Wednesday, February 07, 2024

Carnival Corp Highlights Strategies for Cruise Ship GHG Emission Reductions

AIDAnova LNG-fueled cruise ship — AIDAnova was the first cruise ship able to operate at sea using LNG as its fuel (AIDA)

Carnival Corporation is highlighting that its cruise ship operations are “on pace” to achieve its ambitious reductions in greenhouse gas emissions as it also reaffirms progress toward achieving its goals. The world’s largest cruise company, with a fleet of nearly 100 cruise ships, highlights that it is following a strategy to both reduce fuel consumption across the fleet and to adopt new technologies and lower emissions with the existing fuel alternatives.

Last year, the company reported it was accelerating its stated 2023 GHG intensity reduction goal by four years, committing to at least a 20 percent cut (measures on lower berth capacity) to be achieved by 2026 instead of 2030 when compared to 2019 levels. Now, Carnival Corp. reports it expects to reach an 18 percent reduction in 2024 (compared to 2019).

Measured against its first benchmark in 2008, Carnival Corp. says it expects to have reduced its GHG emissions by 42 percent (on a lower berth capacity basis). Carnival Corporation asserts today it has reduced GHG emissions by more than 10 percent versus its peak historical year (2011), despite increasing capacity by roughly 30 percent since that time.

One of the key steps is reducing the fuel used by its cruise ships. Onboard they have taken steps such as upgrading the ships with modern and efficient HVAC systems, using LED and smart lighting technology, and remote monitoring which they report has reduced power and in turn fuel by five to 10 percent per ship. Also, 60 percent of the corporation’s ships are now equipped to use shore power in port.

Fleet modernization is contributing with 26 older, less-efficient ships removed from the fleet since 2020 and a quarter of the fleet capacity is on newer, more efficient ships. The new ships include optimizing the hull design. They are also employing special coatings on the hulls to reduce drag and installing air lubrication systems which they report can reduce fuel consumption by up to five percent.

Carnival was also the first cruise company to introduce vessels able to operate on liquified natural gas, which the industry promotes as the cleanest fuel currently available. Today the company has nine LNG-capable ships in service and two more on order. They also report that more than 90 percent of the fleet is outfitted with advanced air quality systems, i.e. scrubbers, to reduce particulate matter.

Other operational changes include developing more energy-efficient itineraries, slowing the ships when possible, using hydrodynamics and ocean currents, and other techniques such as weather routing.

To achieve the next phase of their targeted reductions the corporation continues to explore new technologies. They have already tested new fuels, including biofuel mixes, on several ships including both AIDA and Holland America Line. They are testing other technologies including a first-of-its-kind lithium-ion battery storage system, and for the future look to fuel cells powered by hydrogen derived from methanol.

As one of the most visible segments of the shipping industry, cruising is highly scrutinized and comes in for frequent criticism for its operations. Carnival Corporation like others in the industry continues significant investments they highlight as part of their sustainability programs. The company like the shipping industry overall says its strategy is to pursue net-zero emissions from ship operations by 2050.

Post-Panamax Bulker to be Retrofitted with Wind Rotors in 2024

wind rotor sails — Rendering of the installation to be completed in the coming months of rotors on a large bulker (Oldendorff)

Norsepower, a Helsinki, Finland-based manufacturer of modern wind rotors confirmed that a previously announced project to retrofit wind rotors on a large bulker is proceeding with the installation to be completed in the second quarter of 2024. The project involves the well-known shipping company Oldendorff and a vessel that operates under charter to Teck Resources, one of Canada’s leading mining companies.

Oldendorff which owns a fleet of 130 bulkers and currently has a total of 724 in operations counting charters, has been participating in a series of studies for the past few years to explore the potential of wind-assisted propulsion and specifically the application of the modern version of the century’s old rotor. The Norsepower Rotor Sail is a modernized version of the Fletter rotor that was first displayed in the 1920s. The rotors use a small amount of the vessel’s power to spin and that creates the propulsion force that lowers fuel consumption and emissions with the savings more than offsetting the operating cost of the rotors.

