Cosco Asia Diverse

8/13/2019 Cosco Asia Diverse

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Growth in demand for container

ships and the aggressive pursuit of

market share by container ship

operators and liner services is

fuelling the enlargement of the

world fleet in terms of both

aggregate capacity and unit ship

size. As long as the drivers behind

this rapid expansion continue, the

outlook for this dynamic sector

remains positive.

Growth of the container trades has

averaged 9.8% since 1980 and is

forecast to remain at this level for

the foreseeable future. Container

cargo volumes are determined

by the demand for imported

consumer and manufactured

goods, which drives growth in the

container trade and container ship

employment.

Over the short- to medium-term,

foreign manufacturers will

continue to relocate to developing

countries in Asia for cost reasons,

further compounding the effects

of global growth on container

ship demand. This year, the

proportion of total demand for

container shipments on headhaul

(Asia to Europe and Asia

to USA) routes has risen to 67%

from 58% in 2001, clearly

Getting bigger all the time

2 CONTAINER SHIP FOCUS October 2007

Orders for container ship

newbuilds continue to

pour in, but where will

these ships find their

niche?

highlighting Asias pivotal role

on the world market. It is

expected that this ratio will

climb towards the 70% mark

throughout the remainder of the

decade, where it will remain as

long as developing countries in

Asia continue to produce low-

value consumer goods.

Capturing cargoes

Manufactured exports out of

China have provided the

container ship market with

stability in growth over recent

years. These exports have been

boosted by the relocation of

foreign manufacturers to China,

where companies can capitalise

on the competitive advantage

generated by lower labour costs.

This has increased container ship

employment on longer trade

routes.

Most recently, containers have

been used to transport cargoes

that are traditionally synonymous

with general cargo ships. The

proportion of total dry bulk

seaborne trade carried in

containers has grown considerably;

from 17% in 2001 to 24% in 2006.

This proportion is forecast to rise

to around 30% by 2010, at the

expense of general cargo

shippings market share.

The growth in unitised seaborne

dry bulk cargoes is a very

clear demonstration of the

progressive role of container ships

in shipping. Recently, high dry bulk

freight rates have made container

ships the obvious choice when

transporting traditional minor

bulks such as scrap and steel.

Depending on which analyst you

ask, forecasts for annual growth in

container ship demand vary

between 9 and 15%. But even if

growth is at the lower end of the

range, it will be significant. Sizable

growth in demand for container

ships is required to provide

employment for the rapidly

expanding container ship fleet

which has been exhibiting double-

digit annual growth rates for more

than eight years.

Some turbulence ahead

While the robust forces of

globalisation will ensure that

container ship demand growth

will remain firm in the long

term, it is inevitable that there

will be fluctuations along the way.

Container ship demand is

inexorably linked to world gross

domestic product (GDP) growth

by a factor of 3 or 4; GDP

growth of 4% would involve

container ship demand growth

of around 12%. During the

1990s, the ratio of economic

growth to container ship

demand averaged 3.6, whereas

it has now risen to 4.4.

When world economic growth

slumped to around 1.5% in 2001,

demand growth for container

ships fell to 4.1%. As global

growth rebounded to 4% just

three years later, demand growth

for container ships increased intandem. Since then, the past three

years have shown robust demand

growth for container ships on the

back of globalisation.

Any risks or shocks associated with

countries to which world GDP is

most sensitive could also threaten

container ship demand. For

example, an economic slowdown

in the US, Europe, Japan and,

more recently, China would affect

global growth, subsequently

impacting demand growth for

container ships.

41+13.2% compound annualgrowth rate 2002-2010

mGT

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%2002

15.32366071

2003 2004 2005 2006 2007 2008 2009 2010

Figure 1: Proportion of the

existing fleet and orderbook.

by size.


