Singapore terminal operator PSA Corporation and Japanese containerline Ocean Network Express (ONE) have released details of a successful collaboration to recover and recycle refrigerant gas from reefers.

PSA is the first in Southeast Asia to commence trials on the use of reclaimed refrigerant gas for reefers, with ONE being the first shipping line to successfully complete the trials using their reefers with PSA.

Recycling refrigerant gas effectively saves about 4,000 kg of carbon emissions per reefer, which is equivalent to the emissions from driving a normal internal combustion engine car for close to a year, the two companies stated in a release today.

Refrigerant gas, or hydrofluorocarbons, are potent greenhouse gases which contribute to global warming.

PSA now aims to offer this service to other shipping lines.

Sam Chambers.

May 20 has been given as the first official deadline for Shanghai, China’s largest city, to open up.

The metropolis, home to the world’s largest container port, entered lockdown in late March for what was meant to be 10 days as part of China’s strict zero-covid policy. Most of the city’s 25m population have been living in lockdown ever since with a deleterious effect on local transport as the trucking chart below illustrates.

Closed loop productions are unacceptable as a long-term solution for German companies to operate in China

Up until today, Shanghai authorities had been unwilling to give a firm date for when the city would reopen with persistent cases of covid flaring up across its 16 districts.

Vice mayor Wu Qing said at a news conference today that an orderly opening would now proceed in the middle of this month, using a Chinese term that refers to the period between May 11 and 20. 

In terms of port operations, Peter Sand, chief analyst at container platform Xeneta, told Splash earlier that it would take anywhere from four to eight weeks for normal operations to resume, while gateway terminals in the US and Europe have repeatedly been warned by container analysts to brace for a so-called whiplash effect from Shanghai’s reopening.

The reopening cannot come soon enough with many international manufacturers reporting extreme distress and pessimism at how local authorities have handled the Shanghai outbreak.

A flash survey carried out from May 6 to 8, polling 460 member companies of the German Chamber of Commerce in China, shows that only a small number of firms have been able to operate and resume production in the People’s Republic. Foreign employees are increasingly planning to leave the country due to China’s strict covid strategy, the survey showed.

In areas affected by lockdowns, companies can only restart their operations under constraints. Just 19% of the surveyed German companies have permits to produce under adverse conditions in such areas. Of those allowed to run operations under lockdown, many only operate at less than half of their full production capacity. Logistics problems, low availability of staff and uncertainty caused by sudden changes in policies are the main reasons for hampering the increase of production capacity, the survey showed.

Nearly one third (28%) of foreign employees of the surveyed companies plan to leave China due to covid-related measures, with 10% planning to do so even before their current employment contract ends.

“It will be extremely challenging for German companies to substitute these employees with new staff from abroad, considering how the current covid outbreak in China is handled”, said Maximilian Butek, executive director of the German Chamber of Commerce in Shanghai. “The current circumstances under which German companies have to operate in China can only be short-term solutions in emergency situations. Closed-loop productions are unacceptable as a long-term solution for German companies to operate in China.”

Among other key findings from the survey, it turns out that 73% of the respondents’ business operations are in areas under full or partial lockdown

At least 32 cities across China are now under full or partial lockdown, impacting up to 220m people, according to calculations from international news channel CNN.

Authorities in China have this week imposed a de facto international travel ban, forbidding citizens from going overseas for non-essential reasons.

In a statement Thursday, the Chinese National Immigration Administration said it would tighten its reviewing process on issuing travel documents such as passports, and strictly limit those looking to leave.

Sam Chambers.

With the cargo business blasting, financier firms are bouncing from organization to organization quickly, prompting high paces of turnover. Regularly, agents are beginning the work with the guarantee…

Mediterranean Shipping Co’s lead over 2M partner Maersk at the top of the liner rankings has stretched beyond the 100,000 teu mark, a gap that is set to widen considerably further in the months ahead.

Latest data from Alphaliner shows the Aponte family-controlled MSC has 4,351,960 slots in its fleet compared to Maersk’s 4,248,120. Alphaliner reported MSC surpassing Maersk in fleet size on January 6, the first time in a quarter of a century that Maersk has not been at the top of containerline rankings. Moreover, MSC’s orderbook, the largest in the industry by some distance, will ensure the gap widens beyond 500,000 teu in the coming months.

