So you think you're a Shipping Geek!

Tradewinds (18/12/12) has posted a 'Litmus Test', developed by Shipping Analyst, Sydney Levine, designed to separate the shipping wannabes from the true geek. I got 20 out of 20. Good fun, happy to answer questions via the Blog or you can email the author.

AM

'RTM Flinders' is launched

Post-Panamax Hull S.365, to be named 'RTM Flinders', was launched on Thursday 13th December in Imari, Japan. Her sister, 'RTM Dias' completed sea trials the day before and will be delivered in early January 2013.

The AM's colleague went  straight from the sea trials and launching in Japan to Subic Bay for the sea trials of PN69/'RTM Cabot'. She will also be delivered in January with PN70/'RTM Drake' - three ship deliveries in one month.

Photos of 'RTM Flinders' courtesy of Keel Marine's site team.

AM

Loss of the Baltic Ace

The shipping media is reporting the tragic loss of the PCCT 'Baltic Ace' off Rotterdam, in which 11 of her crew lost their lives. What was notable about the collision and sinking was the huge loss of life - almost half the crew. In 2012, sinkings are usually a relatively drawn out affair with the crew able to abandon ship in lifeboats or liferafts. 'Baltic Ace' is reported to have sunk within 15 minutes of the collision.

m/v Baltic Ace (photo: www.FleetMon.com)

The website 'VesselFinder.com' has uploaded a video of Baltic Ace AIS data, showing 'Baltic Ace' as the 'stand on vessel' and 'Corvus J as being the 'giveway vessel'. 'Corvus J' alters course to starboard to pass astern of 'Baltic Ace', but then 'Baltic Ace' appears to alter course to port whereby 'Corvus J' hits 'Baltic Ace' in her starboard side. AM can't attributed any blame to either vessel - this is just what the Collision Regulations state for crossing vessels.

gCaptain is also reporting daily on the casualty and have photos of damage to 'Corvus J's bulbous bow after the collision. 'Baltic Ace lies on her side in 36 metres of water (her beam is 25 metres), salvors have been appointed to remove her bunkers and a diver's search for the bodies of the missing crew is underway.

The result of the collision is eerily similar to the loss of Wilhelmsen's 'Tricolor'. Pure Car and Truck Carriers are essentially floating car parks, designed with as many large area decks and as few watertight bulkheads as can be allowed under Class Rules. Combined with high freeboard and a tender stability, water in the wrong places has rapid and dramatic consequences.

The fact that the collision lead to rapid flooding and loss of stability in a modern, 2007-built vessel will hopefully spur the IMO and Classification Societies to review why PCCT's have such relatively poor survivability. The crews of bulk carriers and Roll on/Roll off ferries have all benefited (eventually) from design changes after high profile casualties with large losses of life.

The Antipodean Mariner

Rena, salvage and contractual fairness

When the Salvors of the 'Rena' needed a small tanker to receive the bunkers, lubes and hydraulic oil, their first call was to SeaFuels for their bunkering tanker 'Awanuia'. SeaFuels shuffled around their bunkering programme at some cost and inconvenience and chartered her to Svitzer for an initial seven day period for a tidy sum (reported to be north of $NZ180,000 a day).

Awanuia de-bunkering Rena: Maritime NZ

Svitzer then rolled that short term charter over twelve times on the same terms and conditions.

Svitzer are now claiming that the contract (the one voluntary renewed twelve time) as unconscionable and they they should be able to get the Court to set a more reasonable hire rate retrospectively.

As the legal points relate to application of the salvage convention and the provision to give priority to the protection of the environment, this case is attracting attention from maritime Lawyers. This article is from Lloyd's List and examines the legal issues surrounding whether the Convention can be cascaded down to sub-contractors providing supporting services.

A fairly dry legal read, but with all the elements of a best seller.

AM

Can salvage sub-contracts be set aside for unfairness?

Landmark litigation is under way in New Zealand in relation to the Rena salvage

Simon Tatham and Mike Allen, Lloyd's List - Thursday 6 December 2012

IT IS rare in practice that provisions of the 1989 International Salvage Convention fall under the judicial spotlight.

Many are familiar with the famous provisions of Article 13 in assessing salvage awards and others are only too happy to forget the infamous Article 14 killed off, in effect, by the incorporation of Scopic within Lloyd’s Open Form.