“We are extremely excited about reducing fuel consumption and emissions by harnessing the power of the wind,” said Torsten Barenthin, Director of Research & Development for Oldendorff. The company reports it has already built over 100 eco-friendly bulkers in the last decade and is also pursuing other elements including biofuels. In 2022, the company working with Lloyd’s Register and Shanghai Merchant Ship Design and Research Institute along with another rotor manufacturer, Anemoi Marine Technologies, participated in a study on the potential for rotors on large bulkers. The first project focused on a 210,000 dwt Newcastlemax bulk carrier from Oldendorff validating the potential savings.

Oldendorff has been working with Teck since November 2021 to reduce supply chain emissions. They estimate the efforts have already saved approximately 115,000 tonnes of CO2 emissions.

The installation, which will happen by mid-2024 involves three 79-foot tall and 13-foot diameter rotors (24m x 4m) that will be installed on the Dietrich Oldendorff, a 100,449 dwt dry bulk carrier with a length of 770 feet (235 meters). The huge, spinning rotors are partly manufactured from approximately 342,000 plastic bottles.

Built in 2020, the vessel carries shipments of Teck’s steelmaking coal from Vancouver, Canada across the Pacific to Asia. The rendering shows the vessel outfitted with three rotors offset on the starboard side between the six hatches so as not to interfere was cargo operations.

The companies report they have analyzed forty years of weather data which confirms that the trade between the Pacific Northwest and Asia is one of the best trade lanes for producing reliable wind energy.

ALTERNATIVE FUELS

Estonia Proceeds with Innovative Hydrogen-Electric RoPax Ferry

Estonia is seeking construction proposals after receiving design approval from Lloyd's Register (Estonian State Fleet)
PUBLISHED FEB 6, 2024 9:16 PM BY THE MARITIME EXECUTIVE

Estonian State Fleet, the national ferry operator, is moving forward with one of the most innovative ferry designs seeking to launch in 2026 one of the largest hydrogen-fueled, electric RoPax ferries. The design project began in 2021 and recently they concluded a tender for the shipyard to construct the vessel.
Designs for the zero-emission ferry were developed working with Finnish ship design and engineering firm Deltamarin. Lloyd’s Register reviewed and certified the design approving the current state of the design process to be suitable for further design, construction, and procurement of the RoPax ferry. The design was awarded Approval in Principle by LR last November and Estonian State Fleet immediately moved into the construction tender. Proposals were due by January 17, and they are expected to shortly announce the winner.
According to Andres Laasma, Director General of the Estonian State Fleet, great attention was paid to energy efficiency when designing the innovative ferry. The propulsion system calls for a fully electric drive that will be able to operate either from batteries charged while the vessel is docked or from hydrogen-fueled power cells.
"What makes the ferry special is the way it uses green energy and the technology of energy storage and release into electrical energy," says Laasma. "Thanks to updated technologies and a new hull design, the energy consumption of the new ferry is almost 20 percent lower compared to the previous generation ferries."
Lloyd's Register approved the design to proceed toward construction in November 2023 (LR)

He notes that the ferry which will have a little over 1,000 linear meters for cars, will be able to operate in Estonian ice conditions with lower energy consumption. It will also provide approximately 20 percent more space than previous generations of ferries. It will be able to accommodate nearly 200 passenger cars or for example a mix with 16 large trucks and 50 passenger cars. While being highly energy efficient, it will also increase passenger comfort with the ability to accommodate 700 people and provide a lounge area and restaurant with an onboard galley. There are also cabin spaces for the crew.
“The Estonian State Fleet is committed to leading the way in innovation within its sector,” said Laasma. “To achieve this, we have undertaken a project to develop a passenger ship with a remarkably high level of autonomy. Despite the challenges involved in this complex endeavor, including regulatory hurdles, technological risks, and significant initial investments, the potential benefits are considerable.”
The new ferry will be highly efficient and designed to take advantage of future developments. This includes systems for automatic movement and decision support. In the future, it will be able to operate fully autonomously handling functions including docking and mooring. It is also designed to be ready for remote operations.
Plans call for the ferry to connect the Estonian mainland with its two largest islands, Saaremaa and Hiiumaa. The company expects to spend approximately €40 million with the shipbuilding financed by the European Modernization Fund and CO2 quota fee revenue. The tender specifies the vessel should enter service on October 1, 2026.