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For further information contact

Gary Morgan, Market Analyst, Lloyds Register

E [email protected]

T +44 (0)20 7423 2725

F +44 (0)20 7423 2213

October 2007 CONTAINER SHIP FOCUS 3

Fleet profile

The container ship fleet is currently

keeping pace with overall demand

growth. During the past 12

months, the container ship fleet

has increased by 14%. The fleet

now totals 118 million gross tonnes

(gt), comprising 4,089 ships. This

translates to a cargo carrying

capacity of some 10.2 million teu.The container ship fleet has been

growing at an average of more

than 9.5% since 1980 and is

forecast to maintain this rate to

2010 and beyond.

Currently, the orderbook represents

some 55% of the existing cargo

carrying capacity of the fleet. A

principal reason behind this swell

in orderbook capacity has been

the evolution of the 11,000-plus

teu ultra-large container ship

(ULCS), a popular choice for

newbuilds so far this year. There

are currently 119 ULCSs on the

orderbook; 82% of which were

contracted in the last six months.

Figure 1, which illustrates the

proportion of the existing fleet and

orderbook by size range, shows

those size categories where there is

serious market interest. While the

post-panamax and ULCS rangeshave only a small existing fleet

share, phenomenal development

in both these sectors is expected.

Reflecting confidence in the

markets, the container ship

orderbook for ships of 10,000-plus teu expanded heavily in

the third quarter this year.

Of the 150-plus orders for ships

representing a total capacity of

1.9 million teu currently on

order, some 60% were placed

during July, August and

September. Figure 2 shows Lloyds

Registers impressive performance

in this category, with a 31% share

of the orderbook.

Need for feeders

Figure 1 also reveals possible

shortcomings in the smaller ship

size ranges, particularly the

small feeders. Some 62% of the

container ship fleet by number

is comprised of small and large

feeders, so their contribution is

significant. But feeder tonnage

makes up some 82% of the

20-plus-year-old fleet, which

points to a replacement

requirement in the medium term,

despite the tonnage required to

service the huge increases indemand for container ships.

Feeder tonnage is vital to the

logistics supply chain in which

container ships operate.

The challenge for the container

ship fleet going forward will be

to accomplish equilibrium amid

the rapid pace of development

in the market. This will be

challenging, since the container

ship fleet is a very young one;

45% of the fleet was built less

than five years ago and, when

we consider that a mere 9% of

the fleet is more than 20 years

of age, it becomes clear that

increased scrapping may not be

an immediate source of market

stability. However, pressure may

be felt by companies owning

the slower, smaller and older

tonnage, as their fleets face

obsolescence.

Lloyds Register48 ships of 0.53m teu

31%

Rest of Class109 shipsof 1.33m teu

69%

Figure 2: Lloyds

Registers market

share of 10,000-plus

teu orderbook.

Bigger is better

Container ship operators use a variety of means to increase their

market share. An expansive geographical territory, a frequent and

efficient service and a youthful fleet of large ships are all ways inwhich players differentiate themselves in this competitive market.

There is much at stake; earnings have remained volatile in this

environment, hovering at an average $1,300 per teu for

headhaul and backhaul routes over the past six years, making

economies of scale a vital aspect for operators.

Ship design is influenced by a variety of factors, which range from

the regulatory to the economic. From an economic perspective,

growth in demand for container ships is driving ship capacity

upwards, the only constraint being the global transport

infrastructure. At the same time, the promise of significant profits

has also motivated the evolution of larger container ships.

But size is not everything. The container ship trade model is

a dynamic one, which changes in response to external drivers.

The expansion of the Panama Canal, for example, is an

infrastructural development which will have a significant

bearing on the container ship market going forward. This is

examined in greater detail on page 4.


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How low can you go?


the development work and will

continue to be used once the

work is complete, ultimately

providing a total of three strings

of locks at each end of the canal.Thus the canal will be able not

only to accept larger ships but

the total annual tonnage passing

through the canal will be

greatly increased.

