Saturday, March 23, 2024

US Speeds Offshore Wind Farm Development with More Reviews and Tax Guidance

The Biden administration is taking steps to accelerate development of the offshore wind energy industry (Vineyard)

The Biden administration continues to place a high priority on offshore wind as a key part of the country’s renewable energy strategy and is taking steps to support and accelerate the development of the industry. The Bureau of Ocean Energy Management (BOEM) announced plans to start the environmental review for another project while the Treasury Department finally issued long-awaited updates on the tax credits the industry views as essential to its planning.

BOEM reports that it will commence the environmental review of the plan submitted for Vineyard Northeast, the second project from Copenhagen Investment Partners which already has the Vineyard Wind Farm under construction with Avangrid. This second project calls for 2.6 GW of capacity located 29 miles offshore of Nantucket, Massachusetts.

The Vineyard Northeast proposal includes the installation of up to 160 wind turbine generators, up to three electrical service platforms, and one booster station in an adjacent lease area. It also envisions two offshore export cable corridors, one to Connecticut and one to Massachusetts, and associated onshore transmission systems.

This will be the 13th review initiated by the Biden administration and follows an announcement just a week ago to also start the view for Atlantic Shores Offshore Wind, which will be off the coast of New Jersey. Last month, the bureau reported it had completed the review for the New England Wind project to be located offshore Massachusetts, while it is also working on broader reviews for the New York Bight, the Central Atlantic, and now the Gulf of Maine.

The industry has also been calling for clarification and steps to implement the tax credits outlined in the Inflation Reduction Act passed in 2022. Eleven months ago they issued the first rules prompting questions from companies in the wind and other sectors. Ørsted and others cited in 2023 the challenges in gaining the credits as presenting a hurdle or the reason for abandoning some of their planned projects.

The Department of the Treasury today issued the long-awaited guidance for the requirements to gain the bonus under the Inflation Reduction Act for clean energy projects and facilities. Developers can receive a bonus of up to 10 percentage points on top of the Investment Tax Credit and an increase of 10 percent for the Production Tax Credit. The act provides a base 30 percent credit for renewable energy projects.

Saying that offshore wind projects make significant investments and create jobs at eligible ports over the duration of the projects, the guidance provided steps permitting offshore wind facilities to attribute their nameplate capacity to additional property in these ports. The guidance also clarifies details for a project that has multiple points of interconnection.

The Treasury Department says these steps will provide additional support to low-income communities by locating the equipment and jobs in those areas. The guidance was critical to the industry which was seeking additional information on the steps required for these credits.

Hornsea 3 Offshore Wind Farm Will Achieve an Energy Output of 2.9 GW

[By: Sarens]

The new wind farm, located 120 km off the Norfolk coast and 160 km off the Yorkshire coast, will be the single largest offshore wind project in the world with a surface area of 696 km2 and up to 231 turbines.

Sarens will work together with Aibel to assemble the two HVDC converter platforms at the Maptaphut facility in Rayong (Thailand), from where they will be transported to Haugesund to be equipped with Hitachi Energy's latest generation HVDC converter valve technology prior to final completion and commissioning.

The new Hornsea 3 offshore wind farm, located 120 km off the Norfolk coast and 160 km off the Yorkshire coast, will become, once commissioned in 2027, the largest offshore wind project in the world with up to 231 turbines, 696 km2 of occupied area and a clean electricity production of 2.9 GW, which will be enough to supply more than 3.3 million homes in the UK.

Sarens, world leader in heavy lifting, engineered transport and crane rental, is working with Aibel on the construction of the wind farm's two HVDC (high-voltage direct current) converter platforms at Aibel's facilities in Maptaphut, Rayong (Thailand). These units will be key to ensuring the performance of the wind farm, as they are the units responsible for transmitting large amounts of electricity over long distances, once the electricity produced by the wind turbines has been converted into alternating current.

This new facility, which will be operated by Ørsted, joins the two previous phases, which came on stream in 2019 and 2022 respectively. These two farms already contribute more than 2.5 GW of renewable energy to the UK grid, benefiting nearly 2.5 million homes.

For this operation, scheduled from January 2024 to the first quarter of 2025, Sarens transported two CC2800-1 crane units, each with a capacity of 600 tons, from its facility. Both cranes will collaborate in lifitng Section S210 weighing, 273 tons, and Section S220 weighing ,388.7 tons to their final positions, completing the module. As a preliminary step, the cranes were positioned on steel mats for crawl and stack the section on the surface , ensuring the operation’s security, precise crane movements, and preventing damage to both the material and operators in the vicinity.”.

