Marine Link
Tuesday, January 23, 2018

Cut Costs News

Groups Say NZ Port Merger will Cut Costs

Reports said that shipping and business groups say a proposed merger of New Zealand's largest ports will cut costs. The Ports of Auckland and Ports of Tauranga say they are in advanced discussions about working together, making savings for exporters through a more efficient supply chain. The Employers' & Manufacturers' Association agrees the merger has the potential to reduce costs. The association says they could keep the land but publicly float the combined company, freeing ratepayers' money for investment in other areas. The talks come as Danish shipping company Maersk reviews the option of dealing with a single port in the North and South Islands. Source: Radio NZ

Korean Shipyards Still in Rough Sea

File photo: Hyundai Heavy Industries

South Korean shipyards are still struggling to cut costs through unpaid leave for their workers and shutting down dry docks idled amid a lack of orders, Yonhap reported quoting industry sources. The report said that for decades, the shipbuilding sector has been one of the key growth drivers for Asia's fourth-largest economy. The top three shipyards in the country - Hyundai Heavy Industries Co (HHI), Samsung Heavy Industries Co. (SHI) and Daewoo Shipbuilding & Marine Engineering Co.

Internet Can Help Shipping Companies Cut Costs, Say IT Firms

Shipping companies, criticized for being slow to modernize, are being targeted by information technology (IT) companies who see the Internet as a way for shipping companies to cut the annual cost of handling containers, by eliminating the inefficiency of return trips with empty containers. SynchronNet Marine Inc. has set up a database to allow shipping companies to share information, making it easier to fill containers.

Kawasaki, Mitsui To Cooperate On Shipbuilding

Kawasaki Heavy Industries Ltd. and Mitsui Engineering & Shipbuilding Co Ltd. apparently have agreed to cooperate widely in shipbuilding to enhance their competitiveness against South Korean shipyards. The two major Japanese shipbuilders will tie up on design, material procurement and production, they said in a statement. The companies will create a system to jointly utilize advanced technologies and their work forces, they said. They aim to strengthen competitiveness by cutting costs and improving efficiency.

Maersk Line Welcomes Box Shipping Consolidation

Maersk Line says its alliance with MSC unaffected by Asia-focused vessel sharing deal by other rivals Maersk Line says welcomes consolidation in container industry and will help cut costs.   By Reuters London newsroom, Jonathan Saul

Sevan Marine Divests Stake in KANFA Aragon

Sevan Marine ASA said it has disposed 50 percent of its stake in KANFA Aragon AS to Sembcorp Marine Ltd. for cash consideration of NOK 20 million, representing a step in the company’s efforts to cut costs and complexity while increasing its focus on its core cylindrical hull technology.   The transaction was completed and funds were received June 28, 2016, Sevan Marine said.   The sale will generate a one-time financial gain of approximately $1 million in the Sevan Marine Group in Q2 2016.  

Nippon Steel May Transport Iron on Valemax Ships

5-Vale Beijing VLOC being loaded in Brazil. (Photo - Vale do Rio Doce)

Nippon Steel & Sumitomo Metal Corp, Japan's biggest steelmaker, may start talks on a contract to transport iron ore from Brazilian miner Vale on Valemax ships, the world's biggest bulk carriers, to cut costs, a senior official said. Such a contract would be a boost for Vale, which is trying to increase use of the ships after China in 2012 prevented the world's biggest iron ore miner from docking the giant vessels in its ports to protect its own shipping companies. The 400,000 deadweight tonne (dwt) vessels could cut Nippon Steel's shipping costs by at least $400,000 on each cargo.

HMM Looks for Profit in Q1

Photo: HYUNDAI Merchant Marine CO.,LTD

Hyundai Merchant Marine Co. (HMM) expects its profitability to improve slightly in the first quarter of next year on the back of an improvement in freight rates and its cost-cutting measures, reports Yonhap, quoting its chief executive Yoo Chang-keun. Yoo said the shipping firm will seek to replace outdated ships. "We are planning to place orders for five container ships and three or five oil tankers," he said. HMM returned to the black in the third quarter of the year from a year earlier largely thanks to cost-cutting efforts and asset sales.

US Navy Touts Energy Plan, Congress Seeks Cuts

Speaking at awards ceremonies recently at the United States Naval Memorial in Washington, D.C., senior officers and civilian officials said new energy initiatives will reduce defense spending without sacrificing capabilities. “Taking the long view is really important,” said Monica Medina, a special assistant to Defense Secretary Leon Panetta responsible for energy and environmental matters. Cutting costs and increasing efficiencies through environmental and energy programs is a priority in the secretary’s office and for the Navy, she said. Her comments came after Senate and House committees voted in May against the Navy’s biofuel plans.

