are many poor. This imbalance in an export oriented economy will need to be addressed, many felt.
· The majority of those polled said that with more box ship deliveries set to hit the market this year while 12% of the worldwide container fleet was idle, it was likely that 20% of the global container fleet would be idle by the end of 2009. The recovery, when it happens, will show Asian percentage volumes rising.

With inputs from wire reports from Singapore, Sea Asia sources, conference and financial reports from Cargonewsasia and SeekingAlpha)

Industry Snapshots

Filipino seafarers to continue sailing in Gulf of Aden, clarifies Philippine Labour Secretary Marianito Roque, provided ship owners employing Filipino seamen ensure that their ships transit the Maritime Security Patrol Area. Authorities in the Philippines have issued confusing statements over the last week or two; reports have been widely published saying that Filipino ships would not sail through the Gulf of Aden. In what appears to be a clarification, the Department of Labour now says that besides sticking to the MSPA, ship owners and manning agencies will have to submit full crew lists and details of the transit to the administration, but Filipino seafarers may sail through the Gulf. Filipinos constitute about a third of global maritime labour and are major foreign exchange earners for their country, a fact the government cannot ignore. Critics have alleged that in any case, any rules barring Filipino seamen from the Gulf of Aden would be almost impossible to enforce.

CMA CGM to develop more eco friendly ships as it launches a new policy to minimise the global ecological footprint of its businesses. Environmental Director Philippe Borel told Fairplay that the company had first inducted environmental issues into operations a decade ago. “We believed that we should set an example, also in our economic activities, and that it would not be so much a constraint as a company objective,” he says. CMA CGM intends to use cleaner vessels sailing at optimum speeds as well as use advanced waste management systems to achieve this objective. Their policies will apply to owned as well as chartered tonnage.

Shipping Ministry moots single tariff regime for ports, whether public or private, reports Livemint. The Tariff Authority for Major Ports (TAMP) would, in this eventuality, become the oversight body that would decide rates across ports in the country. Private and State Government owned ports control about a quarter of the traffic at present; with new private ports coming up, this percentage is slated to go much higher. Joint Secretary Rakesh Srivastava is quoted in the newspaper as saying, “TAMP now sets tariff for Union government owned ports. We want TAMP to do this for ports owned by the state governments also.” Around 185 ports outside the Central Government control are understandably worried by these developments, as they set their own rates at present. The Central Government is also planning to expand the purview of TAMP and give it greater legal powers. “We want to have a powerful and all pervasive TAMP,” Srivastava says, adding that the new structure would be transparent and come into force in 2 years. Many feel, however, that with inevitable resistance from States that have developed ports with private partnerships, the voyage towards a uniform TAMP regime will not be a smooth ride at all.

Threat to coastal shipping as river levels decline in India and across the world. The National Centre for Atmospheric Research (NCAR) located in Colorado, USA, will publish a report saying that widespread changing river levels linked to climate change will threaten future supplies of food and water. This will undoubtedly have an impact on coastal shipping as well, many scientists say. Sponsored by the National Science Foundation, the study examined changes to flows in rivers across the globe. Researchers concluded that about a third of the largest rivers in the world were significantly affected with decreasing water levels. Included in this list are the Ganges, the Yellow River, the Niger and the Colorado rivers, all of which are critical for large populations. Unsurprisingly, greater stream flows were reported near the Arctic, where ice is melting. Other factors: dams and other artificial means of river diversion. The Brahmaputra has not shown a marked decrease, but scientists fear that melting Himalayan glaciers would make this phenomenon a reality in the not so distant future. Some analysts say that Indian shipping has been hit already by changing river patterns and that the industry must come to grips quickly with changing depths before it is too late. They point to developments in Haldia as one example: with dwindling water transport and ships lightening at ports like Paradip, recent reports have raised a question mark over the port’s sustainability, saying that some of the silting is irreversible and cannot be managed by dredging any longer.


Thursday, 23 April 2009

Somali hijackings: the kill zone widens

MANAMA, Bahrain, April 7: The Combined Maritime Forces Task Force, a conglomeration of anti piracy global naval forces, has issued an updated Special Maritime Advisory message to the global maritime fleet after a dramatic escalation in hijackings hundreds of miles off the South Eastern coast of Somalia as far away as the Seychelles Archipelago. The advisory ennumerates the large number of recent assaults on ships and asks merchant mariners to be increasingly vigilant when operating in those waters.