The expansion plans are,

however, not compatible with

the largest container ships

expected to be in service by 2014;

these 14,000 teu goliaths feature

22 boxes across the breadth of

the ship and a beam of about 56

metres. Such vessels are, instead,

most suited to the Asia-Europe

trades, so it is likely that vessels

ranging in capacity between

12,000 and 13,000 teu will

become the new panamax

(NPX) container ships.

The expansion of the Panama

Canal is likely to lead to a

complete redefinition of container

trades. Lloyds Registers and OSCsextensive research suggests that

US East Coast ports will benefit

substantially from the changes,

and that the expansion forms

a vital element in the likely

reshaping of trade patterns.

With larger ships able to transit

the canal, routes between Asia

and the US East Coast will provide

the most cost-effective means to

move freight in and out of theAmerican Midwest. Central to the

success of the revitalised trades

will be the ability of ships to call

at New York.

Ships entering the most important

of the New York and New Jersey

container terminals will need to

pass under the Bayonne Bridge.

Orders are already

being placed for ships

optimised to the

dimensions of the

Panama Canal

Authoritys Third

Set of Locks project,

but our research reveals

an additional constraint

in the form of the

Bayonne Bridge.

of the Miraflores locks will be

built. Each set of locks will feature

three levels, or chambers, similar

to the configuration of the

existing Gatun locks.

The chambers will allow transit

of vessels with a beam of up to 49

metres (160 feet), an overall length

of up to 366 metres (1,200 feet)

and a draught of up to 15 metres

(50 feet). Each chamber willbe connected to three water

reutilisation basins; 18 in total.

These basins, which are being built

to conserve water, together with

the increased capacity produced

by deepening Gatun Lake and

Gaillard Cut and the raising of

Gatun Lakes maximum operating

level by approximately 0.45 metres

(1.5 feet), will enable many more

additional lockages per day.

The existing two strings of locks,

which can accommodate ships of

up to 32.3 metres (106 feet) beam,

will remain in use throughout

Work has started on the expansion

of the Panama Canal. If all goes

according to plan, the expansion

will cost some $5.25 billion

and the new locks should be

operational by 2014. The project

to add a third set of locks is a

major feat of engineering and will

have a lasting impact on shipping

worldwide.

The container trades are a majordriving force behind the expansion

plans, which will provide greater

throughput and allow an increase

in the maximum vessel size.

Lloyds Register has teamed

up with Ocean Shipping

Consultants Ltd (OSC) to look

at what the expansion means

for container ships.

Whats happening whenTwo sets of locks one at the

Atlantic end of the canal, east of

the Gatun locks, and the other at

the Pacific end to the south-west


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David Tozer

Andrew Penfold


David Tozer, Business Manager Container Ships, Lloyds Register

E [email protected]

T +44 (0)20 7423 1562

F +44 (0)20 7423 2213


Height restriction

Our study highlights a crucial issue:

ships entering the most important

of the New York and New Jersey

container terminals will need to

pass under the Bayonne Bridge.

With an air draught of 46 metres

(151 feet), this bridge currently

poses a problem for nearly all

post-panamax ships currently in

service and on order. It is

understood that the 75-year-old

bridge will eventually be raised,

but this will be an expensive and

lengthy long-term operation.

This height restriction is,

therefore, a serious issue for

the container trades.

As the drive for improved

economy continues, the latest

generation of large container

ships is being designed with even

higher stacks of containers and

with the ability to carry a greater

proportion of high cube

containers. These factors make

transit under the Bayonne Bridge

even more problematic.

This is a very significant issue that

must not be overlooked, says

OSCs Director, Andrew Penfold.

On the one hand, an NPX ship

delivered today would create

significant employment prospects on a competitive cost basis

in the Asia to Europe trades.

This could drive operators

towards committing to larger

ships, as many have done to

date. But, on the other hand,

operators might very well see

an inability to enter New York as

a significant limiting factor.

David Tozer, Lloyds Registers

Business Manager for Container

Ships, adds: As the timescale for

the possible raising of the bridge

is uncertain, Lloyds Register is

proposing interim solutions that

will help operators to provide a

competitive service from Asia to

the US East Coast including New

York while the air draught

under the Bayonne Bridge

remains at 46 metres, which can

then be enhanced once the

bridge has been raised.

