Korea Line future in doubt

From Reuters

SEOUL, Jan 26 (Reuters) - A court could decide whether to restructure or liquidate Korea Line Corp. within a month, a company official said on Wednesday, a day after the South Korean company filed for bankruptcy protection. The country's second-biggest dry bulk shipping line filed for receivership with the Seoul Central District Court on Tuesday after struggling to stay afloat amid a sharp drop in freight rates.

"We are seeking all ways to normalise operations through additional borrowings and debenture issues but we have no choice but to file for receivership on persistent pressure from bad loans in the past and high-cost charter contracts," Korea Line said in a statement on Tuesday.

click here for link to complete article

Chinese (or Lunar) New Year is Feb. 3, 2011

The Chinese (Lunar) New Year falls on Feb. 3rd this year.

Because it is based on a lunar calendar, it's always a different date.

Anyone who works in the international shipping business from Asia, knows the impact of this holiday.

Basically all the factories shut down for at least a week, generally more. Everyone goes home (which is often a small village in China) to celebrate the holiday with their family.

And because the business of the country is shut down, nothing ships out, or in.

There could also be some major shifts in the Chinese economy.

From Bloomberg

China may raise the reserve requirement ratio for banks this year, the People’s Daily said, citing Bank of Beijing Co. Chairman Yan Bingzhu. The country may also use “other tools” to reduce liquidity, the report said, citing Yan.

The nation may raise interest rates around the Chinese New Year, the China Securities Journal said in a Jan. 21 front-page editorial.

As I have said before, China's economy will be driving the rest of the world in the next decade, so it's important to notice what's going on in China.

Government Documents regarding Mafia arrests

I haven't yet started reading this, but on the USDOJ (U.S. Department of Justice) web-site is available details of charges against those arrested today.

Here's the link

USDOJ:OPA: Documents and Resources from the January 20, 2011 "La Cosa Nostra" press conference

More on the Mob arrests on the waterfront

This from The Wall Street Journal

The indictment filed against more than 100 alleged mobsters arrested in a three-state sweep Thursday morning describes a scam used on the New York and New Jersey waterfront.

Three accused Cosa Nostra members would turn up before Christmas, when workers from the International Longshoreman’s Association receive a check from the “container royalty fund”–a sort of year-end bonus for union members. According to the indictment, workers’ payments to the alleged mobster were “induced by wrongful use of actual and threatened force, violence and fear.”

In other words: extortion. The indictment cites incidents going back to 1982, making this scheme a holiday fixture over nearly three decades.

“It’s tradition on the waterfront,” said Ronald Goldstock, a member of the Waterfront Commission of New York Harbor, which is tasked with countering the influence of organized crime on the docks. “If you want to work there — if you want the good assignments or overtime — you kick back the Christmas check to the people who allow you to work there.”

click here for link to article

Arrests made in extortion of dockworkers in New Jersey

Today, more than 100 persons were arrested in a round-up of Mob types in New York, New Jersey and Rhode Island.

From the NY Times

An indictment handed up in Newark charges 14 people with racketeering and extortion of Local 1235 of the International Longshoremen’s Association and other dockworkers locals, including several current and former union officials who are said to be affiliated with the Genovese family. The indictment alleges a conspiracy over the course of many years to extort union members around Christmas, when they receive an annual bonus based on the number of cargo containers that move through the port.

And, from Bloomberg News

“It means that actual longshoremen in this case, with real mortgages and real families, were forced to kick back to corrupt officials of ILA Local 1235 between $500 and $5,000 each from their annual Christmas bonus if they hoped to rise above entry level jobs on the docks. Eventually those kickbacks helped line the pockets of the Genovese crime family.

“Organized crime means what it has always meant on the waterfront: mobsters getting rich on the backs of dock workers. This case helps put an end to it.”

It will be interesting to see the list of those arrested.

Stay tuned.

Update- Shipcraft vessel Leopard

Nothing new to report today.

Shipcraft is not saying if the pirates have made contact with them.

This report from IC Publications gives a very good account of the incident.

A Danish shipping company said Friday it was searching for six crew members who have been missing since their cargo ship was attacked by pirates two days ago in the Gulf of Aden off Oman.

