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August 2004

Watchkeeping rules 'not effective'
TIGHTER bridge watchkeeping and lookout regulations have been called for by the UK’s Marine Accident Investigation Branch (MAIB) following a study into 65 collisions. The study was set up after the cargo ship Jambo sank in Scotland last June. The Jambo, the MAIB highlights in the study, “is the latest in a series of remarkably similar accidents, the common features of which included fatigued officers, one-man-bridge operations at night, missed course alterations and no watch alarms". The present regulations “were not effective” said the MAIB and it has recommended that all merchant vessels over 500gt should have a minimum of a master and two bridge watchkeeping officers. It has also called for stronger rules on posting lookouts as its study identifies the late detection or failure to detect small vessels as a cause of collisions. The MAIB cites “minimal manning consisting of a master and a chief officer as the only two watchkeeping officers on vessels operating around the UK coastline, leads to watchkeeper fatigue and the inability of the master to fulfil his duties which, in turn, frequently lead to accidents". © Lloyd's Register - Fairplay Ltd 2004

Numast calls for action on fatigue
UK officers' union Numast has called for urgent action following the publishing of the recent MAIB investigation into vessel accidents. The union says the report is a “damning indictment on the shipping Industry and maritime authorities”. It is proof, Numast claims, that both existing hours of work and safe crewing legislation are “totally ineffective” with no adequate policing or enforcement. Numast has had discussions with a number of shipping ministers regarding the issues surrounding fatigue and would like to see a concentrated inspection programme on compliance with the existing rules. Numast spokesman Andrew Linington said the existing rules have not been updated to allow for additional duties to watchkeeping imposed upon seafarers, such as the ISPS Code, which has worsened the situation. The MAIB study was an investigation into bridge watchkeeping and was commissioned to establish the primary causes of accidents in UK waters. The report established that one-third of accidents involving a ship running around involved a fatigued officer alone on the bridge. © Lloyd's Register - Fairplay Ltd 2004

China – Singapore unease
THE impact of the diplomatic spat between China and Singapore over Singapore deputy prime minister Lee Hsien Loong’s visit to Taiwan last month has spilled into the economic arena. The immediate casualty appears to be talks related to finalising a free trade agreement. “His [Lee] visit has dampened the mood to negotiate the free trade,” an unnamed official from China’s Ministry of Commerce was quoted as saying in the China Daily. The official also hinted at possible termination of the negotiations saying, “Delaying or cancelling the talks will not cause problems.” Lee, who is set to take over as prime minister from Goh Chok Tong on 12 August, visited Taiwan between 10 and 13 July on a “private and unofficial” visit. But China insists that the Taiwan question directly affects China’s sovereignty and territorial integrity. Singapore has crucial investments in China including those in container terminals through PSA, which is also said to be interested in the Shanghai deepwater port project. Bilateral trade between the two countries amounted to $40Bn last year. © Lloyd's Register - Fairplay Ltd 2004

NVOs take case to FMC
NON-vessel-operating common carriers (NVOCCs) including FedEx and UPS are expected to file a unified petition today with the US Federal Maritime Commission (FMC) demanding the right to negotiate confidential rate and service agreements with shippers. Under the Ocean Shipping Reform Act (OSRA) of 1998, that right is reserved for vessel operators. Various NVOCCs have individually filed such petitions before, but this week's request marks the first time the sector has pursued a consensus approach. According to a press release by the US National Industrial Transportation League, the FMC need not "engage in any time-consuming further inquiry, fact-finding or study of the issues", but must act "as quickly as possible" to institute the change. Critics of the proposal point out that it is expressly not allowed under OSRA, and that growing ocean transport players such as FedEx and UPS should instead charter their own container ships. Altogether, the signatories of this week's joint submission to the FMC are BAX Global, BDP International, CH Robinson Worldwide, FedEx, the National Industrial Transportation League, Transportation Intermediaries Association, and UPS. © Lloyd's Register - Fairplay Ltd 2004

Singapore launches maritime degrees
SINGAPORE has launched degree programmes in maritime studies in conjunction with BI Norwegian School of Management. Singapore’s maritime industry is projected to grow by 6-8% per annum until 2018. The introduction of Bachelor and Master of Science programmes in Maritime Studies at Nanyang Technological University (NTU) is the first time such courses have been offered by a local educational institution. “As we move up the value chain to develop Singapore as an international maritime centre, there is a greater need for maritime personnel trained at the tertiary or higher levels,” Minister of State for Health and Transport Balaji Sadasivan said yesterday. The degree programmes have been initiated through co-operation between the industry, the Maritime and Port Authority and NTU. There are plenty of career opportunities in the maritime industry, the minister said, pointing out that demand for dedicated manpower in the industry will nearly double over the next 14 years. “With the positive growth projections for the maritime industry, career opportunities in the industry are expected to be considerable,” said MPA chief executive Lui Tuck Yew.© Lloyd's Register - Fairplay Ltd 2004