The solution

To meet the current air draught

restrictions in New York, the NPX

container ship will need a

reduced height. This may be

achieved by the fitting of folding

masts, a lower funnel and by

carrying fewer tiers of containers

on deck, possibly as few as five

tiers. Designs are likely to emerge

with a one third forward or

even fully forward bridge

arrangement to maximise the

ships container capacity.

In the future, when the Bayonne

Bridge is raised, it will be a

relatively straightforward matter

to convert these ships to carry

seven or eight tiers on deck by

increasing superstructure and

funnel heights, providing this

enhancement is designed-in at

the time of build.

Container ship orders are forging

ahead, but it is important to

understand the environment in

which these ships will operate. We

can help ship owners and builders

understand how best to address

some of the technical challenges

facing container ship design today.

To meet the current air draught

restrictions in New York, the

NPX container ship will need

a reduced height.

Bigger is better

The growth of the

container trades is

remarkable, not only in

terms of the total capacity

of the container ship fleet

which has now surged

past 10m teu, but also in

terms of ship size. The

largest container ships in

service today have

capacities greater than

10,000 teu, which seemed

unthinkable just a few

years ago.

In 1999 Lloyds Register,

then classing the largest

container ships in the

world, embarked on a

comprehensive study to

examine the future

prospects for ultra-largecontainer ships (ULCS) and

predicted the introduction

into service of ships like

the Emma Mrsk, the

largest container ship in

service today by a

significant margin.

Today Lloyds Register is

investigating, again with

OSC, the implications of

the next major influenceon the container trades:

the development of the

Panama Canal to

accommodate container

ships almost as large as

the ULCS.


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Going for green


But appearances are not

enough; a better-informed public

knows to look beyond whatis presented to them at the

shopfront. They want reassurance

that the consumables they are

presented with have arrived

with due care; an expectation

that extends far down the

supply chain.

The resulting pressure from US

retailers keen to demonstrate

green credentials under

accreditation schemes such

as ISO 19000 is encouraging

container ship owners to look

at the impact of their own

operations on the environment.

At the same time, green issues

are falling increasingly under

the regulatory spotlight (see

page 8) and it is likely that

existing regulations and

recommendations requiring

the construction, maintenance

and operation of ships to take

place with minimum impacton the environment will be

more stringently enforced in

the future.

COSCO cares

China Ocean Shipping (Group)

Company (COSCO) is among a

core of container ship owners who

recognise the need to build shipsthat demonstrate green credentials.

The latest and largest addition to

the COSCO fleet, the 10,050 teu

COSCO Asia, has been classed

by Lloyds Register and holds

our Environmental Protection

(EP) notation. She is the first of

four sister ships to be built at

Hyundai Heavy Industries (HHI)

yard in Ulsan, South Korea. The

remaining three are due fordelivery by mid-2008.

The stringent environmental

standards COSCO Asia has

been built to reflect COSCOs

commitment to its responsibilities

under the UN Global Compact

(see www.unglobalcompact.org).

The company has fully embraced

this Compact and is applying its

principles throughout its operations.

The Compact asks companies

to commit, within their sphere

of influence, to a set of ten core

values addressing the environment,

human rights, labour standards

and anti-corruption. Regarding

the environment, the Compact

stipulates that businesses should

support a precautionary approach

to environmental challenges;

undertake initiatives to promote

greater environmental

responsibility; and encouragethe development and diffusion

of environmentally friendly

technologies.

COSCO Asia has been built to

stringent environmental standards,

reflecting COSCO's commitment

to its responsibilities under the UN

Global Compact.

There are sound economic reasons

why shipowners should build

environmental awareness into

their container ships.The shelves of North American

and European hypermarkets are

filled with bargains originatingfrom the vast manufacturing

hubs of the Far East. Container

ships, boasting ever-increasing

capacities, have transported them

there in huge quantities and at

low cost.