When the wind farm comes online, Ørsted’s Hornsea trio – comprising Hornsea 1, 2, and 3 – will have a total capacity of in excess of 5 GW, making it the world’s largest operating offshore wind zone. The Hornsea zone will also include Ørsted’s Hornsea 4 project, which could have a capacity of up to 2.6 GW. Hornsea 4 received its development consent order from the UK government earlier in 2023 and is now eligible for forthcoming CfD allocation rounds.

Sarens has extensive international experience in the assembly and maintenance of wind farms. It has participated in various installations in France such as Fécamp, Saint Nazaire, Provence Grand Large in the lifting and transport work for the foundation bases of the new offshore wind farm in Saint Brieuc, located off the Brittany coast. During this project, Sarens successfully transported loads weighing over 1,150 tons. More recently, Sarens has worked in the receiving and loading out the monopiles and transition pieces for 176 turbines for the Coastal Virginia Offshore Windfarm.

The products and services herein described in this press release are not endorsed by The Maritime Executive.

Shell Sells Position in U.S. SouthCoast Offshore Wind JV to Partner

The realignment in the offshore wind sector continues with Shell reporting that it is honing its portfolio. In the latest move, Shell New Energies exited its 50 percent stake in SouthCoast Wind Energy which is in the permitting process for a 2.4 GW wind farm to be located off the coast of Massachusetts. It is the latest step seeing the energy giant reduce its participation in wind energy.

SouthCoast Wind was formed as a 50-50 joint venture in 2018 to develop offshore wind projects with its first lease for a site 30 miles south of Martha’s Vineyard and 23 miles south of Nantucket. The company is a partnership with Ocean Winds North America, which in turn is a partnership between EDP Renewables and ENGIE. When EDPR and ENGIE combined their offshore wind assets and project pipeline to create Ocean Winds in 2019, the company had a total of 1.5 GW under construction and 4.0 GW under development. In addition to SouthCoast Wind, Ocean Winds has Bluepoint Wind in the New York Bight and recently won the lease for Golden State Wind in the first auction for sites offshore from California.

The SouthCoast Wind project is still in the permitting stage with Rhode Island conducting hearings last month. The first phase of the project which would deliver approximately 1.2 GW via an electric grid connection in Massachusetts is targeted for the late 2020s. SouthCoast Wind still developing plans for the second phase of the project.

Shell reports it closed on the sale of its 50 percent interest of SouthCoast Wind to Ocean Winds. No valuation was announced for the shares. Ocean Winds now has 100 percent ownership of SouthCoast Wind, which was formerly known as Mayflower Wind.

"In-line with our Powering Progress strategy, Shell continues to hone our portfolio of renewable generation projects in key markets where we have an advantaged position," said Glenn Wright, Senior Vice President of Shell Energy Americas. "We are grateful to Ocean Winds for their years of partnership within this venture, and continue to seek opportunities to provide more energy, with fewer emissions."

The sale of the asset in the United States follows a similar strategy Shell is deploying globally. Last month the energy giant sold its position in a company working on the development of a wind farm in South Korea. Shell has also exited projects including in September 2022 two planned Irish wind farms. After acquiring French floating wind specialist Eolfi in 2019, Shell was reported in May 2023 preparing to sell the company after Wael Sawan became CEO and said Shell would be focusing on creating greater value for shareholders.

In addition to positions in wind energy in the UK and Norway, Shell is also a partner in New Jersey’s Atlantic Shores Offshore Wind with a 50 percent position. They are working in partnership with EDF Renewables North America for that wind farm project which calls for 1.5 GW of capacity. It is a more advanced project as last week the Bureau of Ocean Energy Management reported it is beginning the environmental review for the proposal.

Shell joins other majors which are also rearranging their positions in offshore wind energy. BP and Equinor ended their partnership splitting their U.S. wind portfolio while U.S. generation company Eversource is selling its project including a deal with partner Ørsted and another deal with private equity investors. The private equity sector is showing an increased interest in offshore wind as the sector matures and the projects have moved closer to construction completing the drawn-out permitting and approval process.

Liberian Tanker Exchanges Gunfire with Pirates in Gulf of Aden

YAR!PRIMITIVE ACCUMULATION OF CAPITAL,MATEY

piracy — Pirate boat exchanged gunfire with the security guards on a tanker (file photo)

For the second time in as many days, a commercial vessel reports being approached by pirates in the Gulf of Aden. Today’s incident resulted in an exchange of gunfire before the pirates were chased away and comes as authorities have warned that multiple pirate action groups are on the prowl off Somalia.

