container shipping – Cargo News Today

Analysis: Meltdown in the Container Shipping Sector Gains Speed

admin — Thu, 24 Nov 2022 10:17:09 +0000

Facing global economic headwinds, the volume of containerized cargo movement continues to plummet, Peter Sand, Chief Analyst, Xeneta, summarizes: “It is clear that the carriers are no longer in charge, the shippers are.”

Peter, it seems like the news in the container shipping sector started as a flow and has turned into a torrent. There was some data released yesterday that showed a 9.1% drop in September year on year for dry containers, and a 2.3 decline in the reefer sector. I’ll ask you to do what you and Xeneta do best, and that’s to fill out those declines with some additional data and analytics.

Peter Sand, Xeneta

You are absolutely right: these numbers confirm what we have seen in Xeneta data for the past couple of months, a literal meltdown of the spot market. I’m the first one to admit that I did not see this torrent coming with such thunder, but it makes sense if you look at it from an economic perspective, and we have been surprised (positively) for quite some time that consumber demand [has held up for as long as it has]. [As the economies continue to worsen] shippers and carriers are really trying to find shelter, with really nowhere to go.

I don’t know if it’s too dramatic to say that the main hauls are in collapse, but why don’t you tell us what you see? And more importantly, what moves are the big carriers making today based on the current market?

Peter Sand, Xeneta

If we get back to the meltdown on the Transpacific we see in Xeneta data that it’s a drop of 31% from Far East to US west coast in the month of September compared to the same month last year. We see it is down almost 10% for the first three quarters of the year. This is driven also by a drop of 22% from Far East into north Europe [trade].

What are the carriers doing right now to stem this decline? We continue to see ‘blank sailings’, pulling a lot of capacity that was scheduled to be deployed towards the end of the year, anticipating that shipping freight rates and markets still defy economic gravity. Now we know that the only way to stop this dramatic decline is capacity management.

Let’s look at the ship side. How much new carrying capacity is scheduled to come into the market in 2023? And do you see that changing?

Peter Sand, Xeneta

When we have a crisis coming at the pace of the current one, we see those investors and shipping lines that have made the [orders] for new ships calling directly to the builders saying, “perhaps we can postpone some of those ships that I planned taking next year.” Currently we have 1,000,700 TEUs to be delivered next year, and I think it’s fair to say that carriers will need to work hard with their shipyards to postpone or delay [deliveries]. But it seems to be somewhere between five and six percent of sheer nominal capacity growth in the container shipping sector. The more scrapping you get, the more [newbuild delivery] postponement you get, the closer you will get to five percent. But currently, we stick to our estimate around six percent. And time will, of course, always give us the damn truth in what will actually be delivered. But I think it’s fair to say that tables are turned. Carriers are no longer calling the shots, shippers are.

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Container Shipping Rates: Has the Peak has been Reached?

admin — Fri, 29 Jul 2022 17:31:44 +0000

Container Shipping Rates: Has the Peak Been Reached?

Despite another slew of rises in long-term contracted ocean freight rates across key global trade corridors, month-on-month growth is slowing – and spot rates continue to weaken – suggesting prices may have peaked. However, according to the latest Xeneta Shipping Index (XSI), which crowd-sources real-time data from the world’s leading shippers, today’s valid long-term agreements stand 112% higher than this time last year, and a massive 280% up against July 2019.

“The carriers have enjoyed staggering rates rises, driven by factors such as strong demand, a lack of equipment, congestion and COVID uncertainty, for 17 of the last 19 months,” comments Xeneta CEO Patrik Berglund. “July has seen yet more upticks across the board, but the signs are clear there is a ‘shift’ in sentiment as some fundamentals evolve.”

Explaining, he notes that July’s increases are the slowest since January, with upward pressure on long-term agreements easing as spot rates fall across major trades. In addition, volumes on many corridors are down, with, for example, containerized European imports falling by 3%, and exports 6%, in the first five months of 2022.

“So, indications are there that we may have reached a peak and that prices of new agreements are more likely to hold than suddenly leap up again, as we’ve become accustomed to seeing of late,” he says. “However, that’s probably of little comfort to shippers that have been continually battered by a market in overdrive and now see prices stabilizing at historically high levels.