Starting out in 1970 with a German-built secondhand vessel of just 2,900 dwt, acquired from Hapag-Lloyd and renamed Patricia, MSC, now headed by former Maersk COO, now operates 664 ships of which 186 have been bought on the secondhand market since August 2020, the greatest fleet buildup in the 66 years of containerisation.

In recent years Maersk has repeatedly stated its intention be a logistics integrator with a fleet no larger than 4m to 4.4m teu.

“If MSC ends up having more capacity than we do, that’s not the end of the world,” Maersk CEO Søren Skou said during Maersk’s capital markets day last May. “That’s not how we think about being number one. Our focus is on having a much higher turnover per container that we ship.”

In similar comments, MSC’s Toft said in the wake of surpassing his old employers three months ago: “Size isn’t an objective for us. At MSC, we never set a specific target to be the biggest. Growth, profitability and supporting customers are what have driven us, and what will continue to drive us forward.”

Sam Chambers.

The State of Maryland has asked Taiwanese liner Evergreen to establish a so-called responsibility fund to pay for costs related to the month-long grounding of its Ever Forward vessel in the state’s Chesapeake Bay.

In a letter to Benjamin Tsai, president of Evergreen Shipping Agency (America) Corporation, Maryland comptroller Peter Franchot said, “While we do not know the full scope of the environmental impact thus far, a 131,420-ton ship, carrying tons of cargo and fuel, getting stuck in our waters undoubtedly has resulted in disruptions to the Bay’s fragile ecosystem.”

Franchot asked the company to set up a $100m fund to cover the environment-related costs, as well as economic costs, in particular for the seafood industry.

“The damage that this incident has already caused – and could potentially continue to cause – will require financial resources to correct,” he said.

Regarding the dredging undertaken to help free the ship, Franchot wrote: “While this may have been a necessary action, among its potential consequences include damage to oyster beds and disruptions to the spawning season for several species that our seafood industry – already struggling economically due to labor shortages – will harvest in the coming months.”

Franchot said money from the fund would potentially compensate workers in the seafood industry if they are impacted, and pay the cost of labor for employees from federal, state and local agencies involved in refloating the ship.

“The establishment of this fund will send a clear message that Evergreen is a good faith actor,” he said, that “understands the environmental and economic damage this incident has caused to the state of Maryland.”

Kim Biggar.

For years, the shipping industry has focused on regulations and procedures to improve safety. Yet shipping is still at risk of major accidents. The whole industry needs to change its focus. Ticking boxes never made anyone safer, argues Dr Torkel Soma, chief scientific officer at SAYFR in the first of a two-part series for Splash.

It has been well documented that most maritime accidents (~80%) are caused by human error. Still, most of the focus on learning is rooted in technical causes and adding procedures and checklists.

Despite this bias, many accident investigation reports pinpoint that the leadership or safety culture was the root cause of more recent accidents such as the Bulk Jupiter, El Faro, Helge Ingstad and Costa Concordia, as well as older accidents such as the Exxon Valdez, Bow Mariner, Herald of Free Enterprise and Amoco Cadiz.

Industry blind spot

The critical failures leading to the accident were in most cases known before the accident took place. This demonstrates that failures which are not handled properly may develop into critical situations and accidents. This is a blind spot because the biased focus on technicalities and “impeccable” safety inspections makes people reluctant to be open about their failures, concerns and mistakes.

We at SAYFR think shipping companies, and the whole industry, needs to change its focus. Thousands of auditors and inspectors across the world are engaged by classification societies, flag and port state authorities, vetting and insurance companies and HSEQ departments. They verify that ships do the right thing and comply with technical and procedural requirements. However, ticking boxes never made anyone safer.

Cover-up culture

Also, and worryingly, there is a cover-up culture causing errors and unsafe practices. There are now so many procedures and checklists that, in some cases, it is impossible to comply with all of them. The fear of failure is driving accident statistics, and surveys reveal that 45% of seafarers admit that they regularly do not comply with procedures.

I firmly believe that human factors are key to prevent threats and failures from escalating. Yet improving safety or performance is about improving not only individuals but also the collaboration between sea and shore staff, between officers and crew and between different nationalities and cultures on board ships.