The statement follows an unprecedented spate of hijackings last fortnight in what were earlier considered safer areas. Well organised pirate gangs have hijacked yachts and ships in incidents almost too many to count during this period. There have been numerous other reported attacks on shipping in the Indian Ocean far away from the well patrolled Gulf of Aden as criminal gangs venture much further out to sea than ever before with their ‘mother ships’ providing logistical support and a higher range of operations. Attacks almost a thousand miles from the Somali coast have been reported.

“We continue to highlight the importance of preparation by the merchant mariners and the maritime industry in this message,” said Vice Adm. Bill Gortney, the commander of the Combined Maritime Forces. “We synchronize the efforts of the naval forces deployed to the region. However as we have often stated, international naval forces alone will not be able to solve the problem of piracy at sea.”

“Piracy is a problem that starts ashore,” the Admiral added.

Many analysts agree with the last statement; many have been crying themselves hoarse about the need to tackle the menace on a war footing on land. Meanwhile, Somali pirates have become increasingly daring and flexible, shifting operations into vast swathes of the open Indian Ocean that are impossible to effectively patrol. After the high profile hijacking of the Sirius Star in November 2008 almost 500 miles Southeast of Somalia, they seem to have well understood that mariners and their ships are easy pickings hundreds of miles off the southern and eastern coasts of Somalia, Kenya and Tanzania.

The CTF151 (Combined Task Force 151 which is the EU, NATO and international naval alliance) notice says quite clearly that their ships and aircraft are unlikely to be close enough to provide support to vessels under attack. The waters off Somalia, Kenya and the Gulf of Aden equal more than a million square miles; the Somali coastline is about the same length as the entire Eastern Seaboard of the United States. The nearest naval vessel could be days away from effective support in the event of an attack on a merchant ship, and naval aircraft are of limited use in such emergencies.The CTF advisory highlights that merchant seamen are the first line of defence, and that many have successfully repulsed pirate attacks with a combination of evasive manoeuvring and other defensive measures.

However, the fact remains that in April alone, half a dozen vessels, including a yacht with a child on board, have been hijacked in the Indian Ocean. VOA quotes IMB director Mukundan as saying that the maritime community is alarmed not only by the number of vessels seized in such a short period, but where some of the hijackings are taking place. "I think the important change has been the fact that there are now attacks taking place hundreds of miles southeast of Mogadishu. And that is the big change," Mukundan says, pointing out that the area around Seychelles and the Comoros Islands seems to be particular vulnerable, given that there are no international patrols there.

Although the Royal Naval ‘Northumberland’ has been stationed south to protect the southern flank of the Indian Ocean, the fact remains that it is impossible to patrol the massive waters there effectively, or to escort ships as is being done in the narrow waters around the Bab El Mandab Straits off Yemen.

The global maritime community and the Task Force are reacting to the pirate’s actions right now; the initiative in the conflict is on the side of the criminals. Until they take the fight to the pirates and on land in Somalia, the situation is unlikely to improve.


Industry Snapshots

Death knell for single hulled tankers? Hellenic shipping news reports that single hulled tanker owners will face particularly tough times in the present market. It quotes Gibson’s latest weekly report, “We are very close to the end for the single hull tanker age and preference have already steered many charterers away from single hulls, but over the recent boom years there have not been enough double hulls and so the singles have been needed. However, the problem now is that this position is changing rapidly. The drop in world oil demand despite OPEC moves to cut crude production to support prices has meant demand for crude and product tankers has fallen sharply over the past 3 months”. Demand for 2009 is expected to be around 80 million barrels per day, which is almost 2.5 million bpd below 2008 uptakes. Hellenic says that spot charter rates have dropped to sometimes even below operating costs, and quotes the Gibson report again, “If this is the case for modern, double hull tankers then the singles trading on the spot market can only expect to be operating at a discount to these already dire market conditions. With no immediate signs of a pickup in demand and a lot more new tankers to be delivered, the next two years could be a challenge to owners of double hull tankers; this and the IMO 2010 phaseout, means the position for owners of single hull spot tonnage may be impossible”. Other analysts have said that laying up single hulls will be suicidal in view of the impending IMO phaseout and so scrapping them will be the only alternative.

