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2020: BIMCO submits draft for vessels unable to get compliant fuel

‘Difficult predictions’ for the availability of compliant fuel, particularly outside of big bunkering ports.

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Manifold Times is publishing the third of five articles attributed to BIMCO in regards to five IMO-submissions the latter co-wrote to IMO last week:

BIMCO drafts standard documentation for ships unable to get compliant fuel in 2020

BIMCO has drafted a standard form which can provide documentation for shipowners unable to buy compliant fuel in a port. The standard will be discussed at the Intersessional meeting the International Maritime Organization (IMO) in July. 

BIMCO submitted the draft standard to IMO together with CLIA, ICS, INTERTANKO, INTERCARGO, Panama and WSC.

The standard Fuel Oil Non-Availability Report (FONAR) should provide documentation that every effort to obtain compliant fuel was made before bunkering non-compliant fuel.

It is important to stress that the FONAR will not work as an excuse for not doing the utmost to obtain compliant fuel. The FONAR should document that everything possible actually has been done, and can be verified by the authorities.

The draft standard is part of BIMCO’s and the co-sponsor’s efforts to ensure a practical implementation of the 2020 sulphur cap. The format is inspired by other similar documents currently used in the U.S. and the EU.

The form allows the ship to, for example, describe any operational constraints that prevented the ship from using available compliant fuel oil, such as issues with non-compliant flashpoints.

Difficult predictions
The availability of compliant fuel – particularly outside of the big bunkering ports - is currently one of the big uncertainties before the sulphur cap enters into force on 1 January 2020. A clear process for reporting non-availability will therefore be of great benefit to ships and shipowners.

“At the time of this writing, fuel oils with a maximum content of 0.50% m/m are not widely available or introduced to the market. It is therefore not possible, at this stage, to precisely predict quality parameters and limits for these fuel oils,” the co-sponsors write in the submission.

Shipowners may, for example, get fuel oil, which complies with the low sulphur requirements, but doesn’t comply with other fuel oil parameters.

The co-sponsors agree that ships will be expected to bunker and use other compliant
fuels including 0.1% sulphur distillates, in cases where 0.5% sulphur compliant
fuels are unavailable, according to the submission.

However, the ships will also have to carefully consider, on a case by case, if the ship can safely store, process and consume the fuel, and whether they need to clean their tanks of all residual fuels, before they load non-compatible alternatives to the same tank.

Related: BIMCO suggests sulphur implementation plan for ships
RelatedBIMCO proposes changes in sulphur sampling points

Photo credit: International Maritime Organization
Published: 9 July, 2018
 

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Winding up

Singapore: Liquidators schedule final meeting for Sejahtera Shipping and related companies

Final meetings will be held at 9 Raffles Place, #19-21 Republic Plaza Tower 2, Singapore 048619 for Sejahtera Shipping, Molek Shipping and Madu Shipping.

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The final meetings of Sejahtera Shipping Pte Ltd and its related companies have been scheduled to take place on 21 June, according to the company’s liquidators on a notice posted on Monday (20 May) on the Government Gazette.

The other companies are Molek Shipping Pte Ltd and Madu Shipping Pte Ltd. 

The meetings will be held at 9 Raffles Place, #19-21 Republic Plaza Tower 2, Singapore 048619 at the following times:

  1. Sejahtera Shipping at 11am
  2. Molek Shipping at 10.30am
  3. Madu Shipping at 10am

They will be held for the purposes of having accounts laid before the meeting showing the manner in which the winding-up has been conducted and the property of the company disposed of, and of hearing any explanation that may be given by the liquidator.

The details of the liquidators are as follows:

Cheng Sam Tai Catherine
Liquidator
c/o Crowe Horwath First Trust Corporate Advisory Pte. Ltd.
9 Raffles Place, #19-20 Republic Plaza Tower 2, Singapore 048619

A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the company. The instrument appointing a proxy must be deposited at the Registered Office of the company not less than 48 hours before the time set for holding the meeting.