The vessel, which was identified as the Liberian-register tanker Yamilah III (74,886 dwt) by EUNAVFOR Atalanta, was reported to be approximately 100 nautical miles southeast of Nishtun, Yemen in the Gulf of Aden. The UK Maritime Trade Organizations said the master of the tanker reported sighting a small boat approaching the tanker which had departed Fujairah, UAE bound for Yanbu, Saudi Arabia. The tanker is managed by a company in the UAE.

The report said the small boat followed the tanker before beginning an approach. When it was at a close distance the armed security guards aboard the tanker fired warning shots. Unlike yesterday’s incident where the pirates withdrew, the report said there was an exchange of small arms fire between the pirates and security guards. The pirate boat departed after the exchange of fire.

Yesterday, a bulk carrier identified by EUNAVFOR as the Liberian-registered New Leonidas (170,500 dwt), reported it was followed for approximately 20 minutes by a small boat. They reported the people in the boat were armed and they could see a ladder in the boat. When the pirates approached, the armed guards on the bulker fired warning shots and the pirates departed without returning fire. Yesterday’s incident was in the same general area as it was reported to be 160 nautical miles southeast of Salalah, Oman.

The security operations for the region have issued multiple warnings in recent days highlighting increased activity in the region. EUNAVFOR believes possible four pirate action groups are currently active in the region looking for targets.

Having successfully stopped three recent incidents in the region, commanders from the Indian Navy yesterday highlighted their increased patrols in the region. Ajay Bhatt, the Minister of State for Defence, since 2008, India has deployed approximately 110 vessels to provide security in the region. He said they have escorted 3,440 ships and over 25,000 seafarers to ensure the freedom of navigation in the region.

EUNAVFOR Atalanta reports the incident with the Yamilah III, which they classified as an attempted attack, was the 24th incident since November 2023. Reuters is reporting that it spoke with one of the piracy groups and they have stepped up efforts believing the Houthi attacks in the Red Sea could be distracting international naval forces and providing an opening for resuming their piracy efforts.

The hijacking of the Navibulgar bulker Ruen in December was reported to be the first successful Somali piracy attack since 2017. An attack the prior month on a chemical tanker was stopped by U.S. naval forces and when the pirates attempted to flee, they were apprehended by the Americans. The Maritime Security Center for the Horn of Africa warned this week that the possibility of piracy incidents has increased and that ships should be taking extra precautions in a wider area as the pirates are now using motherships in a range up to 600 nautical miles from Somalia.

Pirates Permit Abdullah Crew to Call Home but Move Ship Toward Shore

hijacked bulker — Attempts to contact the vessel went unanswered the Indian Navy reported (EUNAVFOR)

The Somali pirates holding the Bangladeshi vessel Abdullah apparently are fearing a possible rescue attempt by the international forces. Reports are that they repositioned the bulker closer to shore while reiterating that they are holding the crew aboard. To emphasize conditions they also permitted the crew to call home for the first time since the incident began more than a week ago.

The media in Bangladesh is quoting family members reporting that each crewmember was given a few minutes on the vessel’s satellite phone to call their families. The pirates have confiscated cell phones and electronic devices from the crew and it has been a week since there had been any direct contact.

The crew is reporting that they are in good condition but are now fearful that the ship will soon run out of drinking water and food. They told family members that the ship only had supplies aboard for the voyage that would have already reached the UAE.

The 22 crewmembers said they were still aboard the Abdullah. They are reporting that tension and anxiety are running high with the captors brandishing AK-47 rifles onboard but said they have not been mistreated.

Contributing to the tensions was news that the Indian Navy successfully rescued the crew of the Bulgarian vessel Ruen last weekend. Reports are that a warship working with the EUNAVFOR Atalanta mission is watching the Abdullah from a distance after tracking the ship to Somalia. The Indian Navy reported it had followed the ship until it reached Somali waters.

EUNAVFOR released a video of the warship following the Abdullah with a helicopter monitoring the ship

With a warship on the horizon, the reports said the pirates had now moved all the crew into a single room. Previously they had been permitted to stay in their cabins. Additional pirates also boarded the ship, possibly relieving the first batch that seized the ship.

The reports are that the ship was repositioned just four miles from the Somali coast to discourage any attempts by the international forces. In addition, officials from the government in Bangladesh and SK Shipping told the Bangladeshi media that they did not approve an action with force and remain hopeful of a quick settlement.