The average Western consumer,

dazzled by the attractive figures

on the price tag, used not to

think very deeply about the

wider implications of such

apparent good value. However,

the new political and societal

focus on the environment,

driven by worries about climate

change, is encouraging people

to think again.

Shoppers, now expecting moral

as well as financial fulfilment

from their purchases, are

beginning to realise how their

choices can make an ethical

impact. Retailers are duly takingnote and, as part of their efforts,

recognise that it is increasingly

important to be seen to be green.


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Peter Catchpole, Environmental Services Manager,

Lloyds Register EMEA

E [email protected]

T +44 (0)20 7423 2011

F +44 (0)20 7423 2026


COSCO Asia embodies these

principles. We undertook the

plan approval of the ship, her

equipment and systems, and

surveyed her during construction.Built according to our Rules

on Environmental Protection,

COSCO Asia goes beyond our

basic EP Notation. The three

supplementary characters on

the end of COSCO Asias EP

Notation (B, O, R) indicate that

she incorporates the following

environmentally friendly features:

B: a ballast water management

plan (BWMP) approved byLloyds Register;

O: a 5 parts per million (ppm) oily

water separator; and

R: a refrigerant system in which

the refrigerant gases are

restricted to an ozone

depleting potential (ODP) of

zero and a global warming

potential (GWP), of less than

1,950. GWP is a measure of

how much a greenhouse gas

is estimated to contribute to

global warming, relative to the

mass of carbon dioxide (CO2).

Complying with the 5 ppm

requirements is not an industry

standard and demonstrates

COSCOs great commitment to

the environment, says Lloyds

Register surveyor Haikun Zhu.

Based in our Ulsan office,

Zhu has been involved in the

delivery of the COSCO Asia and

is working on other ships under

construction at HHI.

The environmental standards

that COSCO Asia adopts surpass

international requirements

in three main ways, adds

Hector Sewell, Lloyds Registers

Vice President of Marine

Business Development for China

and Korea. Firstly, COSCO Asias

main engine and generator

comply with the latest

international environmental

protection regulations; secondly,

the separation of oil from oily

water generated by the engine

has been enhanced by using

a new technique on the oily

water separator; and lastly,

she is equipped to fully

implement the ballast water

management plan under the

guidelines of the International

Convention for the Control and

Management of Ships' Ballast

Water and Sediments.

And theres more

Of course, there are further

steps shipowners can take.

Beyond the supplementary

notations B, O and R mentioned

above, ships can gain additional

characters in recognition of

other environmentally friendly

features, as follows:

A denotes that the hull

antifouling system features non-

biocidal paints for example,

silicone-based paints.

P indicates that the ships oil tanks

are protected, as they would be

under MARPOL Regulation I/12A.

N shows that the ships emissions

of nitrous oxide (NOx) do not

exceed a maximum 80% of the

limits specified in MARPOL

Regulation VI/13.

S sets a maximum of 1.5 % m/m

sulphur in fuel oil and a maximum

0.2 % m/m in gas oil.

G demonstrates that the ship has

a grey water treatment plant

installed and that the effluent

conforms to strict limits regarding

its content.

V, which applies to tankers, shows

that vapour emission control

systems have been fitted to

control cargo vapours during

transport and fluid transfer.

Besides the obvious benefits to

the environment, there is a strong

business case for building ships

to EP Notation. Our Rules on

environmental protection have

been developed in anticipation of

upcoming and future legislation

and thus help to future-proofships for compliance going

forward. Furthermore, if

shipowners take a proactive stance

through such green initiatives, they

may also ensure that this future

legislation remains pragmatic

and beneficial to industry.

Environmental inventory

We also offer a Green Passport approval and verification service

for both newbuilds and existing ships (see HorizonsJune 2007,

pages 6-8). The Green Passport, intended to comply with the

International Maritime Organizations (IMO) Guidelines on Ship

Recycling under Resolution A.962 (23), paragraph 5, lists the

materials present in a ships structure, systems and equipment

that may be hazardous to health or the environment. This helps

owners promote better hazard management, increase their

environmental awareness and enhance planning.