NYK Repowers Japan's First LNG-Powered Tug to Run On Ammonia Instead

Sakigake, Japan's first LNG dual fuel tug, at delivery in 2015 (NYK)
PUBLISHED FEB 5, 2024 4:45 PM BY THE MARITIME EXECUTIVE

Japanese shipowner NYK has taken delivery of an ammonia-fueled engine for use in a tug application, and it is tearing out the LNG dual-fuel engine of Japan's first LNG-powered tug to make a testbed.
The tug Sakigake was the first LNG-fueled vessel of its kind in Japan. With support from the Japanese government, it was constructed by NYK's Keihin Dock Co. and delivered to NYK in mid-2015, and it was put into service in Tokyo Bay. At the time, it was considered a technical achievement, since fitting a complete LNG fuel storage and delivery system into the small hull of a tug is a difficult feat of marine engineering.
For the new conversion, Keihin Dock Co. is cutting into the tug's engine room to remove the existing LNG-powered main engine. It will install a new ammonia-powered engine, supplied by IHI Power Systems, and the tug will be returned to service in June.
IHI Power Systems’ Ota Plant began testing the 280mm-bore, four-stroke ammonia engine in April 2023. It is designed to run on 20 percent diesel / 80 percent ammonia, and it is paired with exhaust aftertreatment to eliminate unwanted nitrogen-based emissions from ammonia combustion. In particular, the testing verified near-zero emissions of dinitrogen monoxide (N2O) and unburnt ammonia.
A parallel project aims to adapt the technology to a 250mm-bore engine for use on an auxiliary engine, which will be installed aboard an ammonia-fueled ammonia carrier, currently under development for delivery in 2026.
IHI is developing a range of engines powered by ammonia, from diesel-cycle internal combustion engines up to gas turbines for powerplant applications. In 2022, it achieved the first trial run of a gas turbine on 100 percent pure ammonia. It is working on a commercialized version of the turbine system for sale by next year.
In years to come, Japan is expected to draw down 20 million tonnes of green ammonia per year for consumption in its coal-fired powerplants, creating immense demand for the green hydrogen-derived fuel from a nascent global market.

Evergreen and X-Press to Launch Methanol-Fueled Feeder Service

Eco Maestro at launch — Eco Maestro, one of X-Press Feeders' new boxships, goes down the ways (X-Press Feeders)

Taiwan's Evergreen Marine has reached an agreement with X-Press Feeders to acquire capacity on X-Press' new methanol dual-fuel boxships within the European market, where carbon emissions regulations are tighter than anywhere else.

Evergreen is a key customer of X-Press, and the new deal will help underpin the new methanol-powered container service in Europe. In 2021, X-Press Feeders ordered 16 dual-fuel methanol boxships from New Dayang Shipbuilding and Ningbo Xinle Shipbuilding, following the lead set by Maersk. The world's first operating dual-fuel methanol boxship is also a feeder, the Laura Maersk, which will also operate in the European market.

X-Press' dual-fuel methanol fleet will begin operation out of Rotterdam later this year, with Evergreen's support. The network will cover destinations in the Baltic and in Scandinavia. Ultimately the line will have 14 of the vessels operating in the region, including both northern Europe and the Mediterranean.

The fuel will be bio-methanol supplied by OCI Global, and it will be certified to International Sustainability and Carbon Certification standards for green fuel. The feedstock for fuel production will come from decomposition of organic waste and residues, according to Evergreen.

X-Press Feeders has pledged to achieve net-zero emissions by 2050, in line with the IMO's current ambitions.