They are not revealing any additional details after reports Wednesday that they had been contacted by a third-party representative of the pirates. At that point, however, the reports said no specific ransom demand was made.

Houthi Attacks Force Port of Eilat to Lay Off Half its Staff

Port of Eilat in better times, with a full lot of imported cars (Adiel Io / CC BY SA 3.0)
PUBLISHED MAR 21, 2024 9:29 PM BY THE MARITIME EXECUTIVE

The Houthi attacks on Red Sea shipping have disrupted cargo traffic between Europe and Asia, increasing shipping times, costs and fuel consumption. This has forced port operators to adapt to altered schedules. For the Red Sea port of Eilat, Israel, the disruption has been much more severe: its operator is laying off half of its workforce because of a sharp drop in business.
On Wednesday, Israel's Histadrut Labor Federation said that the managers of Port of Eilat intend to lay off 60 out of 120 employees. “The port management is trying to take advantage of the war situation and harm the livelihood of dedicated workers in the southern periphery," asserted Nir Eisenberg, head of the maritime transport workers' division of Histadrut.
Port of Eilat has lost no less than 85 percent of its traffic since the Houthi campaign against Western shipping began. Houthi forces have pledged to attack Israel-bound ships in the Red Sea, and Eilat can only be accessed from the east through the Red Sea. Vessels arriving from the west can also call at Israel's Mediterranean ports, without paying Suez Canal fees to reach Eilat.
Accordingly, ro/ro imports have plummeted. Eilat handles eastern car imports for the Israeli market, and last year it brought in 150,000 cars via the Red Sea route. So far this year, the number is zero, according to Israeli business outlet Calcalist.
Eilat Port CEO Gideon Golber told Middle East Monitor that if the Israeli government did not step in to pay all salaries, the enterprise would have no choice but to impose layoffs. "I hoped the coalition countries would have solved the [maritime security] issue in a few months, but they are not solving the problem," he said.
Eilat is also within missile range of Houthi forces, and has come under attack directly. On Sunday, a Houthi cruise missile penetrated Israeli missile defense systems and struck north of Eilat, causing no serious damage. The Israeli Defense Forces confirmed the attack and said in a statement that it is investigating why the missile was not shot down.
On Thursday, Israeli air defenses shot down a suspicious aerial target off the coast of Eilat, before it could reach shore.
Top image: Courtesy Adiel Io / CC BY SA 3.0

Maersk Says “Not Yet” for Return to Red Sea Routing

Maersk containership — Maersk on an earlier transit of the Suez Canal nows says it is too soon to go back to the Red Sea (SCA file photo)

Three months after starting to divert all its vessels from a passage through the Red Sea, Maersk told customers today that it is too soon in its assessment to resume its normal routes. They said the routing around Africa allows the best supply chain stability, in their assessment, saying that a switch is complex and they wanted to make sure it would be sustained over the long term and avoid further disruption.

They write that they are aware that Operation Aspides has taken shape and welcome it as a positive development along with the U.S.-led efforts. Maersk writes that they are also in “continuous dialogue” and monitoring developments in the region.

“Regretfully, both our internal analysis, as well as insight we received from external sources, still indicates that the risk level in the region remains elevated,” they wrote in their latest customer alert.

Maersk vessels were targeted by the Houthi on two different occasions in December leading the carrier to first suspend, then resume, and then suspend again transits through the region around the Bab el-Mandeb Strait. The Maersk Gibraltar had a near-miss incident on December 14 leading to the first pause. After getting security assurances after the U.S.-led effort began, at the end of December Maersk said it was updating voyage plans on a vessel-by-vessel basis, which would see the first vessels pass through the Red Sea again.

A day after they informed customers that they were resuming some transits, the Maersk Hangzhou on December 30 was hit by an unknown object. The ship had passed through the Bab al-Mandab Strait sailing from Singapore to Port Suez, Egypt. While there was no indication of a fire on board, Maersk said out of a concern for crew safety they were again rerouting all sailings.

“At Maersk, we are aware that some other shipping lines have continued sailing through the Red Sea despite security risks or have announced their plans to resume sailing,” the March 22 alert says. “We respect the right of each carrier to make such decisions individually. At the same time, we continue with our own assessment that the current situation does not allow us to make a similar decision and thus still believe that sailing via the Cape of Good Hope and around Africa is the most reasonable solution at the moment and the one that currently allows the best supply chain stability.”

