Ports plan tariff hike

A number of major ports in Malaysia plan to increase port tariffs or introduce new tariff items going forward.

This is because the revision of some of the tariff items has been long overdue. The move is also to match the investments that have been made to expand the ports.

Port Klang Authority acting general manager Capt David Padman toldStarBiz that some of the new rates should be applicable by the first quarter of 2012 pending the Transport Ministry’s approval.

“The revision of a number of tariff items including conventional cargo and marine services for Port Klang has been mooted since three years ago.

“This is because a large section of the conventional tariff has not been revised for 45 years since the days when Port Klang was administered by the Malayan Railways.

“Also, terminal operators have many times requested charges to be increased in line with the investments in the facilities and services including the construction of new berths, purchase of new cargo handling equipment and subsequent maintenance of the facilities.”

He said terminal operators had also requested an increase in marine service charges as fuel prices had increased substantially since 2008.

After extensive examination of the proposals by the operators and subsequent consultation with the industry and port users, charges for conventional cargo handling such as stevedorage, wharf handling and storage would be increased, Padman said.

“On the other hand, certain charges such as wharf labour and third-shift surcharge have been withdrawn as they are no longer justified given the scope of current port operations.

“Marine service tariffs will see a slight increase while container handling will see new charges for containers of more than 40 ft long,” he said.

It was reported in StarBiz last month that Penang Port Sdn Bhd also planned to introduce new tariffs in the middle of next year.

Chief operating officer Obaid Mansor was quoted as saying that the proposal to raise port tariffs, comprising largely cargo-handling and ship charges, had been submitted to the Penang Port Commission.

Penang Port tariffs were last revised in 2003 and implemented in 2007, which saw a 30% increase in handling charges for container cargo to the present rate of RM182 for a 20-ft container and RM273 for 40-ft container.

About 80% of the cargo handled at Penang Port’s North Butterworth Container Terminal comprises full container load cargo, which is expected to generate 75% of Penang Port’s revenue this year compared with about 65% in 2010.

Meanwhile, ports in Johor namely Johor Port and Port of Tanjung Pelepas, (PTP) are also expected to introduce new tariffs of some sort.

Chairman for both ports, Datuk Mohd Sidik Shaik Osman said Johor Port had recently received approval for a small revision of its port tariff only after 24 years.

“The new port tariff at the Johor Port has been effectively implemented since August 2011.

“The previous revision in Johor Port’s tariff was in 1987,” he said.

As for PTP, Mohd Sidik said it was currently exploring with the Johor Port Authority on the possibility of introducing new tariff items which were not currently prescribed.

“However, the expected impact on port users will be very minimal,” he said.

As of last year, Port Klang, which comprises Northport and Westports, were ranked at 13th place in the global container ranking by volume at 8.87 million twenty-foot equivalent units (TEUs).

PTP came in at 16th place last year with a volume of 6.54 million TEUs,

It was reported that for the first five months of this year, Malaysian ports handled a total of 8.2 million TEUs, up 10.9% from the same period last year.

Sourced from here.

Extreme shipping

Sourced from here-

I WRITE from the pilot’s cabin of one of the world’s largest container ships, the Eleonora Maersk, moving almost imperceptibly through the South China Sea off the Vietnamese coast. Eight storeys up from the deck, my windows just about clear the top of the thousands of containers that are stacked in 22 rows across the vessel. This allows me a view to the ship’s forward navigation mast, a full 250 or so metres away. But the rain is coming in now, and it will soon disappear from sight.

The accommodation section, and above it the bridge, is a bit aft of amidships, so the stern is another 150 metres or so behind me. Or, put another way, the whole is about four football pitches long and half of one wide. Or again: about two-fifths the height of Scafell Pike, the highest peak in England. This is “economy of scale” made steel…and the reason why the retailer Primark will be able to sell me a Chinese-made T-shirt for just a pound or two on my local high-street in Britain, just inside a month.

The vessel is specifically designed to ply the world’s most important trade route, the Asia-Europe run: this is now (euro-area debt crisis notwithstanding) the main artery of globalisation. Having started its homeward-bound voyage in South Korea and having picked up most of its cargo in Shanghai, the Eleonora is due to dock in Rotterdam in a couple of weeks’ time. I joined the vessel on October 26th at the container terminal of Yantian, the port of Shenzhen, just inside mainland China north of Hong Kong. I will disembark on October 30th when we reach another massive port, on the southern tip of Malaysia, just north of Singapore. Even if I wanted to stay on board for the next leg, non-stop to Europe, I wouldn’t get very far. As was explained to me in “the citadel”, a secure room in the bowels of the ship where everyone has to gather in the event of a boarding by pirates, no guests or even family are allowed on Maersk vessels past Sri Lanka, because of the threat from Somalia. In truth however, this ship is just too big (and fast) for pirates to grapple with.

So, what are we carrying? This boat will be fully loaded after Malaysia, with about 7,500 containers (or 100,000 tonnes) of European Christmas presents, mostly—and a New Year treat. For we must be shipping much of the continent’s New Year celebrations as well: 1,850 tonnes of fireworks, including 30 tonnes of gunpowder, probably from Hunan province, where most of these things are made. Oh, and about 28 containers (290 tonnes’ worth) of plastic cigarette-lighters, destined for the Danes, Swedes and Poles.