Industry supports WMD interception
MARITIME industry groups have indicated their initial support for a new international security regime aimed at intercepting containers potentially carrying weapons of mass destruction (WMD) components. During a two-day meeting in Copenhagen hosted by the Danish ministry of defence earlier this week, government defence experts from 17 countries, together with industry representatives, discussed various scenarios for intercepting suspect consignments. According to one Bimco official present at the meeting, widespread support was given to the concept of introducing a universally applicable advanced cargo manifest regime, similar to the US 24-hour box rule. The meeting was established as part of the Proliferation Security Initiative (PSI), a US-led programme currently supported by some 60 governments worldwide, aimed at limiting the spread of WMD and their components. According to the Bimco representative, industry officials at the meeting indicated that if approached by a PSI-supportive government, co-operation would be given to intercept suspect cargo. “Efforts to interdict containers suspected of transporting components for WMD would, under the PSI framework, adhere to applicable national and international laws and regulations,” explained a Bimco report of the meeting seen by Fairplay. © Lloyd's Register - Fairplay Ltd 2004

Government opposes new Jakarta port
JAKARTA city administration's plan to build a $500M port in the north of the city has been attacked by central government officials. The office of the State Minister of State Enterprises and government-owned port operator PT Pelabuhan Indonesia II (Pelindo II) have accused the city administration of violating a law that states infrastructure projects should be managed by the government. “The administration should first co-ordinate with the central government and Pelindo as one of the nation’s port authorities,” Deputy State Minister of State Enterprises Ferdinand Nainggolan said. “We will try to cancel the project,” he warned. Pelindo II president director, Abdullah Syaifuddin, said the new port site belongs to the port enterprise. Jakarta governor Sutiyoso, however is unperturbed. “The law stipulates that the Jakarta administration has the authority to manage its own seaport,” he countered. The construction of the new port, which will be able to handle 3M TEU per year, is intended to be completed in 2010. The facility is intended to complement the “overcrowded” existing facility of Tanjung Priok. © Lloyd's Register - Fairplay Ltd 2004

Strong boxship charter rates
BOXSHIP charters remain strong and the few remaining Panamax class container ships on order awaiting fixture are currently being snapped up by eager liner operators. According to Braemar Seascope, “It is being hinted that a pair of 2005 delivery 5,000 TEU units are expected to be secured at around the low $30,000’s per day for eight year fixtures and also that Hanseatic Lloyd is talking closely to prospective charters for three ships of the same class at similar rates.” Such vessels were being fixed at $25,000/day for five years, suggesting that patient owners have been rewarded handsomely. A number of 2,500TEU class ships are becoming available although owners appear to be holding out for long-term business and probably only undertaking short-term charters for vessel positioning purposes. Braemar Seascope states that the 1,000TEU sector continues to surprise as rates approach $15,000/day for 6-12 month charters. Recent fixtures confirmed include the 3,424TEU Hansa Africa which has been secured by NYK Line for forward fixture from June 2005 for three years at $31,000/day. In the feedermax sector Maersk Sealand has fixed the 1,016 TEU Hansa Greifswald for six months at $14,700/day while Wan Hai Lines secured the 831TEU SITC Yokohama for two years at $13,800/day.© Lloyd's Register - Fairplay Ltd 2004

Asian box charter problems
HIGH container ship charter rates and non-availability of tonnage are causing difficulties to many liner consortia, espeically in Asia, resulting in the suspension of some services. The Indian Sub-continent Europe Service (ISES) service, operated by Shipping Corp of India (SCI), Zim, Yang Ming, Evergreen, K- Line and MISC is facing ongoing difficulties in chartering 2,600 TEU ships. According to reports, some ISES sailings from JNPT in India were recently suspended due to unavailability of vessels. Companies such as SCI, which are heavily dependent on chartered vessels, are suffering badly. SCI participates in the IndAmEx service to the US and IndFex I and II, two services to far eastern destinations. It contributes two our of the seven vessels on the ISES service. "Even when we are ready to pay high charter rates, we don't get appropriate ships," said a senior SCI official. © Lloyd's Register - Fairplay Ltd 2004

Bush signs CG, MarAd budgets
PRESIDENT George W Bush yesterday signed into law the appropriation bill to fund the US Coast Guard for the coming year and the Maritime Administration for the next four years. The bill provides $5.4Bn to operate the Coast Guard and an additional $1.5Bn for repair and replacement of ships, aircraft and other equipment. MarAd is funded at $19.5M for 2005, rising to $20.75M in 2006, $21.5M in 2007 and $22.6M in 2008. The bill also contains an extra $300M for port grants under an amendment offered by Senator Fritz Hollings. The overall $8.2Bn bill takes effect on 1 October when the fiscal year begins. The bill strengthens the Coast Guard, adds 8,500 active duty personnel to its rosters, gives Coast Guardsmen added law enforcement powers in port areas and provides funding for new cutters and aircraft. In addition to its growing security responsibilities, the Coast Guard carries out search and rescue missions, interdiction of contraband, maritime resource and environmental protection and national defence functions. The bill also modifies myriad regulations including providing an exemption for certain passive owners (primarily institutional lenders) in OPA 90, and mandates oil spill response plans for non-tank vessels in excess of 400gt. © Lloyd's Register - Fairplay Ltd 2004