Aspides reported this week that it has been in place for a month and already escorted 35 merchant vessels. They reported the defensive actions led to the shooting down of eight UAVs and the repelling of three other UAV attacks. Since then, the French shot down another UAV targeting a ship they were protecting, the German warship Hessen destroyed a USV while it was escorting a ship, intercepted and destroyed 3 ballistic missiles while yesterday the French reported they intercepted and destroyed three more ballistic missiles.

Among the major carriers, only CMA CGM has said it was prepared to resume transits. At the end of February after having suspended transits they advised customers that they had “reevaluated the situation in the Southern Area of the Red Sea.” They said the situation was being assessed for each ship individual.

Previously, Rodolphe Saadé, Chairman & CEO of the CMA CGM Group, told the Financial Times they were making the Red Sea transits when they could be escorted. He said the disruptions were playing havoc on their schedule and even when they were making the trips they were often having to wait for their escorts.

MSC reported it was also avoiding the transit. Even still, one of its vessels heading to Djibouti was attacked on March 4 with a small fire started in containers. The Indian Navy assisted with the fire and the MSC vessel was able to continue its voyage.

Most of the transits are being made by smaller operators. BIMCO reported this week that traffic through the region was down by 50 percent in January and February. In the first three weeks of March, they calculated that the gross tonnage transiting the Suez Canal had dropped 61 percent year-over-year.

Why Houthi Attacks in the Red Sea Are Likely to Persist: They're Popular

Since mid-November 2023 the shipping route through the Red Sea has been disrupted by a series of attacks on vessels by Yemen’s Houthi movement, recently designated as a terrorist organisation by the US government. The Houthis have presented their attacks as retaliation for Israel’s military assault in Gaza. Although this undoubtedly is one of the motivations for the Houthis’ activities they are also driven by more long-standing domestic political considerations. These dynamics may propel the Red Sea crisis forward for the foreseeable future, especially if U.S. and U.K. forces are unable to hobble the Houthis’ offensive capabilities.

The most dramatic result of the Houthi attacks has been an 80% drop in the volume of freight passing through the Red Sea since late November. Insurance costs have soared for those ships still attempting the passage. Roughly 45% of lost traffic now detours around the Cape of Good Hope, lengthening journey time by an average of 30% and adding significant extra costs. Freight rates, especially, have skyrocketed. Despite the raised insurance premiums and increased costs for the rerouted voyages, the overall economic impact of the disruption to shipping will be limited if the situation continues as it is for a relatively contained period, perhaps adding up to 0.7% to core goods inflation globally in the first half of 2024. That said, there appears to be no end in sight to Houthi attacks.

Having framed their actions in the Red Sea as a response to Israel’s actions in Gaza, it might not be unreasonable to believe the Houthis would cease their attacks in response to a ceasefire in Gaza. The Houthis could claim such a ceasefire as a major victory. Ongoing multilateral diplomatic efforts to secure one could, therefore, resolve the crisis in the Red Sea. There are two problems with this position: firstly, the likelihood of a lasting ceasefire being agreed soon is low due to the uncompromising negotiating position of the Israeli government, an apparent lack of US political will or ability to soften Israel’s stance, and the unrealistic demands of Hamas. Secondly, even if a Gaza ceasefire were to be signed, there is a substantial likelihood that the Houthis would continue their attacks in the Red Sea in any case due to domestic political incentives to do so. They may attempt to justify such a continuation of attacks in terms of the Palestinian cause in general, beyond the current military campaign in Gaza.

Prior to the conflict in Gaza the Houthis had suffered a decline in public support due to poor governance. Now, however, the Houthis have successfully leveraged strong local pro-Palestinian sentiment to reverse this decline and boost their support. Appearing to take action in support of the Palestinian cause, the Houthis can now credibly present themselves in Yemen as the true representatives of the popular will both there and across the broader region. Moreover, long-standing Yemeni hostility to foreign military intervention has meant that US and UK missile attacks on Houthi positions – and Houthi retaliatory attacks on US and UK shipping – have only bolstered the Houthis' domestic popularity. The Houthis can now claim to be making good on their long-stated goal of militarily confronting the US and its allies. Domestic rivals of the Houthis are loathe to move against them for fear of appearing to undermine this ‘resistance’, and some traditional rivals have even started to provide material support to the Houthis. Similarly, Saudi Arabia, the Houthis’ old regional foe, is especially keen to avoid any confrontation that might harm the progress of its Vision 2030 and, to this end, is anxious to complete paused bilateral peace talks in Yemen. Beyond the Middle East, the Houthis can even claim political gains at the global level, having recently reached an agreement with the Russian and Chinese governments to guarantee safe passage for Russian and Chinese shipping in exchange for increased political support for the Houthi cause from those countries on the world stage. Indeed, the Houthi-Russian-Chinese trilateral talks in themselves are emblematic of the Houthis’ now greatly enhanced political stature.