Less so Article 7, however, which is currently the subject of litigation in New Zealand in the context of the Rena grounding. In that case the salvage, now a separate wreck removal operation, was initially commenced under LOF terms with Scopic invoked. The most suitable tanker available to receive the casualty’s bunkers was chartered in at short notice by the salvors, Svitzer. It all happened very quickly, as bad weather was expected.

The parties entered into a short-term sub-contract on the Supplytime 2005 form with rates and other terms following for discussion only after the tanker was already under way for the grounding site. Unfortunately for the salvors, many weeks later the price, originally sought for an expected seven-day job, was now running into millions of New Zealand dollars.

No doubt coming under pressure from the P&I Club that was picking up the bill under Scopic together with the usual uplift on expenses, the salvors eventually applied to court seeking an order that the contract be annulled or the price modified pursuant to Article 7. The interesting question, among others in dispute, is whether this provision applies to a sub-contract as opposed to the salvage contract itself.

To turn the clock back, reflecting to an extent old case law on the jurisdiction of the Admiralty Court, the preceding Brussels (Salvage) Convention of 1910 contained a provision that every agreement as to assistance or salvage entered into at the moment and under the influence of danger may, at the request of either party, be annulled or modified by the court, if it considers that the conditions agreed upon are not equitable. It is reasonably clear from this that the convention was intended to apply to salvage contracts only.

However, the provision was subtly changed in the 1989 convention. Article 6 provides that the convention applies, in rather broad terms, to “salvage operations”. Article 7 then provides that “A contract or any terms thereof…” may be annulled or modified by the court if its various tests are met.

In other words, the convention draughtsmen did not specifically restrict the scope of this narrowly to salvage contracts.

Reading these two articles together, does a contract entered into for the purposes of or in the context of a salvage operation fall within the ambit of the convention so as to give a court the power to modify or annul?

If so, then potentially every contract for services entered into between a salvor and a sub-contracting third-party supplier may likewise be caught. Of course, the applicant is still required to show that the contract was entered into under undue influence or influence of danger and the terms are inequitable terms, or that the payment is in an excessive degree too large or too small for the services actually rendered. These are fact dependent and quite high threshold tests.

Nonetheless, this is or should be a concern for the salvage industry and in particular their sub-contractors. Salvors frequently have no choice but to pay exceptional rates to local contractors either because time does not permit haggling or the contractor is the sole provider of essential craft or equipment or simply because the action is taking place in a difficult corner of the world.
Is it desirable that salvage contractors might agree to those terms in the knowledge that the agreement can be revisited in due course? Of course it might cut both ways inasmuch as that same threat might temper the financial ambitions of the less scrupulous suppliers just as it might assist P&I clubs in keeping a lid on runaway Scopic expenditure where not all salvors, conscious of their 25% mark-up on expenses, might go that extra mile to negotiate the best prices.

A final point lest this is not entirely clear. The convention will be applied by the tribunal chosen under the sub-contract, not the LOF arbitrator.

Returning to the litigation in New Zealand, the sub-contractor tanker owners applied to strike out the claim on grounds that the convention was never intended to apply to third party sub-contracts. The judge at first instance decided that there was a triable issue, and so the case goes on.

As it is unlikely that a similar case will crop up, and this is the first on the point since the 1989 convention came into force, the salvage and P&I world is, or should be, looking closely at the outcome.

Simon Tatham is a solicitor and partner of Tatham Macinnes LLP and Mike Allen is a consultant with TugAdvise, a specialist legal service advising those concerned in the tug and OSV markets.

Tradewinds photo competition 2012

Every year, the Norwegian shipping newspaper Tradewinds runs a photo competition for readers in the maritime industry. This year's 12 finalists have been selected from 100 entries and are listed on their web story Tradewinds Maritime Photographer of the Year

The Antipodean Mariner has got one finalist as has Captain Kevin, Master of 'Go Canopus' - a night shot of his vessel backed up to the stern of Rena attaching the static tow wire.

Anyway, take a look - the story is not in the 'subscription only' part of the site and there 10 other fabulous shots by amateur maritime photographers capturing the essence of the sea.

AM

One day in the life of 'RTM Flinders'

This sequence were taken in the course of one working day at Namura Shipyard, the 22nd of November 2012. During this day, the Mitsubishi UEC main engine was loaded, and the two sets of topside blocks attached to enclose Hold 3.

