MARITIME STRATEGIC PLAN MALAYSIA

DPM launches Malaysia Maritime Strategic Plan 2040

BERNAMA - Tuesday, December 06, 2011

LANGKAWI, (Bernama) - Deputy Prime Minister Tan Sri Muhyiddin Yassin today launched the Malaysia Maritime Strategic Plan 2040 (MMST 2040) book at the Mahsuri International Exhibition Centre, here. 

The MMST 2040 is the blueprint which will drive the Malaysian Maritime Enforcement Agency (MMEA) towards excellence. 

It is a prime document that sets the direction for the agency in the short term and long term in carrying out the mission set by the government. 

MMEA director-general, Maritime Admiral Datuk Mohd Amdan Kurdish, said the MMST 2040 was the outcome of the review of the MMST 2020 documented in 2006. 

He said MMST 2040 was drawn up using the approach called Balanced Scorecard. 

"Nine strategic objectives were identified to ensure the vision and mission could be accomplished to make the MMEA a forward-looking organisation not just in the country but in the international arena as well.

"In the current geopolitical scenario and dynamic maritime security situation, the MMEA needs a flexible approach, that is, being able to make suitable changes to a strategic plan in setting the agency's direction, and in building capacity and developing assets in a holistic manner." 

Mohd Amdan said as Malaysia's sole maritime enforcement agency, the MMEA had to monitor the country's waters. 

"Its task is different from that of similar agencies of other countries as the MMEA not only has to enforce Malaysia's maritime law but to also prosecute those who violate the law," he said. 

Mohd Amdan said the MMEA's performance had been positive and one to be proud of since its establishment in 2005. 

"Its good performance shows its seriousness and use of effective strategies which not only focus on domestic operations, but also playing an active role on various regional and international platforms of cooperation," he added.

MAERSK LINE LEAVES TRAIL

Dec. 6 (BusinessDesk) – Ports of Auckland, in the midst of strike disruptions, will lose almost $20 million of annual revenue after Maersk, the biggest shipper visiting New Zealand, switched one of its services to Port of Tauranga.

The loss of Maersk’s Southern Star container service amounts to 52 ship calls, or 82,500 containers a year, Ports of Auckland chief executive Tony Gibson said in a statement. The industrial action at Auckland played a part in the decision, Maersk’s New Zealand marketing manager Dave Gulik said in a separate statement.

“The security of their supply chain is of primary importance to our customers, so anything affecting that, or likely to affect that in the future, will come into the equation when we are deciding schedules,” Gulik said.

The loss of revenue amounts to 11 percent to the $177 million Ports of Auckland garnered in sales in the year ended June 30. Profit fell 37 percent in its latest year.

The port has postponed mediation talks with the Maritime Union that had been slated for today. The union and the port have been at loggerheads over their employment contract, precipitating a strike and a lock-out this month – typically a peak period in the run-up to Christmas.

“We are hugely disappointed,” Gibson said. “The Southern Star was one of Auckland’s largest shipping services.”

Maersk’s switch will take effect from this weekend.

Shares of Port of Tauranga rose 0.9 percent to $9.90 and have climbed 32 percent this year. Tauranga and Auckland are fierce competitors who haven’t found a way to progress a merger. Tauranga now operates an ‘inland port’ in south Auckland, sending containers by rail to its wharves in the Bay of Plenty city. Port of Tauranga claims to be the nation’s biggest port by volume.

Maersk’s Northern Star service will continue to visit Auckland. The two star lines link New Zealand with key Asian hubs of Port Klang and Tanjung Pelepas.

Maersk’s Gulik said the service changes would not have a material impact on total transit times. Most of the export cargoes shipped out of Auckland originate from the Waikato-Bay of Plenty regions, where exporters’ transport and logistics operations “tend to be port-neutral,” he said.

The postponed mediation was an attempt to reach agreement on the terms of a new collective pay contract for waterfront workers. The strike involved 327 of the ports 500 employees.

Maersk operates the South Star service with Malaysia’s MISC Berhad, which has flagged it will exit the container business in June 2012, Gulik said.

MARITIME - Regional Leadership

Monday November 28, 2011

Malaysia can become regional leader with better supporting infrastructure and incentives

By SHARIDAN M. ALI
sharidan@thestar.com.my

KUALA LUMPUR: Malaysia has the potential of becoming a regional champion in maritime industry if efforts to improve its supporting infrastructure and incentives are given more focus by the Government.