With a cessation of attacks in the Red Sea unlikely to be forthcoming from the Houthis, the future security of Red Sea shipping relies on the effectiveness of the US-led military response. So far, however, the US-led mission in the Red Sea has largely failed to achieve its objectives, raising questions about the prospect for future success.

The sizeable US-led naval task force is stretched thin, and is widely regarded as too small to effectively guard the entirety of the vast area of water within which the Houthis can strike. A January attack on two Maersk-operated US Merchant Navy ships, despite a naval escort, highlighted the challenges facing the task force. Moreover, the Houthis possess a potent anti-ship missile arsenal that is comparable to many state armies and includes sophisticated missile types alongside low-cost but effective Iranian-supplied UAVs. Recently, the Houthis reported to have acquired advanced hypersonic missiles (most likely via Iran) and claimed to have established a production facility to manufacture more of these missiles domestically. This formidable arsenal poses a serious challenge to the high-tech but overstretched resources of the US-led coalition, exacerbating the difficulty of protecting shipping routes.

Successive waves of US and UK missile strikes have not stopped Houthi attacks. This has been partly due to the group's expertise in concealing assets, in addition to US and UK’s relative lack of detailed intelligence on Houthi military assets resulting principally from a lack of intelligence focus on Yemen in recent years. Furthermore, depleting the Houthis’ munitions stockpiles in the long term is difficult as the group possess efficient resupply channels that combine domestic production with reliable sea smuggling routes from Iran. While it has been argued that the reduced frequency of Houthi attacks since 26 January indicates that airstrikes are working, this trend is equally attributable to Israeli, US and UK ships avoiding the Red Sea. Indeed, the recent attacks on the Rubymar, which has now sunk, and the True Confidence, which lost three sailors to a Houthi strike, demonstrates the continued potency of Houthi missile capabilities.

With a comprehensive ceasefire in Gaza not imminent and the Houthis making large political gains, the route to quick de-escalation in the Red Sea therefore lies in either an increased naval presence or expanded airstrikes. The US remains unwilling, however, to reduce its naval presence elsewhere to expand its forces further in the Red Sea. The EU has recently launched a small supporting naval mission, but its impact remains uncertain. The US also appears reluctant to substantially expand its aerial campaign, as suggested, for example, by US efforts to rein in the Houthis via Omani and Chinese diplomatic intercession with Iran, the Houthis’ primary state backer. The Red Sea crisis may therefore persist unchanged in the short-to-medium term, and may even deepen as the EU naval mission brings EU merchant shipping into the Houthis’ crosshairs. Indeed, the group has recently declared its intention to expand the geographical reach of its attacks to the Indian Ocean. Houthi coordination with other members of the Iran-aligned ‘Axis of Resistance’ in Iraq, Syria, and Lebanon may also increase, potentially raising the risk of further escalation of the conflict within the region. Indeed, there are already suggestions that moves toward greater coordination may already be underway.

Bilal Sabbagh is a director at risk management consultancy K2 Integrity.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

MONOPOLY CAPITALI$M

MSC to Acquire French Freight Forwarder as Sector Consolidation Accelerates

MSC continues its acquisition buying another freight forwarder (Felixstowe file photo)

MSC Mediterranean Shipping Company has agreed to acquire French freight forwarder Clasquin as it works to build out its global network. The negotiations were first announced in December and now the companies report terms have been reached for the acquisition, which will be completed by MSC subsidiary SAS Shipping Agencies Services Sàrl.

Clasquin, a mid-sized international freight forwarder and overseas logistics company, highlights that for more than 40 years it has been designing and managing the entire overseas transport and logistics chain, organizing, and coordinating the flow of client shipments between France and the rest of the world. The company manages shipments both by land and sea to and from Asia-Pacific, North America, North Africa, and sub-Saharan Africa. Management highlights that there will be strong synergies with MSC’s African logistics operations, which were acquired from Bollore

The transport and logistics market according to Clasquin management is fragmented with many small, local players and international giants. They created a unique position between the local players and international giants. However, after a successful international growth strategy, analysts point out that the shipping companies are consolidating and becoming more concentrated.