Huge potential to reduce accidents

Although this is recognized, it is not always addressed, so I believe a new approach is necessary to improve collaboration and reduce risks. Indeed, collaboration is strongly correlated with the risk of accidents and business interruption. Our experience of working on multiple projects over the years shows that it is possible to reduce the risk of major accidents by up to 75%.

However, there is no quick fix to improve collaboration and implement behavioural changes through, for example, training courses. Changing the culture is key and that process takes time. To help operators improve their approach to safety, proven methodologies must be used.

Culture assessments key to improving safety

In order to understand how the organizational culture influences safety, there is a need to use methodologies specialized for this purpose. One thing that many people are ignorant of is that a key professional competence of organizational psychology is advanced mathematics and data analysis. The evaluation of organizational culture relies on interviews, observations and questionnaires applying psychometric instruments that are tailor-made to ensure valid and reliable results. The professionals drive the process while the data provides the results. As a consequence, the more and better the data on these topics, the more valid, reliable and to-the-point are the results. Therefore, SAYFR has developed tailor-made psychometric instruments to assess these topics and has a database of responses from about 300 000 seafarers.

Reduction in the frequency of serious accidents

It is not only the psychometric instruments that rely on data. The use of digitalization, the internet of things (IoT), sensor data, machine learning, and big data has picked up in recent years. The idea is that those with the most data can create the best analytics and forecasts. With the use of more quality data, risk assessments and worst-case scenario simulations provide reliable predictions and identify effective interventions to prevent accidents.

In short, what we at SAYFR see is that the best shipowners and operators have a proactive organizational culture that goes beyond ticking the ‘compliance boxes’ and instead applies a collaborative, trusting approach from top to bottom in the company’s organization. This also includes assessing culture using valid and reliable survey instruments. This is what really helps to improve safety.

Source: Splash

In the presence of the Egyptian prime minister, a memorandum of understanding was signed on Monday between Maersk and Egyptian authorities in a joint bid to further accelerate the supply of green fuels.

This partnership follows six fuel sourcing partnerships announced earlier this month, and with it Maersk joins forces with the General Authority for Suez Canal Economic Zone (SCZone), the Egyptian New and Renewable Energy Authority (NREA), the Egyptian Electricity Transmission Company (EETC), and the Sovereign Fund of Egypt for Investment and Development (TSFE).

“Egypt has excellent conditions for renewable energy production and ambitions to become global leader in the green energy value chain. We are very excited to be able to explore options together, drawing on our more than 100 years of business relations in the country,“ said Henriette Hallberg Thygesen, CEO, fleet and strategic brands at Maersk.

The parties will be conducting a feasibility study before the end of 2022 to examine an Egypt-based hydrogen and green marine fuel production, powered by renewable energy with Maersk as committed offtaker.

Ayman Soliman, CEO of The Sovereign Fund of Egypt, said; “Maersk’s bid to accelerate the supply of green fuels and the global transformation to net-zero shipping will expand the Suez Canal’s service offering as a main global hub for green bunkering in the region.”

Maersk said yesterday it intends to explore similar opportunities in other regions with strong potential for renewable energy development.

Sam Chambers.

UMAS, a commercial advisory service affiliated with the UCL Energy Institute at University College London, has issued a report commissioned by The Ocean Conservancy that shows the scale of US shipping fleet emissions and opportunities to decarbonise the sector. In 2018, carbon emissions from all US-flagged vessels amounted to around 26m tonnes, approximately 2.4% of global shipping emissions. Domestic shipping voyages accounted for about 70% of carbon emissions from the US-flagged shipping fleet, which presents a unique opportunity for US actions to effectively decarbonise the American maritime sector.

The report, titled The Maritime Fleet of the USA—the current status and potential for the future, says that more than 40% of the energy used by the US fleet could be replaced with zero-emissions solutions this decade.

It estimates that 17% of the current US fleet’s energy demands could be substituted with electrification. This would include, for example, ships relying on battery electrification for short voyages or ships running off onshore electric power sources when in harbour.

A further 24% of the fleet’s energy demands, coming from longer voyages than battery power alone can support, could be met with zero-emissions fuels, such as green hydrogen. These technologies are already available and adopting them would require minimal infrastructure updates. They could happen within the existing renewal schedule and would not require scrapping and rebuilding ships ahead of schedule.

