Ports & Ships Maritime News

Jul 29, 2009
Author: Terry Hutson
















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TODAY’S BULLETIN OF MARITIME NEWS

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  • First View – RAGNHILD K

  • African Development Bank makes money available for Kenya-Ethiopia sea/land corridor

  • Port of Dar es Salaam container terminal crippled by strike

  • Navy gets new eyes

  • Clashes in Somalia forcing more refugees across Gulf of Aden – UN agency

  • Trade news – Japanese shipping lines offer bleak outlook

  • SA weathering recession quite well - Fitch

  • Pic of the day – OCEAN LYRA




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    First View – RAGNHILD K



    The Norwegian-owned but Singapore registered offshore supply tug RAGNHILD K (1,763-gt, built 2008) arrived in Cape Town yesterday (28 July) from Durban and en route to Angola. Picture Aad Noorland



    African Development Bank makes money available for Kenya-Ethiopia sea/land corridor

    The proposed land and sea corridor between Kenya and Ethiopia, that will make Ethiopia less reliant on Red Sea ports in the future, has come a step closer with the granting of a US$326 million loan by the African Development Bank.

    The money will be utilised in the construction of a second container terminal at the port of Mombasa and also in the building of a 438km paved highway between the two countries to facilitate the movement of freight.

    The new highway together with Mombasa’s second port is intended to also help reduce delays on cargo moving from the port to landlocked Ethiopia. According to the UN and other agencies operating in the area the new corridor has significant potential to promote trade and “quicken the pace of integration in the Horn of Africa region.”

    The agencies say they confidently expect transit times and costs to be reduced and volumes to increase as a result.



    Port of Dar es Salaam container terminal crippled by strike

    Workers at the Dar es Salaam container terminal brought all container handling operations to a standstill on Monday when they went out on strike over a wage dispute.

    The strike at the Tanzania International Container Terminal (TICTS) involved something like 600 workers who said they would not be returning to duty until all their demands had been met.

    “We will continue our strike,” said a spokesman for the Dock Workers Union. “We will continue striking until all our demands have been met.”

    Another union representative said the outlook was not positive as management was downplaying their demands.

    The dispute is believed to revolve around an incentive bonus payable on the number of containers handled per hour, overtime rates and a risk allowance.



    Navy gets new eyes

    The CSIR has researched and developed a short range optical surveillance and tracking system known as the Wide Area Surveillance Prototype (WASP), reports the latest CSIR Newsletter – find it HERE

    The research, which was performed in conjunction with the University of KwaZulu-Natal, aims to fulfill a need of the South African Navy (SAN) to have additional 'eyes' onboard a naval vessel that will detect and warn the crew against possible visual threats at sea and in hostile territory.

    The WASP as a short range visual surveillance system provides close range multiple target information, calculated trajectories and visual identification to ship's command on a 3D terrain map. It also has the capability to interface with other surveillance systems.

    The system passively observes the scene and requires no moving parts, making it both covert and robust. One of the advantages is that it requires only one person to keep an eye on the surveillance system as opposed to a number of sailors fulfilling the post of 'lookout'.

    The 60 degree real time image is obtained via four cameras (15 degree field of view, 1360x1024 pixels), stitched into a 4000x800 pixel image at approximately 20 frames per second.

    WASP runs on commercial off-the-shelf hardware with specially developed software, which uses adaptive background modelling to identify possible threats to track.

    An omni-directional version, dubbed WASP360, is currently in development.



    Clashes in Somalia forcing more refugees across Gulf of Aden – UN agency

    28 July 2009 – Fleeing escalating violence in the capital, Mogadishu, and central Somalia, thousands of Somalis are making the perilous journey across the Gulf of Aden to begin new lives in Yemen, the United Nations refugee agency reported today.

    Some 12,000 Somalis – out of 232,000 people who have escaped clashes that broke out in early May between Government forces and the Al-Shabaab and Hisb-ul-Islam militant groups – have reached the northern port town of Bossaso since early May, and most of them are hoping that smugglers will transport them to Yemen.

    Partners of the UN High Commissioner for Refugees (UNHCR) report that Bossaso is already very crowded and that smugglers are already collecting cash from refugees trying to reach Yemen.