Pertamina board sacked
THE Indonesian government officially confirmed today that the board of directors of state-owned oil and gas company Pertamina, including its president, has been sacked. Roes Aryawidjaja, Deputy State Minister of State Enterprises for Strategic Industry, has named Widya Purnama as Pertamina's new president director, replacing Ariffi Nawawi. Widya is also the chief executive of Indonesia’s second largest telecommunication firm Indosat. Roes explained that the decision was triggered by the recent VLCC sale to Frontline and also other “complicated problems” such as oil subsidies, the restructuring process and lack of transparency. “We have to restore the heavily tarnished image of Pertamina. This reshuffle is expected to become the starting point for that,” he said. The government has replaced all but one of Pertamina’s directors, with only Alfred Rohimone retaining the finance director’s portfolio. Early last month, Pertamina sold two newbuild VLCCs for $184M to Norwegian tycoon John Fredriksen’s Frontline. Both the ships were ordered at Korea’s Hyundai Heavy Industries. One ship has been delivered while the second is expected to be completed in September. © Lloyd's Register - Fairplay Ltd 2004

China to reduce soybean imports
CHINA, the world’s major soybean importer, may reduce imports of soybean during the current fiscal year, contrary to US forecasts that place China’s imports at 24M tonnes. During 2003-04 China imported 16.5M tonnes, and it is possible that the figure for this year will be lower than this. Factors contributing to a possible drop in imports are higher domestic output due to good weather conditions and government incentives, reduced demand for soybean dregs and abundant storage by companies involved in soybean processing, news agency Xinhua reported. An official of the State Cereal and Oil Information Center (SCOIC) affirmed that China would import less, though he hastened to add that it would continue to rely on overseas supplies. China has tightened soybean import regulations through the introduction of new permit certificates which have been issued to local importers since June this year. © Lloyd's Register - Fairplay Ltd 2004

US demands 2,000-mile track and trace zone
US - The United States is pushing ahead with moves that would force all ships to carry equipment transmitting their identity and exact location at a range of 2,000 miles. Any such step opens up a range of technical and political questions, not least the obvious unwillingness of hostile nations being forced to let each other know the latitude and longitude of all their ships at all times. The regulations — which the International Maritime Organization could adopt as early as 2005 — will be over and above the current drive to make the 50-mile range automatic identification systems compulsory by December this year. Although little noticed at the time, the idea was first raised in principle at the IMO’s December 2002 special conference on security, which drew up the International Ship and Port Facility Security Code. Since then, the idea has been discussed at several IMO bodies, most notably the subcommittee on radio communications, search and rescue, known in IMO-speak as Comsar. Now the US Coast Guard has gone public with the idea, in an interview given by its commandant, Thomas Collins, to the Reuters news agency. “We are working closely together on what should be the international requirement that we impose on international shipping, what the technical dimensions and standards of that should be, and then require them to implement it by a certain date,” said Adm Collins. © 2000 - 2003 informa asia publishing ltd. all rights reserved.

Bullish in Bangkok
THAILAND - Riding the intra-Asian transport bull market, Regional Container Lines reported that its second-quarter net profit rose by 345% year-on-year to Baht660.3m ($16.1m) compared with Baht148m in the same period last year. Consolidated revenues totalled Baht4.23bn, up from Baht3.25bn the year before. The improvement of Baht981m, or 30%, was in line with improved liftings as well as freight restoration put in place in March and June this year. First-half net profits also jumped, to Baht1bn this year from Baht387m in first half 2003. The company said its total liftings in the quarter reached 573,743 teu, breaking the half-million mark for the first time. Total liftings were up 23% year-on-year and represented a 9% improvement on a quarter-on-quarter basis. © 2000 - 2003 informa asia publishing ltd. all rights reserved.

CMA CGM and OOCL lead renewed boxship building surge
UK - Two leading container lines are reported to have placed newbuilding orders in recent weeks as German owners show signs of backing off. Both CMA CGM and Orient Overseas Container Line are said to have ordered more panamax tonnage in South Korea, according to brokers, while other lines are also back in the market. Japan’s MOL is believed to have obtained board level approval this week for a big newbuilding programme. Evergreen is also in negotiations. The latest spate of ordering coincides with new figures showing that the world’s boxship fleet has doubled over the past seven years and will expand a further 40% by 2007. Recent deliveries have brought cellular capacity to 7m teu, according to BRS-Alphaliner. This compares with a fleet of 3.5m teu in May 1997. By late 2007, capacity will break through the 10m teu barrier, the Paris firm predicts. In fact, the container capable fleet will reach this landmark by the end of next year, according to Clarksons, after 8.3% growth this year and 9.6% in 2005. Even before the latest reported contracts were placed, the total orderbook was standing at almost 3.4m teu teu or 48.5% of the existing fleet, BRS-Alphaliner estimates, with the delivery schedule stretching through to 2009. Clarksons puts the size of the orderbook slightly lower at 46.9%. The number of post-panamax ships on order has reached 237 units of 1.7m teu, the broker calculates, almost exactly matching the size of the existing fleet of that size vessel. The panamax fleet is forecast to grow by 42.5% over the next few years, based on current orders. But that number looks poised to move higher. The latest orders include a quartet of 4,300 teu units placed by OOCL with Samsung Heavy Industries at a reported $57.5m each, according to industry sources. Three of the ships are scheduled for 2007 delivery with the fourth to be completed in 2008. CMA CGM is believed to have placed an order for four panamax units with Hyundai Heavy Industries for 2007 delivery. But while ocean carriers are still willing to order newbuildings, some German owners are said to regard today’s prices as too high, and are growing alarmed not just by the level of supply in the pipeline, but the prospects for container transportation given that infrastructure bottlenecks that will only get worse if shipbuilding activity continues to outpace port expansion by such a huge margin.© Lloyd's Register - Fairplay Ltd 2004

