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April 3, 2023

Image Source: Maksym Yemelyanov — AdobeStock

Shares of oil tanker companies, including Frontline, Euronav, and DHT Holdings, have fallen due to OPEC+’s decision to cut oil production by around 1 million barrels per day. This cut may result in a significant loss of cargoes for tanker companies, as around 40% of global crude output is transported by sea. Tanker brokers and analysts have stated that the largest supertankers’ earnings may temporarily drop by about a third due to the decline in cargoes. Russia’s invasion of Ukraine and China’s exit from COVID-19 zero policies had previously tilted the market in favor of tanker owners, with rates for modern ships earning high levels.

The OPEC+ step may not have a lasting impact on demand for tankers if consumption picks up, according to analysts.

Image Source: Austal USA

Three men from Alabama have been charged with organizing an accounting fraud scheme at Austal USA LLC, a Mobile-based shipbuilder that constructs vessels for the U.S. Navy. Craig Perciavalle, Joseph Runkel, and William Adams allegedly deceived Austal Limited’s shareholders and the investing public about the financial condition of Austal USA from 2013 to 2016. They are accused of manipulating the estimate at completion (EAC) accounting metric related to multiple LCS ships being built for the U.S. Navy, inflating Austal Limited’s reported earnings in its financial statements. When the true costs were eventually disclosed, the stock price took a significant hit, and Austal Limited wrote down over $100 million.

The defendants face multiple charges, including conspiracy to commit wire fraud, wire fraud affecting a financial institution, and could each face up to 30 years in prison if convicted.

Image Source: Saipem

Italian energy services contractor Saipem has confirmed five new contracts worth a total of approximately $650 million. These deals include the engineering, procurement, construction, and installation of rigid pipe-in-pipe flowlines with associated subsea structures for Azule Energy’s Agogo full-field development project offshore Angola, decommissioning of existing infrastructure in the Heather oil field in the UK sector of the North Sea for EnQuest, and offshore EPCI of one platform topside and the associated subsea flexible, umbilical and cable systems for Aramco LTA program in Saudi Arabia.

Saipem will also execute two front-end engineering design (FEED) competition contracts for gas development projects for Shell Trinidad & Tobago for the Manatee natural gas field and for the Papua LNG project, in partnership with PT Tripatra Engineers and Constructors and Daewoo Engineering & Construction.

Image Source: IMO

Seven candidates, including Arsenio Dominguez from Panama, Nancy Karigithu from Kenya, Suat Hayri Aka from Turkey, Cleopatra Doumbia-Henry from Dominica, Moin Uddin Ahmed from Bangladesh, Minna Kivimäki from Finland, and Zhang Xiaojie from China, have thrown their hats in the ring to become the next International Maritime Organization (IMO) secretary-general. The election will take place at IMO headquarters on July 18, with the elected candidate expected to take office on January 1, 2024.

Image Source: Alf van Beem

Shipping analysts predicted that hundreds of thousands of vintage boxships would be scrapped at the beginning of the year. However, the reality is that shipping vessels are still profitable, and candidates for demolition are finding new owners instead. Despite Taiwan’s Evergreen circulate two of its ships, the Ever Uberty and Ever Unific, as scrap candidates, the Mediterranean Shipping Co (MSC) has taken the ships instead. The 1999-built vessels have trading certificates until Q1 next year. MSC has also bought the 2006-built Pohorje for $21m, making its tally of secondhand purchases around 300 ships in less than three years.

Container values seem to have found a floor and are beginning to stabilize. This means that the global boxship fleet is getting old quickly, with the number of boxships aged 21 or more growing by 21% over the last year.

Image Source: Exmar

Nicolas Saverys intends to launch a voluntary and conditional public takeover bid for all shares in Belgian gas shipowner and infrastructure provider Exmar. Saverys’ investment vehicle, Saverex, will offer €12.10 in cash for each share it does not already own, a premium of 24.74% over Exmar stock’s closing price on March 31. Saverex already owns over 45% of Exmar’s shares. If shareholders agree to a dividend payment of €1 per share at a general meeting on May 16, this amount will be deducted from the offer price. Exmar’s board of directors supports and recommends the bid, which is subject to customary conditions, including a 95% acceptance threshold.

Image Source nkycn — Instagram

The Consortium of State Maritime Academies, which represents the US’s six state maritime academies, has asked Commandant of the US Coast Guard Linda Fagan to review the Chart Plot module of the U.S. Coast Guard Third Mate exams. The request came after the majority of cadets taking the exam failed a test required for them to become Merchant Marine officers. The Consortium questioned the need for a paper exam during the age of digital charts. Passing rates for the Chart Plot module have dropped significantly since new exams were introduced in 2021. The academies requested a review of the exams in March 2022, leading to revisions in the past two months, but the problems within the module persist. The Consortium has urged the formation of a new review team to address the problems within the Chart Plot exam module.

Image Source: APM Terminals

APM Terminals has revealed a new expansion project at its Maasvlakte II terminal in Rotterdam. The expansion will cost approximately $1.08 billion and involve a site of around 47.5 ha with 1 km of deepsea quay. The project will increase the terminal’s capacity by 2 million TEU and is expected to be operational in the second half of 2026. In addition to the new terminal, an empty depot of around 16 ha will be built for Star Container Services in the area adjacent to APM Terminals Maasvlakte II, marking the leasing of all vacant sites in the Amaliahaven area.

You can read yesterday’s issue of ‘Currents’ here.

Disclaimer: ‘Currents’ is an online shipping news service by Earl’s Rock Trading (Pvt) Ltd that reports on the latest developments and trends in the maritime industry. We do not take any responsibility for the accuracy or completeness of the information provided in our news stories or for any opinions expressed by the people quoted in them. Our aim is to provide our readers with up-to-date news and insights from reliable sources. However, we do not endorse or take any responsibility for any actions taken by our readers based on the information provided in our news articles. We also want to make it clear that we do not own any of the images used in our news stories, unless stated otherwise. All images belong to their respective owners, and we use them solely for illustrative purposes. If you are the owner of any image used in our news stories and want it to be removed or credited, please contact us, and we will take the necessary action.