“That said, nothing is certain. US and European ports are still congested, industrial action on the logistics chain is spreading globally and, of course, we still have the threat of COVID and its impact on economic activity, particularly in China. There’s a lot of variables at play, so it’s imperative to stay tuned to the latest intelligence when negotiating long-term contracts to achieve a competitive edge.”

Xeneta also disclosed that it ran a survey of its customer base in July and found that many were now looking to renegotiate contracted rates given the recent spot market drops.

“Our customers, mainly large volume shippers, now find themselves in a stronger negotiating position,” said Berglund. “Our survey showed that 44% no longer feel confident in the stability of long-term contracts – of that 44%, some 22% said they were more likely to allocate lower volumes only to cheaper contracts, while 22% preferred to move allocation to the spot market as soon as prices dip below long-term rates. It’s going to be an interesting few months ahead.”

Regional insights

On a regional basis, July’s XSI shows a rise in the global index of 435.2 points and gains, albeit relatively small ones, across all major corridors.

European imports continued to grow, but at a much slower rate than recent months, rising by 1.9% in July (a 62% year-on-year increase). Exports climbed more strongly, by 3.9%, having now soared 92% this year. Far East exports have enjoyed a bumper 12 months, now standing 150% up year-on-year, with another 2% rise this month (again, a slower rate of increase). Imports edged up 1.1% and now stand 53% higher than July 2021.

The US benchmarks on the XSI showed the strongest performances, with the import figure gaining 5.9% (up a huge 173% year-on-year), while exports also climbed 5%. This latter benchmark is the only one to have enjoyed greater growth in July than June. However, Berglund points out that export volumes have declined considerably compared to pre-pandemic levels, with the ratio of loaded imports to loaded exports to the US rising from 1.9 in 2019 to 2.5 in the first five months of 2022.

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A New Approach to Maritime Safety is Needed

admin — Mon, 23 May 2022 09:14:18 +0000

For years, the shipping industry has focused on regulations and procedures to improve safety. Yet shipping is still at risk of major accidents. The whole industry needs to change its focus. Ticking boxes never made anyone safer. Also, assessing culture using valid and reliable survey instruments can help to improve safety.

It has been well documented that most maritime accidents (~80%) are caused by human error. Still, most of the focus on learning is rooted in technical causes and adding procedures and checklists.

Despite this bias, many accident investigation reports pinpoint that the leadership or safety culture was the root cause of more recent accidents such as the Bulk Jupiter, El Faro, Helge Ingstad and Costa Concordia, as well as older accidents such as the Exxon Valdez, Bow Mariner, Herald of Free Enterprise and Amoco Cadiz.

Industry blind spot

The critical failures leading to the accident were in most cases known before the accident took place. This demonstrates that failures which are not handled properly may develop into critical situations and accidents. This is a blind spot because the biased focus on technicalities and “impeccable” safety inspections makes people reluctant to be open about their failures, concerns and mistakes.

We at SAYFR think shipping companies, and the whole industry, needs to change its focus. Thousands of auditors and inspectors across the world are engaged by classification societies, flag and port state authorities, vetting and insurance companies and HSEQ departments. They verify that ships do the right thing and comply with technical and procedural requirements. However, ticking boxes never made anyone safer.

Cover-up culture

Also, and worryingly, there is a cover-up culture causing errors and unsafe practices. There are now so many procedures and checklists that, in some cases, it is impossible to comply with all of them. The fear of failure is driving accident statistics, and surveys reveal that 45% of seafarers admit that they regularly do not comply with procedures.

I firmly believe that human factors are key to prevent threats and failures from escalating. Yet improving safety or performance is about improving not only individuals but also the collaboration between sea and shore staff, between officers and crew and between different nationalities and cultures on board ships.

Huge potential to reduce accidents

Although this is recognized, it is not always addressed, so I believe a new approach is necessary to improve collaboration and reduce risks. Indeed, collaboration is strongly correlated with the risk of accidents and business interruption. Our experience of working on multiple projects over the years shows that it is possible to reduce the risk of major accidents by up to 75%.

However, there is no quick fix to improve collaboration and implement behavioral changes through, for example, training courses. Changing the culture is key and that process takes time. To help operators improve their approach to safety, proven methodologies must be used.

