Moody’s: global shipping industry’s strong performance in 2020 set to continue
Although the container shipping industry was hit hard by the pandemic in the first half of 2020, the industry managed to stage a turnaround to become one of the best performing nonfinancial corporate sectors globally last year. There were three main reasons for this: disciplined capacity management by carriers which supported freight rates, low fuel costs and a quick rebound in demand in the latter part of the year. We believe that high demand and elevated freight rates will persist for at least the next six months and possibly throughout 2021. Demand for container shipping services fell sharply at the start of 2020 as the coronavirus outbreak in China hit manufacturing output. Further, measures introduced by countries to contain the virus as it spread globally reduced demand for containerized goods in the second quarter. In response, carriers canceled an unprecedented amount of sailings, which acted as a stabilizer for freight rates.
Florida’s Jaxport completes $104m berth expansion
This work added an additional 213 metres of newly rebuilt deepwater berthing space. Another phase of the project, which will add a further 213 metres, is scheduled for completion by the end of 2021.
The SSA Jacksonville Container Terminal is a public-private partnership between Jaxport and SSA Marine.
Upon completion of the berth enhancements later this year, the facility will feature two newly reconstructed 363 metres container berths capable of simultaneously accommodating two post-panamax vessels. The berths are electrified to handle a total of six state-of-the-art environmentally friendly electric-powered 100-gauge container cranes, including three currently in use.
Crew changes at Singapore port cross 100,000 amid covid-19
Recognising the importance of ensuring that international trade and the flow of supplies into Singapore remain uninterrupted amidst the pandemic, MPA continues to facilitate crew changes for ships of all flags and crew of various nationalities through a ‘safe corridor’. MPA has been working together with the unions, industry, and international partners, on crew change protocols that safeguard both seafarers and the local community, the MPA stated.
To-date, since 27 March 2020, MPA has facilitated 100,000 sign-on and sign-off crew of all nationalities from ships of different flags involving more than 5,000 companies and 6,700 ships.
The 50,000 mark for crew change was crossed last November when MPA announced crew changes of 50,821 since 27 March 2020.
Newbuilding ordering activity shows no signs of slowing down
Ship owners are feeling more confident in terms of contracting more newbuildings, as evidenced by the activity of the past few weeks. In its latest weekly report, shipbroker Allied Shipbroking said that “despite being in the midst the peak period of the Chinese New Year Festivities, which is typically a quieter market point, we experienced a rather modest flow of fresh orders coming to light the past few days or so. From the side of the dry bulk sector, things have slowed downed significantly, with just a single order for 1 option 1 Kamsarmax taking place.
Ship recycling market expected to firm up
The ship recycling market is predicted to accelerate in terms of activity during the coming weeks. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “there is hope that a more bullish market may come into play following rumours that the Chinese Government may decide to import steel rather than export which would have put paid to the recent caution of the Chinese flooding the Indian sub. Continent markets with cheap steel. These previous rumours had, we are reliably informed, affected the sentiment in the waterfront with the recyclers having held back from showing interest to acquire tonnage and thus this change in position from China, if true, should actually bring about a more positive approach from the recyclers and subsequently help to rekindle interest and push price indications northwards again”. According to the shipbroker, “we shall see how correct these rumours are once the Chinese New Year festivities have finished! Meanwhile, it has remained a very quiet week with a lack of action being seen – there have been a few sales concluded as reported below, but generally the market has become stagnant where owners have been reluctant to consider the recent weaker levels and strong and optimistic second hand values and freight rates have ensured new tonnage in circulation for recycling remaining limited.
WHO is responsible for the cargo when force majeure is declared?
The development of a new BIMCO Force Majeure Clause is progressing and continued last week as the subcommittee met to draft a bolt-on provision relating to situations when cargo has been loaded onto the ship and a party declares force majeure.
The starting point is that while a vessel is carrying cargo there is no right for either party to terminate the contract. This approach has been taken to avoid that the provision acts as a weapon in the hands of the party claiming force majeure. It should be noted that if a contract is terminated while the ship has cargo on board, the owners will remain responsible at law as bailees of the cargo and will have to bear the costs of discharge with no contractual rights vis á vis the charterers.
What does the bolt-on provision then do for the parties? It sets out a number of liberties if force majeure prevents the completion of loading, or the departure from the load port, or discharge, for more than 21 days from when force majeure notice was declared.