A different kind of confinement in Somalia ended recently as the ‘MV Jaikur I’ and 14 Indian crew in a complement of 21 were released from Mogadishu port. Detained in the Somali capital since Oct 2 last year due to an insurance dispute between the owners and cargo interests, the crew of the Panamanian registered vessel had recently gone on a hunger strike after corrupt harbour officials in league with local businessmen refused to release the ship[ despite instructions from the Prime Minister’s office in Mogadishu. The crew of 14 Indians, the Iraqi Captain and other crew (Pakistanis and Somalis) would undoubtedly be relieved after their six and a half month ordeal in Somalia. DNA reports that the Indian Embassy in Nairobi arranged the flights for the Indians back home, quoting Directorate General of Shipping sources as saying that all were in good health.

Philippines bans its own merchant ships from Gulf of Aden, reports Chinese agency Xinhua. Authorities are also pressurising foreign shipowners employing Filipinos to strictly follow security guidelines and safety zones. "The Department of Labour has also issued a ban to commercial ships against the travel to the Gulf of Aden or within 200 nautical miles or 300 kilometers from Somalia," a statement released by the Presidential office said. Press Secretary Cerge Remonde said shipowners and manning agencies are urged to follow these regulations or face sanctions. Filipinos constitute almost 40% of seafarers worldwide, so this move will have far reaching consequences. Currently, well over a hundred (almost half) of the hostages held by Somali pirates are Filipinos.

Karaikal port opens with the MV Beluga Fanfare, the first vessel’s call. An ancient port that dates back to the seventh century, MARG Ltd has now built an all weather deep water modern port close to the south of Pondicherry, 280 km from Chennai. Equity Bulls reports that “the port with 2 berths having a combined capacity of 5 MMTPA (Million Metric Tonne Per Annum) is ready, with a back up area of 2.4 lakh sq. metres. It is built on a BOT (Build Operate Transfer basis)

‘Dog overboard’ but back after more than four months. In November 2008, Sophie Tucker, an Australian cattle dog, fell overboard off a yacht as her owners were on a sailing holiday off Queensland, Australia. A house dog, she then swam five miles in shark infested waters to the largely deserted island of St. Bees where she lived off baby goats and until being discovered, more than four months later, by visiting park rangers. Sophie was captured by the rangers who thought that she was a wild dog. The Griffiths, Sophie’s owners, happened to contact the rangers and were overjoyed to hear the news. Sophie is now reunited with the Griffiths; although she affectionately ‘flattened them’ at the pier on her return, she had understandably become a little wild and vicious after her ordeal. Not for long, though. The canine castaway is now back to home comforts, including air conditioning, according to Australian news reports.


Thursday, 16 April 2009

Industry Snapshots

Indian merchant navy officer killed in unprovoked attack in Glasgow. Police confirm that a 20 year old youth has been arrested in the stabbing and murder of Indian officer Kunal Mohanty in the Gorbals area of Glasgow. The 30 year old Mohanty was walking with friends near the Citizen’s area on March 27 when he was apparently stabbed as he passed a group of people. He died soon after being taken to hospital. "We are still trying to piece together exactly what happened. This terrible attack has resulted in a young man losing his life. It was completely unprovoked and it is imperative we trace the person or people who are responsible," said Detective Inspector Carson of the Glasgow police. Mohanty was a student of the Glasgow College of Nautical Studies and was planning to return to India in April after appearing for his Master’s examinations. Married just a year and a half ago, he leaves behind a pregnant wife in Jullundur, India. This news comes just a month after Marex reported that three British teenagers had been sentenced for six and a half years each for killing another Indian seafarer, Gregory Fernandes, in a rabidly racist attack in Southampton in 2007.

JNPT eyes foreign ports. Chairman SS Hussain has told the Economic Times “We are planning to expand our operation abroad as a port as well as terminal operator.” JNPT is looking at countries in Africa and Latin America and is evaluating European and Canadian partnerships for setting up Greenfield ports. JNPT is the largest container port in the country. Sources say that it is open, at the moment, to all opportunities, including a royalty or investment scenario. ET says that the JNPT board will make a presentation to the Ministry shortly seeking approval and asking for ‘more autonomy in its functioning’. There are moves to set up other terminals within the country as well.