"We do not know where the crew is and we are concentrating on locating them and bringing them home to safety," Shipcraft chief executive Claus Bech said in a statement.

He confirmed a report late Thursday that the pirates had taken the six crew members -- two Danes including the captain, and four Filipinos -- and abandoned the cargo ship, The Leopard.

He did not reveal if the kidnappers had demanded a ransom.

A search onboard the boat Thursday by Turkish soldiers, who are part of an international NATO-led force in the Gulf of Aden, turned up "neither pirates nor crew members," Bech said.

The shipping company last had contact with The Leopard crew on Wednesday at 1300 GMT, when the captain sent a distress signal indicating that the cargo ship had been "attacked by pirates who were boarding from two speed boats," the statement said.

After receiving the alert, NATO sent the Turkish warship Gaziantep to the scene, a spokesman for the alliance's anti-piracy mission, Jacqui Sheriff, told the Politiken daily's website.

Shipcraft, which has not provided information on what the cargo ship had been carrying, is known as a specialist in shipping explosives and ammunition, the paper reported, adding that The Leopard was transporting weapons.

All the company's ships have traveled in the area with armed guards since pirates attempted to capture another of its cargo ships, The Puma, in mid-2009.

However, Politiken.dk reported that The Leopard had let off its armed guards at the Oman port of Salalah before sailing into a zone considered "safe" where it was attacked.

Location unknown of Leopard crew

Yesterday the speculation was the crew of the Leopard was taken, as the vessel was found with (apparently) all cargo intact.

Today however, there has been speculation the crew was killed.

This is what the BBC is reporting.

The two Danes and four Filipinos are now thought to be held on a captured Taiwanese fishing boat, the Shiuh Fu No.1, an EU naval official said.

Pirates in two skiffs attacked the Danish-flagged M/V Leopard on Wednesday but later took the crew off the ship.

Nato sailors searched the abandoned vessel. Its cargo is said to be intact.

The Nato sailors from a Turkish warship, the Gaziantep, boarded the M/V Leopard on Thursday, when it was found to be drifting.

It is not clear why the ship was immobilised, said a spokesman for the EU's Navfor anti-piracy mission.

"We believe the ship was carrying arms, ammunition and explosives, and we believe the cargo is still intact," said the spokesman, Wing Commander Paddy O'Kennedy.

The international naval forces refrained from attempting a rescue as a radio message picked up while the pirates were on board warned them to stay away, he said.

The M/V Leopard is reported to be about 810km (500 miles) from Oman's port of Salalah.

The ship's owner, Shipcraft, says "our main focus is now on the safe return of our crew; however, at present we do not hold any reliable information as to their whereabouts".

Update-crew of Leopard taken by pirates

Apparently the pirates decided to hold the crew of the Leopard ( the Shipcraft vessel) instead of hijacking the ship.

Shipcraft transports arms and military equipment, and I guess the pirates realized taking such cargo would give them a lot of problems.

Best to just hold the crew for ransom (or so I presume).

This from AFP

Pirates kidnap Danish ship crew but leave vessel: report

(AFP) – 6 hours ago

COPENHAGEN — The crew of a Danish weapons ship have been kidnapped by pirates in the Gulf of Aden off Oman, but in an unusual departure from normal practice, the vessel was not seized, a report said Thursday.

Sources told the TradeWinds shipping publication that the 2,000-tonne ship, The Leopard, was carrying "sensitive" cargo, believed to include weapons.

Vessels operated by the Leopard's Danish operator, Shipcraft, routinely carried nuclear items, although none were believed to have been on board this vessel, it said.

The six crew -- two Danes including the captain, and four Filipinos -- had been taken to a seized Taiwanese fishing vessel being operated as a mothership, the report added.

The ship had meanwhile been located and searched by the Turkish navy and no trace of any pirates or pirate skiffs had been found.

According to some "chatter" I read, it was thought the vessel had armed guards onboard the ship, which disembarked shortly before the encounter with the pirates. So, presumably this attack occurred outside of what would be considered the danger zone.

Guess the danger zone just got bigger.