MSC approached Clasquin in December and commenced a due diligence. Terms have now been reached with the management and key shareholders tendering 42 percent of the company at approximately $155 per share. They highlight that the offer price represents a nearly 60 percent premium to the last closing price before news of the MSC approach became public. It is a further 13 percent premium to the current market price.

SAS will make a tender for the remaining shares of Clasquin. They reported that SAS intends to proceed with a squeeze-out should conditions be met after the closing.

The management of Clasquin is supporting the transaction. They report the company will continue to operate under its current management and name after the acquisition.

It is the latest in a series of transactions in the sector by the largest shipping companies. CMA CGM recently completed its acquisition of the global operations of Bollore Logistics but lost out on its bid to acquire UK-based Wincanton.

The sector is now gearing up for a likely bidding battle as DB Schenker, one of the largest logistics and freight companies. Parent company Deutsche Bahn reported that more than 20 companies have registered interest in acquiring the freight forwarded after it confirmed that it was starting a bidding process. AP Moller – Maersk recently said it was considering an offer and MSC is rumored to also be considering a bid for Schenker. AD Ports Group is also rumored to be a possible bidder as the consolidation of the sector continues.

ECOCIDE

NOAA Tells Californians “Don’t Touch” as Container Debris Washes Ashore

beach debris — Cotton bales and other debris are reaching the beaches more than a month after the containers were lost overboard (NOAA)

PUBLISHED MAR 22, 2024 8:32 PM BY THE MARITIME EXECUTIVE

The Monterey Bay National Marine Sanctuary and NOAA which oversees the unique marine preservation site are warning beachgoers and tourists to look but not to touch and report any debris they find along the coastline. On Tuesday they posted a picture of a 500 lbs cotton bale that has washed ashore weeks after reports that an APL containership lost boxes along the coastline.

In a statement issued a week ago, Lisa Wooninck, Superintendent for the marine sanctuary wrote, “Please report and do not disturb any cotton bales that have washed up recently on local beaches.” While it might be a usual sight to find these large bales along the shore, Wooninck warns the cotton could cover sensitive flora and fauna in the intertidal and on the shoreline. “It is best that the bales remain covered and banded until cleanup contractors can safely remove them from the beach.”

Debris first started washing up on beaches around San Simeon at the beginning of March. NOAA reported on March 4 that people reported cotton bales and empty wine barrels on the San Luis Obispo County beaches. Since then, more cotton bales have been reported from Big Sur Coast to Point Sal, including the Northern Channel Islands, and affecting Monterey Bay.

The debris is being linked to the APL containership President Eisenhower (93,558 dwt) which reported to the U.S. Coast Guard that it lost containers overboard on February 6. NOAA says the boxes were lost approximately 15 miles out to sea with the USCG setting the position 64 nautical miles southwest of Monterey. The vessel which has a capacity of 7,800 TEU reported that 24 boxes were lost saying that there were no hazardous materials involved. The ship continued its trip to the Port of Oakland.

A USCG plane observed a container in the water on February 9 near the southern reaches of the Monterey Bay National Marine Sanctuary. They did modeling indicating that the drift estimate was a downcoast movement but warned the staff at NOAA and the sanctuary. The area is considered to be one of the nation's most spectacular underwater parks covering more than 6,000 sq. miles of diverse ocean ecosystems.

For the time being the warning is not to touch or remove anything found on the beach. The bales should be covered in blue plastic and dry would weigh 500 lbs. They also warn that some of the bales could have broken apart meaning beachgoers might find loose cotton on the beach or in the rocks. Due to the danger to marine organisms, they want the materials not to be moved until the contractors can reach and recover the various debris.

SCAB SHIPPERS

Report: Shadow Tankers Sail Without Danish Pilots Despite Recent Collision

Danish Strait — The area around Denmark is one of the busiest shipping lanes

(L-BBE -- CC BY 3.0 Deed)

PUBLISHED MAR 22, 2024 7:25 PM BY THE MARITIME EXECUTIVE

There are renewed concerns that the fleet of shadow tankers carrying Russian oil continues to disregard international regulations and is creating an increasing maritime danger. The Danish Maritime Authority is confirming that one of the tankers was involved in a small accident earlier in the month as the Financial Times today published a leaked report that says the tankers are now regularly declining the services of pilots as they transit the busy shipping lanes in the Danish Straits.

