Shanghai Harbor
Issues such as pirate-proofing vessels, rogue waves and Plimsoll lines are all important, but cannot be covered in just one article. In fact, one might even argue why put any information in writing that pirates might read and use, so may not be covered much in future issues. Suffice it to say, however, piracy has advanced far beyond the purview of bands of rag-tag Somalis armed with grappling hooks and AK-47s. They may get to keep part of their booty, but the piracy operations are now controlled by European gangsters.
Enough about that…back to Post-Panamax vessels.
Delivery of Double Fortune, the first IS-NEXTER Post-Panamax bulk carrier
Post-Panamax Vessels
On September 29, 2014, PCL took delivery of the Post Panamax bulk carrier Double Fortune built at Imabari Shipbuilding Co. Ltd. (Marugame Yard). This vessel is the first in a series of the IS-NEXTER design, which has been developed as the next-generation of Post-Panamax bulk carriers catering to the demanding needs of its clients in the steel and power sectors. The vessel has various advanced features, including a hybrid fin for enhanced fuel efficiency. The majority of the deck machinery is electrically driven to prevent oil pollution. This is the first of six sister vessels PCL will receive over the next few years. Its present fleet of Post-Panamax bulk carriers (including vessels on order) stands at 18.
It should be clear from a comparison of the Double Fortune’s dimensions that although it holds more cargo (95,790 metric tons) than the typical Panamax, this Post-Panamax vessel will hold much less than the physically larger New-Panamax vessels.
Demolition
Everyone learns about the law of supply and demand in school, but it seems no one pays any attention to it when it comes to making capex decisions. The same rule works in coal or shipping. There has been an overhang of coal production since the oil companies began opening mines in the Powder River Basin in the 1970s, but that hasn’t stopped new investors from opening new mines. Oversupply of coal is just now being corrected as low prices are forcing some coal producers to go bankrupt. Look for coal prices to start creeping back up.
The same dynamic is true in ocean shipping, where high charter rates in 2007-2008 stimulated ship owners to order far more dry bulk vessels than demand could ever support. The dry bulk market has long suffered from weak freight rates stemming from falling demand and an oversupply of ships, so the increased demolition of Capesizes in particular comes at a much needed time for the market. At first it sounds odd, but a reduction of vessels means more competition for business, which means higher freight rates.
BIMCO Chief Shipping Analyst Peter Sand said, “The high amount of Capesize demolition will benefit the segment. Although increasing scrapping was expected, the actual development exceeded BIMCOs expectations. This could have a positive impact on the market. ”What choice did ship owners have? Sell vessels to competitors only to be out-bid when bidding on new freight business? It is the age-old dilemma of “selling rope to the hangman.” The same thing happens in the barge and railroad industries.
View from the bridge of a Panamax — this is a so-called gearless vessel, meaning it has no deck cranes. Beneath each of the hatch covers is a 70-ft-deep cargo hold capable of holding about 10,000 metric tons of coal. Since it has no deck cranes or other equipment that may obstruct shore-based ship loaders, it can be docked and loaded most efficiently. Each of the hatch covers is parted in the middle and rolled toward the side of the ship.
The Capesize dry bulk demolition market is off to its busiest start ever in 2015 amid some of the lowest dry bulk freight rates in the last three decades. According to the world’s largest ship owner association, BIMCO, during the first four months of 2015, 52 Capesizes with a total deadweight tonnage (DWT) of around 8.7 million have been sold for demolition. BIMCO pointed out that with those numbers, the market is well on its way to break the 2012 record, where a total of 70 Capesize ships were scrapped.
The demolition of Panamax ships has also been on the rise in 2015, and although the development is not quite on par with the Capesizes, it is still substantial. In 2015, as much as 2.6 million DWT has already been sold for demolition, equaling more than half of last year’s total, when 4.8 million DWT was scrapped.
Not all coal travels in Capesize or Panamax vessels. Not all ports have deep enough water or can justify large unloading facilities. For the smaller Handymax and Handysize vessels, demolition has also increased in 2015. For Handymax, a little more than 1 million DWT has been scrapped so far in 2015, 34% more than the same period last year. For Handysize, the numbers are 2.2 million DWT so far, up 79% from last year.
BIMCO noted that, despite worsening freight market conditions, the demolition of dry bulk tonnage has not been adapting fully to this trend as could be expected, at least until now. During 2014, bulk carriers equaling 16 million DWT were sold for demolition, down from more than 23 million DWT in 2013. Scrap prices are under pressure from a general diminishing demand for steel in addition to cheap steel coming out of China. With low scrap prices, currently around $370 per LDT (light displacement ton), owners are more reluctant to let go of their ships despite being pressured from poor freight market conditions. However, data from the first four months of 2015 shows that more owners are scrapping their ships than ever before.
Carrollton Gauge
Vessels approaching the Southwest Pass Gulf Outlet will notice the normally blue Gulf waters are muddy brown farther out than usual due to high water on the Mississippi River. As of June 2, the Carrollton Gauge near New Orleans, Louisiana, had reached 12 ft and is predicted to remain above 12 ft. High water rates become effective at fleets in the vicinity at a 12-ft Carrollton Gauge reading.
River men don’t really have to be told to take special care when they see the river rising and huge logs floating into barge tows fleeted on the river banks, but the Coast Guard’s VTS (Vessel Traffic Services) will make sure they have proper guidance anyway. As a result of the Carrollton Gauge reading (or expected to read) 12 ft and rising, the following Algiers Point VTS Special Area Operating requirements are in effect:
- 33 CFR 165.803 (m) requires stricter barge fleeting standards on the Lower Mississippi River. (Fleets that normally held 250 barges will be reduced to account for river stage.)
- 33 CFR 165.810 (b)(2) describes high-water requirements for all vessels operating in the Lower Mississippi River below mile 233.9 AHP, including South Pass and Southwest Pass.
- In addition to these requirements, the Algiers Point Vessel Traffic Control lights are energized and vessel traffic is being regulated in the vicinity of Algiers Point. The Vessel Traffic Control lights are located at Governor Nicholls Light, 94.4 AHP, LBD, LMR (LLNR 13630/33185), Gretna Light, 97.6 AHP, RDB, LMR (LLNR 3655/33210) and the Westwego Repeater Light, 101.4 AHP, RDB, LMR (LLNR 13715).
- Downbound vessels: Check in with Vessel Traffic Service Lower Mississippi River (call sign “New Orleans Traffic”) no lower than the Huey P. Long Bridge, MM 106.1, AHP (SHIPS and TOWS), and the Marlex Terminal, MM 99.0, AHP (SHIPS and TOWS).
- Upbound vessels: Check in with “New Orleans Traffic” no higher than the Algiers Canal Forebay, MM 88.0, AHP (SHIPS), Industrial Canal, MM 92.7, AHP (SHIPS and TOWS), and Crescent Towing Smith Fleet, MM 93.5, AHP (TOWS).
- In accordance with 33 CFR 160.111 (c), the COTP (Captain of the Port) has determined that during periods of high water, unless moored to a shore-side facility or mooring buoys, all deep draft vessels must have three means to hold position. An example would be two fully operational anchors and the propulsion system in standby. Should a vessel lose an anchor or become inoperable with no redundant capabilities available, such as aft anchors or two main engines, a third means of holding position could be via tug assist.
Dave Gambrel is a transportation consultant and writer for Coal Age, E&MJ and coal transporters. He may be reached at bunkgambrel@earthlink.net.