Falling Oil Tanker Rates Pose Growing Safety Concern

Despite high crude oil prices, oil tankers are facing trying times, as rates around the world continue to fall, according to Bloomberg. While concerns about supply have pushed up the price of crude oil, actual demand remains relatively low with many economies around the world slowing. This has combined with an overabundance of tanker ships to push down oil tanker rates, placing increasing pressure on many in the industry to cut costs. It’s a large concern, according to industry experts, who fear that shipowners will feel the need to reduce costs on vessels. One of the ways to reduce costs on vessels is by cutting crews and also maintenance. Through March, 15 crew members were killed in four separate oil tanker fires, highlighting the seriousness of the problem.

Vale Financials Disappoint; Iron Ore Prices, Currency Cited

Brazil's Vale posted a surprise loss of $1.44 billion on Thursday, hurt by a fall in the price of iron ore, higher production costs and a weakening Brazilian currency. Analysts said the results were disappointing and suggested Vale might find it harder than expected to fund expansion projects over the next two years and its dividend could be cut. The performance will be taken as an ominous sign by some as Vale competes with Australian rivals Rio Tinto and BHP Billiton to increase production and cut costs in the face of an iron ore price near five-year-lows. The world's largest producer of iron ore mined a record amount of the steel-making ingredient during the quarter, but Vale's slight rise in production was not enough to offset the plunge in price.

Offshore Wind Industry May Generate $57 Billion for U.K. by 2050: Report

Offshore Wind Industry May Generate $57 Billion for U.K. by 2050: Report The British government estimated that the offshore wind industry may contribute more than $57 billion to the economy by 2050, if the cost of the technology is cut quickly enough, according to a report by Bloomberg. The industry must cut costs 25 percent by 2020 and pare the estimated 3.1 million pounds per megawatt needed to pay for wind turbines installed offshore, according to a report published by the Department of Energy and Climate Change in London today. The U.K. plans to install 18 gigawatts of turbines at sea by 2020, up from about 2 gigawatts now. It’s aiming to obtain up to 15 percent of its energy from renewable sources and to replace aging power plants.  

P&O Cruises Looks To Boost Yield

P&O Princess Cruises, the world's third largest cruise operator, said lower holiday prices would cut revenue yields this year, but added it still hoped to boost earnings by cost cuts and lower tax rates. P&O Princess reported a slight fall in second quarter pre-tax profits to $93.8 million from $95.2 million a year ago, but earnings per share rose seven percent to 12.9 cents. Lower prices led to the fall in pre-tax profits, and P&O Princess Cruises added in a statement that pricing remained "competitive" in its key North American market, which counts for 75 percent of group turnover. The company added it expected overall like-for-like net revenue yields -- a measure of how much money the company makes per passenger -- to fall three percent during the year.

Yangzijiang Shipbuilding to Slash 2,000 More Jobs

Chinese shipbuilder Yangzijiang Shipbuilding Holdings Ltd said it plans to cut 2,000 additional jobs, just under 10 percent of its current workforce, stepping up efforts to cut costs as new vessel orders slide amid a volatile global economy. The Singapore-listed firm, which says it is one of the largest private shipbuilding companies in China, has already cut about 4,000 jobs this year, a spokesperson said late on Thursday, bringing its current workforce to 22,000. Earlier this month, it said revenue was nearly halved in the second quarter as it soaked up a broad industry downturn. The company, which has four shipyards in China's Jiangsu province…

MSC Consolidates HQ in Norfolk

(Photo: MSC)

Military Sealift Command (MSC) received approval Oct. 30 to officially begin geographically consolidating at Naval Station (NS) Norfolk, Virginia, a single headquarters that since 2012 has been physically split between the Washington Navy Yard, D.C., and NS Norfolk. The consolidation is scheduled to be complete by the end of Fiscal Year 2019. Consolidating MSC headquarters staff in Norfolk helps streamline processes, maximize customer service with our Navy, and cut costs associated with maintaining two geographic headquarters' locations. Additionally, it collocates MSC with the other U.S.

Bergesen To Replace Staff, Cut Costs

Norwegian shipping company Bergesen plans to replace around 600 European staff members by the end of 2002 to create cost savings worth about $22.4 million a year, company officials said. Bergesen Managing Director Svein Erik Amundsen said despite recent efforts by Norwegian politicians to encourage recruitment to the shipping industry, the company was struggling to find qualified Norwegian seafarers. He said the company was in talks with unions to arrange wage packages to employees who would be forced to quit. Union officials said Bergesen workers had not yet accepted the company's proposal. They said the union had offered its members legal assistance in an effort to fight for improved wage packages. About 3,800 seafarers currently work onboard Bergesen vessels.