Saudi Arabia to launch $2.5 billion training facility backed by Saudi Aramco in the country. Director Amer Al Sulaim says that the purpose of the new entity, the Arabian Gulf Ports Association (AGPA), is to provide well trained mariners in the numbers required to the expanding regional industry. ‘We are excited at the prospect and are hoping it would provide the necessary impetus to the industry,’ he said in Bahrain at a conference, adding that not enough facilities existed to handle projected industry requirements. The AGPA is looking to Bahrain for additional expertise in setting up the facility.

Great Eastern wins $53 million (Rs266.6 crore) contract from Mangalore Refinery and Petrochemicals Ltd, reports Livemint. GE will ship eight crude oil shipments a month from Iran and Saudi Arabia starting in May; each shipment will involve feeding about 90,000 tonnes to the MRPL Mangalore refinery.

International Maritime Employers’ Committee tells ITF they may seek salary cuts, reports Lloyds List. IMEC official Giles Heimann has, in any case, shot down hopes of salary increases, saying, “Our standpoint is that we cannot entertain a pay increase this year.” The statement comes as owners prepare for negotiation with the ITF and other Unions under the International Bargaining Forum mechanism (IBF). Heimann added, “Due to the financial climate, the ship owners do not believe they have the means to entertain any form of pay increase. We are sending a very firm message.” The ITF, on its part, has said that the IMEC publishing its views through a press statement is “unhelpful”, and that the ITF intends to respond only at the meeting of the IBF.

Cruising, ‘imprisoned’ and angry. More than 600 irate passengers on the P&O Aurora say that they were "imprisoned" on the £200m cruise ship because port calls were cancelled to make up lost time. A protest committee of angry passengers demanded to talk to the Captain because the Aurora called just two ports in three weeks. Passengers claim that the ship was trying to make up for time lost in Auckland, New Zealand, where she underwent unscheduled engine repairs for five days, and that calls to islands in French Polynesia and Tahiti were therefore cancelled. Passengers have shelled out upwards of 9000 British Pounds for the three month long ‘World Cruise. One passenger called the cruise line’s behaviour ‘unforgivable’. P&O, on its part, says that they will offer a compensation package to the passengers. The Aurora has apparently had more than its share of unsavoury incidents starting from the time of its launch, when the champagne bottle swung by Princess Anne failed to break, according to media reports.


Friday, 10 April 2009

Industry Snapshots

Syndicated loan market ‘disappeared’ reports Lloyds List, quoting industry sources. This market, traditionally responsible for the industry raising massive quantities of capital, is showing signs of a major slowdown; just four deals have been struck so far in 2009 compared to 268 in the entire year of 2008, says Fortis Bank. In money terms, 2009 has so far raised around 330 million USD, a fraction of the almost 16 billion raised in the first quarter of 2008. “The syndicated loan market has disappeared. There are just bilateral and club deals only,” Harris Antoniou of Fortis says. “This is going to create significant challenges going ahead,” he said. Fortis is one of the top five in the business. Others are not optimistic either; HSH Nordbank’s Robin Das says that their order book “will be cut substantially.” Analysts say that of the almost 500 billion dollars required to finance ships by 2012 in Asia and Europe, only half the money has been raised. Part of the problem is that prices of ships have fallen drastically with bulk carriers being particularly hit; some of these have fallen to a third of their value in the last six months. As players look to new avenues for raising capital, the results have been discouraging so far; money is sitting on the sidelines worried that things could possibly get worse; some seem to be looking for even cheaper assets in the future. Meanwhile, reports in Indian financial newspapers suggest that the industry has been trying to get the government to float a ‘Shipping Development Fund’ to tide over the capital crisis, with SCI planning to purchase ten more ships this year.

Seaspan sees ‘sliver linings’ in tough times. Boss Gerry Wang claims that “the newbuilding over supply situation is not as bad as it is being shown in the headlines” and that this was one of many ‘silver linings’ in the present crisis. “I do not see any crash of major operators. Globalisation will continue and business will pick up,” he said, pointing out that many analysts disregard the likelihood of around half the newbuild orders for boxships being cancelled. (In related tanker news, UK broker Simpson Spence and Young says that a fifth of new tankers due this year will not be delivered) Seaspan is a major North American based container company. Wang also said that demand for boxships may be higher as many owners are now sailing around the African Cape instead of through the Suez Canal. Wang has also said that reports of a tenth of the global boxship fleet being laid up were wrong, and that many were “idling (waiting) to be activated”.