“We are pioneering the use of dual-fuel vessels and we decided to take delivery of our vessels sooner, rather than later, because we know we need to take significant steps today to meet the targets for reductions in GHG emissions,” said Francis Goh, X-Press Feeders’ Chief Operating Officer.

Matson Proceeding with Third LNG Conversion for its Containerships

Matson containership — Shipyard has been contracted for the conversion of the Kaimana Hila to dual-fuel LNG operations (Matson)

Matson is proceeding with its plans to convert three of its containerships to dual-fuel LNG operations. China’s COSCO Shipping Shipyard (Nantong) reports it signed a contract with Matson for the third step in the conversion program, the retrofit of the 2019-built vessel Kaimana Hila.

The project was first announced in 2022 when Matson contracted with MAN PrimeServ for the conversion of the first ship of the Aloha Class, the Daniel K. Inouye, which had been built in 2018. The two sisterships are 50,000 dwt containerships measuring 841 feet in length and with a capacity for 3,800 TEU.

Matson noted that the sisterships along with the later sisterships Lurline and Matsonia were all outfitted with LNG-capable dual-fuel engines in anticipation of their eventual conversion. However, at the time the ships were introduced, they noted that commercial supplies of LNG were not yet available in its network.

Details on the project and its timing were not announced, but Matson previously said it would begin in the second quarter of 2024 and is scheduled to be back in service by year-end. It is being coordinated with the retrofit of a third Matson vessel, the Manukai (29,500 dwt and 2,370 TEU). Built in 2003, the vessel arrived last August in Nantong for a more extensive renovation project that involved replacing her main engine as well as the installation of LNG tanks and the systems. She is due to return to service this summer.

MAN PrimeServ reported in March 2023 that Matson had taken up the option for the conversion of the Kaimana Hila. MAN noted that the dual-fuel conversion provides fuel flexibility to take advantage of optimal fuel prices while the vessels can also comply with IMO emission targets and extend their operational lifetimes.

The conversion of the Kaimana Hila will be similar to the work carried out in the first half of 2023 on the Daniel K. Inouye, which involved the fitting of three LNG tanks, which was completed in March 2023, as well as the gas supply and control systems, associated piping and other conversion equipment, which was due to be completed by June 2023. Matson estimated that the conversion of each of the Aloha Class vessels was costing approximately $35 million.

After completing the conversion, the Daniel K. Inouye was initially fueled in Long Beach, California in a truck-to-ship operation. The first operational LNG bunkering took place on September 4 loading nearly 1,400 cubic meters of LNG.

Matson and CNOOC Zhejiang New Energy Co. in October 2023 entered into an LNG supply agreement. It was the first international ship LNG bunkering fixed-term contract of CNOOC and followed by the first LNG ship-to-ship bunkering of 759 tons of LNG performed at the Meishan in the Ningbo port complex for the Daniel K. Inouye. CNOOC will be supplying the LNG for the Matson ships operating between the United States and China.

Matson has also ordered the construction of three new 3,600 TEU Aloha Class containerships which will be delivered LNG-ready. They are to be built at Philly Shipyard for delivery in 2026 and 2027. The company at last report was also considering LNG retrofitting projects for the Kanaloa Class vessels, Lurline and Matsonia. Matson is investing nearly $1 billion for the three conversions and another $1 billion to build the three new vessels.

European Ethanol Producers File Challenge to FuelEU Maritime Regulation

An industry group representing European ethanol producers launched a legal challenge they announced yesterday seeking to at least partially annul the FuelEU Maritime Regulation saying that it improperly addresses sustainable biofuels such as renewable ethanol. In a filing made last month to the General Court of the European Union they argue the maritime regulations due to go into effect in 2025 failed to properly reflect the EU’s Renewable Energy Directive and if permitted to proceed would jeopardize the EU efforts in biofuels.

The efforts to extend the FuelEU regulations to the maritime and aviation industries were a long and hard-fought battle with a political agreement finally reached in March 2023. The shipping industry won some key concessions but starting in 2025 the regulations move to aggressively reduce carbon emissions through a series of step down between next year and 2025. It includes provisions for e-fuels but there were also concerns about creating competition with the food supply.

