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GSF: Maersk Urged to Reconsider New Fuel Surcharge Plan

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…As Moody’s Reviews NYK for Rating Downgrade***

Danish shipping company needs to reconsider its plan to introduce new fuel surcharge arrangements from January 1, 2019, the Global Shippers Forum (GSF) believes.

Earlier this month, Maersk Line said it will change fuel adjustment surcharge to recover presumed costs from the introduction of low-sulphur marine fuel from January 1, 2020.

The new charges, which are additional to agreed contract rates, are based on two factors – an average cost of fuel and a ‘trade factor’ that upscales the costs on head trades and discounts the fuel cost on reverse trades. But because the charge is per box, the greater number of revenue-earning boxes sailing west will collectively pay far more than they need to in order to compensate for the same boxes returning east when empty, according to GSF.

As explained, this has the effect of applying higher than average surcharges on the company’s most profitable routes. For example, the Far East to North Europe route has a trade factor of 1.3, but North Europe to Far East of 0.7.

In addition, the new measure comes twelve months before the rules related to the use of surcharges actually come in. What is more, the new charging structure would apply to all variations of fuel price.

“Asking customers to contribute to new environmental costs is to be expected, but this charge lacks transparency; no data is available to let customers work out how the charge has been calculated. Given historical experiences with surcharges, shippers are naturally suspicious over something shipping lines say is ‘fair, transparent and clear’. GSF will be taking this piece of financial engineering apart piece by piece as we suspect this has more to do with rate restoration than environmental conservation,” James Hookham, GSF Secretary General, said.

“Maersk has other options. Global rules allow lines to meet air quality standards by fitting ‘scrubbers’ to clean up exhaust emissions, rather than buying more expensive low-sulphur fuel. This requires a one-off capital expense, but for shippers this is a better option than paying sulphur surcharges indefinitely. Some of Maersk’s biggest competitors are taking this different approach, and customers will be looking at the options and voting with their wallets,” Hookham continued.

He also reflected on the lack of negotiation about the timing and the structure of the charge.

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“We suspect that other shipping lines will be tempted to follow suit, but it would surely be of concern to competition authorities around the world if the same formula were to be used by other shipping lines, especially in the same alliance,” Hookham further said.

In the meantime, the Baa3 issuer rating of Japan’s shipping major Nippon Yusen Kabushiki Kaisha (NYK) has been placed on review for downgrade, according to Moody’s rating agency.

“We expect NYK’s leverage will likely stay at its high level of above 7.0x for the next several years and surpass our downgrade trigger of 6.5x,” Motoki Yanase, a Vice President and Senior Credit Officer, said.

Moody’s explained this debt/EBITDA leverage metric does not appear likely to improve materially without substantial efforts to reduce debt. Without debt reduction, the ratings agency forecasts NYK’s retained cash flow/net debt will stay around 10% compared to 11.9% during fiscal 2017 ended on March 31, 2018.

Additionally, the merger of the containership businesses of NYK, Mitsui O.S.K. Lines, and Kawasaki Kisen Kaisha, which started operation in April 2018, is expected to realize some cost savings and margin improvements for the new entity, Ocean Network Express (ONE).

“With the inception of ONE, NYK has deconsolidated its containership business. The deconsolidation of this long unprofitable business will temper NYK’s earnings volatility, though it will take time to bear out its effect on its credit metrics.”

Moody’s expects that NYK, as the largest 38% shareholder of ONE, will remain exposed to the credit risks originating from the containership business. NYK expects that its revenue for the fiscal 2018, after the deconsolidation of the business, will decline by approximately 20%.

The rating agency said that the review will focus on NYK’s plan to manage future debt, including how this could be managed with asset sales and vessel turnover in the next several years; the progress of the integration of the containership business under the new company and associated cost savings; and how the company’s other businesses – such as air cargo and bulk shipping, including energy and car carriers – will trend and help support NYK’s future profits.