HHI president and CEO KS Choi

and Lloyd's Register Chairman

David Moorhouse pictured

with COSCO representatives

Chen Hongsheng, Mao Mei,Wang Wenying, Zhang Fusheng

and Sun Jiakang.

Complying with the

5 ppm requirements

is not an industry

standard and

demonstrates

COSCOs great

commitment to the

environment.


8/12

Emission impossible?


Reviewing the regulations

IMO has now begun a review of

MARPOL Annex VI, looking to

lower SOx and NOx limits further.

There is a lot at stake in making

newbuilds and existing ships

environmentally friendly. Modern,

10,000-plus teu container ships

now feature even larger diesel

engines of up to 14 cylinders,

which burn more than 200 tonnes

of fuel per day. Any changes

to emissions limits will have

a substantial impact on business.

IMOs independent reviewgroup has identified a number of

options to reduce SOx limits. These

proposals include: retaining a 4.5%

worldwide limit, but lowering the

SOx Emission Control Area (SECA)

limit to 1%; introducing a lower

limit worldwide for an agreed

distance offshore; and lowering

the 4.5% limit to 3% in 2012 and

to 1.5% in 2016. On the last point,

legislation could be used to

encourage the use of emissions

control technology on top of a

requirement for ships to use low-

sulphur distillate fuels in SECAs

and port areas.

There are also proposals for ships

to use distillate fuels with a

maximum sulphur content of 1%

by 2012, which would later be

cut to 0.5% by 2015. This could

come with an option to use

residual fuels with scrubbers to

achieve the same effect.

Meanwhile, the review groups

proposals aim to reduce NOx

limits in stages from 2011,

and again some five years later

for new engines. IMO is also

considering legislation to lower

NOx emissions from slow-speed

engines and NOx limits are also

being considered for ships built

before 2000.

Particulate emissions are also

likely to be increasingly

regulated: IMO is considering

other measures such as the use

of shore-based power in port

and emissions trading schemes,

says Graham Greensmith, Lloyds

Register Lead Specialist, External

Affairs. On a wider scale, the

impact of greenhouse gases

namely carbon dioxide (CO2)

emissions from ships is also

under scrutiny.

Balancing act

Emissions can be lowered

using distillate fuels, shipboardequipment, or an approach that

combines the two.

But while the availability and

quality of low-sulphur bunker

fuel remains uncertain, there

is plenty of research into

developing shipboard technology

to cut exhaust emissions.

Extensive research into exhaust

gas cleaning systems, which

tackle emissions in the waste

stream, is currently underway;

trial results show reduction of

SOx and NOx emissions by some

90% and 15%, respectively, and

MARPOL Annex VI, which was

first adopted by the International

Maritime Organization (IMO) a

decade ago, finally came into force

in May 2005. Since then, a steady

stream of headlines informing us

of increasingly extreme weather

conditions, global warming and

the melting of the polar ice caps,

has captured the worlds attention.

Emissions control is perceived

to be an important factor in

minimising our impact on the

environment. And, at the same

time, there is increasing evidence

of the negative impact of exhaustemissions on our health.

Along with other industry sectors,

shipping must do its bit.

The regulations of MARPOL

Annex VI which deals with the

prevention of air pollution from

ships target ship exhausts and

set limits on sulphur oxide (SOx)

and nitrogen oxide (NOx)

emissions. They also prohibit

deliberate emissions of ozone-

depleting substances.

Modern, 10,000-

plus teu container

ships now feature

even larger diesel

engines of up

to 14 cylinders,

burning more than

200 tonnes of fuel

per day.

Increasing evidence

linking climate change

and poor respiratory

health with exhaust

emissions has necessitated

a review of MARPOL

Annex VI.