The filing argues that the FuelEU Maritime Regulation fails to properly recognize the proven benefits of sustainable crop-based biofuels and has therefore violated several key EU legislative procedures. They are saying that the regulation excludes Renewable Energy Directive (RED)-compliant crop-based biofuels from the decarbonization objectives of the maritime sector.

“The EU’s patchwork approach to crop-based renewable ethanol – confirming its sustainability and importance in the Renewable Energy Directive but sidelining it in FuelEU Maritime and RefuelEU Aviation – is more than just discriminatory,” said David Carpintero, Director General of ePURE, the European renewable ethanol association. “It also jeopardizes the EU’s ability to meet ambitious decarbonization targets,” he argues.

The legal action is based on several arguments, including among others that the European Parliament and the Council “committed a manifest error of assessment by failing to rely on scientific and technical data in preparing their policy on the environment.” The argument contends that the policymakers violated the principle of proportionality by considering that RED-compliant crop-based biofuels have the same emission factors as the least favorable fossil fuel in maritime transport. The regulation as written they argue violated the principle of equal treatment because the methodology used to calculate GHG intensity of the energy used on board ships is not consistent with the RED's biofuel GHG emission calculation.

The lobbyists are asking the court to annul the portions of the regulation that they contend fail to properly reflect the Renewable Energy Directive.

If the FuelEU Maritime regulation is permitted to proceed as written, they are arguing the EU would be discouraging domestic renewable fuel production. One producer, agribusiness Pannonia, and its subsidiary ClonBio Group are calling the policymaking “irresponsible” and “unstable,” saying they are pursuing investments in the U.S. instead. They argue that the EU will be left behind when the global maritime and aviation markets harmonize around solutions such as sustainable crop-based biofuels because of the failure of the FuelEU regulations.

India Invites Bids for Four Gigawatts of Offshore Wind Capacity

India has opened the first round of auctions for its planned development of four gigawattts of offshore wind capacity. In a statement released on Friday, the Ministry of New and Renewable Energy (MNRE) said that the bids invited are for four blocks of one gigawatt each on open-access basis.

The sites are located off the coast of Tamil Nadu. The developers who wins the bid for each block will sell electricity directly to consumers and industrial customers.

The bids have been invited through Solar Energy Corporation of India (SECI), a government-owned energy company under MNRE. The last date of bid submission is May 2.

This bid announcement is a follow-up to another public notice issued back in September by MNRE, stating that the government intends to allocate seven areas off Tamil Nadu. The proposed zones cover an area of 550 square miles and have capacity for a total of seven gigawatts of wind power. With four blocks already advertised, the remaining three are planned to be put on offer in 2025.

According to World Bank estimates, India has 112 GW of bottom-fixed and 83 GW of floating offshore wind potential, with Tamil Nadu and Gujarat as the most suitable locations. The country has planned to auction 37 GW of offshore wind capacity by 2030. India, which is heavily dependent on coal for its power generation, has committed to reach net zero by 2070.

Meanwhile, finance minister Nirmala Sitharaman in her budget speech on Thursday announced that the government would provide Viability Gap Funding (subsidization) for an initial one gigawatt of offshore wind energy development. Although the minister did not offer details on how this would be funded, some analysts interpreted the message as an important guarantee to galvanize the offshore wind market in India.

Algeria Reels Under its Own Boycott of Moroccan Ports

CUTTING NOSE TO SPITE ONE'S FACE

Tanger med — Tanger Med Port, one of the largest transshipment hubs in North Africa (Tanger Med file image)

On January 10, the growing diplomatic row between Algeria and Morocco reached the shipping sector. Algeria’s Professional Association of Banks and Financial Institutions (ABEF) banned its members from processing transactions for goods transshipped through Moroccan ports, with immediate and severe consequences.

Unfortunately, the decision has plunged the Algerian economy into a crisis with shortages of critical imports, including meat and cereals. As consumer pressure mounts, ABEF has been forced to issue another directive, less than a month after the previous, with fresh instructions now to allow direct debit transactions for imports of goods, especially fresh produce and meat.

