Tag Archives: ocean shipping

Dark Fleets and Flag States

It’s no secret that flag states are a weak point in maritime standards and regulations enforcement. Shipowners can easily circumvent rules by reflagging to a state that is more interested in the revenue from fees than in enforcement. And there are lots of them.

This article paints a darker picture than we have heard of– outright bribery of flag states. The motivation is to skirt sanctions of Russian entities and other a few other countries such as Iran.

According to the article, the Paris Memorandum of Understanding on Port State Control (Paris MoU) has released details of how states are trying to allow their ships to avoid detentions for violation of sanctions. One mechanism was to make bilateral agreements with port states.

I don’t quite see how the bribery angle works, though.

But with dark trade increasing, there’s no question that it would be worthwhile for shipowners to bribe flag states to register old and poorly maintained tankers. And most of those would find their way into the petroleum trade to Asia from Russia.

Dark fleet vessels engage in tactics like dangerous ship-to-ship transfers and AIS masking, which can allow oil to move without being affected by the sanction rules.

I hope the maritime authorities, such as the IMO and P&I clubs, will come up with improved procedures to stop unsafe practices.

Sam Chambers May 22, 2024

https://splash247.com/dark-fleet-registers-seen-bribing-flag-states-to-avoid-detentions-paris-mou/

Surcharges, artificial demands and market opportunists

Xeneta, a data analytics firm specializing in shipping markets, has presented some data for their webinar January 25, 2024.

One of the most striking figures is the percentage of loads being shifted from negotiated contract rates to freight-all-kinds (FAK) rates. The latter are substantially higher in most cases and allow for additional accessory charges to be added.

One of those extra surcharges is for the risk associated with Red Sea transits. The Houthi attacks from Yemen have made sailing the Red Sea more dangerous, even though a consortium naval fleet is patrolling and has even hit Houthi positions in Yemen. There’s no question that insurance rates have increased for Red Sea transits.

These changes not only increase shipper cost, but also add to the volatility of load charges. Shippers have more trouble doing business when they can’t estimate their shipping costs precisely enough.

There’s also a fear that carriers are creating ‘artificial demand’, by blanking sailings. Discussions of a shortage of containers also lead shippers to book sooner than might be required. There’s not exactly a shortage. But changes to the routes are playing havoc with the ability to reposition containers. That means there could be a temporary shortage, and if a particular shipper is affected it creates a negative perception of the ocean carriers.

Freight forwarders are worried that this demand creation will pull forward shipments that could have been delivered later. There could be a large dropoff in business later in the year.

All this turmoil means shippers need to begin thinking about renegotiating contracts now before the season starts. There are many more moving parts to be discussed with the carriers.

Xeneta clearly hopes their data service will be chosen to aid in the negotiations. But the careful analysis provided should alert shippers, forwarders, and carriers to the instability and uncertainty in the pricing of ocean shipping services today.

ELOISA TOVEE FEBRUARY 01, 2024

Surcharges, artificial demands and market opportunists

Berge Bulk capesize sail installation expects big savings

Berge Bulk has retrofitted a 2018-bilt Newcastlemax bulk ore carrier Berge Olympus with four large sails. They can be seen in the picture here. It’s pretty impressive. Expected savings are 6 tonnes of fuel and 20 tonnes of CO2 per day. The installation was done during the ship’s first special survey, in China.

The ship trades the Brazil to China route carrying iron ore.

Paul Bartlett Oct 17, 2023

Berge Bulk capesize sail installation expected to clock up double-digit savings