Daily Briefing February 19 2020
Free to read: Ships poised for new CO2 measures in 2022 | EU competition watchdog eyes shipping consolidation tipping point | Coronavirus latest sees port calls drop and P&I clarify cover | DP World delisting addresses investor disconnect, but debt action and deleveraging is demanded
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Ships will likely have to comply with new global emissions-cutting measures as early as 2022, as regulators deliberate proposals next month under intense pressure to deliver on the IMO’s initial greenhouse gas emissions strategy. The detail is open for negotiation, but with one proposal for a technical measure now widely backed and a proposed operational measure also now in the running, the industry faces the near certainty of at least one new measure coming into force in a couple of years’ time, primarily geared towards the IMO’s target of reducing carbon intensity of vessels by at least 40% by 2030 compared with 2008.
The EU’s competition regulator has warned shipping that consolidation can only go so far. To date the EU has ‘accommodated’ maritime mergers, but a tipping point is in sight according to the man at the top of the EU’s competition watchdog.
Coronavirus: Ship calls to China’s leading container port of Shanghai indicate the impact of the coronavirus outbreak on box shipping is continuing to worsen. Data from Lloyd’s List Intelligence shows that ship calls to the main container hubs at Shanghai and Yangshang fell again during week seven, with just 251 calls from container-related vessels.
Coronavirus: China is struggling to bring back truck drivers to clear the port logjams. The Zhejiang government says the box congestion has seriously affected foreign trade and port operations in the province, but it’s aiming to bring 3,000 container truck drivers back on the roads by February 23, and to double that tally by the end of the month.
DP World delisting addresses investor disconnect, but debt action and deleveraging is demanded. DP World is delisting to focus on its medium-to-long-term strategy of becoming ‘the world’s leading logistics provider’, and argues that the demands of the public market for short-term returns are incompatible with this industry. But that’s only part of the story. The path back to full state ownership will see DP World take on an additional $8.1bn in debt as Dubai continues to feel the repercussions of the emirate’s 2009 debt crisis.
The lasting impression from this first Lloyd’s List Maritime and Logistics Summit is that Qatar has developed a regional presence that shows every likelihood of pushing out beyond the Middle East, writes Richard Clayton.
From the News Desk: How is the coronavirus affecting shipping? Carriers faced with the likelihood of a steep decline in earnings are taking steps to mitigate losses, while China reacts to the backlog of containers building up at major ports. Get the inside track on all the stories shaping shipping with our weekly missive from the Lloyd’s List Newsdesk.
China has offered more tariff cuts on US goods amid coronavirus gloom. Products such as soyabeans, pork, LNG and crude oil are on the list and importers can start to apply for the tax waiver from March 2. The move comes as Beijing has pledged to spend an extra $200bn on purchases from the US — which includes $78bn on finished products, $32bn on crops and $52bn on energy — over the next two years.
The coronavirus and its impact on seaborne trade and bulk commodities demand weighed on the 2020 outlook for Glencore and Golden Ocean Group today as both reported fourth quarter and final-year results.
Coronovirus: Shipowner liability where a seafarer contracts coronavirus in the course of duty is covered by P&I insurance in the normal way, even were the illness to result in death, a Standard Club executive has confirmed.
Qatar’s gas shipping company Nakilat has posted stellar results for 2019 despite the generally weak liquefied natural gas market, reporting net profit of QR1bn ($274.7m) — its highest yet achieved.
Qatar Petroleum, which increased the scale of its expansion plan late last year, has delayed the process of selecting its partners by several months. The delay is likely to open the door for new North American project contracts.
Malaysian energy shipping company MISC is bullish on rates for both the petroleum and liquefied natural gas shipping markets, forecasting that the petroleum tanker market is “widely expected” to remain firm in 2020.
The transhipment logistics provider Shi.E.L.D. Services has leveraged its relationship with Indonesia-based bulk logistics player Asian Bulk Logistics to expand operations to Guinea.