6UEC Eco engine goes in

Into its bed in the Engine Room

Starboard topside of No.3 Hold goes on

and the Port Side

And since these photos were received, the bow and foc's'le have gone on;

'RTM Flinders' will be launched on 13th December, and join her sister 'Dias at the Fitting Out Quay. RTM Dias' will head out on sea trials on 9th December for testing and commissioning. Thanks again to Dr Paul and the KML Site Team for the great photographs.

For those in the Marine Industry and with a 'Tradewinds' login, check out the AM's entries into the '2012 Tradewinds Maritime Photographer of the Year' competition.

The Antipodean Mariner

Chinglish

I know it's a real 'cheap shot', because I'm sure their English is a truck load better than my Mandarin. However, the AM couldn't resist posting the User Instructions for a rechargeable LED helmet lamp send by a colleague in the Shipyard. The unit, an ML YAO YD-909, is actually a very good headlamp...

AM

Post-Panamax 'RTM Flinders'

The Antipodean Mariner's site supervision team have been sending a steady stream of progress photos and it's time to put some of them up on the Blog. The second ship, 'RTM Flinders' is about 3 months behind RTM Dias, with the first super-block comprising the engine room and No.5 Hold bulkhead going into the Dock in late October.

The first block in the Dock

No.5 Hold tank top

Poop being lifted on over the Steering Flat

With typical Japanese efficiency, her construction continues toward the dock divider where there is a 250,000 DWT ore carrier. When her hull reaches the divider, the ore carrier has to be floated out and the divider repositioned. Like her sister Dias, she will float out stern first to the Fitting Out Quay.

Up against the Dock Divider, No.5 Hold enclosed

'RTM Dias put to sea in mid-December for sea trials and delivery into service in January. Many thanks again to Dr Paul and Asanomi-san for the photos from Imari.

AM

Grim outlook continues for shipping - Lloyd's List

The saviour for any Blogger with 'writer's block' is to re-post articles written by professionals. I liked this one because it goes to the fundamentals of shipbuilding's capacity to renew the global fleet faster than it depreciates. The logical extension of this premise is that ships, like cars, will become technologically redundant (and scrapped) at ever younger ages.

AM

Grim outlook continues for shipping
Sector has become a non-industry for banks that are in no rush to return