9/12


Graham Greensmith, Lead Specialist, External Affairs,

Lloyds Register

E [email protected]

T +44 (0) 20 7423 2789

F +44 (0) 20 7423 1564


particulates by some 80%. Sulphur

scrubbers also reduce particulates

and other harmful gases.

The use of natural gas as a fuel

may also provide an answer. Its

minimal SOx and NOx output must,

however, be balanced against the

other ways in which natural gas

impacts the environment.

The future regulatory

developments under MARPOL

Annex VI remain, for the time

being, unclear. One thing,

however, is certain: the focus on

the environment is only going

to sharpen and the industry will

be expected to demonstrate its

commitment to tackling the issues.

As part of this, downward pressure

on exhaust emission limits can

therefore be expected to continue.

SOx a punch

As the regulations in MARPOL Annex VI have gone through the

long journey from adoption to implementation, legislation to

tackle emissions has also been introduced on a more local level.

The European Union (EU), Norway and the more environmentally

conscious US states, such as California, are among those targeting

emission from ship exhausts.

The 2005 amendments to MARPOL Annex VI include the establishment

of the North Sea SECA, which overlaps with European Union (EU)

Directive 2005/33/EC and amended Directive 1999/32/EC.

Under the EU Directives, all ships entering SECA zones are limited

to a maximum 1.5% sulphur content in fuels. The North Sea and

English Channel become SECAs under EU legislation this month,

while the Baltic Sea has held SECA status for more than a year.

In addition to this, from January 1, 2010, there will be a 0.1%

sulphur limit on fuels used by inland vessels and seagoing ships

at berth in EU ports. Directive 1999/32/EC goes on to stipulate

that the sulphur content of marine gas oil (ISO 8217 DMA or

DMX) must not exceed 0.2% m/m within territorial waters and,

from January 1, 2008, this limit will be reduced to 0.1% m/m.

More SECAs are likely to be established in the coming years, says

Greensmith. Possible candidates include the Mediterranean, Black

Sea, Hong Kong, Singapore and areas or individual states of the US.

A proactive approach

Ships crews face increased pressures and time constraints when

maintaining manual records to demonstrate environmental

compliance with exhaust emissions and pollution controls.

MARPOL Annex VIs approach of using the bunker delivery note (BDN)

and a bunker manifold sample to demonstrate quality and sulphur

compliance is a well-established process for quality verification of fuel

loaded onto a ship. However, the BDN does not enable an operator to

demonstrate what is actually passing through the fuel system at any

particular point in time, because ships inevitably carry more than onegrade of fuel and these are segregated according to sulphur content.

The MARPOL approach relies on BDNs providing a true indication

of the quality of fuel loaded, and this will depend on how well the

samples have been drawn, as well as on the integrity of the parties

involved when reporting data, says Tim Wilson, Principal Specialist

Engineer and Product Manager of Lloyds Registers fuel oil and

bunker analysis service (FOBAS). Therefore, it allows at best a

calculated guess, based on assumptions, as to the actual quality

and sulphur content of the fuel entering the engine.

FOBAS Onboard

We are currently developing a new real-time fuel and lubricant

quality management system, called FOBAS Onboard with Lab-On-

A-Ship, which will help operators to monitor the sulphur content

of fuel entering ships engines at any point in time. It will also

measure a range of other quality parameters to ensure that the

fuel is of acceptable quality for combustion.

FOBAS Onboard with Lab-On-A-Ship will give operators the ability

to monitor online the level of sulphur entering the engine,

explains Wilson. It will be linked to the ships global positioning

system (GPS), providing a tamper proof system that will be able to

generate data reports linked to the ships position on demand.

Early indications suggest that flag administrations will consider

these SECA compliance reports as equivalent to the handwritten

log of change-over times and low-sulphur quantities that is

currently required by the regulations.

Sulphur is only the first step for FOBAS Onboard Lab-On-A-Ship,

adds Wilson. In the future, we intend to extend the system to

cover a wider range of fuel and lubricant quality parameters, as

well as introducing capability to conduct other environmental

studies, such as evaluating the composition of exhaust gases.