Indian Navy puts cargo ships under the scanner, says Chief of Naval Staff Sureesh Mehta. Speaking to reporters in Vizag, he said that surveillance of merchant ships has been stepped up to check terrorism. "Terrorists that operate against us and those are inimical to our development will quite often look for more innovative ways to do things”, he said, adding that “Measures have been put into place to make sure that cargo coming to the country through proper regulated shipping is inspected.” The naval chief also revealed that eight maritime reconnaissance and patrol aircraft would be purchased soon to shore up surveillance in the aftermath of the Mumbai terror attacks.

In the US, boat owners are sandpapering names off their prized possessions and filing off registry numbers before abandoning or scuttling their boats, the New York Times reports. Weekend sailors can no longer afford the maintenance, marina and operational costs and the second hand market is ‘dead in the water’. Insurance frauds are also on the rise. The dangers of derelicts clogging US waterways have prompted many States to draft laws so that legal action can be taken against the offenders. California, says the NYT, is planning a “boater bailout” that would encourage owners to surrender their boats to the State or pay a $1000 fine. Florida has seen 118 derelicts swamp its waters; in South Carolina, the figure is at 150 and counting, even though laws passed in January there allow for $5000 fines and a month’s jail term for abandoning a boat in S Carolina waters. “Our waters have become dumping grounds,” says Maj. Paul R. Ouellette of the Florida Fish and Wildlife Conservation Commission.


Wednesday, 8 April 2009

“A cemetery without gravestones”

Tripoli, April 1 At least 277 migrants are feared dead after their small boat capsized in the Mediterranean Sea in stormy weather over the last weekend in March. The exact number of casualties may never be known.

The capsized wooden fishing vessel had a capacity of 50 but was packed with around 350 migrants. It is believed to have been heading for Italy when the tragedy occurred. Egyptian authorities have confirmed that at least 10 Egyptians are among the dead, MENA reports from Egypt. Conflicting reports suggest that between 25 and 36 people have been rescued. Many were picked up ‘swimming amongst corpses’. More than 250 people looking for economic betterment in Europe, have just ‘vanished into the Mediterranean’, one UN official said.

The Libyan Navy leading the Search and Rescue operations is believed to have called off their SAR ops four days after the incident. It is believed that the boat left the northern Mediterranean coast of Libya and sank about 30 miles north of the coastal town of Maleta and about 50 miles west of Tripoli. The boat carried migrants from Africa and the Middle East, some of them Syrian Kurds. Libyan authorities say that the boat was probably leaking, hugely overloaded and far from seaworthy.

The Guardian in UK quotes Italian Charity Caritas saying that the Mediterranean is a "cemetery without tombstones". More than 13000 economic refugees have died in the last decade trying to reach Italy in overcrowded and leaking boats. Oliviero Forti from Caritas says, "We hear the daily reports from fishermen who are finding more and more bodies caught up in their nets."

Actual figures may be much higher. The BBC says that the UN estimates that more than 67,000 people were attempted to be smuggled into Europe last year, and at least 1,700 are known to have died, but “that figure could be far higher, because no one really knows exactly how many people the smugglers cram onto their vessels”

Coincidentally, another tragedy was averted last weekend as yet another vessel packed with 350 migrants was towed back to Tripoli after the boat’s main engines broke down. "The seas were rough and they were heading for a horrible fate," said Francesco Barraco, the Italian tug’s Captain who rescued them. These refugees were lucky, as they happened to be near an oil platform, which alerted the tug. The boat had such a low freeboard that the towing operation took 14 hours to cover the short distance to port, Barraco fearing that a faster speed would cause the boat to sink.