Malaysian Maritime Institute’s (Ikmal) new president Datuk Abd Hak Md Amin said Malaysia had world-class facilities such as airports, hotels, road networks and modern ports but shipowners still preferred to go to Singapore for their crew change or stock-up provisions, refuel and others.

“The crew change for ships in Malaysia and Singapore alone ran into more than a million crew annually, but 95% of this crew change take place in Singapore,” he told StarBiz in an interview at Ikmal new headquarters in Setiawangsa.

“This activity contributed significantly to the economy of the republic because they use airport, hotels, transport facilities (air, land and sea) and entertainment outlets during their few days’ stay while waiting for the ships or to be repatriated back to their home countries.

“Singapore makes the immigration, custom and port clearance processes for ships calling at its port as hassle-free as possible. We need to emulate some of the good things that benefit the shipowners.

“For example, crew-change process that involves immigration clearance should be simpler.

“In certain countries, online advance immigration clearance could be done without requiring physical attendance of the seafarers.

“Another example is “spares in transit” which sometime put off the shipowners using Malaysian airport as transit point because of the bureaucracy.”

Hak said more support should be given to the local shipbuilding industry which would in turn create a lot of economic spin-offs.

The shipbuilding industry in Malaysia, he said, was “neither here nor there”.

“For example, the shipbuilding industry in Japan, South Korea and China would not have flourished without strong support from their governments especially in the initial stages.

“In Japan and South Korea, their governments supported the industry via giving a lot of shipbuilding contracts to new shipbuilders.

“They also encourage their shipping companies to build their ships locally by giving incentives like soft loan or grants. After seven to 10 years of usage, the ship must be sold to other foreign owners like Malaysians, Indonesians or Africans so that they could continue to order new ships from their shipbuilders, and the cycle continues,” he said.

This way the supporting industries like the designers, and engine and equipment makers will also flourish. There is also the element of sustainability in the industry.

Hak said the issue of piracy had also recently re-surfaced in this part of the region.

The Strait of Malacca was identified as a piracy hot spot prior to 2006 until there were dramatic improvements owing to the three littoral states’ effort.

The strait was removed from a war-risk zone list in 2006.

“Piracy is becoming a menace again especially around Batam and South China Sea areas, according to complaints by our members. Although it does not involve serious crimes like hijacking or vessels or kidnapping of crew, the pirates there have boarded ships and stolen the belongings of the crew.

“If this continues, it will dampen the spirit of the crew and could lead to more serious crimes later on. Fortunately, we have a world-class navy and coastguard that we can depend on to safeguard our waters,” he said.

On the current state of the maritime industry, Hak said obviously it was in a downturn where in Malaysia several shipping companies had ceased operations.

“Even the biggest shipping company, Maersk was reported to record a loss this year and at home, the third-quarter result for Maybulk dipped by 99%,” he said.

According to Hak, if the downturn persists, it will affect the country’s maritime graduates’ employment opportunities.

“Thousands of maritime-related graduates are being produced annually and if nothing is done to spur the growth of the industry, it will become a problem. For example, something should be done to support the growth of our shipbuilding industry as I earlier mentioned.

“Furthermore, the recent proposal to reduce income tax exemption for shipping firms to 70% of statutory income from next year, versus 100% currently, will further impede the investment and expansion for this industry.

“Most countries worldwide do not impose tax on shipping companies as they are one of the main trade facilitators and Malaysia is ultimately a trading nation,” he said.

Hak said currently Malaysian Shipowners Association (Masa) was talking to the Finance Ministry on that matter and Ikmal would give it full support to Masa.

On his appointment as the president of IKMAL, Hak was proud that he was the first marine engineer to helm the institute.

MARITIME - World's Largest Container Port

Shanghai set to handle over 30m TEUs in 2011

Shanghai expects its container throughput to reach 31.5 million TEUs this year, further cementing its position as the world's largest container port after it overtook Singapore in 2010.

The city is boosting capacity as it bids to become a global shipping centre by 2020, reported Shanghai Daily.

"Shanghai is estimated to achieve the target set in the beginning of this year, with year-on-year growth rate of about 8.4 percent," Yan Jun, vice-president of Shanghai International Port Group, said on the sidelines of a forum during the Marintec China 2011 show in Shanghai yesterday.