NOL evaluating Temasek offer
SINGAPORE-listed Neptune Orient Lines’ (NOL) board of directors is ‘carefully’ considering the offer of shareholder Temasek Holdings to buy out the remaining NOL shares. Temasek is the investment arm of the Singapore government. It controls over 30% of shares in liner and logistics company NOL and has made an offer of S$2.80 ($1.63) per share to shareholders. The offer is conditional on receiving acceptances that would see Temasek control at least 50% of NOL’s equity. “The Board is committed to making the best decisions in the interests of all shareholders and we are considering the offer carefully,” chairman Cheng Wai Keung said today. NOL has appointed the Hongkong and Shanghai Banking Corp (HSBC) as its Independent Financial Adviser to evaluate the offer. Cheng has also stressed that the offer and the offer process will have no impact on operations. The IFA’s advice and the recommendation of NOL’s independent directors will be sent to shareholders. © Lloyd's Register - Fairplay Ltd 2004

US fines another polluter
THE US Department of Justice (DOJ) has sentenced US bulk operator Sabine Transportation to pay $2M for its environmental crimes following testimony from three whistleblower crewmembers. The judge ordered that $1M, half the overall fine, be divided up among the three crewmembers as a reward. According to the DOJ, Sabine deliberately dumped thousands of litres of waste oil, hundreds of tonnes of diesel-contaminated wheat, and plastic waste into the sea. The company neglected to use the required pollution prevention equipment aboard its Trinity, Juneau, Sea Princess and Colorado - then used false oil record books to hide discharges from the US Coast Guard. The company also admitted to deliberately dumping oily waste "with frequency" from other ships in its fleet. Three former Sabine crewmembers came forward to testify on illegal fuel dumping off Jacksonville, Florida in June 1998 as well as the dumping of diesel-contaminated wheat off the coast of Portland, Oregon in March 1999. Last year, Sabine pleaded guilty in Louisiana to dumping hundreds of tonnes of rust scale, tank cleaning waste and other oily waste into the Mississippi River. © Lloyd's Register - Fairplay Ltd 2004

Korea-China freight rate raise
THE Yellow Sea Liners Committee (YSLC) has announced an increase of $50 per TEU and $100 per FEU in the Korea-China route. The freight rate hikes will be effective from 1 September. An official of the liner grouping explained that current levels of $180 per TEU are well below the “break-even” rate of $350 per TEU. Rates in the route have remained unchanged for the past few years, he added. The Committee is also planning to introduce a fuel surcharge of $20 per TEU and $40 per FEU. Container volumes in the route have been increasing steadily accounting for 1.8M TEU during 2003 against 1.6M TEU in 2002. YSLC consists of 32 members: 14 Korean shipping companies including Hyundai Merchant Marine and Hanjin Shipping, and 18 Chinese companies including China Shipping and Coscon. © Lloyd's Register - Fairplay Ltd 2004

Athens liabilities 'unrealistic'
ATTEMPTS by governments to impose unrealistically high passenger liability limits could result in cruise and ferry operators being unable to obtain insurance cover, a P&I club manager told Fairplay today. The limits are being proposed following the 2002 Protocol of the Athens Convention. Under the protocol, which establishes a liability per passenger of 400,000 Special Drawing Rights ($590,000), the shipowner is liable for events such as a chemical or biological terrorist attack that he is unable to prevent. These could generate claims of up to $2Bn, according to Paul Hinton, CEO of A Bilbrough, manager for the London P&I Club. Commercial war risk policies available to shipowners include cover for acts of terrorism but exclude loss, damage or liabilities caused by chemical, biological or electromagnetic weapons. While one or two such claims could be absorbed through the commercial insurance markets, the problem lies in the possibility of there being a series of claims, said Hinton. “If legislation is to have credibility then the level of liability must be realistic,” he argued. One potential solution was for ship passengers to purchase additional insurance cover as part of ticketing arrangements, but governments have a fixation about blame apportionment, he added. © Lloyd's Register - Fairplay Ltd 2004