World Maritime News

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COWA Free Medical Outreach: Ogun I Command Treats Over 300 People, Distributes Drugs, Eye Glasses 

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COWA Free Medical Outreach: Ogun I Command Treats Over 300 People, Distributes Drugs, Eye Glasses 

…Says COWA gesture aligns with the First Lady’s Renewed Hope Agenda, advocating for empowerment of widows, protection of vulnerable families

The Customs Officers Wives Association COWA, Ogun 1 Command, Idiroko, has stressed the need to be prudent and cost-effective in the pursuit of good health, stressing that quality health begins with common sense, rather than money.

The COWA Chairperson for Ogun 1 Command, Mrs Fausat Ajoke Otunla, made the observation while amplifying the contextual message of the COWA President, Mrs Kemi Adeniyi, the wife of the Comptroller General of Customs, CGC, Dr Adewale Adeniyi MFR.

“You do not need to have up to N50,000 before you can eat something that builds your health, you may just start with fresh vegetables, followed by drinking plenty of water”, she counselled, at the two-day impactful health outreach held at the Command’s headquarters, and declared open by the Customs Area Controller, CAC, Gbenga Otunla.

She thanked the COWA President for the sincere and dedicated pursuit of her programme of focused support and promotion of family ideals of Customs personnel and their families, noting that it is a testament to COWA’s humanitarian spirit.

She was also thankful for the unwavering support her husband has given to her as COWA Chairperson.

Mrs Otunla, who represented the National President of COWA, Mrs Kikelomo Adeniyi, enjoined COWA members to holistically take care of themselves and their families.

She said, “You don’t need 50,000 to make a healthy pot of soup. Taking fresh vegetables and drinking clean water will go a long way”, Mrs Otunla counselled, calling attention to the association’s goals on sustainability, empowerment, and welfare of women and children. 

This, accordingly, aligns with the First Lady’s Renewed Hope Agenda, which advocates for the empowerment of widows, protection of vulnerable families, and care for children.

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“COWA remains committed to improving the health and welfare of not only Customs families but also those in our surrounding communities,” Mrs Otunla further highlighted.

A Correspondent of  Maritime First observed that the the two-day event provided scores of beneficiaries, not fewer than 300 people, cutting across Customs personnel and their families; families of sisterly organisations and members of the community with totally free medical checks, particularly blood pressure, hepatitis screening, eye screening, blood sugar screening, and obesity; as well as other free medical consultations and drugs and eyeglasses distribution, under the watchful, professional eyes of Dr Zakariyah Abdulmalik of the Ogun 1 Custom Command, alongside other skilled medical personnel.

Speaking on the occasion before officially declaring it open, the CAC Comptroller Godwin Otunla charged everyone to make the best of the free medical services for their health.

 The Customs Area Controller commended the initiative, describing it as a key part of the association’s Corporate Social Responsibility (CSR) and an extension of the CGC’s Customs people-oriented policies. 

He particularly praised the policy thrust of the Comptroller-General of Customs, Bashiru Adewale Adeniyi, MFR, Ph.D, saying it consistently prioritises community engagement and welfare

One of the non-Customs security agencies and a few members of the communities who spoke at the occasion expressed satisfaction with both the medical checks and subsequent drugs distributed, saying it was truly timely and noteworthy.

The  Onita of Ita Ege, which is under the Ipokia Local Government, Oba Matthew Ademola Adesoye, specifically lauded the Nigeria Customs for the noble gesture, and prayed for the good health of both the wife of the CGC, Mrs Kemi Adeniyi, and the chapter chairperson, Fausat   Ajoke Otunla.

Speaking in the same vein, Dr Zakaria, while pointing out that “health is wealth”, emphasised the importance of medical checkups, stressing that when diseases are identified early enough, through medical checkups such as being provided by the COWA, as represented by Otunla and his wife, the probability of predicting a positive outcome becomes very high.

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She posited that health is not merely the absence of disease but a state of complete physical, mental, and social well-being, stressing that preventive care genuinely helps in the timely detection of silent killers such as high blood pressure, diabetes, and high cholesterol before they can cause real damage.

Dr Zakariyya also indicated that the 20-member medical team included two doctors, one pharmacist, four nurses, four medical records officers, two pharmaceutical technicians, three opticians, and four laboratory technicians.

