That’s Not a Ferryboat, That’s a Paradigm

The outlook for US shipyards remains uncertain, despite a number of recent orders and proposals to build commercial ships.  Work from the US Navy, which has sustained most yards over the past decade, is beginning to dry up. Jim McCaul, president of IMA Associates Inc., a Washington, DC-based consulting firm that studies the shipbuilding industry, notes that Navy orders are expected to be halved over the next decade: about 11 ships ordered annually compared to 22 per year during the 1980s.  “It’s a very dismal market when you come right down to it,” says Mr. McCaul.

Commercial Orders

Only one large oceangoing vessel is currently under construction in the US – a new containership  for Matson Navigation being built by National Steel and Shipbuilding Co.

The Marine Spill Response Corp. (MSRC) earlier this month awarded contracts with a total value of about $185 million to build 16 workboats that will be used to clean up oil spills. A dozen of the boats, which cost about $11.5 million a copy, will be built by the Halter Marine Inc. subsidiary of Trinity Industries Inc. The remaining four will be built by Bender Shipbuilding and Repair.  Continue Reading

Norwegian Drilling Groups Plan Merger

Two Norwegian drilling companies, Transocean Drilling and Trans-Nor, are planning to merge, cementing an already close relationship. Trans-Nor share-holders will be offered three shares in a new joint company also known as Transocean Drilling for every four existing shares. Investors currently holding shares in Transocean will be offered new shares on a one-for-one basis.

The current Trans-Nor fleet comprises five drilling platforms, including four jack-ups and one semi-submersible. For its part, Transocean operates two rigs, one in the Far East and an accommodation platform in the Ekofisk field in the North Sea.  The company also has management contracts for 14 other fixed installations and an ancillary but thriving business in mud drilling, through associates Anchor Drilling Fluids and Target Drilling Fluids. The combined net adjusted equity of the group is estimated to be in the region of Kr1.5-1.6bn. Continue Reading

LPG Shipping Reverting to More Familiar Patterns After Gulf Crisis

Shipping markets, distorted by the Gulf crisis, are reverting to more familiar trading patterns. The conflict may have long term implications for the industry, but at least the immediate disruptions have subsided, particularly in the more specialized trades. In retrospect, the conflict had a greater impact on the specialized oil and gas trades than on the “mainstream” tanker and dry bulk markets.

In the LPG market, the Gulf factor has had the most profound effect on the smaller ships, which are primarily concerned with the carriage of miscellaneous petrochemicals. During the height of the conflict, importers in the Far East tended to stockpile chemicals in anticipation of possible shortages, giving an artificial stimulus to the market. But when hostilities stopped, industrial shippers, either with adequate or surplus stocks, also stopped importing. As demand flattened out, the market virtually collapsed, and a large number of ships switched to the “C4″ trades on the North Atlantic, involving the carriage of butadeine from Europe to the US Gulf, and propylene on the back haul leg. Continue Reading

Shareholder Challenges Merger of B+H Companies

The three public companies associated with the Bergvall and Hudner group – B+H Bulk Carriers Ltd., B+H Ocean Carriers Ltd. and B+H Maritime Carriers Ltd. – said the independent committees of their boards of directors have agreed upon terms to merge and form a new company that would have a fleet of 17 dry bulk carriers and 10 product tankers.

Shareholders in the three firms will exchange their shares for stock in the new entity according to the following formula:  Continue Reading

Anangel Ship Manager Named in Fuel Theft Scheme

Though it is certainly a publicity nightmare, a criminal indictment against the ship manager of Anangel-American Shipholdings Ltd. is expected to have little long term effect on the company.

Anangel Shipping Enterprises S.A. of Panama pled guilty to falsifying fuel reports for the ship the Anangel Leader to the Military Sealift Command during operation Desert Storm. The ship was arrested in Alaska, and the company agreed to pay $1 million to the US and pay $85,000 in restitution rather than have the ship tied up in a lengthy court battle that might keep the ship under arrest for weeks. The company is subject to a further $500,000 fine.

