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May 24, 2023

The Russian Defense Ministry reported an unsuccessful attack on the Russian warship Ivan Hurs by three Ukrainian uncrewed speedboats near the Bosphorus strait in the Black Sea. The warship, which safeguards the TurkStream and Blue Stream gas pipelines, remains committed to its duties. The incident serves as a justification for Russia to enhance defensive measures, particularly following the pipeline explosions in September that affected the Nord Stream 1 and 2 pipelines. The tensions in the Black Sea escalate as Russia recently extended a deal allowing Ukraine to export grain from its seaports. The Ivan Hurs, a medium reconnaissance ship, effectively defended against the attack.

Ocean Network Express (ONE) and Wan Hai Lines have agreed to pay a combined total of $2.65 million in civil penalties to settle separate allegations of misconduct brought by the Federal Maritime Commission’s Bureau of Enforcement, Investigations, and Compliance (BEIC). ONE reached a compromise agreement with the FMC, addressing allegations of U.S. law violation by charging detention fees during equipment return free time. ONE agreed to pay a civil penalty of $1.7 million and provide restitution to affected shippers.

Wan Hai entered into a settlement agreement with the Commission, resolving allegations of not adhering to fair and reasonable practices in charges for returning empty containers. Wan Hai agreed to pay $950,000 in civil penalties and refunded impacted shippers for detention charges. The FMC emphasized the importance of carriers’ compliance with U.S. legal obligations and their commitment to fair practices.

South Africa’s rail line, linking the Port of Durban to Gauteng province, has operated at only 25% capacity due to theft, vandalism, and rail damage. Transnet SOC Ltd., the state-owned entity managing the line, reported 39 security-related incidents targeting critical areas, resulting in closures. Heavy rain also contributed to further closures. Criminals, often in armed gangs, target the country’s state-owned infrastructure, affecting freight-rail lines and electricity-generating plants. The disrupted container-rail line is crucial for imports, including automotive transportation and manufactured goods to the port. Transnet has made repairs, replaced stolen equipment, and arrested individuals involved. However, the disruption has led to numerous trains being stranded on the line or in staging yards.

Hanwha, a South Korean conglomerate, has finalized its acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) and rebranded it as Hanwha Ocean. The extraordinary shareholders’ meeting established Hanwha Ocean, with Hyek Woong Kwon appointed as CEO and new board directors added. Hanwha Group affiliates hold a 49.3% stake in Hanwha Ocean. DSME has faced financial challenges due to declining global demand for new ships, labor costs, and delivery delays. Hanwha Ocean aims to focus on advanced technology and sustainable solutions for the maritime industry. Leveraging Hanwha’s strengths, the company plans to become a globally competitive provider of eco-friendly and low-carbon marine energy solutions. Hanwha Ocean will contribute to Hanwha’s green energy ecosystem and drive positive change worldwide.

Russia’s state nuclear energy corporation Rosatom and Novatek, the country’s largest natural gas producer, have announced plans to launch year-round navigation on the eastern part of the Northern Sea Route (NSR) in early 2024. The NSR, considered crucial for Russia’s economic development, serves as a maritime link between Asia and Europe and provides access to valuable Arctic resources.

Russian President Vladimir Putin emphasized the importance of the NSR, acknowledging the opportunities arising from climate change. The freight traffic along the NSR has significantly increased in recent years, prompting a goal to expand its capacity to 100 million tonnes by 2026 and 200 million tonnes by 2030. To achieve this, Russia plans to invest 1.8 trillion rubles (~USD 22.4 billion) in infrastructure upgrades, including the construction of additional icebreakers and ice-class ships. The development of the NSR will require an estimated 100 Arctic class ships and 15 floating energy units. Furthermore, training a skilled workforce of 7,500 crew members, including 1,500 for the nuclear icebreaker fleet, is deemed crucial for the project’s success.