 In a statement later issued by the Public Relations Officer for the Ogun I Command, Deputy Superintendent of Customs Chado Zakari, the outreach was described as COWA’s affirmation of an unwavering commitment to health and safety promotion within its host communities.

“The association is passionate about the well-being of people in the communities where we operate. In line with the CGC’s vision of cooperation, this initiative reinforces our belief that ‘Customs cares.

“The association is passionate about the well-being of people in the communities where we operate. In line with the CGC’s vision of cooperation, this initiative reinforces our belief that ‘Customs cares,’” the statement further said.

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Customs intercepts 60,000 litres of diverted petrol in Katsina

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Customs Intercepts 60,000 Litres Of Diverted Petrol In Katsina

…NIS intensifies border patrol, monitoring in C’River over Illegal migration

The Nigeria Customs Service (NCS) said, on Friday, it intercepted a tanker loaded with 60,000 litres of petrol, suspected to be diverted to the border area in the state.

The tanker, suspected to be enroute to the border area for smuggling, was intercepted on the Jibia Road on Sept. 30 by the NCS’s special task force, ‘Operation Whirlwind’.

The National Coordinator of the task force, ACG Kola Oladeji, disclosed this while handing over the tanker to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Katsina.

Oladeji was represented by the Commander Kano/Jigawa and Katsina axis, AC Sa’ad Isah-Yahaya.

According to him, the success was recorded in a decisive move to curb the smuggling of petroleum products and enforce national energy regulations in the country.

“The interception, which took place during a coordinated patrol operation on Jibia Road, was part of the service’s ongoing efforts to combat the illicit diversion of petroleum products and protect Nigeria’s economic interest.”

“The tanker, suspected to be enroute to a border area for possible smuggling, was apprehended based on the grounds of a fake manifest and improper documentation,” he said.

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Oladeji reaffirmed the NCS’s commitment to upholding the government’s directives against fuel smuggling and ensuring that all petroleum products meant for domestic consumption remained in the country.

“This handover underscores our determination to support national energy security and collaborate effectively with sister agencies like the NMDPRA.”

“Together, we’re sending a strong message that economic sabotage through fuel diversion will not be tolerated,” he said.

He affirmed the commitment of the task force to the fight against smuggling, economic sabotage, and all acts capable of undermining the nation’s energy distribution framework.

Receiving the tanker, the NMDPRA Coordinator in the state, Mr Mohammed Omar, commended the NCS for its vigilance and inter-agency cooperation.

He emphasised the importance of synergy in sanitising the sector and appreciated the proactive role of the Customs in intercepting illegal movements of petroleum products.

“NMDPRA remains committed to ensuring proper monitoring, accountability, and compliance within the sector,” he said. 

In another development, the Nigeria Immigration Service (NIS) in Cross River says it has started regular patrol and monitoring of border areas to tackle illegal and irregular migrations.

The Deputy Comptroller, NIS command in Cross River,  Ibiama Oshiokamel, made the disclosure at a public sensitisation programme in Calabar on Friday.

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The sensitisation programme, which is being held simultaneously nationwide, has the theme: “Say No to Migrant Smuggling: If you must, Migrate Orderly, Safely and Regularly”

Oshiokamel said that the immigration service would deploy both kinetic and non-kinetic approaches to address the challenges of illegal and irregular migration.

She also said that the service would continue to hold sensitisation programmes to create awareness on the inherent dangers of illegal migration.

“The dangers in illegal and irregular migration far outweigh what people see as the benefits. So there is a need for everyone to rise against this menace,” she said.

“We are not preaching against travelling, we are saying that those travelling should follow the rules by obtaining the right documents through the regular channels,” she said.

Also speaking, Bissong Bestman, a Deputy Superintendent of Immigration, said that the sensitisation programme was in the interest of the public.

Bestman said that people who got involved in illegal migration had most times fallen prey to financial scams, sexual exploitation and human trafficking.

The NIS official urged members of the public to follow laid-down rules while planning to travel out of the country in their own interests.