Paul Slater
Lloyd's List, Wednesday 14 November 2012

THE third quarter of 2012 has come and gone and various public company reports show the financial results continue to worsen.
As I have said many times, shipping economics is primarily driven by the economics of its customers, the ups and downs of world trade and the macroeconomics of nations for which shipping is an essential service to support their industries.
It is shipping’s ability to respond to these changes that preserves its vitality, but when shipowners get ahead of the markets for their services and order thousands of new ships without contracts for their use, they create their own economic disaster.
Manufacturing industries can stop production, and mines and other mineral producers can slow their activities when demand for their products declines.
Shipping is saddled with fleets of ships of all types and sizes which, unless sold for scrap, can trade globally for 20 years or more. New ships on average take two years to deliver from the date they are ordered and a lot can change in two years.
The cause of the boom in all markets in the middle of the last decade was China’s surging economy. However, although China’s economy is not centralised, its policies are, while its industrial economics are driven regionally.
Thus the extraordinary growth in China’s regional demand for shipping services exceeded the overall requirement, as individual industries needing shipping were themselves governed by the demand for their products, mostly from outside China.
Put simply, China’s own recession was caused by the recessions in Europe and then the US, and Beijing’s new government is unlikely to stimulate its industries financially until the other nations’ economies recover.
Shipowners old and new took advantage of the ignorance of equity investors and the carelessness of the banks to order thousands of new ships of all types.
The abundant supply of public equity acted like a magnet to banks, which grossly overlent to shipping companies to order more and more new ships. These could only be paid for if the freight markets expanded above and beyond the unprecedented levels of 2005 and remained there for another decade.
Worse still, shipyards — mainly in South Korea and China — expanded their capacity to double the levels of the late 1990s and today can statistically replace the world fleet every seven years.
The results of all this are clearly and painfully seen today.
Except for shipping companies in smaller markets or those with ships on long-term charters, as in most of the liquefied natural gas fleet, most are losing money every day.
Bankruptcies and restructurings are the daily norm: “too big to fail” is a mantra that does not exist in shipping. Past collapses in the 1970s and 1980s show that fleet size is no protection if the charter revenues are not there.
Few, if any, public shipping companies have any franchise or goodwill value, and today most have little or no remaining equity value.
As an investment, shipping is viewed today as one of the worst industries and, despite the vitality of the services it provides, it will take a long time for investors to return.
The very recent collapse of Overseas Shipholding Group’s share price, which dropped 90% from its high in 2008 to October 1 this year, then fell a further 80% in the rest of October, leaves a market capital value of only $38m from its five-year high of $2.7bn.
Torm, another very large tanker company, has undergone major restructuring. Its banks now own 90% of a company that in 2008 had an MCV of $3bn. It will probably liquidate its fleet under bank governance.
Another major failure has been Excel Maritime, partly owned by the former major shareholder of Torm. Its peak MCV in October 2007 reached $7bn and it is now just $35m.
There are numerous other public companies whose values have collapsed and that operate under a mountain of debt that greatly exceeds the market values of their assets.
Behind the scenes, numerous private companies are facing similar problems. Even the major Asian owners are reporting sharply reduced revenues and growing losses.
As with all previous market collapses in the 1970s, 1980s and 1990s the shipping landscape changes and the recoveries take longer than upturns.
We still have a way to go before sustained recovery in freight markets is seen. Some are saying the capacity of the wet and dry fleets will need to contract by at least 30% for it to begin.
The container sector was looking to cope with the dramatic increase in ship sizes when the overall demand for slot spaces began to decline.
Today there are more containerships laid up than at any time before, yet the orderbook for jumbo-sized ships still shows a 50% increase by the end of 2013.
Companies such as Seaspan may reduce or defer some of their huge newbuilding programme as their customers face the problems that oversupply is causing.
Some factors may assist fleet reduction over the next few years, however.
The experience of investors in publicly traded shipping companies is as bad as the collapse of the dot.com bubble. Institutional investors are totally absent and short-term traders are very disillusioned.
The shipping banks are all carrying large amounts of non-performing debt, much of which will soon fail altogether. Thus shipping is a non-industry for most banks and it will be a long time before they return.
Private equity is also in short supply, demanding unachievable returns and short-term exit strategies that will mostly not occur.
In summary, there is no new money for new tonnage unless it is covered by charter contracts with real end-users.
The shipyards are already looking at a near 50% reduction in orders from a few years ago and, despite a significant reduction in prices, face further reductions.
The eventual outcome will be smaller fleets of more fuel-efficient ships that can trade profitably in the markets of post-recession economies, but these are far away.
The problems of today’s oversupply of ships will continue to haunt the industry for several more years.

Turangawaewae

Turangawaewae* is a Maori word, a beautiful word which describes both a concept and a sense of well-being.

Defined in the Encyclopedia of New Zealand literally, tūranga (standing place) and waewae (feet) is often translated as ‘a place to stand’. Tūrangawaewae are places where New Zealanders, Maori and Pakeha, feel especially empowered and connected. They are our foundation, our place in the world, our home. In the concept of tūrangawaewae, the external world is a reflection of an inner sense of security and foundation. The mountains, rivers and waterways to which one can claim a relationship, also express this internal sense of foundation.

The Antipodean Mariner returned to New Zealand last week for a shipmates reunion, the Apprenticed Cadets of the Union Steamship Company of New Zealand. The USSCo. is no more, but was as great a force of national economic development as QANTAS is to Australia or Maersk Line is to Denmark. It was with some irony that of the seven Cadets who signed indentures in December 1977, the AM is the only one not currently sailing (though two of the AM's shipmates have recently revalidated and gone back to sea in the Offshore Industry). One of the seven was Captain Kevin J., Master of the 'Go Canopus' during the Rena salvage operation. Like the old saying goes "the older we get, the better we were".

The trip back to New Zealand provided an opportunity to reconnect on two levels. On the first level, it was renewing the deep friendships formed by a common experience. At the second level, it was a re-connection with the beauty of the country where the AM was born, worked and raised a family - my turangawaewae.

To some extent I had written off New Zealand as too small, too slow and too far away from the reality of my life now in Melbourne. But six days and 1,400 km around Napier, Gisborne, the Bay of Plenty and the Coromandel Peninsular on a borrowed BMW has changed that perception and I feel reconnected with (and maybe even a little homesick for) the place where people talk like me.

Australia is where I live but New Zealand is my turangawaewae.