    “As the sea is already very dangerous because of the prevailing conditions, the majority of the people are expected to camp in Bossaso and wait for September, when winds are more favourable,” UNHCR spokesperson Ron Redmond told reporters in Geneva today.

    Last year, over 50,000 people reached Yemen’s shores, marking a 70% increase from 2007. During the first half of 2009 alone, more than 30,000 people have made the “dangerous journey” to Yemen, Mr Redmond noted.

    In 2008, over 1,000 people died, either being thrown overboard or forced to disembark from boats too far from the shore by smugglers, as they attempted to make landfall in Yemen, he added.

    So far this year, nearly 300 people have lost their lives or are missing as they tried to cross the Gulf of Aden, according to UNHCR.

    “The smuggling phenomenon places increasing strain on Yemen’s limited resources and poses more challenges to the Government’s efforts to balance its obligations under international law with the need to protect the country from illegal entry,” Mr Redmond said.

    New arrivals are picked up by UNHCR’s partner agencies and taken to reception centres where they are registered and given food, shelter, medical assistance and other basic assistance while they recover from their journey.

    “The Government of Yemen recognizes Somalis as refugees on a prima facie basis,” the agency’s spokesperson said, adding that the refugees can choose to shelter at the Kharaz camp two hours west of the Yemeni capital, Aden, where they receive legal and physical protection and help.

    Already 13,000 refugees, mostly from Somalia, have made Kharaz camp home temporarily, while tens of thousands of other refugees have chosen to stay in urban areas around Yemen.

    Somalia is one of the world’s biggest refugee-producing countries, and UNHCR is providing protection and assistance to nearly 500,000 Somali refugees in nearby countries while also reaching out to 1.3 million people displaced within Somalia. source UN News Centre



    Trade news – Japanese shipping lines offer bleak outlook

    Japanese shipping giants NYK, K Line and MOL have each painted bleak financial pictures of existing conditions and shipping prospects ahead.

    K Line set the scene having registered a quarterly year-on-year drop in revenue of 45% for the first quarter of 2009, resulting in a net loss of US$155.08 million for its first quarter which ended on 30 June 2009.

    The company said it was focusing on counter measures, including cost reductions and the curtailment of capital investments. “However, such measures were unable to counter the adverse effects of the sharply and significantly deteriorating business environment,” said the company in a statement.

    It said that in the container business cargo movement was expected to “continue to stagger.”

    “The company plans to normalise freight rates on principal service routes during the summer peak season, in addition to promoting rationalisation through adjusting the scale of operations and cost reductions.”


    Another Japanese carrier, NYK Line says it anticipates making a loss for the first time in 23 years, with an anticipated loss of US$53 million for the year. This follows a posted loss of $19,9m in revenue for the first quarter, a drop of 44 percent.

    In response to the downturn NYK has cut its fleet by 15% and has laid up a number of containerships.


    On Monday the giant Mitsui OSK Line (MOL) announced a revision of its financial year outlook for 2009, saying that in the second quarter MOL expects deterioration in freight rates, stagnation of cargo trade mainly for containerships, and a delay in the recovery of completed car exports, along with a substantial rise in bunker prices.

    “These factors are expected to deteriorate profits significantly more than we expected in the previous outlook.”

    In the third quarter MOL says it “anticipates that the external conditions will not reverse the deteriorations in the first half. Based on this prospect, the Company made a downward revision of its earlier announced outlook for FY2009.”

    MOL adds that future outlooks such as plans and strategies related to matters other than the past and present facts contain potential risks and uncertainties, and are not guaranteed. The full MOL statement with details of the actual revisions can be seen HERE



    SA weathering recession quite well - Fitch

    Pretoria, 28 July 2009 (BuaNews) - South Africa is weathering the global recession quite well compared to other countries and political risk has eased since April's smooth transfer of power to the new administration, says global rating agency Fitch.

    “South Africa is weathering the global recession and credit crunch quite well compared to its rating peers,” said Veronica Kalema, Director of Fitch's Sovereign group, in a statement.

    “Although GDP will fall by 1 to 2 percent this year, this will be far less than most 'BBB' category sovereigns.

    “Political risk has also eased since April's smooth transfer of power to President Jacob Zuma,” said Ms Kalema.