Concerns have been raised before about the potential of tankers attempting to navigate the narrow channels and strong currents in the Danish Strait without the country’s experienced pilots. The Danish Maritime Authority expressed concerns about the dangers of vessels traveling in the busy shipping lanes without assistance in September 2022. These concerns are being renewed and causing a political debate in Denmark in the wake of the reports that a somewhat mysterious tanker inbound to the Baltic clipped a smaller cargo ship outbound at the beginning of March.

In a leaked report seen by the Financial Times and Danwatch, a Danish media group, they are asserting that at least 20 tankers were identified as making the transit without Danish pilots in 2024. The story in the FT cites information from analytics company Kpler to assert that the tankers were carrying a total of approximately 10 million barrels of oil. Further, they write that only three of the tankers were carrying insurance from a recognized Western provider.

By a treaty dating back hundreds of years, vessels can make an “innocent passage” freely without a mandatory requirement for a pilot. Many insurance providers however require the use of pilots especially in challenging and busy areas such as the Danish Straits.

A firestorm erupted in Denmark when an opposition leader demanded an investigation after news of the collision at the beginning of March leaked into the media this week. One politician called for the government to impose a mandatory requirement for the use of pilots while the government’s energy minister said they were working with the European Union to address the concerns. Last year, it was suggested that Denmark might begin checking insurance and certificates for tankers transiting the straits.

The Danish Maritime Authority confirmed that it is currently detaining the tanker Andromeda Star after the collision on March 2. They are however reporting that an initial inspection revealed that the tanker had all the required certifications, including insurance, while public databases are unclear of the vessel’s current ownership. A request was however filed with the Danish police to investigate the incident.

The tanker, which was reported to be traveling only with ballast at the time, suffered minor cracks. According to the media reports, the tanker was taken to a shipyard for repairs.

Initially, the other vessel in the collision was not identified. Media reports however are now saying that it was a smaller general cargo ship named Peace. The vessel appears to be a 16,800 dwt ship registered in Bulgaria which was outbound from Sweden. The vessel reportedly was not damaged and her AIS signal shows she is now in the Mediterranean heading for Alexandria, Egypt.

Top photo by L-BBE in 2013 -- CC BY 3.0 DEED

Strike Paralyzing Cargo at Finnish Ports Extended for Third Week

Helsinki port — Cargo operations at Finland's ports are stopped as the unions protest labor law changes

(Helsinki file photo)

PUBLISHED MAR 22, 2024 5:34 PM BY THE MARITIME EXECUTIVE

Finland’s main trade unions announced they are extending their strike that is crippling the country’s cargo operations for a third week after talks with the government were termed “fruitless.” The union which represents the dockworkers started the strike and was joined by others with reports that 7,000 workers are now on strike since March 11. Imports and exports were largely brought to a standstill while the unions protested proposed labor law changes that they call “ideological” and fundamental to the quality of life.

“We are disappointed. We have hoped for equality and a softening of hard actions for the employees,” said Jarkko Eloranta, President of SAK (the Central Organization of Finnish Trade Unions). “The government did not agree but still intends to implement numerous business life goals that are negative for employees. Many of them have no effect on employment or the balance of the public finances.”

Chief among the complaints from the union are steps by the government that would permit more localized and individual labor contracts. The union’s universal collective agreements have long been a part of the Scandinavian culture and workplace. Other changes the union says would cut social security benefits and prevent sympathy strikes.

The trade association writes in its announcements that it “cannot watch from the sidelines the scrapping of the rules of the game of working life built over decades.” They said that 54 percent of Finns approve of the strike.

They highlight that this is a political strike and not an action against individual workplaces or for new contracts. One of the unions struck last year to win a new collective agreement for the dockworkers. The trade association however met with Minister of Labor Arto Satonen reporting that its calls for compromise were rejected. They said they were willing to suspend the strike if the government showed understanding of the workers’ concerns.

Container operations came to a halt as the strike began on March 11 but it was due to end this weekend. Now the union says it will be extended to at least April 1. They are targeting port operations as well as the railroads that move cargo.

Among the specific companies targeted are all the cargo operations of Viking Line in both Helsinki and Turku. Passenger operations are not impacted by the strike. They are also targeting the storage facilities and tankers of Neste.

The Central Organization of Finnish Trade Unions reports that the Finnish Industry Association, the Automotive and Transport Workers' Union AKT, the Service Trade Union PAM, the Construction Union, the Public and Welfare Union JHL, and the Electricity Union are all participating in the strike.

LA REVUE GAUCHE - Left Comment