Confidence in Shipping Industry at a six year high

The Moore Stephens Shipping Confidence Survey report is certainly encouraging; the results showed that confidence in the industry rose to the highest level in six years. There was more good news for freight; rates are set to improve or at the very least maintain their existing levels over the year, and an increase in private equity funding is very likely to have a significant impact.

On a scale of one to 10, respondents to the survey reported that their confidence in the markets in which they operate averaged 6.5 in February 2014, the highest score since 2008 when the survey was first launched.

Probably due to this increased confidence, respondents also reported that they were just as likely to make a major investment in their business or a significant development over the next year as in the previous year. Other issues that had an impact included tonnage supply, operating and supplanted fuel costs –no surprises there!

There was more good news from the freight sector with a higher level of optimism about rate increases reported in the dry bulk and container ship sectors.  In the dry bulk sector there was a two per cent increase in the overall numbers of those anticipating rate increases - the highest figure recorded since the survey was started.

34 per cent of respondents from the container ship market think that rates will increase over the next year, more than last year.

The conclusions of the survey are mostly encouraging for shipping companies.  Although it might be a little too early to talk about the downward cycle of recent years being over, it does look as though things are beginning to improve, and the next 12 to 18 months are looking optimistic.

The future of the freight markets is looking brighter than it has done for some years, partly due to worries about over-tonnaging being allayed by increased scrapping and a practical approach to expanding businesses.

In the world of shipping finance, there has been and continues to be a significant level of interest and investment from the private equity sector, which replaces the more traditional bank finance which has been harder to source in recent years. Although some respondents were pleased about this, others did feel that it could depress rates in the long run, potentially delaying recovery, or in some cases enabling people to put expansion plans into place without thinking them through.

One respondent said, “The over-supply of tonnage, together with private equity investment, will continue to depress rates and delay recovery.” Another noted, “The flood of private equity funding, which must be spent before it reaches its sell-by date, persuades previously sensible operators to ignore basic economic principles. It’s happened before.”

The cost of impending regulation didn’t seem to impact on the respondents too much – maybe because the cost of complying with legislation like the Ballast Water Management (BWM) Convention and the proposed new regulations governing emissions control aren’t yet quantifiable.

One leading ship owner has recently estimated that the industry as a whole will have to find US$80 billion to achieve BWM compliance – so it will be interesting to see whether respondents are feeling so positive in the next survey.

Exciting times ahead for the shipping industry

The shipping market is as always erratic and uncertain* and in the changing times of power generation the UK coastal ports are needing to think. On the East coast especially, the offshore wind turbine market is emerging and as the necessity to find suitable port facilities to handle the capacity of large vessels and land which this industry requires there is even more thinking going on. Cockenzie (the old coal fired power station) is being looked at as a new facility as an alternative to established ports which lack sufficient capacity to cope with the new vessels which are employed in the manufacture and shipping for the offshore wind farms.

New facilities are being sought and the Humber is an example of where new ports can and are being developed – Cockenzie has the promise of a nascent port for the new industry as well as present oil and gas business and the future of offshore rig and platform decommissioning. It can be developed to ‘go out’ into deeper water to gain the capacity that these emerging trades require. The land where the power station and coal storage area used to be can take some of the manufacturing space to build some of the blades, tower, nacelles, castings and gearboxes that are land hungry. Other options at other potential ports and sites are being considered.

Many thousands of turbines will be built and many hundreds of offshore platforms will be decommissioned over the next 5 to 20 years and the size of the component parts simply mean that ‘nothing’ can move by road. Some of these parts can be manufactured and handled in existing ports but the assembly of the structures need very large facilities to cope. One can look across the Forth from Edinburgh to Methil and see the size of the Samsung turbine, this is in shallow water and they will get larger as the industry develops, we are going deeper and bigger – it is the new oil and gas industry starting all over again. The picture is quite similar, offshore structures producing oil and gas with a pipeline running to the shore as opposed to wind turbines producing electricity with a cable running to the shore.

These are fascinating and exciting times for shipping companies. The evolution of alternative energy is upon us and will change what we know, just as the shale gas industry is turning the US energy market upside down with compounding affects of that knowledge across the globe. The cost of all this generation of power is always part of the discussion, but all energy supply is fiscally adjusted as we are becoming to learn so clearly. Put that into the context of Shale, Nuclear and Wind (and other energy sources) and it gets your spreadsheets combusting.

As a US economist said when asked – ‘How big is shale gas?’ he replied ’About as big as the world wide web.’ Oh if I was only 30 years younger – what fabulous opportunities and what fun!

There is something that is certain* in the shipping industry and that is change. My company, t. ward shipping ltd  have always relished it and being quick on our toes we are reacting.

The Arkutun Dagi Jack Up

We thought you would be interested in the latest video of the record breaking Jack-up of the Arkutun Dagi topside in Korea.

The fascinating video shows exactly how ALE used the innovative Mega Jack to lift the record breaking weight to a height of 24m. The topside was lifted and additional assembly work was carried out which added the additional weight to the structure that on its completion weighed 43,475t.

The design of the Mega Jack keeps working at height and worker / machinery interaction to an absolute minimum, and enables any readings and adjustments to be made via a control hub.

Exxon Neftegas Limited awarded ALE ‘Contractor of the Year' for 'Excellence in Safety Performance’ on the project. The award was presented at the annual Sakhalin 1 Contractor SSHE Forum in Yuzhno-Sakhalinsk, Russia last September.

The piece will become part of the Arkutun Dagi field off the east coast of Russia; the development is expected to be the largest oil and gas production platform in Russia. The first oil is scheduled to be produced later this year.