MISC posts RM920m first-quarter net profit by Sidek Kamiso
Malaysia International Shipping Corp Bhd (MISC) reported yesterday a year-on-year jump of more than 100% in net profit to RM920.2mil for its first quarter, thanks to higher freight rates and an exceptional gain from the disposal of 17 vessels during the period. The latest result meant earnings per share was up to 49.5 sen from 24.2 sen a year ago, MISC told Bursa Malaysia in a statement. Turnover rose 57% to RM2.3bil for the three months ended June 30, versus RM1.5bil a year ago. Pre-tax profit surged to RM924.6mil from RM462mil previously. “The significant improvement was the result of better performance in the main shipping segment arising from higher freight rates and improved operating efficiency,” the company said, adding that the inclusion of American Eagle Tankers Inc Ltd (AET)'s operating results also contributed to the higher revenue. MISC acquired the entire equity interest in AET in July last year for US$445mil (RM1.7bil). Excluding the exceptional gain from the disposal of vessels, the group's pre-tax profit was still impressive at RM604mil, which was RM142mil or 30.7% higher than the comparable 2003 figure. Quarter-on-quarter, however, MISC's latest pre-tax profit figure was RM124.2mil or 17.1% lower. The company attributed the difference to lower rates in the petroleum shipping segment and lower contribution from liquefied natural gas (LNG) transport due to refurbishment of an LNG tanker. The disposal of bulk vessels also resulted in lower profits in this sector. Going forward, MISC said it remained positive about its prospects for the current year in view of the continued strong freight rates and its long-term charters and contracts in the LNG and petroleum businesses which it said would continue provide strong and stable earnings. Earlier, at a press conference after company's AGM, chairman Tan Sri Mohd Hassan Marican said that MISC was expected to maintain its lead position in the world’s LNG sector in view of its tanker delivery programme. The company, which has 17 LNG tankers, has ordered nine more for delivery by 2008. “Our new tankers are not built for speculation but for our trading ... They are meant for specific charter operations,” Hassan said, adding that the new tankers were also not for exclusive use by Petroliam Nasional Bhd (Petronas). Besides the LNG tankers, MISC also has a fleet of 46 petroleum tankers, 15 chemical tankers, 24 containerships and 36 bulk carriers. The company is looking to increase its non-Petronas charter business and is optimistic of the prospects in view of the large global demand for LNG. MISC is the world’s largest LNG tanker owner with about 10% of the total global capacity. Over the years, the company had also started operating on non-traditional routes such as Lumut to West Australia and Brunei to South Korea. And from 2007, MISC is expected to start delivering LNG to Britain after Petronas signed a deal yesterday to transport three billion cu m of LNG annually to Centrica plc. Currently, MISC's main LNG destinations are Japan, South Korea and Taiwan. Hassan said that besides expanding into new areas, the company would also look at strengthening its business in the Far East as demand for LNG had increased in the region. “We are also looking at capitalising on the growing demand for LNG in the United States and European markets,” he said. As for liner operations, Hassan said MISC would maintain its focus on the Far East-Europe long-haul sector because it was giving the best value to the company despite the stiff competition. © 2004 The Star

Positive Singapore stand expected
JOHOR BARU: The state government is hoping that Singapore’s new leadership will show a more conclusive stand on the plan to demolish the Causeway and replace it with a bridge. Mentri Besar Datuk Abdul Ghani Othman said the bridge was needed to link the new Customs, Immigration and Quarantine (CIQ) complex with Woodlands. “Without it (the bridge), the new CIQ might just end up as a 'white elephant' project. “Therefore, we hope the new leadership will be positive about the plan and show us a more convincing stand on it,” he said when asked to comment on the appointment of Lee Hsien Loong as the new Prime Minister of Singapore. Abdul Ghani also expressed confidence that Lee and his Cabinet would take Singapore to greater heights. “If Singapore prospers, we in Johor will definitely enjoy some benefits,” he said. Johor MCA secretary Tee Siew Kiong said he believed Johoreans were more interested in having a prosperous Singapore because it would have a significant impact on business activities in the state. He said although Singaporeans continued to come in droves to Johor, particularly Johor Baru, to shop and dine, some of them were still thrifty when spending their money. “They are reluctant to spend more and we hope the new Prime Minister can further strengthen their economy. “The wealthier they are, the better it will be for us,” he added. Johor Baru MP Datuk Shahrir Abdul Samad said he was not expecting the new leadership to bring about any significant changes to how Singapore treated issues related to Johor. “Considering that Lee has been a key player in Singapore politics for a long time, the only thing that we can hope is for him to be pragmatic when dealing with us,” he said. Universiti Teknologi Malaysia Dean of International Affairs Prof Dr Ahmad Zaki Abu Bakar hoped to see more interaction between the higher learning institutions on both sides. © 2004 The Star

Small ships to be tracked too
Singapore will go beyond the requirements of an international maritime security code to safeguard ships against terrorism and start tracking the movements of virtually every vessel in its waters. The code applies only to bigger ships, but Transport Minister Yeo Cheow Tong told an international conference for the maritime community that small vessels matter too. He reminded them that the US Navy warship, USS Cole, was attacked by two suicide bombers in a small boat in Yemen in October 2000. So in due course, about 3,000 small vessels – including tug boats, pleasure craft and passenger ferries – will be tagged with low-cost electronic sensors that will let the authorities track and identify each boat. He said action should not end with the implementation on July 1 of the International Ship and Port Security Code which, among other things, requires ship owners to have security plans for crew to know what to do if attacked. Ships which do not comply may be barred from sailing or risk delays due to extra security checks. Yeo said it was no longer enough to make sure that a ship’s cargo was not tampered with from the point of origin to its destination. He said there was an increasing need to know what was in the boxes on board, and the challenge was how to find out without hurting global trade. Track and trace technology would have to be harnessed, he said, adding that even this would come to nought if the process of loading ships was not secured in the first place. Likewise, securing vital sea-lanes remained a prime concern, Yeo said. © 2004 The Straits Times/Asia News Network.

