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Sept 22, 2023

Republican presidential candidate Ron DeSantis, Governor of Florida, has proposed a plan to block Mexican ports in order to curb the influx of deadly fentanyl into the United States through the Southern Border. Despite the United Nations’ Law of the Sea prohibiting such actions, DeSantis aims to mobilize the Coast Guard and Navy to intercept precursor chemicals used in the production of synthetic fentanyl. The Biden Administration’s Operation Blue Lotus has already made progress in combating fentanyl smuggling, leading to increased seizures and arrests. DeSantis’s campaign website emphasizes the need for direct action if Mexico fails to address the issue.

Scorpio Tankers, a global provider of petroleum product transportation, has obtained commitments for a $1 billion term loan and revolving credit facility. The funds will be utilized to finance 45 unencumbered product tankers. With a final maturity of five years and favorable interest rates, the loan reflects market confidence in current industry fundamentals. Scorpio Tankers currently owns, leases, finances, or charters-in 113 product tankers, including LR2, MR, and Handymax tankers.

Due to Russia’s obstruction of Black Sea shipments, Ukraine must be prepared to export grain primarily through its Danube River ports. Last July, a deal facilitated by the United Nations and Turkey aimed to ensure the safe passage of Black Sea grain, alleviating the global food crisis caused by Russia’s invasion and blockade of Ukrainian ports. However, Russia threatens to discontinue the agreement unless certain demands, including the removal of obstacles to its own grain and fertilizer exports, are met.

Ukrainian officials stress the importance of deepening the Bystre Canal on the Danube to increase export volumes. Additionally, transit via Romanian territory to Constanta port on the Black Sea remains crucial. Ukrainian Prime Minister Denys Shmyhal has proposed measures to enhance transit cooperation between the two countries, including joint customs control and the exchange of databases.

The Philippines, a leading supplier of maritime labor, anticipates a recovery in seafarer deployment to reach its pre-pandemic level by the end of the year. Over 150,000 seafarers were deployed last quarter, putting the country on track to meet its 2019 deployment figures. The nation aims to regain the over 505,000 seafarers deployed in 2019. Shipping companies, including those from the US, have shown interest in hiring Filipino crew members. Efforts by the government to address outstanding issues in the maritime industry have been welcomed after the European Commission’s recognition of government-issued certificates to Filipino seafarers.

The US Navy has finalized a Master Ship Repair Agreement (MSRA) with Larsen & Toubro Shipyard in India, as part of efforts to promote diplomatic relations between the two countries. The MSRA allows for the repair and maintenance of US Navy ships in Indian shipyards, saving time and costs for the military during mid-voyage operations. Similar agreements with Mazagon Dock Limited (Mumbai) and Goa Shipyard (Goa) are also being finalized. The initial agreement led to the successful maintenance of the US Navy’s cargo ship at Larsen & Toubro last year, with subsequent reports of two other vessels receiving similar brief maintenance periods at the shipyard.

Attentive Energy One, an offshore wind developer partially owned by TotalEnergies, has reached an agreement to retrain and retain approximately 100 union workers from a natural gas-fired power plant in New York City. The company plans to repurpose the plant for a 1.4 gigawatt offshore wind installation off the coast of New York. This move is part of Attentive Energy One’s bid for a power contract with the state.

The retrained workers may have roles in operating the project’s control room, managing spare parts for wind turbine servicing, and handling logistics functions. The agreement aligns with the Biden administration’s push for renewable energy development and the creation of union jobs. New York has set ambitious renewable energy targets and aims to develop 9 gigawatts of offshore wind capacity by 2035. Winners of the state’s third offshore wind solicitation will be announced in the coming months.

A new report by Dutch researcher CE Delft highlights the potential for international shipping to reduce greenhouse gas (GHG) emissions by 28-47% by 2030 compared to 2008 levels. The report comes as the International Maritime Organization (IMO) prepares to finalize its strategy for GHG emission reduction next month. The proposed measures include the widespread adoption of wind-assisted technology, reducing speeds by 20-30%, and a 5-10% uptake of zero-GHG fuels. However, these measures could increase shipping costs by 6-14% on average. Operational measures contribute to half of the emission reductions, while a quarter comes from technical measures like wind-assisted propulsion, and another quarter from the use of zero and near-zero-GHG fuels. The findings provide valuable insights as IMO delegates consider setting targets for a sector responsible for 90% of global trade.

Affinity, led by Richard Fulford-Smith, has hired six former employees of the bankrupt Lorentzen & Co to join its bulker-oriented entity, Affinity Dry Bulk. The new hires, including Nick Tangney as managing director, John Geoghegan as director of business development, and Bob Tangney, will establish Affinity’s new base in New York. They will collaborate with Affinity Dry Bulk’s existing operations and research personnel in Greece to ensure a smooth transition. Lorentzen & Co recently submitted a tender request after incurring heavy losses and changing its name to Lilleaker Shipping Advisors. The debt of the Oslo-based firm amounts to approximately $9.3 million, with a significant portion owed to the parent company Tidships.

Toro, the Nasdaq-listed tanker and LPG owner, has sold its nineteen-year-old aframax LR2 tanker, Wonder Musica, for around $28 million, resulting in a net gain of $17 million. The sale is part of Toro’s strategy to profit from the disposal of aging tankers purchased in 2021. The company had acquired the vessel, formerly known as Alonissos, from Eleston for $11.1 million. Toro has also recently completed the sales of the 2005-built Wonder Polaris and the 2006-built Wonder Bellatrix, generating a total of close to $43 million in proceeds.

Eastern Pacific Shipping, controlled by Idan Ofer, has purchased the 2018-built Elandra Osprey, a modern suezmax tanker, for approximately $76 million. The Singapore-based owner acquired the vessel from Vitol-backed Elandra at a significant premium. The transaction reflects the high demand for available tonnage in the current hot tanker market, with secondhand prices reaching their highest level in 15 years. The purchase of the Elandra Osprey sets a benchmark for modern South Korean-built suezmax tankers, as the market witnesses increasing values for these vessels. The acquisition showcases Eastern Pacific Shipping’s strategic expansion in the tanker sector.

You can read previous 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.