Approximately 1,650 contractors in the UK offshore sector are set to engage in two rounds of 48-hour strikes, raising concerns over job security, wages, and working conditions. The strikes, scheduled for June 1-3 and June 8-10, will impact companies such as Bilfinger UK Limited, Stork Technical Services, and Sparrows Offshore Services. A wide range of offshore workers, including technicians, deck crew, scaffolders, and crane operators, among others, will participate in the action. Unite, the union representing these workers, blames the dispute on corporate profiteering at the expense of employees.

The upcoming strikes mark a significant escalation in the ongoing conflict between contractors and oil and gas operators in the UK North Sea sector. Major operators like Apache, BP, Shell, and TAQA are expected to be affected. The union demands improved pay, fairer working rotas, and better working conditions for its members.

Bristol Harbor Group Inc. (BHGI) has partnered with United Launch Alliance (ULA) to develop a roll-on/roll-off barge capable of transporting ULA’s Vulcan Centaur Rockets. The barge will have the flexibility to operate in both river and ocean waters. BHGI, renowned for its expertise in space travel, will serve as a consultant for ULA, assisting in the search for shipyards and overseeing the construction of the transport barge. BHGI’s previous experience includes working on the NASA cargo barge, PEGASUS, in collaboration with the U.S. Army Corps of Engineers and the Marine Design Center. The PEGASUS played a vital role in transporting components for NASA’s Space Launch System. BHGI’s involvement in the project involved extending the PEGASUS to accommodate larger transports.

Chinese buyers are increasing their purchases of Australian coal, which has put pressure on domestic prices. In April, Australia’s coal shipments to China reached their highest level since the import ban in 2020, with a surge of 75% compared to the previous month. This rise in demand for high-quality Australian coal is attributed to concerns over lower-grade fuel in domestic production.

Australia’s share of China’s coal imports reached 10% in April, nearly double the level seen in March. However, it is important to note that the higher volume of Australian coal recorded in November 2021 was due to previous shipments that were stranded by the import ban and took a considerable time to clear customs. Concurrently, Russia’s coal exports to China decreased from the record level in March, along with a decline in crude oil shipments and seaborne gas cargoes. Chinese total coal purchases in April slightly declined, but the year-to-date shipments have increased by 89%. The influx of imports has led to a drop in the benchmark price at the port of Qinhuangdao.

Renault Korea Motors has taken an unconventional approach to overcome high costs in the car carrier sector by shipping brand new cars in containers. While it is common to transport secondhand cars in containers, shipping new cars in boxes is rare.

Renault Korea Motors is utilizing 40-foot containers to transport its compact SUV XM3 Arkana vehicles from Busan, with three cars squeezed into each container by tilting the middle car. The company plans to ship approximately 1,500-1,700 Arkana cars per month from Busan to Le Havre and expand container shipping to other destinations such as the US, Belgium, Italy, Mexico, and Australia. While the container method offers benefits, including the ability to fit three average-sized cars in a container, there are considerations such as terminal handling charges and potentially higher inland distribution costs compared to car carriers. The shortage of available car carrying capacity worldwide has led to soaring rates, despite a record number of car carriers on order

Abu Dhabi’s AD Ports Group has signed a memorandum of understanding with Vale, the world’s largest producer of iron ore and nickel, to develop a mega hub at Khalifa Port. The hub aims to support industrial complexes that produce low-carbon products for the steelmaking industry, catering to both the local and seaborne markets. The facility will enable the calling of giant valemax vessels, with a handling capacity of up to 50 million tonnes of cargo annually.

AD Ports Group will undertake the development and management of conveyor infrastructure for the transportation of iron ore and finished products to and from Khalifa Port. Additionally, the collaboration will explore commercial opportunities related to the marketing and sale of by-products in the UAE and the wider region. The partnership also encompasses the exploration of maritime collaboration, including the management and operation of very large ore carriers (VLOCs). Vale sees this opportunity as a strategic move to reduce global CO2 emissions by utilizing low-carbon technology in the production of hot briquetted iron.

You can read previous issue of ‘Currents’ here.

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