Related: Singapore: Sejahtera Shipping and related companies to be wound up voluntarily

 

Photo credit: Benjamin-child
Published: 21 May 2024

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Winding up

Singapore: Final meeting scheduled for World Fuel Singapore Holding Company I

Final meeting will be held on 19 June at 4pm at 8 Marina View, #40-04/05, Asia Square Tower 1, Singapore 018960.

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The final general meeting of World Fuel Singapore Holding Company I, has been scheduled to take place on 19 June, according to the company’s liquidator on a notice posted on Friday (17 May) on the Government Gazette.

The meeting will be held at 4pm at 8 Marina View, #40-04/05, Asia Square Tower 1, Singapore 018960. 

It will be held for the purposes of having accounts laid before the meeting showing the manner in which the winding-up has been conducted and hearing any explanations that may be given by the liquidators.

The details of the liquidator are as follows:

Ho May Kee
Liquidator
c/o 8 Marina View
#40-04/05, Asia Square Tower 1
Singapore 018960

An Annual Report of World Fuel Services Corporation, before it was renamed to World Kinect Corporation, was filed on 24 February 2023 on the US Securities and Exchange Commission website. 

According to the report, World Fuel Singapore Holding Company I was listed as one of its subsidiaries.

Related: World Fuel Singapore Holding Company I to be wound up voluntarily, creditors to submit claims

 

Photo credit: Jo_Johnston from Pixabay
Published: 20 May 2024

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Bunker Fuel

Allianz: ‘Shadow fleet’ of tankers involved in at least 50 incidents including oil spills

Vessels have been involved in at least 50 incidents to date, including fires, engine failures, collisions, loss of steerage, and oil spills; shadow tankers also participate in ‘dangerous practice of STS transfers in the open ocean’.

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Allianz Commercial marine experts shared some of the major consequences of growing volatility and uncertainties from war and geopolitical events, climate change risk, including the threat the rise of the ‘shadow fleet’ poses to vessels and the environment and the multi-faceted impacts of rerouting. 

The following are excerpts from the original expert risk article by insurer Allianz :

Recent incidents in the wake of the conflict in Gaza have demonstrated the increasing vulnerability of global shipping to proxy wars and disputes. Between November 19, 2023, and the beginning of April 2024, there were more than 50 attacks against merchant shipping in the Red Sea by Houthi militants in response to the conflict. We have also seen the first total loss of a vessel, the first fatal attack, as well as signs that the crisis may have spread following the seizure of a container ship by Iranian forces in the Strait of Hormuz, the world’s most important chokepoint for oil shipping. The Houthi military group has also warned it would target any ships heading to Israeli ports if they are within range.

Disruption to shipping has persisted longer than expected and is likely to remain for the foreseeable future, says Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. “While we have seen sporadic attacks in the past, the conflict in Gaza has opened the flood gates. Even if a political solution is reached, we may see attacks continue as there is clearly now an opportunity for those wishing to disrupt shipping in the Red Sea and beyond. Ultimately, shipping has become a ripe target for those wishing to wage a proxy war. It opens avenues for terrorists or militia groups to get recognition and hit global markets.”

Rerouting brings supply chain, trade, risk, inflation, and environmental challenges

Attacks against shipping in the Red Sea and Middle East waters, closely following on from the ongoing disruption caused by drought in the Panama Canal, have amounted to a double strike for shipping, causing yet more issues for global supply chains, as well as significantly adding to the distance vessels must sail.

The attacks in the Red Sea have severely impacted Suez Canal transits, while a lack of rain and the El Nino phenomenon contributed to the second driest year in the Panama Canal’s history, also affecting transits.  Both routes are critical for the transport of manufactured goods and energy between Asia, Europe, and the US East Coast.

At the start of 2024 transits in the Suez and Panama canals were down by more than 42% and 49% respectively, compared to their peaks. Whichever route vessels take, they face lengthy diversions and increased costs. For example, avoiding the Suez Canal adds at least 3,000 nautical miles and 10 days sailing time to each trip, rerouting via the Cape of Good Hope.