The Antipodean Mariner


*Te Ahukaramū Charles Royal. 'Papatūānuku – the land - Tūrangawaewae – a place to stand', Te Ara - the Encyclopedia of New Zealand, updated 1-Mar-09. http://www.TeAra.govt.nz/en/papatuanuku-the-land/5

Launching 'RTM Dias'

On Saturday 13th October, Hull S.364 - to be named 'RTM Dias' - floated out of her building dock in Imari, Japan. RTM Dias is the 6th Post-Panamax to be built for the AM's Company but is to a different design to RTM Wakmatha. At 38 metres beam and a full double-hull design, she will be suitable for coal and bauxite cargoes and will enter service in early 2013.

The photo montage tells the story. My thanks to Paul and Asanomi-san from the KML Site Team for these photos and for climbing up on the Yard's gantry crane for the magnificent overheads.

In the Building Dock before flooding.

Flooding the dock 

Energy saving devices - Namura Fin and Rudder Fin

The Antipodean Mariner

Force Majeure

Force Majeure is a legal 'out' for parties to a contract whereby an external event, which is not in the control of either of the parties, results in one party being unable to perform its obligations. The Shipyard has a contractual timeline to deliver the remaining five vessels to the AM's company and Force Majeure is a permissible delay which 'stops the clock' on any financial penalties from late delivery.

'Typhoon Jelawat' formed to the east of the Philippines in late September and meandered north before passing over Japan on the 1st of October.

Typhoon Jelawat's path

Unfortunately, the ship carrying the two Doosan-built  MAN B&W engines for the final two vessels 'Columbus' and and 'Tasman' left for Subic Bay as Jelawat formed, and despite hugging the Chinese coast got a hammering. The two Intermediate shafts and two tail shafts broke free from their lashings and rolled around inside the cargo hold. The engine entablature (upper engine part) for 'Tasman' slipped off its securing chocks, damaging the machined surface where it joins with the bedplate holding the crankshaft.

The engines are shipped with the pistons and conrods hanging up inside, and securing wires broke causing the rods to swing and damage sides of the crankcase.

Both engines are being shipped back to Korea for repair by the Manufacturers and the Shipyard has declared Force Majeure, allowing them to delivery the last vessels late and without penalty.

Tailshafts broke free

Crankcase door impact damage

Surface joining entablature and bedplate deformed

Exhaust gas receiver damaged

Engine will be returned to Korea

The Antipodean Mariner

Post-Panamax progress

Since the last post of RTM Dias (Ship 364) on 19th September, progress has been rapid. This sequence covers 5 days (23rd to 27th September) when the ship has gone from No.3 Hold to the complete hull in the building dock.

No.3 Hold

Starboard side of No.2 Hold and transverse stool
being lifted in to place

No.2 and No.3 Hold tank-tops and ballast tanks

Bulbous bow attached

Accommodation block lifting on

Add caption

 Thanks to the KML Site Team and Asanome-san for the sequence.

The Antipodean Mariner

The second Post-Panamax series

Ticking along quietly in the background has been the construction of two Post-Panamax bulk carriers, Ships 364 and 365, in Imari Japan. This pair will go to work in the bauxite and coal trades next year, but differ significantly from the five Post-Panamax already in service.

These designs are a variation on a standard coal carrier and are innovative for their full double hull construction. Most bulk carriers have a section of single hull between the lower hopper and topside ballast tanks. These vessels' holds have smooth sides, with all structural strength contained in the wing ballast tanks, similar to a modern double-hull oil tanker.

The operational benefits of double hull are that the cargo doesn't 'hang up' in the side structure, the vessel can carry all her water ballast in wing tanks and doesn't require a Ballast Hold.

The current schedule will see S.364 (RTM Dias) go to sea trials in November, for delivery in January and her sister-ship (RTM Flinders) in March. The Antipodean Mariner has stitched together a quick montage of progress since August, finishing with the loading of the Main Engine today (a Mitsubishi 6UEC60LS II-ECO slow-speed, 2-stroke diesel).

S.364 Engine Room and No.5 Hold Double Bottom

No.5 Hold lower stool/bulkhead and start of Hold 4

No.5 Hold enclosed, No.4 Hold starboard side lifting in to place

MHI 6UEC engine being lower into place

Thanks to Dr Paul R. and the KML Site Team for these photos.

The Antipodean Mariner