Board to take over Malacca Port as company is dropped by A. Letchumanan
Malacca: The state will set up a board to oversee the administration of Malacca Port. Chief Minister Datuk Seri Mohd Ali Rustam said the setting up of the Malacca Port Board was necessary to streamline and provide efficient services as well as project a good image to tourists. The board, he added, would take over the management of the port at the mouth of Sungai Malacca from Syarikat Perkhidmatan Pelabuhan dan Perkapalan Gabungan, a private company. “The company was supposed to dredge sand at the rivermouth annually but has failed to do so,” he said yesterday. Mohd Ali said the Internal Security Ministry had approved the construction of an RM8mil Customs, Immigration and Quarantine centre on a 0.8ha site at the port. “The Marine Department will undertake the work soon and it is expected to be completed within two years.” He said the existing checkpoint facilities would be transferred from the jetty to the new centre when it was ready. Mohd Ali said the jetty serves some 40,000 people who used the ferries plying between Malacca and Dumai, Pekan Baru and Bengkalis in Sumatra every month. “The number increases during holiday periods.” © 2004 The Star

Encroachment angers Pangkor fishermen
Lumut: Fishermen in Pulau Pangkor are crying foul over alleged “encroachment” by their Langkawi counterparts, in search of the valuable sea cucumber off the waters of Pulau Sembilan, not far from here. They claim that fishermen from the northern state are catching sea cucumber, also known as gamat, in Pulau Sembilan although the population of the species is said to be declining. According to the locals in Pulau Pangkor, many of these fishermen came equipped with scuba gear, allowing them to “clean the ocean of sea cucumber and destroying coral in the process.” Man Mat, 59, a fisherman in Pulau Pangkor, claimed that the Langkawi operators were “cleaning out” the population of sea cucumber for their own industry. “They have come here because they have depleted their supply in Langkawi. Many have been seen setting up camp on some of the islands in Pulau Sembilan, staying as long as 10 days in a stretch to catch sea cucumber,” he said. He also claimed that the fishermen from Kedah harvested, cleaned and dried the sea cucumber on the beach. Another fisherman, Ishak Hanif from Teluk Gedung on Pulau Pangkor, said they had lodged complaints with the Fisheries Department and marine police but so far, no action had been taken. He said that while catching the sea cucumber, the divers removed and in the process, destroyed coral beds. “We only go as deep as two metres during low tide when catching sea cucumber. The divers go anywhere they want and clean out everything,” he added. © 2004 The Star

Minister defends ban on pump boats
The ban on the use of pump boats (boats operated by water pumps) by traditional fishermen in Sabah is necessary to ensure security in the state’s waters, said state Agriculture and Food Industry Minister Datuk Abdul Rahim Ismail. Describing Sabah’s security concerns as unique when compared to other states, he said there were no plans to review the ban implemented by security agencies. The ban, he added, was also needed to protect the marine environment. “These pump boats are fast and there have been many instances of people using them for fish-bombing activities,” he said. He was replying to question by Datuk Mohd Lan Allani (BN – Sulayabayan), who urged the state government to review the ban as many traditional fishermen had been affected since it was implemented two years ago. Answering an earlier question by Au Kam Wah (BN – Elopura) on the number of fish-bombing cases, Rahim said there were 257 cases involving 145 people and 25 tonnes of fish were seized between 2000 and last month. © 2004 The Star

Fisherman spots ‘bodies’ in sea
Kota Kinabalu: A massive search by sea and air has started after a fisherman reported to police on Wednesday that he saw three bodies floating near his boat off the city here a day earlier. To date, however, the bodies have neither been seen nor located by the search and rescue team comprising the police, the marines and local boatmen, although they have combed the area from Likas Bay to Tanjung Aru beach and the nearby islands. An aerial search was also carried out after the fisherman from Sembulan, near here, said he spotted the bodies at around 3pm on Tuesday between Pulau Gaya and Pulau Sapi. The fisherman said he spotted the bodies during strong winds and waves which scared him. He returned to shore immediately and, on the advice of friends, lodged a police report at about noon on Wednesday. Kota Kinabalu district crime officer Supt Awang Besar Dullah said an intensive search has yet to show any signs of the bodies. “We are still checking with the help of the marine police. So far, we have not seen or recovered anything,” he said yesterday, confirming that the fisherman had lodged the police report. Supt Awang Besar said that they have not received any missing persons report in the city or from neighbouring districts. © 2004 The Star