Mitsui To Post Special Loss of $126M

Mitsui Engineering & Shipbuilding Co. Ltd. will post a special loss of $126 million in the first half of 1999-2000 due to restructuring costs. At the same time, the company said it would also post a $26 million extraordinary profit in the half year to Sept. 30 on sales of part of its real-estate holdings and security of properties of a former warehouse in Osaka. Company officials said last month that it and Kawasaki Heavy Industries Ltd. have agreed to cooperate widely in shipbuilding to enhance their competitiveness against South Korean shipyards. The two major Japanese shipbuilders will tie up on design, material procurement and production in the aim of strengthening competitiveness by cutting costs and improving efficiency.

Freight Rate Hikes Benefit South Korean Shipping Firms

South Korea’s major shipping companies benefited in 1999 from freight rate hikes and lower foreign debt service costs resulting from the won’s surge against the dollar, analysts said. However, they said, expectations of rising shipping capacity following more deliveries of new ships would weigh down the growth of revenues for shipping firms this year. Container shipping rates rose about six percent on average last year, which is in line with the country’s recovering exports, one analyst said. The won’s rise against the dollar helped cut costs of dollar-denominated debts of the country’s shipping companies, about 90 percent of whose debts are from overseas. The won/dollar rate fell to an average of 1,190 won in 1999 from about 1,400 in 1998.

Hapag-Lloyd Operating Profit Down on Lower Freight Rates

Containership loading: Photo Hapag-Lloyd

Germany's Hapag-Lloyd's said it expected operating profit to drop considerably this year after tough competition in container shipping dragged freight rates lower in the second quarter. The company, partly owned by TUI AG, posted a second-quarter operating loss of 73.7 million euros ($98.5 million), compared with an operating profit of 13.5 million euros a year earlier. "The fact that we ended up with this unsatisfactory result despite clear efforts to cut costs is down to the disappointing development of freight rates across all trades…

ExxonMobil Sees PNG LNG Producing at 16 pct Above Nameplate

Photo:  PNG LNG

ExxonMobil expects to deliver 7.9 million tonnes of liquefied natural gas from Papua New Guinea this year, around 14 percent above nameplate capacity of its PNG LNG plant,  says a report in Reuter's quoting the company's PNG head. The PNG LNG plant, operated by its biggest owner ExxonMobil, can produce at more than 8 million tonnes a year or 16 percent above original design specifications, ExxonMobil's PNG managing director Andrew Barry said at a conference in Sydney. "The benefits…

Statoil Goes Ahead with Arctic Field after Halving Costs

Photo: Statoil

Norwegian oil major Statoil plans to develop its Arctic Johan Castberg oilfield after having cut costs by half, with a decision on investments in 2017, its chief executive said on Tuesday. Worried by high costs of operating in the remote Arctic Barents Sea, the Norwegian oil major last year delayed a final investment decision for Castberg, one of the world's northernmost oil finds. "The investment estimate is almost halved from around 100 billion crowns ($11.29 billion) to between 50 and 60 billion crowns," Chief Executive Eldar Saetre told an industry conference on Tuesday.

Samsung Heavy Venturing Overseas

SHI is ready to invest around $950 million in the overseas shipbuilding facility by 2017, according to SHI’s Chief Financial Officer Chun Tae Heung. Tankers, bulk ships and smaller container vessels might in the future be built in Malaysia, Indonesia or Vietnam, Chun said. SHI is trying to move the production of lower-margin vessels abroad in an effort to cut costs, while reserving domestic operations for building oil-exploration products and larger ships. The shift of attention towards overseas options is in line with the latest merger within the Samsung Group which was carried out to enable SHI to compete successfully with its European rivals Saipem SpA (SPM) and Technip SA. (TEC). ”We believe there will be demand for offshore oil and gas projects in the long term.

Tanker Groups To Pool Vessel Marketing

Two major clean oil product tanker operators will reportedly form a vessel pool to market each other's ships on opposite sides of the world. Japan's NYK Line and International Product Tankers Ltd. (IPC), a joint venture company formed by OMI Corp. and Osprey Maritime Ltd., said the agreement would cut costs and improve services. Under the agreement, IPC will market NYK's fleet of product tankers to European and U.S. customers when positioned in European or Atlantic waters. NYK will market IPC's fleet of product tankers to customers in Japan and South Korea.

Maritime Reporter Magazine Cover Dec 2017 - The Great Ships of 2017

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Subscribe
Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News