To make it worth one’s while to ship cigarette-lighters and sparklers most of the way round the world, it is best, of course, to have a ship as big as the Eleonora Maersk. Only with such behemoths can shippers and retailers achieve the economies of scale that are necessary to make the Asia-Europe trade pay. Maersk lines, the world’s biggest container-shipping company, has eight such E-Class ships—and has just ordered 20 even (slightly) bigger ships from Korean yards. High oil prices are now forcing all the main container-shipping firms to order ever bigger ships. They might be awesomely expensive (Maersk’s new ones will cost almost $200m each), but with fuel costs making up such a large part of their bills, all the shipping lines are looking to reduce the cost per mile per container on the Asia-Europe run. The only feasible way to do that is pile more containers on one ship.

So almost everything about the Eleonora, which was built in the mid-2000s, is quite simply—The Biggest in the World, Ever. It is not just the biggest kind of container ship, but the biggest ship of any sort in service. To move its load through the water, it boasts the largest combustion engine ever built—generating horse power equivalent to 1,000 family-sized cars. The 14-cylinder engine turns the longest propeller shaft (130 metres) ever built, at the end of which is the largest propeller, weighing in at 130 tonnes. Yet so efficient is the engine, says the Danish chief engineer, that cruising at an average of 17 knots the ship consumes just 3 grams of fuel per tonne per nautical mile—which certainly sounds low. This sort of calculation, above all, makes a sophisticated laptop or iPad made in China affordable in Copenhagen.

Alarmingly, at least for a container-ship neophyte like myself, the world’s biggest ship seems to have a crew of only 19. But that’s a few too few, surely? In fact, the Danish captain explains that, strictly speaking, the boat is designed to be run by just 13 people; but he likes to have some more on board, for maintenance and repairs…Sensible chap. Together with some cadets, that brings the full complement to a gangway-shoving 24.

But then the ship is so automated that the captain appears to exercise full mastery over everything in sight with only the slightest touch to a half-ball, the size of one hand’s palm, which protrudes from a control panel. I can see all the traditional signalling flags neatly stowed on shelves on the bridge—so neatly, in fact, that I suspect that, along with the sextant and the flares, they might never have been used.

MIDF research downgrades ports sector to negative

MIDF Research had downgraded the ports sector from neutral to negative in face of weaker exports to the faltering US economy and Europe's sovereign debt crisis.

It said on Monday, Oct 3 that Malaysia's export slowed down as it posted a 7.1% year-on-year (y-o-y) growth in July 2011 from 9.6% y-o-y increase in June 2011.

In terms of sequential month, July's export was 2.2% month-on-month (m-o-m), lower than 5.1% m-o-m posted in the previous month, it said.

"We believe that this had led to the decline in Electrical and Electronics exports where it continued to decline for the fifth consecutive month," it said.

The research house said the declining exports would add pressure to seaports, especially container based ports given that rates are fiercely competitive.

Meanwhile, port traffic is seeing signs of easing as well as NCB HOLDINGS BHD []'s faltering port twenty-foot equivalent units (TEU) growth.

The group posted a decline of 3.4%y-o-y in its 1H11 port TEU while port revenue fell by 1%y-o-y. Also, port profit before tax margin declined by 5.8 percentage points, which suggest the company was facing margin squeeze and rates pressure.

However, the research house maintained its Neutral rating on NCB citing its defensive qualities as its dividend policy would moderate weaken sentiments.

Source: Edge

MIDF Research maintains negative on shipping sector

MIDF Research maintained its stance on the shipping sector due to persistent problems that are caused by depressing rates or moderation of upside potential.

It said on Monday, Oct 3 that while Baltic Dry Index (BDI) had recovered in 3QFY11 and may stabilise in 4QFY11, it expect the pressure to the rates will remain given that the overcapacity issues are not being addressed.

In addition, it said the current uncertain economic condition, coupled with the volatile market will likely to continue next year, thus further dampening growth and erode demand.

However, the research house maintained its neutral call on both Maybulk and MISC.

MIDF Research said that based on the median of economists' estimates compiled by Bloomberg, China would expand 8.7% y-o-y in 2012, compared with 9.3% y-o-y expected in 2011.

The consensus forecast suggests that breakeven rates for ship owners will not come until 2015, it said.

It said the BDI which reflect the cost to ship bulk products such as iron ore, coal and grains rebound to about 1,920 on Sep 23, 2011, representing 84.1% increase since Feb 4, 2011.

“This was surprising given the hanging overcapacity problem in the industry is still unresolved.

“We understand that the rally is continuing because more ships are being sought by the three top iron-ore producers, Vale SA, Rio Tinto Group and BHP Billiton Ltd., to export cargoes," it said

Meanwhile, MIDF Research said the Baltic Dirty Tanker Index (BDTI), which tracks the shipping rates for tanker had not broken 700 points since Aug 2011 and had only reached above 1,000 points in March this year.

"According to Baltic Exchange, very large crude carriers, or VLCCs, are losing US$ 2,251 a day on the benchmark route of Saudi Arabia to Japan, extending a run that began Aug 26, 2011.

“Rates are coming under downward pressure given that there are more offers for one cargo," it said.

Source: Edge