Shipcraft Vessel Hi- Jacked

I haven't mentioned all the ships which continue to be hijacked. This one was hijacked off the coast of Oman, so I am not sure it's the Somali Pirates, but I suspect so.

From Shipgaz news

The fate of the Danish coaster Leopard is still uncertain after a pirate attack yesterday in the Indian Ocean off the coast of Oman. The crew of Leopard reported an attack from two pirate boats at 2 pm on Wednesday. The crew of six (two Danish and four Filipinos) closed down the engine and rushed to the ship’s safe room, and there has been no contact with Leopard since then. This morning there is still no report from the ship, which is drifting at sea. The pirates are unable to enter the vessel as Leopard is secured with barbed wires and steel doors.

click here for link

Hamburg Süd has a new web-site

Hamburg Süd is a German shipping company. The 2 little dots over the U is called an umlaut, which means one does not pronounce the Süd as Sud (as in rhyming with mud), but as Sued, or really more germanic the S is pronounced as a Z, so it's Zood. I know any German reading this is having a heart attack, but I think it will help my fellow Americans.

Anyway, they have a new web-site. You can find it by googling hamburg sud.

Or, click here for the link to hamburgsud.com

They now have different links to their various divisions, and also to their parent company.

I haven't used the new site too much, but I did look up a sailing schedule from New York to Santos, Brazil. The only thing that baffled me was the date. It said 12.01.2001, and I am like "December is a long way away", and then I realize it's formatted in the European (and South American) style of date first, then month, and then year. They really should change it to use Jan for the month.

If anyone else has tried out this new site and has comments, I would enjoy hearing from you.

Too many bulk ships

Bloomberg published an article yesterday, stating there are too many new bulk ships coming out of yards, which has already caused charter rates to drop.

Leasing costs for capesizes, 1,000-foot-long ships hauling iron ore and coal, will drop 34 percent to average $22,000 a day this year, according to the median in a Bloomberg survey of eight fund managers and analysts. The last time that happened, China’s economy, the biggest consumer of the minerals used in steel and power, was 75 percent smaller and the benchmark Standard & Poor’s GSCI commodity index 67 percent lower.

While Clarkson Plc, the world’s biggest shipbroker, expects seaborne trade in the two cargoes to exceed 2 billion metric tons for the first time this year, the 7 percent increase won’t be enough to eliminate a glut. About 200 capesizes, spanning some 35 miles end-to-end, will leave shipyards this year, expanding the fleet by 18 percent, the Bloomberg survey showed.

Of course, the Chinese could surprise everyone, and stock up on commodities when the shipping is cheap. They did that last year.

Later in the article they quote folks in the containership business as saying "things are pretty good".

Let's see if they stay that way, after more containership newbuildings come into service.

click here for link to article

Forecast for 2011

I guess it's time to talk about what lies ahead in 2011.

This is what I said in previous years.

In 2009 I said we would be in a recession until 2011.

I think that was probably pretty accurate.

We are definitely changing into a world economy.

Still valid, and becoming more evident.

China is very quickly emerging as the dominant economy in the world.

China has already surpassed Greece in purchases of bulk carriers, and now China will build more ships, knocking out Korea who until now was the largest shipbuilder.

I think in the next decade, China will become more important than the U.S., from an economic standpoint. India, Indonesia, and Africa will also become more important.
Africa will expand due to influence from China and India, but with it will probably come exploitation, displacement of peoples, and turmoil.

As for ocean transport, carriers will need to restrain from adding too much capacity. If they forget what happened the last few years, they will throw themselves back into an overcapacity situation, and see rates plummet again.

Oil prices. Last year the best guess was somewhere between 50 and 100 dollars a barrel. Pretty close.

In 2011 I think we will see some wide swings in the price of oil. As soon as there is money to be made, the speculators are back in action.

OPEC is not so stupid as to let the oil prices get so high, that everyone converts to alternative energy sources.

Once again, China will be a dominate factor. They are pushing towards alternative energies, but their demand will grow so fast, I am not sure how much it will offset the increased demand for fossil fuels.

Probably at the best, it will be a wash.

So, that's my best guess for 2011. It won't be a great year, but it won't be horrible.

And if you are still out of work, I suggest you take any job you can find.