Businesses that source goods and components from factories in China and South-East Asia have faced delays and higher costs from longer transit times. Some reported rises of 300% for container hire, and logistical delays, adding up to three to four weeks to delivery times, creating cashflow difficulties, and component shortages on production lines.

Such experiences have thrown the shipping industry and the issue of supply chain resilience into the public consciousness, says Khanna.

“Supply chains have been disrupted by a series of events in recent years, from extreme weather and climate incidents, container ship fires and groundings, through to the pandemic and conflicts in Ukraine and the Middle East, not forgetting the recent Baltimore bridge collapse.

“How should the shipping industry and its customers address this challenge? In today’s interconnected environment it is even more important to have a ‘Plan B’ and alternative options. An unexpected event can have a domino effect globally. Shippers around the world should consider diversification of their supply chains and in some cases nearshoring and onshoring might be an option.”

Increased transparency is also part of the solution, particularly when it comes to tracking cargo. While the global risk environment for shipping has changed significantly in recent years, the average shipper still knows very little about the location of their cargo, which makes it very difficult for them to put effective contingency plans in place to minimize disruption. Ultimately businesses will need to update their approach to cargo risk management and business continuity planning, says Régis Broudin, Global Head of Marine Claims, Allianz Commercial.

Rerouting will also require a shift in the shipping industry supply chain, if large numbers of vessels switch to alternative routes around the Cape of Good Hope for a prolonged period. Container lines tend to ply the same established trade routes, but rerouting will require alternative bunkering, supply, repair, and maintenance facilities. The risk environment could be impacted suggests Wayne Steel, Senior Marine Risk Consultant, Allianz Commercial. For example, storms and rough seas could be more challenging for smaller vessels used to plying coastal waters, especially where crews may not be sufficiently trained and equipped for such conditions.

Other areas impacted include container capacity, older vessels being kept in service as longer journeys means an increasing demand for ships, inflation – according to Allianz Trade analysis, a prolonged period of disruption in the Red Sea could cause it to increase by +0.5% – as well as the environment. The disruption in the Red Sea, combined with factors linked to the Panama Canal and the Black Sea in the wake of the Ukraine war, could erode the environmental gains achieved through ‘slow steaming’, as rerouted vessels increase speeds to cover longer distances. The longer distances caused by rerouting container ships from the Suez Canal to the Cape of Good Hope result in an estimated 70% increase in greenhouse gas emissions for a round trip from Singapore to Northern Europe. Shipping diversions from the Red Sea are already cited as being a primary cause of a 14% surge in the carbon emissions of the EU shipping sector during the first two months of 2024.

Ukraine war: ‘shadow fleet’ risk to vessels and environment

A gradual tightening of international sanctions on Russian oil and gas exports over the past three years since its invasion of Ukraine has resulted in the emergence of a sizable ‘shadow fleet’ of tankers, mostly older vessels that operate outside international regulation and often without proper insurance. This situation presents serious environmental and safety risks in key chokepoints where oil is shipped.

Russia is not the only country to operate a shadow fleet. Iran and Venezuela have used such tankers to circumvent sanctions and maintain oil exports. Estimates put the size of the dark fleet at between 600 to 1,400 vessels, roughly a fifth of the overall global crude oil tanker fleet.

Much of the shadow fleet is likely poorly maintained and may not have undergone appropriate inspections. Shadow tankers also participate in the dangerous practice of ship-to-ship transfers in the open ocean, as well as turning off Automatic Identification System (AIS) transponders to obscure their identity. Vessels have been involved in at least 50 incidents to date, including fires, engine failures, collisions, loss of steerage, and oil spills. The cost of dealing with these incidents often falls on governments or other vessels’ insurers if one is involved in an incident.

“As long as there are sanctions on countries like Russia and Iran, the shadow fleet looks here to stay,” says Justus Heinrich, Global Product Leader Marine Hull, Allianz Commercial. “Given the age of the vessels in the shadow fleet, safety is a big concern. Often these vessels are at the end of their operational lives and are used in a high-risk business.”

Note: The full article by Allianz can be found here

 

Photo credit: Shaah Shahidh on Unsplash
Published: 20 May 2024

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