Existing regulations under the Jones Act provide the US with an opportunity to drive decarbonisation of domestic shipping and the adoption of zero-emission fuels and electrification. By already relying on US production, the domestic fleet can introduce new zero-carbon vessels as older vessels are decommissioned or retrofitted on already existing schedules.

By transitioning the domestic fleet away from fossil fuels, the US could become a global leader in shipping decarbonisation, says the report, and kickstart the international transition to zero-emissions shipping.

Kim Biggar.

Six companies, including Danish carrier Maersk, have formed a partnership that aims to establish Asia’s first green e-methanol plant which converts captured biogenic carbon dioxide (CO2) into green e-methanol. The pilot plant will be set up in Singapore pending successful conclusion of feasibility studies by the end of 2022 and forms another part of the global fuelling jigsaw for Maersk’s raft of methanol-fuelled boxships under construction in Asia.

PTT Exploration and Production Public Company Limited (PTTEP), Air Liquide, YTL PowerSeraya, Oiltanking Asia Pacific and Kenoil Marine Services are working with A.P. Moller – Maersk on the green e-methanol pilot plant, with a minimum production capacity of 50,000 tons per annum, the first of its kind in Southeast Asia.

Maersk has 13 landmark dual-fuelled container vessels able to operate on carbon neutral methanol under construction with delivery dates in 2024 and 2025. The Danish carrier has been busy securing fuel supplies around the world for this new ship type.

Sam Chambers.

China’s most-populous city has yet to give an indication of when lockdown measures will lift, fuelling greater uncertainty for those involved in global logistics.

Shanghai’s daily Covid-19 infections set a record for the sixth straight day on Thursday, as citywide mass testing identified 19,982 cases in China’s financial and commercial hub.

EU Chamber of Commerce in China members estimated yesterday that Shanghai port volumes are down by about 40% week-on-week, despite the port’s operator insisting that it is business as usual at Yangshan and Waigaoqiao thanks to a bubble working environment at the quayside.

The issue, as has repeatedly been stressed since the lockdown came in 11 days ago, is down to limited trucking availability and the shuttering of many factories and warehouses. Many of the entry and exit points on the highways between provinces are also blocked causing severe supply chain issues.

Cargo volumes through the port tracked by FourKites, a supply chain data firm, had dropped by about a third since March 12 as shippers reroute freight elsewhere.

“The indefinite extension of the Shanghai lockdown is causing a significant slowdown of operations at the city’s major air and ocean ports due to labor shortages as well as a drop in the availability of goods as manufacturing and warehouses close, and trucking availability is significantly disrupted,” an update from online freight platform Freightos earlier this week stated.

Last week, a survey of American businesses in China found that 54% of respondents have lowered 2022 revenue projections for the year due to the latest Covid-19 outbreak. Among manufacturers, more than 80% reported slowed or reduced production, as well as supply chain disruptions.

An update from Japanese containerline Ocean Network Express (ONE) yesterday said that the limited trucking availability has impeded the clearance of import cargoes.

The resulting impact is that Yangshan and Waigaoqiao Phase 2, in particular, have “critically high” dangerous goods and reefer yards utilisations, ONE warned.

“Due to operational constraints in the yard side, there is a possibility that certain DG Classes and Reefers may not be allowed to discharge if the quantity cannot be accommodated,” ONE cautioned.

While Shanghai is hogging the headlines, the fallout from Beijing’s pursuit of a zero-Covid strategy is causing lockdown havoc across vast swathes of the world’s most populous nation.

Japanese bank Nomura estimated on Tuesday that a total of 23 Chinese cities have implemented either full or partial lockdowns, which collectively are home to an estimated 193m people and contribute to 22% of China’s GDP.

“These figures could significantly underestimate the full impact, as many other cities have been mass testing district by district, and mobility has been significantly restricted in most parts of China,” said Ting Lu, chief China economist at Nomura.

The lockdowns are taking their toll on the national economy. The China Caixin service PMI recorded the worst month-on-month contraction in March since early 2020.

Christian Roeloffs, the CEO of online marketplace Container xChange, described the situation in China as being akin to a traffic jam.

“Some people now stepped on the brakes really heavily and the problem is that this will lead to a significant sort of bulk up in demand for freight services which will essentially be unleashed once the factories reopen. And when the demand is back, the carriers will again not have enough equipment on the ground because not enough equipment went into China during the port lockdowns and not enough vessels are available,” Roeloffs said.

Sam Chambers.