Six samples of contaminated marine fuel sold in Singapore, one of the world’s largest ship bunkering hubs, has resulted in “severe sludging”, clogged pipelines and overwhelmed fuel filters. Sexy stuff, I know, but a story worth paying attention to nonetheless.
This news follows previous reports of contaminated fuel affecting up to 80 ships by bad bunker fuel loaded in Houston — a situation that had already caught the attention of P&I Clubs concerned about the difficulty of quality control for marine fuel.
The root cause is unclear — contaminants could have been intentionally blended to increase margins (dirty bunker practices are not unheard of, particularly at a point of increasing prices), the contaminants could also be in the bunkers unintentionally due to the extended supply chain for marine fuels. Physical suppliers generally do not blend their own bunker fuel but rely on third-party blenders to create bunker fuel from various refined products. Those blenders, in turn, buy the various products from refiners, so quality control is essential, but expensive to maintain.
Knowing your supply chain is key. With the 2020 sulphur cap looming this is doubly worrying for shipowners, but also important for our insurance, legal and marine services clients. There are already growing concerns from owners and charterers about the compatibility of available blends post-2020. Because the make-up of the new sulphur-compliant fuel blends will rely heavily on regional imports, owners are worried about consistency.
Expect more sludge headlines to come, with financial consequences being the focus on our next analysis
Read more on Lloyd’s List.
Contaminated bunker fuel makes its way to Singapore
Asset quality, size and diversification will determine the success of shipping companies in the next 18 months as higher costs, tighter environmental rules and worsening global trade relations risk offsetting buoyant demand and capacity reductions. That was the headline conclusion from a Scope ratings report out this week. Not news to anyone who has been reading our containers coverage of late, but a pretty accurate summation of our position nonetheless.
Only container shipping companies with the biggest fleets and most efficient vessels are likely to turn a profit this year and meet longer-term challenges.
One problem shipowners face is the oil price. Scope expects a rise of around 25% in bunker prices this year compared with 2017 (such forecasts vary but by and large this is a decent ballpark figure to be working from), squeezing thin profit margins despite robust global economic growth and buoyant trade, notably in Asia (hence my concerns above regarding bunker quality issues being heightened by rising prices).
The steep rise in fuel costs has taken the gloss off what has otherwise been a strong year for container demand. So performance will be key this year. Worrying news, then, that container line schedule reliability remains at its lowest-yet level for the time of the year despite improving from its worst-ever figures during the first quarter of this year, according to analysis by SeaIntel. Not much more positive news from the latest round of financial results out of Japan either, I’m afraid.
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Cyber security continues to keep all key customer bases concerned and a quick glance at the past week’s headlines should be enough to illustrate why.
Broking giant Clarksons has finally revealed the full extent of the cyber attack it suffered last year and confirmed that it will pick up the tab for identity protection on behalf of the victims. That is not going to be cheap.
Meanwhile, only a few days into the latest security breach reported by Cosco, the US Coast Guard has pointed to cyber security as one of its top “common challenges”, according to the military branch’s annual security report.
While Cosco says it has restored its network applications in the US, the incident has once again highlighted concern over the preparedness of the industry to fend off cyber attacks. The USCG report inevitably mentions the 2017 incident in which multiple Maersk facilities worldwide were affected by a ransomware attack costing millions of dollars and shutting down operations at 76 terminals around the world. “This incident was a clear reminder of the importance of cyber risk management in the MTS (maritime transportation system) both nationally and globally,” the report said.
Read more on Lloyd’s List.
Listen to this weeks Lloyd's List Podcast: Cyber rumbles, beans, gas and Trump
An update via @Richard Clayton here: “Busy weeks ahead for the events teams, and some encouraging news. Our webinar on August 23 on The Future of Ship Management has attracted Esben Poulsson, chairman of the International Chamber of Shipping and president of Singapore Shipping Association; Peter Cremers, chairman of Anglo-Eastern Ship Management; and Frank Coles from Transas/Wärtsilä; and a fourth heavyweight might join us.
For the Three Elements of Efficiency Business briefing taking place as part of the SMM jamboree in Hamburg on September 6, we have Andreas Chrysostomou from Tototheo in Cyprus and Chris Wincott — a leadership development consultant from the UK — with Mr Coles again sponsoring.
And for the Round Table on Maritime Sustainability on the same day, we already have Martin Kröger, head of the German Shipowners’ Association, and Alisdair Pettigrew, MD of Blue Communications and a senior adviser to Richard Branson’s Carbon War Room. Olaf Merk, from the International Transport Forum, can’t make it but “loves the bizarre title”: Maritime sustainability — mad, bad, or inevitable”.
INDUSTRY-leading innovation, agenda-setting deals and enhanced efficiency across the supply chain all feature in the shortlist for the Lloyd’s List Asia Pacific Awards 2018, published today.
The line-up of finalists reveals a stellar cast of the industry’s most outstanding companies and projects that, according to Lloyd’s List Editor and judging panel chairman Richard Meade, offers “tangible evidence of an industry now working above and beyond expectations”.
He added: “The quality of the entries was quite astounding this year and it is heartening to see difficult and important industry challenges being met with innovative solutions, ground-breaking deals and exceptional individual efforts from all sectors.”
The competition was as fierce as ever this year. A 40% increase in the total number of entries this year across all sectors and countries highlighted the growing demand from companies seeking independent recognition of their achievements to stand out in a tough market.
The shortlisted finalists will now have to wait until September 27, when the winners will be revealed at the Lloyd’s List Asia Pacific Awards ceremony at the Shangri-La Hotel in Singapore.
To book your table at this year’s ceremony or to get your entry in for the Lloyd’s List South Asia, Middle East & Africa Awards in Dubai on November 27, or the Lloyd’s List Global Awards in London on December 11, follow the links to our Awards page here.
The Lloyd's List Asia Pacific Awards may be closed so why not enter one of our other Awards.
Click here to see a list of our other Awards you can enter.