He said overcapacity and steep price cuts by shipping companies haven't affected the port's income and operation.

Yangshan Deep-water Port's container throughput will be around 13 million TEUs this year.

In the first 10 months of this year, Shanghai handled 23.9 million TEUs, compared with Singapore's 23.56 million.

Last year, Shanghai's container throughput was 29.05 million TEUs, with 10.1 million TEUs contributed by the Yangshan port.

As long as inland trade volume continues to grow, Shanghai will be able to maintain stable growth over the next few years, and the city now has no plan to cut prices next year, Yan said.

He added Shanghai's port infrastructure construction is in line with cargo demand, and the port will maintain a stable and healthy development.

Shanghai will continue to enhance efficiency and better coordinate port and logistics facilities along the Yangtze River to turn the city into a modern transfer hub during the 12th Five-Year Plan period.

Meanwhile, Shanghai will launch a pilot programme that allows exporters to enjoy a tax refund as soon as their dry bulk goods and containers depart for Yangshan Deep-water Port from their home ports, a government official said.

"The tax refund programme will be put into operation at the end of this year or the beginning of next year, and details will be announced very soon," said Dai Haibo, vice-head of Pudong New Area government.

Exporters of dry bulk goods and containers departing from Qingdao and Wuhan that used the Yangshan port as a transfer hub will get their rebates as soon as their cargo has left the home ports.

The Ministry of Finance and the Ministry of Transport support the pilot project and are coordinating with local government institutions, Dai said.

Observers said the tax refund would boost Yangshan port's competitiveness against other Asian ports.

MARITIME - Pulling Out Service

Maersk to end Chennai-North Europe service  In a move to ensure supply demand balance Maersk Line will pull out its fastest and direct container service — ICON (India Colombo North Europe) — from Chennai to North Europe from February, reported The Hindu. This is part of the line's effort to rationalise and optimise the shipping service between the Far East and the Indian sub-continent to North Europe. The world's largest shipping line will merge the ICON service, which was launched in March, with the recently announced Asia-Europe Daily Maersk network, which promises “absolute reliability’’. With seven 4,200-TEUs size vessels, the port rotation for the ICON service that commenced in March is Felixstowe, Zeebrugge, Rotterdam, Bremerhaven, Salalah, Colombo, Chennai, Colombo, Salalah and back to Felixstowe — from Chennai it takes 21 days to reach Zeebruge. However, with the transhipment in Colombo, the number of days increases by three to four days, said an official at a large Custom house agent. Besides the optimisation of trade between the Indian subcontinent and North Europe, this rationalisation will also help in efforts to establish a more balanced supply/demand scenario within the trade from the Far East to North Europe, the shipping line said in a statement. Exports from North Europe to the Indian sub-continent, including Sri Lanka and Bangladesh, will be covered on the AE1 service, which will feature a direct call in Colombo. These changes will not have any impact on the Daily Maersk network. The transportation times will remain unchanged, Maersk said. The network changes will become effective after the Chinese New Year (early February 2012), and will feature the following ICON product enhancements: a dedicated feeder link between Chittagong and Tanjung Pelepas, providing access to the “Daily Maersk’’ network. AE7 service direct call in Colombo westbound, improving the transit time from Colombo to North Europe by two to three days. Weekly Chennai feeder via Colombo, improving on time delivery. Daily Maersk – absolute reliability. Daily Maersk offers a daily service between four ports in Asia (Ningbo, Shanghai, Yantian and Tanjung Pelepas) and three ports in Europe (Felixstowe, Rotterdam and Bremerhaven) creating a giant ocean liner conveyor belt on the world's busiest trade lane — Maersk moves nearly one million containers from Asia to Europe every year. Up until now, customers have had to adjust their production schedules and supply chains to accommodate shipping lines' unreliability, as they have never been able to trust that their cargo would be on time. However, the engine behind Daily Maersk is 70 vessels operating a daily service between Asia and Europe in what amounts to a giant ocean conveyor belt for the world's busiest trade lane. Regardless of which of the four Asian ports the cargo is loaded at, the transportation time — from cut-off to cargo availability — is fixed. Daily cut-offs mean that cargo can be shipped immediately after production without the need for storage.