Safety leadership behaviors

Put simply, it involves observing and identifying working methods on board and then working with all the officers and crew in teams and as individuals to deliver the eight-point safety leadership behaviors, namely:

Giving feedback
Speaking up
Building trust
Creating openness
Showing care
Facilitate learning
Promoting teamwork
Managing dilemmas

Experience shows that the focus on the eight behaviors work because they address the blind spot. By encouraging the participants to openly share errors, failures and concerns, they are able to break the chain of events that can lead up to a major accident. Also, this approach helps to move beyond the culture of punishment to the positive safety-enhancing culture where crew members help each other.

Culture assessments key to improving safety

In order to understand how the organization culture influences safety, there is a need to use methodologies specialized for this purpose. One thing that many people are ignorant of is that a key professional competence of organizational psychology is advanced mathematics and data analysis. The evaluation of organizational culture relies on interviews, observations and questionnaires applying psychometric instruments that are tailor-made to ensure valid and reliable results. The professionals drive the process while the data provides the results. As a consequence, the more and better the data on these topics, the more valid, reliable and to-the-point are the results.

However not all the instruments used in the industry are valid and reliable. In a recent review of safety culture maturity instruments, only 3 of 43 instruments were valid. Indeed, there is not one single test alone that can demonstrate the validity of a survey instrument. Therefore, SAYFR has developed tailor-made psychometric instruments to assess these topics and has a database of responses from about 300 000 seafarers.

When it comes to the qualitative and quantitative tests that can be made to verify validity, the basic one is content validity. This dictates how well a safety instrument addresses a safety issue. It specifies that the survey instrument adequately covers the topic being studied as well as having sound scientific grounds and references.

This is important because so many historical examples show risks that were identified well ahead of time but were not addressed. These include the Deepwater Horizon blowout, which claimed 11 lives and caused huge environmental damage, rig personnel had knowingly by-passed safety barriers. In this case, failures were identified but the root cause of the problem – i.e. human neglect, whether cultural or circumstantial – was not factored in.

Reliability of survey instruments through data

Reliability of the survey instrument is also key and that is ensured statistically by use of data. Factor-analysis is a statistical method used to describe variability among correlated items in terms of a potentially lower number of unobserved variables, called factors. For our instrument, the eight factors are equal to the eight SAYFR leadership behaviours (8SLBs) mentioned above.

Moreover, predictive validity is the instrument’s ability to predict something in the future such as an event, or correlations with instrument measurements made by other instruments. If an organization scores low in terms of the 8SLBs, it is a good indicator of future problems. This has been shown on a number of occasions when departments, units or suborganizations have received low 8SLB scores only to have accidents occur in the intervening time, before action was taken.

Predictive validity can also be applied to solutions. When action was taken based upon a low 8SLBs score, a shipping company experienced a 60% reduction in the frequency of serious accidents, to a level which was maintained five years subsequent to the investigation.
Concurrent validity and construct validity are also important elements. Concurrent validity measures the correlation between two independent measurements performed at the same time. An increase in the ability to manage failures, for example, will necessarily correlate with the number of incidents that occur.

Construct validity is when a theoretical model of cause and effect – for example, do the improvements prescribed following appraisal of the 8SLBs – accurately replicate the real-world scenarios they are intended to represent? Construct validity is the ultimate validity measurement, and necessarily incorporates all other validity factors.

Reduction in the frequency of serious accidents

Also, it’s not only the psychometric instruments that rely on data. The use of digitalization, the internet of things (IoT), sensor data, machine learning, and big data has picked up in recent years. The idea is that those with the most data can create the best analytics and forecasts. With the use of more quality data, risk assessments and worst-case scenario simulations provide reliable predictions and identify effective interventions to prevent accidents.

In short, what we at SAYFR see is that the best shipowners and operators have a proactive organizational culture that goes beyond ticking the ‘compliance boxes’ and instead applies a collaborative, trusting approach from top to bottom in the company’s organization. This also includes assessing culture using valid and reliable survey instruments. This is what really helps to improve safety.

Source: www.maritimeprofessional.com

Author: Dr. Torkel Soma, Chief Scientific Officer, SAYFR

Image: www.pixibay.com

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Shipping Lines Skip a Beat

admin — Fri, 06 May 2022 15:54:33 +0000

Global ports lost more than one-third of their expected capacity to ship containers in 2021, causing economic trouble for some smaller developing nations, among others, finds research commissioned by the Global Shippers Forum (GSF).