“ABEF has received a letter from the Ministry of Transport on the subject of goods imported through Moroccan Ports. Through this letter, you (ABEF members) are kindly asked to reinstate your services, and proceed with the domiciliation of all import operations of products, in particular those perishable and whose date of embarkation on board vessels is prior to 10 January 2024,” ABEF said in a letter dated January 29.

Goods bound for major Algerian ports have usually been transshipped through Morocco’s Tanger Med, which is a massive container hub for international trade. However, the ABEF ban led major shipping lines such as Maersk and CMA CGM to introduce changes in liner services in North African Ports. Both carriers replaced Tanger Med as the transshipment port serving Algerian Ports, instead opting for the ports of Algeciras and Valencia.

Some analysts warned that the Algerian decision would negatively affect its economy, since bypassing Moroccan ports would increase the cost of transportation and delivery time. This would eventually impact the prices of key commodities in the Algerian markets.

The disagreement has been brewing for a long time. Political and economic disputes between Algeria and Morocco intensified in 2021, when Algeria decided to cut its bilateral ties with Rabat.

Morocco accuses Algeria of hosting and financing the Polisario Front, the Sahrawi nationalist group which is seeking the independence of Western Sahara from Moroccan occupation.

The boycott comes after a banner year for Tanger Med. In 2023, the Tanger Med Port Complex processed over 8.6 million TEU worth of freight, representing an increase of 13 percent compared to 2022. This performance is equivalent to 95 percent of the port’s nominal capacity- a feat reached four years earlier than expected.

Further, the port’s two car export terminals processed a total of 578,446 cars in 2023, an increase of 21 percent compared to 2022. Morocco is quickly becoming an auto-manufacturing hub, and the port complex handles vehicles made by the Renault factories in Melloussa and Casablanca and the Stellantis factory in Kenitra.

ERMA FIRST Joins Charter for EU Mission Restore Our Ocean & Waters by 2030

[By: ERMA FIRST]

ERMA FIRST, a leading sustainable maritime solutions provider, has become a signatory of the EU Mission Charter targeting the protection and restoration of regional waters by 2030.

The Mission – one of five EU Missions within the Horizon Europe research and innovation programme – aims to “protect and restore the health of our ocean and waters through research and innovation, citizen engagement and blue investments”. As a signatory to the Mission Charter, ERMA FIRST will attend the Mission’s meetings and events while pledging actions that contribute to its objectives.

Commitment to the Charter consolidates sustainability initiatives already overseen by ERMA FIRST at the local level.

In 2023, the group collaborated with HELMEPA (Hellenic Marine Environment Protection Association) on events in May and November, organising volunteers to remove waste and debris from beaches in Piraeus. Both projects aligned with EU ‘Mission Ocean and Waters Actions’ definitions, with the second event also notable for the assistance given by the ‘jellyfishbot’ IADYS in clean up operations. In an earlier initiative, ERMA FIRST brought the community together to clean up Votsalakia beach in 2021.

In organising and leading these events, ERMA FIRST directly contributed to objectives 1 and 2 of the Mission Charter: to “protect and restore marine and freshwater ecosystems and biodiversity” and to “prevent and eliminate pollution of our ocean, seas and waters”. Furthermore, by involving the local community, the company used one of two Mission ‘enablers’ – “public mobilisation and engagement”.

Mr. Kimon Mademlis, Marketing & Communications Director, ERMA FIRST Group, said: “As a company, we are well-known for providing sustainable maritime solutions, but our commitment to the planet and its waters extends beyond our product portfolio. Being welcomed as a signatory of the EU Mission Charter to ‘Restore our Ocean and Waters by 2030’ is a major endorsement of our efforts to protect the environment by engaging local communities. We look forward to connecting with fellow signatories at forthcoming Mission meetings as we collaborate towards cleaner, healthier waters.”