SHIPPING - plans to cut shipping capacity

Maersk plans idling of ships 

Maersk Line will announce plans to cut its shipping capacity on Asia-Europe routes next week due to the impact of the euro-zone debt crisis on international trade, reported Dow Jones Newswires.
Tim Smith, the company's chief executive for the North Asia Region, said overcapacity remains a key concern for the global shipping industry. Maersk Line is a unit of A P Moller-Maersk.
"I think it's very clear now that we've seen, collectively, we're ordering more capacity than we really need for the short term," he said on the sidelines of a shipping conference in Hong Kong.
He added the company would consider idling more capacity after the Lunar New Year, which falls on January 23 next year.
While lingering concerns about the European debt crisis are weighing on demand for trade on European routes, Smith said the prospects for transpacific routes are better amid signs of a gradual recovery in the US economy.
Freight rates have plunged to unprofitable levels this year as a result of overcapacity in the market. Maersk Line said earlier it expected its container shipping business to post a loss for 2011 mainly due to weak rates on Asia-Europe routes.

SHIPPING - Another liner seeing red

MISC to quit container shipping business 

MISC, the world's largest operator of liquefied natural gas tankers by fleet size, plans to exit the container shipping operations, which have been weighing down its results over the last three financial years.

The Malaysian carrier will pull out of the container shipping business by June 30, 2012, reported Dow Jones Newswires.

MISC will incur a one-time cost of US$400 million due to the move, resulting in a loss for the financial year ending December 2011, but will be positive for earnings over the longer term, the company said in stock exchange filings.

The company reported separately a 62 percent drop in net profit for the July-September period at $44.22 million compared with $115.85 million during the same three months a year earlier. Revenue slipped 15.2 percent to $821.7 million from $969.11million.

It blamed depressed aframax freight rates, lower liftings and high bunker costs for the weak results in the quarter. MISC has recently changed its financial year from end-March end to end-December.

"The exit process will involve the withdrawal from various trade alliances and termination of related service and operational contracts," MISC said, adding that the process includes disposal of its related assets.

MISC said the industry is plagued by over-capacity and operators struggle for profitability in the depressed freight-rate environment. This threatens MISC's restructuring to focus on Asia.

This was hastened after the liner business suffered $789 million of losses over the past three financial years, it added.

PORT CONGESTION

Lines double surcharge at Chennai terminals Delay in finding berths at privately-operated container terminals importing materials in containers through Chennai port's private container terminals has become costlier with shipping lines doubling the surcharge to US$130 per TEU, reported The Hindu. This is because of the delay in container vessels getting berths due to severe congestion. For exports too the surcharge has been increased to $65 per TEU from $35, according to industry sources. The shipping lines said that situation at the two terminals operated by DP World and PSA Singapore has not improved in the last few days leading to delays in arrival and departure of their vessels. As of Friday morning, six container vessels were waiting outside the port's anchorage waiting for berth. A large shipping line even diverted two of its vessels to Colombo from where boxes were shipped to Chennai in feeder vessels. The opening of gate 2A at the Chennai port has not improved the situation at the two terminals. While the inventory at DP World Chennai is around 11,000 TEUs, it is nearly half at the Chennai International Terminal, sources said. An official of one terminal said infrastructure outside the port has not improved for speedier evacuation of containers. The average evacuation at DP World Chennai used to be around 1,800 boxes a day but dropped to around 1,200 due to bottlenecks outside the port. It is a similar situation at the other terminal. Walter D'Souza, regional chairman, FIEO Southern Region, said as Christmas season is approaching, exporters fear there could be a huge backlog during the festival season. Last Christmas, the Chennai port temporarily suspended export cargo clearance for over a week to ease the congestion. As there is no improvement in infrastructure, a similar crisis during the current season is inevitable unless necessary steps are taken by the stakeholders, he said. There are frequent strikes by trailer operators and other supporting services, resulting in traffic congestion in and around the port and exporters do not know when the cargo will reach the port and whether he can ship his consignment in the scheduled vessel. Exporters are forced to pay additional charges to the trailers due to detention at port, and the charges imposed by the shipping lines will make export unviable, he said. D'Souza requested the Commerce Ministry to intervene in this matter urgently, call for a meeting of all stakeholders immediately and outline a road map for a short term and medium term solution to the Chennai port problems.