The UN expects that as the global economic crisis worsens, such crossings will only increase. Human smugglers charge 1200 US dollars per head for the dangerous crossing, but that does not seem to deter refugees from trying to flee African and Asian countries. The UN confirmed that on the rescued boat were 66 Bangladeshis, 5 Indians, 15 Syrians and 2 Pakistanis; others included Egyptians, Somalis, Ghanaians, Nigerians, Tunisians, Eritreans, Algerians and Moroccans. The Guardian reports that the Italian island of Lampedusa received 37,000 migrants last year, and rioting broke out in packed refugee camp conditions at least once.

Italy and Libya have planned joint patrols later this year to stop migrant vessels. Observers are sceptical that this plan would succeed, given that smugglers just change their routes instead of giving up this lucrative but inhuman trade. To make matters worse, as Ron Redmond, chief spokesman for the U.N. High Commissioner for Refugees says, this is the beginning of the smuggling season in the Mediterranean.


Friday, 3 April 2009

Two Tankers hijacked within twenty four hours in Indian Ocean.

Mogadishu, March 28 The cat and mouse game between international navies from a dozen countries and Somali pirates continues. Last week, in the biggest attacks of 2009, two European tankers were hijacked in a twenty four hour period, prompting Andrew Mwangura of the East African Seafarers Assistance Programme in Kenya to say, “The pirates are showing they are very much alive”. Others were more forthright. A diplomat who tracks piracy information is quoted as having said, in an obvious dig at the navies of the United States, the European Union, Russia, India, China and Japan: "Once again, the Somali pirates are making fools of all of them."

Last Wednesday, two chemical tankers, reported to be the ‘Bow Asir’ and the ‘MV Nipayia’, were hijacked in the open waters South and East of Somalia. More vessels were attacked over the same twenty four hour period. The news came even as observers had claimed in recent times that the success rate of attacks had come down, partly due to maritime patrols and convoys, particularly in the Gulf of Aden, but also partly due to greater vigilance and anti piracy measures by ship crews.

The 9,000 tonne MT Nipayia is a Greek owned and Panama registered ship. Reported to have 19 crew on aboard, she was reportedly attacked and overcome about 450 miles South East of Somalia. Conflicting reports are emerging as regards her cargo, some claiming that she was carrying lubes and others stating she is in ballast. The MT Bow Asir, believed to be carrying caustic soda, is Norwegian owned and Bahamian registered, and was hijacked around 250 miles off Somalia in the same general vicinity in the huge Indian Ocean. She is reported to have a crew of 23. Both ships are reportedly heading for the infamous pirate bases of Eyl or Hobyo on Somalia’s east coast at the time of writing this report.

Salhus Shipping AS, owners of the Bow Asir, told Reuters that it had received a security alert from the ship saying it was being chased by two small boats. Confirmation of this attack was received later; it is now believed that about 18 heavily armed pirates boarded the vessel and seized her. No ransom demands have been received, and the crew is reported unhurt.

These two hijackings mark the biggest successful attacks since the Sirius Star incident. It has become clear in recent weeks that pirates are shifting their operations away from the heavily patrolled areas around the Gulf of Aden and attacking ships in the vast Indian Ocean, effectively choosing low risk areas. Analysts are particularly concerned about the waters near Seychelles, which threatens to become a favoured hunting ground for pirates operating from mother ships. A yacht en route to Madagascar was hijacked from near the Seychelles with two men on board not so long ago. Another ship, the ‘Preventor’ defended itself 450 nautical miles southeast of Dar es Salam with water cannon and evasive manoeuvres recently.

In the aftermath of the ‘Nipaya’ attack, Greece has called on the navies of the EU to play a more active role in cracking down on piracy, ‘The Australian’ reports. A Minister said that navies should "expand the rules of engagement and the area patrolled by the European naval force". Coalition forces including the US navy point to the difficulties in patrolling the gigantic region. Officers in the US task force CTF 151 have indicated that between 12 and 16 coalition warships and others from non coalition navies are on patrol in the Gulf of Aden and the Maritime Safety corridor at any given time. CTF 151 operates primarily in and around the Gulf of Aden, Arabian Sea, Indian Ocean and Red Sea, but naval officials say that even this region required 61 naval warships if it is to be patrolled effectively.

Jane Campbell of the US 5th fleet told journalists that monitoring an area as large as the Indian Ocean is very complex. That may well be an understatement; another US official called it a ‘monumental challenge’. “To put the challenge into geographic perspective, the area involved off the coast of Somalia and Kenya as well as the Gulf of Aden equals more than 1.1 million square miles,” he said. “That is roughly four times the size of the U.S. state of Texas, or the size of the Mediterranean and Red Seas combined.”