The study, which was conducted by MDS Transmodal, identifies the extent of capacity restriction in 2021 that resulted from scheduled port calls being skipped by shipping lines. It measured the number of container ship slots that were expected to be available at the port but never materialized because the lines skipped the port—often because vessels were already fully occupied by containers collected at ports called at earlier on the service.

Among the hardest-hit were the ports of Colombo (Sri Lanka) and Piraeus (Greece), where about 40% of expected container capacity never arrived during the last quarter of 2021—a sharp increase from the 15-20% that the ports saw before the pandemic. In Asia Pacific, Port Klang in Malaysia also saw a 40% shortfall, while Melbourne (Australia) and Tauranga (New Zealand) were down by around one-third of the expected container capacity during the second half of 2021. In 2019, average no-shows at those ports amounted to between 10 and 15% of expected capacity.

Skipped ports have become part of how shipping lines are managing their heavily utilized fleets.

“Skipped port calls have multiple effects on shippers,” says James Hookham, director of the GSF. “They create local upward pressure on shipping rates, as shipping line agents ‘auction off’ available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers.

“More pernicious is the wider effect on national economies, especially those of developing nations that lose opportunity to deliver their exports, and hinder the recovery of their economy from the effects of lockdowns and COVID restrictions,” Hookham adds.

Source: www.inboundlogistics.com

Image: www.pexel.com

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Air cargo continues to ramp up its use of digital booking

admin — Mon, 25 Apr 2022 14:32:31 +0000

Airlines have been ramping up their digital booking offerings over the last few years in response to market volatility.

A survey carried out by booking portal Freightos found that 46% of air cargo carriers now enable instant rate searches for quotes on their websites compared with 10% in 2019.

Meanwhile, 33% offer e-booking with instant confirmation compared to 25% in 2019.

But there is still room for development, with 21% offering instant allotment booking and 4% allowing payments to be made online.

Freightos said that the most widespread digital stride among air carriers was the leveraging of third-party platforms to extend their online reach.

The research shows that 46% of leading air carriers provide instant rate search through third-party platforms and 42% also enable e-booking through these channels.

Shipment tracking is also widely available, with 42%providing this as an option.

Freightos said the adoption of third-party platforms was higher in air than ocean, where just 18% offer e-booking on portals.

“In the fragmented air market – compared to the consolidated ocean market and the growing leverage the pandemic has shifted to ocean carriers – airlines are eager for the low-touch access to new customers, new segments and new geographies that platforms represent, even at the cost of making price and service comparisons easier,” Freightos said.

“And the volatility of air cargo during the last two years served as a catalyst for this trend.”

Source: Freightos

The overall shift to digital booking was accelerated by the pandemic, the company said.

“The rush on PPE early in the pandemic, just as passenger travel plummeted, was an extreme example of the volatility in the air cargo industry over the last two years.

“The fast pace of air transport only quickened as labour shortages and ever-shifting quarantine requirements led to frequent operational changes.

“This environment accelerated the ongoing search many carriers had already been engaged in for improved internal efficiency and faster ways to communicate and transact with customers.

“Like in ocean freight, the pandemic accelerated the pre-existing trend toward digital connectivity.

“While carriers made gains in their website offerings and API connections, the biggest shift was in leveraging third-party platforms to extend their reach.”

Johnny Rubio, chief commercial officer of Silk Way West, said that online booking portals allowed carriers to introduce e-booking without a massive amount of investment in resource and capital and also makes its services more visible to a wider customer base.

IAG Cargo head of distribution Peter Roberts added: “Not only have our e-bookings increased, but the average weight per e-booking has too, suggesting that customer trust is growing.

“In addition to improving both customer satisfaction and our reach, the data unlocked through e-booking enables better business intelligence and a data-driven strategy.”

Source: www.aircargonews.net

Image: www.pexels.com

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Russia Faces Drop in Cargo Traffic, Container Deficit

admin — Wed, 20 Apr 2022 08:35:12 +0000

Russia is bracing for a sharp decline in cargo flows and a deficit of containers after major international container shipping lines halted operations in the country due to Moscow’s military campaign in Ukraine, two Russian executives said.