A NEW BENCHMARK FOR THE SHIPPING INDUSTRY

Maersk offers compensation if cargo late One of Singapore's rival ports, Tanjung Pelepas in Johor, has received a boost after Danish container shipping giant Maersk Line offered a money-back guarantee to customers whose cargo does not arrive on time, reported Straits Times. Maersk is also running daily services between Asia and Europe as part of its aim to improve the reliability of its cargo shipments. This enhanced service is also offered at three other Asian ports: China's Shanghai, Yantian and Ningbo ports. Tanjung Pelepas emerged as a potential threat to Singapore's ports about a decade ago but its container traffic is still substantially lower. Thomas Knudsen, Maersk chief executive for the Asia-Pacific region, told The Straits Times the move will help improve supply chains. Maersk's ships that used to sail two to five times a week and arrive at various times will now sail every day at a fixed time, and arrive at a fixed time. This means customers will be able to reduce warehousing costs as cargo can be shipped right after production, Knudsen said. “For any company doing business in Asia to Europe, this has a relevance... Hopefully our customers can see that beyond just the price, there is value in this.’’ A pilot programme started three months ago achieved a 95 per cent success rate. In the industry, more than half of all container ships arrive late, and 11 per cent more than two days late, Maersk said. In Europe, the service will be offered at the three ports of Felixstowe in Britain, Rotterdam in the Netherlands, and Bremerhaven in Germany. Asia-Europe is Maersk's largest shipping route. The new service will cover about five per cent of its total volume shipped globally, said Knudsen. Singapore traders and shippers can still benefit by trucking or shipping their goods to nearby Tanjung Pelepas, or to other stops en route. Maersk will compensate customers US$100 to $300 per container, depending on whether it arrives a day late or more at its destination. Divay Goel, general manager of Siva Shipping, an Indian tanker and offshore firm, said this is a major step for the shipping industry. “Because shipping lines did not adhere to the schedule, shippers did not have reliable delivery. It is a good initiative, but not many have the power that Maersk has to put so many ships in the line.’’

SEAPORT - SHIFTING TRAFFIC

Sohar port gets 350,000 TEU shot in arm

Shifting traffic to Sohar Port adds lustre to its growth
The proposed conversion of Port Sultan Qaboos in Muscat, into a tourism and maritime heritage port, will boost Sohar Port's container throughput by 350,000 TEUs, according to Sohar Industrial Port Company - the landlord-operator of the industrial port, reported the Times of Oman.

In line with the royal directives of His Majesty the Sultan, Port Sultan Qaboos will be converted from a commercial port to a full-fledged tourist port.

All commercial import, export, general cargo and container activities will be shifted to Port of Sohar.

The shifting of these activities towards Sohar will increase the total volume to 500,000 TEUs by the end of 2013.

The Port of Sohar is a 50:50 joint venture between the Government of Oman and the Port of Rotterdam and located 220km northwest of the capital Muscat. The industrial port is a deep-sea port and has grown tremendously in size and importance in only eight years since its start in 2003.

MARITIME - FISHING

Fishermen band together to overcome difficulty
VietNamNet Bridge -

Many fishermen choose to come together in voluntary fishing cooperation and mutual support groups to overcome the difficulty they face in the offshore fishing industry.


Nui Thanh District of the central province of Quang Nam is one of the provinces with the most fishing trawlers in the Central Vietnam.

170 cuttle-fishing boats of the district have been divided into groups of three to eight, to better facilitate cooperation among the fishermen in their work.

All boats from each group will set sail to sea together on every fishing trip.

The family of Huynh Ngoc Du, a 58-year-old fisherman in Tam Giang Commune, is a typical example of this “team work” approach in Quang Nam.

No longer going out to sea, Du is now the “captain” of a group of six fishing trawlers, two of his two sons and four of his neighbors.

He said these boats support each other by sharing the information about the fisheries.
If one of the boats finds a rich fishing ground, it will inform him via the ICOM communication system, and he will relay the information to the other boats in the group.

“If all 8 trawlers work together in one same area to catch fish, the time and cost will be much reduced,” he said. “Moreover, together we stand a much better chance of fighting against natural disaster or foreign invasions.”

The fishermen in Quang Ngai Province even go further. Their fishing corporations and mutual support groups are now sailing to the foreign seas in the Philippines and Malaysia.''