Annual Mission events see signatories from around the European Union gathering to discuss matters and propose actions related to the Mission’s objectives. ERMA FIRST is due to attend the Mission Ocean and Waters Forum in Brussels, Belgium, on 5 March, as well as related matchmaking events on the 4th and 6th.

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

Suez Canal Earnings Fall as Vessels Re-Route Around Africa

Suez Canal traffic, January 13 (File image courtesy SCA)
PUBLISHED FEB 6, 2024 4:04 PM BY REBECCA GALANOPOULOS-JONES, VESON NAUTICAL

As we enter into the third month of escalating conflict in Yemen, the security risk has prompted significant rerouting of vessels with far-reaching consequences for global trade and transport. The latest trade data from Veson Nautical indicates a notable shift in traffic patterns. Geopolitical tensions and conflict have raised maritime security concerns in the region, given its strategic importance and critical maritime trade routes.
In addition, the ongoing crisis in Yemen has implications for traffic through the Suez Canal and therefore Egypt, which may incur substantial costs due to the disruptions in trade and transport. This situation could potentially serve as a catalyst for increased diplomatic efforts to broker peace, considering the economic losses incurred by the Egyptian government as a result of the crisis. Understanding the economic impact on Egypt and specifically the Suez Canal might encourage a more proactive approach towards resolving the conflict and mitigating its adverse effects on global trade.
We take a look at the changes in the Suez Canal toll fees for crude tankers, bulkers, LNG, LPG and container ships over the period spanning from the beginning of 2023 to early January 2024. This analysis provides valuable insight into the financial implications for the Suez Canal and for the Egyptian government as Suez Canal transits reach a low.
Overall toll fees fall about 40% since November 2023
Looking at the weekly tolls graph, overall tolls have fallen by about 40% since the end of November from $47 million to $28 million. Container tolls have significantly decreased, falling by about 66% from the end of November, where estimated fees fell from about $18 million that week to $6 million at the start of January. However, in percentage terms the LPG sector experienced the biggest drop with tolls down by about 93%, from $1 million at the end of November to $153,000 in the first week of January. LNG tolls ranked third, with a fall of about 66%, followed by crude tankers which experienced a fall of about 23% from $7.3 million to $5.7 million in January. Bulkers were the least affected, with a comparatively modest decline of about 7%.
Graph 1: Weekly estimated Suez Canal toll fees for crude tankers, bulkers, LNG, LPG and container ships*
The analysis of the sum of weekly calculated SCNT (Suez Canal Net Tonnage) transiting through the Suez Canal versus the Cape of Good Hope (Graph 2) reveals a noteworthy trend. The graph illustrates a reduction in SCNT through the Suez Canal and a corresponding increase in the Cape of Good Hope region/transit zone, which is particularly evident since November 2023. Month on month, there has been a significant decline of approximately 38% in the sum of weekly calculated SCNT through the Suez Canal, while the sum of SCNT going around the Cape of Good Hope has increased by about 25%.
Graph 2: Sum of weekly calculated Suez Canal Net Tonnage (SCNT) for cargo vessels transiting through the Suez Canal vs Cape of Good Hope.
This shift is attributed to a surge in attacks targeting vessels in the region, compelling ship operators to alter their routes. The consequences include increased costs including rising oil prices, shipment delays, threats to maritime security, and concerns about geopolitical instability. Without a resolution to the situation, this could further impact trade flows and increase commodity prices and emissions.
As vessels divert away from the affected area and opt for the Cape of Good Hope route, tonne-mile demand for various sectors has increased, providing support to vessel earnings.
In addition, the intervention of the US and UK military with strikes has caused a spike in oil prices. While levels have not risen as dramatically as they did following the invasion of Ukraine, there are ongoing threats of retaliation from Iranian-backed forces, suggesting potential further disruptions to oil supply in the future.
Mixed impact on cargo markets
The influence of the situation on the various cargo markets has been mixed. In the crude tanker sector, rates for Suezmaxes and Aframaxes have firmed since the start of December up by around 16% and 63% respectively. The route around the Cape of Good Hope more than doubles the length of voyages from the Middle East to Europe and therefore reduces the supply of available tonnage in the market.
In the container sector, the diversion has reversed a steady downward trend in freight rates since 2022. A large number of vessels have diverted from the Red Sea to Travel around the Cape of Good Hope, and this has also led to increasing earnings with Post Panamax period rates for one year up by about 7% from December.
Although the impact on the bulker sector is significantly lower than for other markets, despite the usual dip in earnings during January, rates have remained historically high for this time of the year, even after a decrease from the peak in December.
Conclusion
The complex interconnection of geopolitical events, maritime security concerns, and global trade dynamics underscores the multifaceted challenges facing the shipping industry in the current scenario. Although longer transit times and increased earnings may be acceptable in the short term, looking further ahead, they could be outweighed by increased costs to the owner.
From the perspective of Egypt, reduced traffic through the Suez Canal and therefore a lower income from toll fees is likely to persist for the foreseeable future. However, understanding the economic repercussions on the nation could foster a more proactive approach to resolving the conflict and alleviate its adverse effects on global trade.
Estimated toll fees were calculated using the toll fees pre-15th Jan.
Rebecca Galanopoulos-Jones is a Senior Content Analyst at Veson Nautical.*
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