The world’s three largest container shipping lines, Denmark’s Maersk, France’s CMA CGM and Swiss-based MSC, have suspended their bookings to and from Russia after Moscow sent troops into Ukraine on Feb. 24, sparking a flurry of Western sanctions.

The exit of major container shipping companies — which transport most manufactured goods around the world and are essential to international trade — is expected to cause a major decline in shipments if no alternatives to these firms are found soon, according to the head of Delo Group, Russia’s largest container operator.

“We expect the drop in shipments (to and from Russian ports) in the northwestern region to be around 90% to 95% starting in May if no alternatives appear on the market,” said Delo Group CEO Dmitry Pankov. He was referring to container terminals at Russian ports including those in St. Petersburg and Ust-Luga.

Pankov said ports in the Russian Far East, the Black Sea and Sea of Azov would suffer less from the exit of mayor container shipping companies because their share of cargo traffic was smaller than that of northwestern Russia and because new players in those regions were beginning to emerge.

He did not name those companies, but said some came from Turkey.

Alexander Isurin, chief executive of TransContainer, predicted the exit of container shipping companies would result in a shortage of containers in circulation on the Russian market.

“The market will need to find a replacement for some 300,000 twenty-foot equivalent units (TEU),” said Isurin. TransContainer expects about 30% of containers on the Russian market to be withdrawn from circulation.

“The Russian transport market will most likely not be able to make up for everything and replace the largest container lines in the world that suddenly decided to no longer work here.”

Isurin suggested Russia might have no choice but to work with smaller regional container shipping companies new to the Russian market.

“There are Chinese, Japanese and Korean companies that can choose their position,” he said. “I think that many of them have taken a wait-and-see position that will depend on how the situation develops.” (Reporting by Reuters; editing by Guy Faulconbridge).

Source: www.reuters.com

Image: www.pixibay.com

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Expedited Shipping Can Save Money

admin — Sat, 26 Mar 2022 13:25:36 +0000

As shipping delays and supply chain issues pile up across the country, more businesses struggle to ship and receive products on time. When companies fail to meet important deadlines, the results can be costly, leading to the loss of valuable customers and vendors.

Fortunately, the use of expedited shipping services can help mitigate these risks. Experienced freight companies can identify the quickest and most cost-effective transportation methods while also helping to prevent financial loss caused by absent or late shipments.

Once you’ve established a working relationship with a reputable freight service, your account information, needs, and any special requests will be saved in their customer database. That means that the next time you contact them, you’ll spend less time explaining your situation, getting your inventory en route even faster.

WHY EXPEDITED SHIPPING SERVICES?

While expedited shipping options are typically more expensive than standard freight services, they offer numerous benefits.

Meet tight deadlines. Missing or late shipments that fail to meet deadlines can be disastrous for small and mid-sized businesses, leading to massive losses or penalties due to corporate chargebacks and lost sales. Damaged or missing cargo, perishable items, and hard-to-replace products often have the strictest deadlines, and failing to meet them can severely damage your bottom line.

Streamline the transportation process by sending freight directly to the consignee as soon as it’s picked up. That means your inventory won’t waste unscheduled time sitting in a storage facility or warehouse, reducing the risk of lost profits. Depending on the industry, just one hour of downtime (caused by lack of equipment or tools) can cost anywhere from $85,000 to $1 million.

Don’t pay for storage. More organizations utilize just-in-time inventory based on their production cycles. This means that supplies arrive only when needed, lowering overall costs. Maintaining the warehouses that store these items can be expensive since the facilities have to carry insurance, hire staff workers, and implement temperature control—leading to higher costs.

Utilizing expedited shipping services to order supplies when necessary eliminates the need for storage space, saving time and money without interrupting production.

Know your inventory is secure. Because your inventory remains on the same vehicle during the duration of its journey, there’s minimal handling, resulting in a much lower chance of damage or losses. Businesses also have the ability to track inventory in real time 24/7/365.

The ability to plan ahead. Planning months or years in advance can help businesses prepare for future demand, maintenance, upcoming supply chain shortages, and more.

Many organizations only utilize a single pallet per shipment when sending or receiving goods. However, they’ll save money in the long run if they order enough supplies to fill all the available space since they’re entitled to exclusive use of that vehicle.