Clearly, Somali pirates are proving to be more nimble than the navies of the world.


Industry Snapshots

Three British teenagers sentenced for six and a half years each for killing an Indian seafarer in a racist attack in 2007. The three were amongst a group of twenty teenagers that attacked Gregory Fernandes and Vinod Pitchilnaviram "like a pack of dogs" in October 2007, according to testimony produced at the Winchester Crown Court. All three pleaded guilty. A fourth teenager, then 13 years old, was sentenced to a twelve month detention order after he admitted attacking Vinod. Fernandes and Vinod had some soft drinks at a hotel in Southampton were returning to their ship, the ‘Garonne’, when they were attacked outside the hotel. Chay Fields, Stephen Pritchard and Daniel Rogers were amongst the racist mob that attacked the two Indians minutes before Gregory collapsed and died. Some in the teenage mob had been heard saying earlier that they wanted to 'beat up a Paki'. Fernandes, 32 was grievously hurt, and, although a passerby took him to the docks, he collapsed and died. Vinod, 29, suffered a broken collarbone. Hampshire police say, "Mr Fernandes suffered heart failure brought on by the stress of the attack.” The three teenagers had faced a murder charge which was plea bargained down to a lesser offence. Floriano Fernandes, the sailor's father in Goa, told the BBC: "Even I've been in England but it wasn't like this before. I felt very safe, but now it seems to be a very unsafe place, especially for Indians. How can somebody kill in such a manner?" Vinod told the BBC that the incident had left him "disturbed"

Koreans now claim the ‘Hebei Two’ lied. Even as Captain Jasprit Chawla and Chief Officer Syam Chetan await their appeal against the Korean conviction, the chairman of the Korean Register has come out with a story claiming that the two “lied and manipulated voyage data recorder information”, according to Lloyd’s List. Oh Kong Gyun, the official said, “The reason why these two seafarers were arrested was not because they created the situation but the very fact that they did not tell the truth when they were investigated by the judicial branch of the Korean court system”. He added that the two officers “hid some information that was revealed to be untrue and they manipulated some VDR information.” Oh Kong Gyun had the grace to tell Lloyd’s List, though, that the treatment of the two officers was “regrettable” and detention “very unusual”. These comments, coming a year and two trials after the initial incident, are unlikely to be taken very seriously by an outraged industry that has unequivocally condemned the South Korean justice system for the criminalisation of the Hebei Two, as well as for the shoddy treatment meted out to the ‘Hebei Two’.

British companies looking at Indian ports for business. Equipment suppliers, shipbuilders, operators, consultants and lawyers met at a seminar in Hyderabad recently. “The UK Port Development Industry has saturated with no need for more ports, whereas the National Maritime Development Programme (NMDP) has earmarked Rs 55,804 crore for 276 port related projects to be completed in India by 2012,” Mr Gordon Rankine, Chairman, UK Ports and Terminals Group, told Business Line at the seminar. “We have worked on a few projects on the west coast but now we seek huge opportunities on the east coast. Companies from the UK are looking to expand and work on more projects here,” he added. The move comes even as the 11th plan period says that Indian ports would handle traffic volumes of over one billion tonnes. The Hindu also quotes Mr Andrew Griffiths of BMT Baxter Eadie as saying that BMT Consultants India was looking at projects in port master planning, design of port facilities, logistics studies and ship design.

Alang ship breaking business hit by two day strike by 20000 workers. The workers had struck work on March 25 after ship breakers reneged on a wage agreement for March, saying they would pay lower wages for the full month. Senior government officials intervened and the strike was called off after businesses agreed to pay the agreed upon wages. New wages will come into effect from April. The turmoil started even as a hundred ships were waiting at Alang to be scrapped, resulting in a sudden shortage of workers, mainly migrants from Bihar, UP and Orissa. Wages were hiked from around Rs 200 to over Rs 300 per day, but ship breakers said late in the month that they would pay just Rs 240 per day, sparking unrest. Alang’s workforce had reduced to about 5000 in the recent shipping boom. Present market conditions mean that demand for workers has soared, with shortages expected to increase this year.