10/12


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CONTAINER SHIPFOCUS

For further information on our

marine services relating to the

container ship sector, please

contact David Tozer, Business

Manager Container Ships:

T +44 (0)20 7423 1562

F +44 (0)20 7423 2213

E [email protected]

Container Ship Focus newsletter

is produced by Marine Business

Development and designed by

Pipeline Design.

Care is taken to ensure that

the information in Container

Ship Focus is accurate and up-to-

date. However, Lloyds Register

accepts no responsibility for

inaccuracies in, or changes to

such information.

Managing Editor:

Sarah Norman

Marine Media Manager

Marine Communications

T +44 (0)20 7423 2105

E [email protected]

12 C ON TA IN ER SH IP F OC US October 2007

Lloyds Register EMEA

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October 2007

Services are provided by members of the Lloyds Register Group.

Lloyds Register, Lloyds Register EMEA and Lloyds Register Asia are exempt charities under the UK Charities Act 1993.

The danger within

Packed and shipped properly,

with the right documentation,

dangerous goods pose no greater

risk to the safety of life at sea than

any other cargo. But it is when

dangerous goods are mis-declared

or undeclared that incidents can

and will occur.

Shipowners have to deal not only

with the danger these large scale

incidents pose to their crews and

huge costs associated with the

aftermath, but also with the

damage done to their name

and reputation.

Although the International

Maritime Dangerous Goods

(IMDG) Code exists to ensure

the safe carriage of packaged

dangerous goods, non-compliance

is widespread. A study bythe International Maritime

Organization (IMO) suggests that

as many as 30% of all containers

on the worlds oceans carrying

dangerous goods have those

goods mis-declared, are badly

packed, or are otherwise non-

compliant with the provisions

of the IMDG code.

The problem is compounded by

the length of the supply chain for

containerised goods. A container

stuffer located inland may not

think to take into account the

forces placed on a sea container

during a marine voyage. The

custody of and responsibility

for a container may change many

times during its journey along

the supply chain; not all custodians

will be aware of the correct

handling, stowage and response

procedures associated with what

is in that container.

More worryingly, some may

seek to send incorrectly stuffed

containers deliberately. We will

never eradicate malpractice, says

Terry Frith, Technical Manager

of the Chemical Distribution

Institutes Marine Packed Cargo

Scheme (CDI-mpc). But we can

help shipowners to make sure they

are doing everything they can to

ensure operational risks are kept

to a minimum.

Asking for auditsShipowners must therefore be

vigilant in deciding what cargoes

they accept. One way in which

they can perform this due

diligence is by encouraging the

companies they deal with to

demonstrate that they have taken

steps to ensure the containers

they are transporting are safe.

Merely declining to take

dangerous cargoes is not an

option; this can encourage less

scrupulous operators to mis-

declare dangerous goods,

making the problem worse.

CDI-mpcs scheme provides an

independent risk assessment

system for the entire supply chain.

The scheme is sponsored by

chemical companies.

The scheme invites input from

a comprehensive cross section of

the supply chain. Lloyds Register

represents the International

Association of Classification

Societies (IACS) at CDI-mpcs

biannual meetings.

CDI-mpc gathers audit data from

logistics service providers involved

in the distribution supply chain

for packaged chemicals. This

includes shipowners and

operators, tank container

operators, container terminals,

container freight stations, freight

forwarders and agents.

The audit will highlight areas for

improvement, but the companies

have a right to reply, says Frith,

Undeclared dangerous

goods threaten

the safety of life

at sea. Lloyds Register

is working with the

Chemical Distribution

Institute to help

shipowners manage

the risk they pose.

pointing out that subsequent

audits can be used to show if

positive action has been taken.

We dont pass or fail any

organisation. It is up to ship

owners and operators to make

that decision. Questionnaires

tailored to the different parts of

the supply chain are available for

download from the CDI-mpc site,

www.cdi-mpc.org.

Cosco Asia Diverse

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