By taking time to evaluate the total cost per shipment and establish a working relationship with a trusted expedited shipping provider, businesses can determine exactly what they’ll need over the next year, combining multiple orders into fewer shipments and reducing overall spending.

Save money over time. Expedited shipping offers security, helps you meet tight deadlines, reduces storage costs, and allows your business to plan ahead. Real-time tracking updates and less handling also ensure a damage- and loss-free delivery with no downtime.

While supply chain disruptions may continue for a while, expedited shipping services can reduce their impact.

Author: Dan Boaz, President and CEO, AirFreight.com

Source: www.inboundlogistics.com

Image: www.pexels.com

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Greenpeace Protests Against Ships Carrying Russian Fossil Fuels

admin — Sat, 26 Mar 2022 13:18:11 +0000

Greenpeace activists have taken to the sea to protest against tankers carrying Russian fossil fuels to Europe.

Traveling in rigid hull inflatable boats (RHIB), kayaks and as swimmers, protesters from Denmark, Sweden, Norway, Finland, Netherlands and Germany on Sunday went in front of supertankers Waikiki and SFC Baltica in the Baltic Sea, displaying banners with “Oil Fuels War” as Greenpeace calls on Europe to reject and ban Russian fossil fuel imports to weaken the attack on Ukraine.

Mads Flarup Christensen, executive director of Greenpeace Nordic, said, “While people suffer in Ukraine and people in Russia take to the streets pleading for peace, Putin’s oil and gas is still arriving at European ports, contributing to his war chest. Supertankers crossing our seas with Russian oil and gas are still delivering fossils to Europe. If we want to stand for peace, we must stop this and urgently get off oil and gas.”

Waikiki, owned by Greek shipping company Cardiff Marine, is reportedly carrying 100,000 tonnes of crude oil from Russia to Rotterdam, and SFC Baltica, owned by Russia’s Sovcomflot, is transporting 85,000 tonnes of fuel oil from Russia to Antwerp.

A new tracking service launched by Greenpeace UK has identified at least 189 supertankers carrying oil and gas from Russia since the start of its invasion of Ukraine on February 24, with 88 of them headed to Europe. Despite some countries declaring a ban on the arrival of Russian vessels, Russian cargo is still arriving via ships registered to other countries.

Russia is the largest source of the European Union’s fossil fuel imports. Europe spends up to $285 million per day on Russian oil, which funds Putin’s war effort, according to the Transport & Environment (T&E) thinktank.

Last week in France, Greenpeace activists confronted Russian liquefied natural gas (LNG) carrier Boris Vilkitsky at sea, and earlier this month 20 activists from Greenpeace Germany painted ‘No Coal’ and ‘No War’ on the side of the bulk carrier Grant T loaded with 100,000 tons of Russian coal as it approached the port of Hamburg.

Dockers in France, the U.K. and the Netherlands have already refused to unload fossil tankers coming from Russia. And the Swedish Dockworkers Union decided on Thursday to block ships from Russia.

Source: www.marinelinks.com

Image: www.pexels.com

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Russia Dropped from Ship Certification Body as Sanctions Bite

admin — Thu, 17 Mar 2022 13:59:29 +0000

The world’s top association of ship certifiers has withdrawn membership from the Russia Maritime Register of Shipping (RS) due to the impact of sanctions on Moscow after its invasion of Ukraine, in another blow to the country’s vital shipping sector.

Classification societies provide services such as checking that ships are seaworthy, and this certification cover is essential for securing insurance and entry into ports.

In recent days, Britain’s LR and Denmark’s DNV, have both announced they were stopping or winding down their business ties with Russia.

The International Association of Classification Societies (IACS), which had 12 members previously including LR and DNV and forms the top tier of ship certifiers globally, said late on Friday it was withdrawing RS’ membership with immediate effect, which it said was “no longer tenable”, citing UK sanctions on Russia where IACS is domiciled.

“IACS deeply regrets the circumstances that have resulted in this decision,” it said.

RS did not immediately respond to a request for comment on Monday.

An IACS spokesperson said on Monday that the impact on RS of no longer being an IACS member would “depend on its various, private bilateral arrangements with entities such as shipowners and flag states”.

The spokesperson said IACS was a technical association that “develops and agrees minimum technical standards”.