While the company is refusing to comment on the case, Marine Money has learned that Anangel Shipping Enterprises has agreed to indemnify Anangel-American for any losses, past present or future, that it may incur as a result of the action.  As a result, there will be no cash impact on the company’s results.

In the documents filed, the chief engineer and master of the Anangel Leader were accused of making false measurements of fuel levels in the ship’s bunker tanks, keeping dual records, and defrauding the United States of money and ship fuel during the charter.  Continue Reading

Ambra Plans 3.75m Share Issue

In the largest fund raising move in its short history, Norwegian shipping company A/S Ambra is planning to launch an IPO worth Kr187.5m ($27.6m). The proposed issue of up to 3.75m new shares at Kr50 is being arranged by Fearnley Finans, and will increase the equity by 50%.

The proceeds may be used to finance the purchase of two new tankers, though no specific ships have been named. According to a Fearnley spokesman, the company may reopen negotiations on the purchase of the Skaugen VLCC Jarabella. The acquisition of the 270,000 dwt vessel, which was built in 1975, was provisionally agreed at around $25m, but the deal fell through.

Ambra finance director Torbjorn Pedersen stressed that no decision had been reached on when the IPO would be launched. “It remains an option to enable us to make a quick response to investment opportunities. But it may also be used for cash purposes. Under the terms of the investment plan, we may raise up to 3.75m new shares.” Continue Reading

Tiphook Finances TEU Order Outside of Europe

Tiphook Plc, Europe’s largest container and trailer rental group, has completed the purchase of 20,000 new TEU’s.  The cost of the newbuilding project was $50m, and was financed through a loan arranged by the CIT Group in New York.

The container giant has been busy expanding through its own internal growth and through acquisition.  Tiphook, which last year acquired Sea Containers, increased its owned and leased container fleet by over 200,000 TEU equivalent units in the transaction.  Outside of that, the company has been expanding its container fleet at a rate of approximately 40,000-50,000 TEUs per year for the last couple of years.  In addition, Marine Money has learned that the company is looking into available options that would permit it to increase its sources of capital in the United States, possibly through increasing its ADR listing. Continue Reading

Oceanlink Storms Back with Steam Coal Contract

After some eighteen months of inactivity, the Hong Kong based Oceanlink has returned to the shipping market by securing some major contracts. These include a ten year deal for China Coal and Export Corp. for the transport of several million tons of steam coal into South Korea. The contract, which has a two year extension option, is connected to the import of coal for use by the Korea Electric Power Corp. Several vessels have been time chartered for the carriage of coal from the Chinese port of Qiunhuangdoa to South Korea.    Continue Reading

The Summer of Our Content

Charter brokers are talking about this spring’s surprisingly buoyant dry charter market.  It has remained stronger for far longer than most people could have foreseen, and caught many of the industry’s most astute brokers by surprise.  A ready refrain is that even the respected Boston based consulting group Marsoft, “did not predict it.” But some businesses have certainly benefited.

That may be because today’s charter rates are not solely sustained by a substantive increase in the demand for ships.  In fact, most charterers will tell you that the amount of cargo being moved is less than last year.   There has been a general switch from oil to steam coal demanded by power companies and, yes, there is a bit more coal for the UK via Rotterdam transshipment.  In addition, there has been a change as to where steel is produced which has resulted in increased ton miles – i.e., ships will be spending more time in the water, thus depleting the supply of tonnage.  Still, economic reports out of the US, EEC and Japan are not great, giving little indication that the recession is behind us. Continue Reading

First Order Outside of Japan in 50 Years by NYK

In a move that surprised many, Japan’s largest shipping line, Nippon Yusen Kaisha (NYK), has placed an order for a 149,000 dwt Capesize bulker from China Ship Building Corporation of Taiwan.  The order represents the first time that the shipping giant has placed an order for a newbuilding outside of Japan since before World War II.  In fact, only two other vessels have been ordered by Japanese companies outside of Japan in recent years.  These include Kawasaki Kaisha (K Line) and Iino Kaiun Kaisha which placed orders for ships with Korea, and Navix Line which placed an order in China. Continue Reading