Singapore plans maritime consortium
SINGAPORE is planning to forge a consortium of port and maritime related companies to facilitate international port development projects. “Such a grouping will help in the development of Singapore into a knowledge-based maritime hub,” minister of state for trade and industry and foreign affairs, Raymond Lim, has said. Lim was speaking at a National Day Observance function held on the 10 August. Details of the scheme were not immediately available, but Lim indicated that it is part of the overall strategy to develop Singapore. The International Maritime Centre concept has been a major initiative of the transport ministry headed by Yeo Cheow Tong. Yeo retains his portfolio in the cabinet named by new prime minister Lee Hsien Loong, who was sworn in yesterday. Prime minster Goh Chok Tong has stepped down after being at the helm for 14 years. Goh had served as MD of Neptune Orient Lines. Lee’s father Lee Kwan Yew, the architect of modern Singapore, is also retained in the cabinet. © Lloyd's Register - Fairplay Ltd 2004

Vietnam bids to join ranks of world class shipbuilders
VIETNAM – After years of government support, the nations shipyards have staked their bid to join the ranks of international shipyards by building the largest container vessel ever constructed in Vietnam, the Vietnam News Agency reported. The Vinashin Mariner was recently launched by the Ha Long Shipyard at Cai Lan port in northern Quang Ninh Province. Built at a cost of US $ 20 million, the vessel has the capacity to carry 1,106 teu’s. The ship was designed and equipped by Poland’s Szeczin Company. Meanwhile, an affiliate of the state owned Vietnam Ship Industrial Corporation (Vinashin), is now constructing a 12,500 tonne vessel, the first of eight ordered by the Vietnam Maritime Corporation. © 2000 - 2003 informa asia publishing ltd. all rights reserved.

South Korean seafarers threaten strike
THE Federation of Korean Seafarers' Unions (FKSU) will begin a general strike from 28 August unless its requests are included in the current revision of the seafarers law. Its requests include a shorter working week, paid holidays and an expansion of the law to cover all vessels over 10 tonnes. It currently covers vessels over 25 tonnes. At a meeting between the government, ship owners and the FKSU it was the ship owners who rejected the latter’s requests. The FKSU said the revision of the law now underway will favour management. A spokesman for the Federation confirmed to Fairplay today that a general strike would commence on 28 August following the completion of a cooling-off period. The strike would include ocean going vessels. The action is expected to bring all South Korea's ports to a standstill as fishing vessels would be used to block port entrances. The South Korean government, FKSU and ship owners will make a final attempt to resolve the dispute on 20 August.© Lloyd's Register - Fairplay Ltd 2004

Masters and Mates admits mistakes
THE Masters and Mates Association of the Philippines (MMAP) has defended itself over accusations of fraud in complying with government financial and tax requirements. MMAP president Adonis Donato told Fairplay that what happened was “an oversight and was not intentional”, referring to allegations that the association failed to submit financial statements to the Securities and Exchange Commission (SEC) and paid no taxes to the Bureau of Internal Revenue over the last eight years. “We admit in all honesty that unfortunately this is true,” Donato said, explaining that it happened because its past leadership believed that non-stock, non-profit making entities like MMAP need not file financial report to SEC or the Bureau. He denied that MMAP submitted spurious documents just to be accredited by the Professional Regulation Commission. A further issue is the fact that MMAP’s old tax account number could not be traced, said Donato. The PRC is scheduled to hear MMAP’s case today. Membership of the deck and engine officers’ body is mandatory for officers taking the Commission's licensing exam. © Lloyd's Register - Fairplay Ltd 2004

Boxship held after collision
ONE person is dead and another six are missing after the Panamanian-flagged Uni-Forward container ship collided with a barge in southern Vietnam yesterday. Eleven people were on board the barge including nine workers from the Southern Waterway Construction Company when the 956 TEU Evergreen-owned and operated container ship struck the barge at 1930 local time, said Luong Truong Phi, an official from the region 3 Marine Search and Rescue Centre. The impact overturned the barge and broke it in two, the official said. Four people managed to leap to safety. Divers with the rescue team found a dead boy inside the barge last night while six others are still missing with little chance of being found alive, said Luong. The barge was anchored in the Ghenh Rai Gulf of Vung Tau province for the construction of the AVAL light house. The official laid the blame on the Panamanian ship as there were warning signs around the barge's anchor area. The 13,995gt container ship is being kept in Vung Tau sea area for investigation and procedures, Luong added. © Lloyd's Register - Fairplay Ltd 2004

US might go alone on tracking
THE IMO is continuing to study long-range vessel tracking, although the US may implement a 2,000 n-mile system unilaterally - if it can find the money. The IMO's safety committee has been studying a draft of functional requirements for a mandatory long range tracking system for months, spokesman Lee Adamson told Fairplay today. And two subcommittees are still researching the matter. "It's certainly on the agenda," he said. But, while the US Coast Guard prefers an international system, it may press forward with its own requirements in the meantime, according to Jeffrey High, director of marine domain awareness for the Coast Guard, which is still struggling to implement the Automatic Identification System (AIS). That programme, which tracks ships 80km from shore, has only been installed in a few ports and broad implementation has been hampered by limited funds. It is estimated that AIS implementation will cost at least $62M, the Coast Guard only asked for $4M for the system in its 2005 budget - just signed by President Bush. They hope individual ports will contribute to the project. © Lloyd's Register - Fairplay Ltd 2004