“IACS will need to make various consequential changes regarding the composition of various working groups,” the spokesperson said.

“IACS is not involved in the operational and commercial activities of its members. As such, the decision whether to continue to engage bilaterally with RS will need to be taken by each IACS member individually.”

RS said in June last year it had formed a strategic partnership with leading Russian shipping company Sovcomflot (SCF), which included cooperating on the development of new marine fuels to reduce emissions and technical supervision of ice-class ships operating in the Arctic.

SCF was among the Russian entities the U.S. Treasury restricted last month from raising capital in U.S. markets, which shipping sources say will complicate transactions for the Moscow-listed company.

It was not yet clear what impact the growing restrictions would have on the safety of SCF’s fleet and their ability to sail.

Source: www.marinelinks.com

Image: www.pexels.com

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Ukraine Invasion: What Can Be Done at Sea?

admin — Fri, 04 Mar 2022 14:35:04 +0000

The closure of the Turkish straits to all warships has drawn attention to the maritime dimension of Russia’s invasion of Ukraine.

From a tactical and operational perspective, Russian naval forces have already contributed, albeit in a limited way, to the current invasion of Ukraine, notably with missile strikes and amphibious assaults. But from a strategic and political perspective, there are other important maritime elements to the conflict, for both Russia and Nato.

Russia is not, and has never been, a maritime power, but it would be a mistake to assume that Russia does not have maritime objectives. Since the late 17th century, securing access to global sea lanes of communication (the primary maritime routes between international ports) has been a recurring driver of Russian foreign policy.

In particular, the country has striven for access to the Turkish straits between the Black Sea to the Mediterranean. This route connects Russia to other global sea lanes and provides the sole access for Russia’s Black Sea Fleet. In the past 15 years, Russia’s annexation of Crimea, securing naval facilities in Syria, and attempts to warm up relationships with Turkey have all contributed to this long-term objective.

According to the 1936 Montreux Convention that regulates control of the straits, Turkey can decide to limit the transit of military vessels in case of war, although ships returning to base are permitted to pass through. The closure of the straits to warships will not make a substantial difference to the war in coming weeks, although it might hinder Russia’s efforts if the conflict continues for months by preventing reinforcements travelling by sea.

However, the political impact of closing the straits is immediately significant. It adds further weight to the various sanctions and acts of diplomatic opposition to Russia’s invasion, such as banning Russian banks from the Swift banking payment system, and closing EU airspace to Russian aircraft, reinforcing Russia’s status as an outcast on the world stage.

Helping Ukraine

There are other maritime actions that western countries can take as part of their efforts to support Ukraine. While they want to avoid an open confrontation with Russia, they are also keen to demonstrate support to allies and to deter Russia from aggression towards eastern European Nato members.

The US and EU could ban Russian ships from docking at their ports (as the UK has already done). And they can enforce sanctions at sea. For instance, on Saturday 26 February, the French authorities seized a cargo ship “suspected of being linked to Russian interests targeted by the sanctions” in the English Channel.

There is a risk that Russia will consider restrictions imposed on Russian assets, such as commercial ships, as a hostile act. This could lead to potential escalation between Nato and EU member states and Russia. But as demonstrated by France’s rapid action, it is possible to implement sanctions so long as risks are measured.

Similarly, Nato is surely going to avoid any naval skirmish that could degenerate into open hostilities. Nato’s priority is to support Ukraine’s defence and enduring independence and sovereignty without risking a war with Russia.

Sealift – the use of ships to deliver assistance and material such as defensive weaponry to Ukraine – is unlikely because of the status of the Turkish straits. Also, there is a large possibility of encountering Russian warships, which are strategically positioned along the access routes to Ukrainian ports, with a risk of an open confrontation.

Third party commercial ships in the Black Sea have already been hit by Russian weapons. What action Nato countries will take if their civilian ships are attacked is a crucial question. Indeed, even if provocations and collateral damages originate from the Russian side, any armed response to them could risk an open war with Russia.

However, naval diplomacy can be part of Nato’s toolkit. Deploying warships, and in particular aircraft carriers, for example in the eastern Mediterranean, would have a substantial symbolic and political effect. This would give a strong message on Nato’s resolve to oppose the invasion to both Russia and eastern European Nato members.

Source: www.theconversation.com

Image: www.pexels.com

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