    On Monday, Fitch Ratings, which provides the world's credit markets with independent and prospective credit opinions, research, and data, affirmed all of South Africa's sovereign ratings. The country's Long-term foreign currency Issuer Default Rating (IDR) is 'BBB+' and the Long-term local currency IDR is 'A'.

    The Outlooks on the Long-term foreign and local currency IDRs remain negative, while Fitch has affirmed the Country Ceiling at 'A'.

    Country Ceilings reflect Fitch's judgment regarding the risk of capital and exchange controls being imposed by the sovereign authorities that would prevent or materially impede the private sector's ability to convert local currency into foreign currency and transfer to non-resident creditors.

    An 'A' rating denotes expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

    According to Fitch, the post-election political landscape and its implications for policy is still unfolding, at a time when the budget deficit is rising sharply and the current account deficit, while diminished, remains large and presents continuing financing challenges.

    South Africa's ratings, Ms Kalema said, have been on Negative Outlook since November 2008 when Fitch took negative rating action on a number of major emerging markets in the face of the sudden and fast deterioration of the global economic environment in the second half of last year.

    “South Africa has been affected mainly through trade and capital flows channels; there were large portfolio outflows and a sharp weakening of the currency.

    “Though portfolio flows have since returned and the Rand has recovered most of the ground lost since March 2009, the combined impact of global recession and a domestic cyclical downturn will be more broadly felt in 2009,” said Fitch.

    Fitch's earlier forecast of recession has been confirmed, but the agency now forecasts that GDP will contract by 1 to 2 percent in 2009.

    “Revenue shortfalls mean the budget deficit could approach 6 percent of GDP in the current fiscal year (Financial Year (FY) 09: April 2009-March 2010) and remain high, albeit declining, in the subsequent two years,” said Fitch.

    Fitch therefore expects the government debt ratio to rise from a low of 27 percent in FY08 to around one-third by FY10. External debt ratios are also forecast to rise as borrowing is stepped up to finance public sector investment and the current account deficit (CAD).

    Several years of prudent fiscal policy gave South Africa fiscal space to weather a temporary increase in the budget deficit without the debt ratio exceeding 'BBB' category medians.

    However, the increase in debt of the broader public sector, which includes non-financial public enterprises, will be much starker, as infrastructure spending is stepped up.

    In the longer-term, this investment will help the country ease some of the structural constraints to a higher growth potential, which will be key to improvement in the sovereign rating.

    Falling inflation and slower private credit growth in response to earlier monetary tightening is also allowing a monetary stimulus, said Fitch, adding that interest rates have been reduced by 450 basis points since December which will help support growth into 2010.

    In addition, due to tighter regulation and supervision, the South African banking sector has been relatively insulated from the global credit crunch and although banking sector asset quality and profitability are worsening in the economic downturn, the sector is better placed than most "BBB" country banking sectors to support the recovery, said Fitch.

    Some of the imbalances in the economy are starting to ease, with credit growth slowing sharply and domestic inflationary pressures abating.

    The CAD is also forecast by Fitch to narrow, though to a still relatively high 5 to 6 percent of GDP.

    As this will not be fully covered by increased public sector borrowing and foreign direct investment, financing will still rely on portfolio flows, presenting a persistent risk to macroeconomic stability given continued volatile global risk appetite.

    High wage pressures also present a challenge to public finances, inflation and competitiveness.

    “A smooth political transition after the fourth post-apartheid general election, the most vigorously contested so far, has reduced short-term political uncertainty, strengthened democracy and should ease investor concerns as the country navigates the downturn,” said Fitch.

    However, political risk has not diminished completely. Expectations have been raised and sporadic riots are a reminder that service delivery, which is a priority for the new government, has the potential to threaten political stability unless effectively addressed.

    South Africa's ratings could come under further downward pressure if economic recovery is weaker and more protracted than Fitch currently expects, leading to a worsening of key credit indicators. A weakening of the policy environment would also be ratings negative.

    However, if the country navigates the downturn over the next 12 to 18 months without a sharp deterioration of its credit metrics and with macroeconomic stability intact, the Outlook would be revised to Stable.



    Pic of the day – OCEAN LYRA



    The Japanese bulk carrier OCEAN LYRA (38,877-gt, built 2005) was in Cape Town recently. Picture by Ian Shiffman



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