India's Navy Steps Into the Spotlight in Red Sea Crisis

The Red Sea maritime security crisis is an unwelcome burden on Indian commerce, but it is also a moment for India's blue-water navy to step out into the spotlight. The Indian Navy has established a heavy presence in the Gulf of Aden and the Western Indian Ocean, responding to Houthi attacks and helping to chase off the Somali pirate groups that are taking advantage of the conflict.

At least a dozen Indian warships are operating to the east of Bab el-Mandeb, complementing the U.S.-led naval coalition without directly participating under its umbrella. It is the largest maritime force that India has ever deployed to the region, officials said.

The Indian Navy's warships have served as first responders, helping in the aftermath of Houthi strikes and defeating hijackings (three in the span of two days).

"[The Indian Navy] is increasingly showcasing the ability to be able to protect not only its interests but also give confidence to regional players that it is willing and able to shoulder regional responsibility," said Harsh Pant of the Observer Research Foundation, speaking to VOA.

According to Chinese military researcher Zhang Junshe, the People's Liberation Army believes that India may have an additional reason for the large-scale deployment: a "gesture of goodwill towards the United States." Even though it has not publicly joined the American-led alliance, India's presence substantially expands the available pool of response assets in the region.
Meanwhile, the U.S. Navy can concentrate on the more politically fraught task of countering Houthi attacks.

UPDATED

Coastguardsmen Rescue a Very Lucky Dog After Eight Days in a Container

Last week, a team of Coast Guard marine inspectors rescued a dog that had been trapped inside a shipping container, saving it from an export voyage and an uncertain fate.

As PO2 Ryan McMahon and his team were walking through a container terminal at Port of Houston, they heard barking and scratching from a container stacked high above them. They got the terminal's longshoremen to bring the container to the ground, and when they opened it up, a shaggy dog came out through the door.

"She was right there, like she knew we were going to be there to open it for her. And she just, she wasn’t scared or anything. She just seemed happy more than anything," McMahon told the AP.

According to a Coast Guard spokesperson, the container was full of junked cars, and it is possible that the dog - nicknamed "Connie" by the inspectors - was hiding in a vehicle and loaded in along with them.

The coastguardsmen took the dog to a nearby animal shelter, where the dog received a full veterinary checkup. After treatment for heartworm and a healthy feeding to get her on the road to recovery, she will be put up for adoption. (McMahon says his team isn't able to take her in.)

It appeared that the dog had been trapped in the container for at least eight days; if the box had been exported, she would have been inside throughout an overseas transit, possibly all the way to West Africa (a common destination for wrecked car exports). "I don't think she would have made it," McMahon told the AP.

For Connie, her ordeal in a container may be turning into a lucky break. After making national news, she has been transferred to an animal rescue agency in the Washington suburbs - by private plane, no less - and is staying in comfortable quarters while her veterinarian weighs a flood of adoption requests.

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