Can China keep the container pace?
Confidence is only shaken by a sense that bottlenecks are choking off the full potential growth. "We have heard from our China customers that the energy shortages in China are hurting production so it is possible that the second half may see some slowing from the growth of the first half," said one freight forwarder. A shipping line executive is decidedly bullish convinced that the Asia Europe trade will power ahead, though the newcomers to the trans-Pacific should be disruptive. "I do not see any turnaround in fortunes even for 2005 after a 14% growth in the first half of 2004 for European trades," said the liner executive. "Truly, there is nothing dramatic taking place. Particularly compared with the new tonnage being put into the trans-Pacific, you could actually call it boring," he added. There has been much made of the entrance of Wanhai and PIL to the Asia Europe, but even there, the 1500 teus tonnage is a small portion of weekly lifitings. "Whatever new capacity is deployed by the existing carrier will not disrupt the trade and I believe that supply and demand will very quickly come back into balance," said the carrier. © TF/Informa 2004

Harzadous Material Regulations
US RSPA has issued a notice of proposed rulemaking covering a number of miscellaneous changes to the Hazardous Materials Regulations. Proposed changes include references to new and updated standards, corrections and refinements to the Hazardous Materials Table, more details on bottom outlet protection for tank cars, and clarification of a number of packaging requirements. © Hazardous Cargo Bulletin

Harzadous Material Security
An informal survey conducted by flow measurement and control specialist Contrec at the Federation of Petroleum Suppliers (FPS) exhibition held in April in Harrogate, UK, revealed that among managers of small to medium sized oil distributors in attendance, 66 per cent said they had concerns about depot security. However, 87 per cent said they allowed their vehicles to be loaded unsupervised. Furthermore, 27 per cent said that the loading data entered was mostly unchecked, as opposed to 31 per cent who said that they checked entered data themselves. Contrec markets a truck loading software package it says can improve product traceability and accountability. © Hazardous Cargo Bulletin

LNG - MISC
Malaysia International Shipping Corporation (MISC) has announced its plans to buy 11 new LNG tankers over the next four years, bringing its total fleet up to 28 by 2008. Tan Sri Mohd Hassan Marican, chairman of MISC, told delegates at a media briefing in Kuala Lumpur, "We will maintain our position as the largest owner and operator of LNG tankers in the world as we continue to take delivery of newbuildings." In the past, all MISC vessels have been chartered to national oil and gas parent company Petronas, however, some of the new fleet will be third-party chartered. Eight vessels have been officially reported to be on order and will be 145,000 m³. © Hazardous Cargo Bulletin

US may assist Indian regulator set-up
THE United States has offered India its expertise and assistance in setting up an Indian maritime commission. Harold J Creel, US Federal Maritime Commissioner (FMC), who is currently on a visit to India, today said a large portion of India-US trade was carried by sea and there was vast scope for bilateral co-operation in marine transport. “FMC could assist in adopting some of the procedures for the proposed maritime commission,” he said at an Indo-US conference on the maritime sector in Mumbai. India’s maritime commission could be on the same lines of FMC which focuses on regulation, monitoring service contracts and fair treatment to customers of the shipping industry, said Creel. © Lloyd's Register - Fairplay Ltd 2004

Alleged ISPS corruption revealed
THE Philippines’ top policy-making body on security, the National Security Council (NSC), is investigating allegations of graft and corruption in Philippines port facilities’ compliance with the ISPS Code. An NSC official told 20 port security officers last week that NSC would get to the bottom of the accusations, referring to security compliance certificates that were allegedly issued without assessments or verifications having been carried out. Some of the assessments and security plans were reportedly copied or duplicated for other facilities, involving payoffs from some facility operators. The spokesman said the presidential office will investigate the audit scam, rectify the pitfalls and “save the country” from embarrassment before the international marine community. Those about to undergo questioning belong to the Office of Transport Security (OTS). This agency under the Department of Transport and Communications was created by President Gloria Macapagal-Arroyo with the task of drawing up and implementing plans that would enhance security across the country’s whole transport industry. From the beginning the hastily-crafted order for creation of the OTS was seen as another layer in the bureaucratic maze, which has resulted in the contracting agency’s failure to reveal the true state of compliance with the ISPS Code. © Lloyd's Register - Fairplay Ltd 2004

PSA-PTP rumours rumble on
PSA International of Singapore and Malaysian rival Port of Tanjung Pelepas (PTP) have refused to comment on renewed speculation about an unlikely alliance between the two. Quoting unnamed sources, Malaysia’s Star newspaper has reported that the Singapore container terminal operator would buy into a subsidiary of PTP. In the past, the latter's chief executive, Mohd Sidik Shaik Osman, has spoken of co-operation between the two rivals who currently compete for a share of the booming transhipment sector. An alliance could transform transhipment operations in South-East Asia, and while it would make commercial sense it would require tremendous political will. Both Singapore and Malaysia have new leaders and the two countries have shown a desire to overcome bilateral issues. PSA terminals in Singapore have come under some strain in recent months while Pelepas, which began operations in 2000, has the luxury of surplus capacity. PTP lured Maersk Sealand and Evergreen from PSA, although no other major lines have transferred since the Taiwanese giant transferred in 2002. © Lloyd's Register - Fairplay Ltd 2004