Kees Claasen said,

“With safety at the core of what we do at ALE, we are honored to have received this award. Gaining recognition for our safe working, particularly on a record breaking project shows the value the team put on safety. As with everything we do at ALE, it is a team effort, and with a strong team we can achieve great things.”

For more information on this project and other projects ALE are involved with please see the website

New North Sea coal could power Britain for centuries

There’s been some good news from the North Sea - scientists have announced that they’ve found enough coal under the sea to potentially power Britain for centuries to come.

Dermot Roddy, former professor of energy at Newcastle University, told the Sunday Times that scientists believe there could be between three trillion and 23 trillion tonnes of coal buried under the North Sea, an amount that’s thousands of times greater than all the oil and gas we have taken out so far.

“If we could extract just a few per cent of that coal it would be enough to power the UK for decades or centuries," he said.

The first exploratory boreholes are expected to be sunk by the end of 2014.

Experts believe that this discovery could be ‘game changing’ – and Richard Selley , Professor of petroleum exploration at Imperial College London is one of them.

"A decade ago the talk was all about peak oil and gas but that has gone out of the window," he said.
"The big game-changer is seismic imaging, which has become so sensitive that we can now pinpoint the 'sweet spots' where shale gas, oil and coal are to be found.

"There have also been huge improvements in horizontal drilling . . . and in hydraulic fracturing [fracking], which lets us get the gas and oil out of rock. If we put aside the green issues, then in perhaps 10 years we could be self-sufficient in gas and possibly oil too."

At T Ward Shipping, we think this is exciting news...watch this space!

Railway Sleepers for your garden

We have a range of treated and untreated railway sleepers available for sale at our facility in Cowdenbeath, Fife which can be collected or delivered all over Scotland. If you’re looking for a few ideas for your garden, come springtime, how about this?

Railway Sleepers are really popular in garden landscaping, and they can be used for anything from raised beds for flowers and to steps or garden furniture.

To build a raised bed using railway sleepers…

Firstly lay the sleepers on a level, firm surface. If you are stacking them horizontally on their broadest side, just overlap the joints of the railway sleepers, from layer to layer, then fasten each layer to the layer below with timberlok screws or similar.

If you are stacking the railway sleepers horizontally on their narrowest side, and two or more railway sleepers high, then you will need to support the construction with vertical posts, or else you might find they fall over! Just dig a hole and fix vertical retaining posts (or sleepers) in with concrete. Once you’ve done that, just stack the railway sleepers against the post, and secure them with Timberlok sleeper screws.

Treated Sleepers

Treated railway sleepers are treated with creosote and so they shouldn’t be used inside buildings or playgrounds, to make garden furniture, picnic tables or anything that will be in regular contact with skin.

At T Ward we have sleepers suitable for any purpose - general garden use, cattle courts, fencing, silage clamps, golf courses and road markings/tracks.
We deliver throughout the UK so contact T Ward to discuss placing an order or for more information.

An Energy Park on the old Cockenzie site?

The iconic Cockenzie Power Station in East Lothian closed down for the last time in March 2013.

There are plans to redevelop the site into a marine energy park. Scottish Enterprise published a Prior Information Notice (PIN) in February indicating that they were ‘exploring options’ for the potential redevelopment for an energy park which would neatly fit into the wider Forth/Tay renewable energy cluster and could operate alongside other N-RIP (National Renewables Infrastructure Plan) locations to help support the needs of the emerging offshore wind turbine, tidal and wave renewables market, in addition to the oil and gas Industries.

Watch the demolition of the old power station here:

Badly packed and stowed cargo causes most insurance claims

The packing of Cargo Transport Units (CTUs) is high on the agenda for the shipping industry, and correctly stowing your freight is absolutely imperative – you might have thought that was obvious, perhaps, but according to The TT Club, a leading provider of insurance for the international transport and logistics industry, a staggering 65 per cent of damage to freight is simply down to bad loading, packaging and stowing. That’s an awful lot of expense and damage which could be avoided with the correct training or expert assistance.

The Cargo Incident Notification System (CINS) backs up the statistics, showing that more than 30 per cent of cases investigated through the system were caused by bad stowage and poor packaging.
In an attempt to reduce the amount of claims, the TT Club has developed a brand new online e-learning course which aims to focus attention on the many problems that bad packing can cause, and provide up to date guidance.

The course, which launched in January, is a useful online training tool for anyone who is involved with packing and unpacking cargo transport units (CTU) and the first release of the foundation course has just been launched.

There are modules looking at cargo, transport, packing and arrival and the course also covers relevant issues such as the forces and stresses encountered during transport, and the careful consideration that needs to be taken when packing and securing cargo.

• Cargo – covers the types and physical characteristics of cargo and looks at the problems that badly packed cargo can cause.
• Transport - the main modes of transport, different types of equipment, and the forces and stresses encountered during transport. Also looks at choosing CTU and route considerations.
• Packing - covers preparation for packing, the basic principles and rules which apply to packing and securing, manual and mechanical handling, cargo securing materials, closing the CTU and securing it, in addition to correct documentation.
• Arrival – what precautions to take when opening the CTU at arrival.

T Ward Shipping has a variety of services available to ensure that your cargo loading takes place smoothly, and avoiding unnecessary damage during transit. We can provide clients with a range of equipment,  mobile cranes, fork lifts, special heavy lift equipment, low loaders, MAFI’s, Stevedoring and any other equipment necessary to get the job done professionally and as quickly as possible.

If you think you may need help with cargo lashing and securing, we can organise that on your behalf too, making sure that you have complete peace of mind at all times.

This video gives you an idea about why packing is so important!