These fishermen have invested a significant sum in their trawlers, obtained passports for their crews and made direct contacts with foreign partners.

D.V.R., a fisherman in Binh Son District, said all of the crew members in his 20-trawler group are legally registered with the local authorities so they can legally catch fish in the Malaysian waters.

He said the much lower price of diesel in Malaysia, just VND8,000 a liter compared to VND21,100 in Vietnam, plus the high price of fishing products in Malaysia have enabled him to earn big profits from each fishing trip.

If the price for their catch in the Malaysian or Filipino markets is lower than in the domestic market, the boats will inform each other and they will sail back to Vietnam sell it, he added.

Truong Van Ngu, a fisherman who joins a mutual support group of 20 trawlers in Kien Giang Province, said the cooperation has helped reduce the risk and increase the efficiency of their offshore fishing operations.

He said four or five boats in his group are given the logistics responsibilities, which are to transport fuel to the others and to bring their catches ashore for sale once a week.
“We no longer need to head back every time the boat is full,” he said.

“This helps bring down the cost of sailing in and out, and thus gives us more time to focus on fishing.”

Although the teamwork scheme has helped fishermen overcome some difficulties, they still need to make further improvement to achieve bigger targets.

Nguyen Van Manh, an experienced fisherman in Phuoc Tinh, said most of the fishing boats in Ba Ria – Vung Tau are capable of fishing in the deep sea.

But at present, most of them only catch fish by trawling at the swallow depth of less than 200 meters.

Nguyen Ngoc Phuong, deputy director of Kien Giang Department of Agricultural and Rural Development, said the trawling technique consumes a lot of fuel and the products it captures usually have low values.

She said the provincial people’s committee has been encouraging fishermen to switch to fishing at the lowers level of the deep sea in the Hoang Sa and Truong Sa fisheries.

This will save cost and increase the product values, she said.

Source: Tuoi Tre

PORT: $342m earmarked to boost Tanjung Priok capacity

State port operator PT Pelindo II will spend up to US$342 million in capital expenditures to boost the capacity of container terminals at the company's Tanjung Priok Port in North Jakarta.


Tanjung Priok Port general manager Cipto Pramono said that his company would allocate around $310.26 milllion of the total expenditures to purchase 47 units of heavy equipment, such as cranes, to support faster loading and unloading activities, reported the Jakarta Post.

"With the new equipment we can speed up our loading and unloading capacity by two to three times and cut a ship's waiting time by 60 percent," he said.

According to Pelindo data, Tanjung Priok Port, which has three container terminals – Terminal I and II of Jakarta International Container Terminal (JICT) and Koja Container Terminal – can load nine to 10 containers an hour, while ships in the port have to wait at least four days to load or unload their containers.

The Indonesian Logistics Association (ALI) recently said that the logistical costs in Indonesia were among the highest in ASEAN at around 25 to 30 percent of the nation's gross domestic product (GDP).

The survey of World Bank's Logistics Performance Index (LPI) for 2010 also placed Indonesia in 75th rank of 155 countries surveyed, below Malaysia (29th), Thailand (35th), the Philippines (44th) and Vietnam (53rd).

The index examined the logistical performance of the countries based on several factors, including Customs clearance efficiency and the period of shipment deliveries, which partly depended on port operation efficiency.

Cipto said that Tanjung Priok terminals would be the priority of its capacity improvement plan because they handled around 65 percent of exports as well as import activities in the country.
According to Pelindo data, the port handled around 4.61 million TEUs in 2010, a 21.31 percent increase from 3.8 million TEUs in 2009.

Cipto said that in anticipation of a surge in the number of containers stored at the port in the future, his company would also spend $13.23 million to expand container piling yards by transforming 13 warehouses into yards. It would also allocate $9.53 million to strengthen the construction of six piers covering a 20 hectare area, he said.

Pelindo II spokesman Hambar Wiyadi said that apart from the expansion plan, his company expected to start the construction of Kalibaru Utara container terminal as part of the long-term development of Tanjung Priok Port. The construction, he said, would take around $2.53 billion in investment.

He said the terminal, which was 3,500 km in length, would be allocated for oil and gas cargoes.

Ambar said his company would also build three container terminals in Palembang, Pontianak and Bengkulu ports with a total investment of $172.36 million next year.