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Nigeria, Denmark Strengthen Maritime Partnership

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Nigeria, Denmark Strengthen Maritime Partnership

As Navy Chief targets training reforms to boost maritime operations

The Government of Denmark has pledged its continued support for Nigeria’s maritime sector development while seeking to explore new areas of economic partnerships.

The Danish Ambassador to Nigeria, Mr Jens Jansen, pledged support during his visit to the Nigerian Maritime Administration and Safety Agency(NIMASA) Head Office in Lagos, according to a statement by Mr Edwin Osagie, Deputy Director of the agency’s Public Relations unit.

Jansen emphasised the relationship between both countries, which spans decades, and has seen the Danish government and Danish private companies invest in the Nigerian maritime industry.

He said that Denmark was willing to explore new areas of collaboration with Nigeria, especially in the area of training of seafarers, maritime security support, among others.

R-L: Deputy Head , Commercial & Trade Advisory, Consulate of Denmark in Nigeria, Sara Ibru; Executive Director , Finance and Administration, Nigerian Maritime Administration and Safety Agency, NIMASA, Chudi Offodile; Danish Ambassador to Nigeria, H.E. Mr. Jens Ole Bach Jansen; Director General, NIMASA, Dr Dayo Mobereola; Counsel General, Consulate of Denmark in Nigeria , Jette Bjerrom; Executive Director Operations, NIMASA, Engr. Fatai Adeyemi and Executive Director, Maritime Labour and Cabotage Services, NIMASA, Jibril Abba during a visit by the Danish Ambassador to the NIMASA headquarters in Lagos

Jansen said that Denmark would also support training initiatives, such as the Ship-in-a-Box (SIAB) simulator project with the UNODC, to enhance the skills of Nigerian maritime law enforcement personnel in areas like Visit, Board, Search, and Seizure (VBSS) operations.

The NIMASA Director-General, Dr Dayo Mobereola, while welcoming Jansen and other Danish officials to his office, expressed appreciation for Denmark’s continued engagement with Nigeria on maritime development.

“I would like to use this opportunity, on behalf of the Federal Ministry of Marine and Blue Economy and the Nigerian Government, to thank the Danish Government for its long-standing support for the maritime sector.”

“This (support)has seen Danish companies successfully invest in various areas of the sector, and we are confident that this relationship can only grow.”

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Director General, Nigerian Maritime Administration and Safety Agency, NIMASA, Dr. Dayo Mobereola (left) and the Danish Ambassador to Nigeria, H.E. Mr. Jens Ole Bach Jansen during a courtesy visit by the Danish Ambassador to the NIMASA headquarters in Lagos

“The key areas of cooperation between both countries have focused on training and professional development for maritime security, as well as joint efforts to improve Nigeria’s maritime sector’s digital infrastructure,” Mobereola said.

He also acknowledged that Danish companies, like APM Terminals, had also made significant investments in Nigeria’s port infrastructure in Lagos, Onne and Kano.

In another development, the Nigerian Navy has pledged to strengthen the training of its personnel to ensure improved performance in both sea and land operations across the country.

Rear Adm. Ebiobowei Zipele, the new Flag Officer Commanding (FOC) the Naval Training Command (NAVTRAC), made this known on Friday during a handover and takeover ceremony held in Ebubu-Eleme, Rivers.

Zipele succeeded Rear Adm. Robert Obeya following a recent posting exercise that saw the redeployment of 65 senior officers.

Zipele stated that the Chief of Naval Staff (CNS), Vice Adm. Idi Abbas, had reiterated his commitment to professionalism, discipline, and operational excellence within the Navy.

“This can only be achieved through effective training and retraining of personnel,” he said.

The FOC added that beyond training, his administration would work closely with the Naval Headquarters to enhance training standards and operational efficiency across all Nigerian Navy training institutions.

“President Bola Tinubu deemed it necessary to appoint new service chiefs to restructure the nation’s security architecture.

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“In line with this mandate of the CNS, one of our key goals is to review and improve our training systems to address contemporary security challenges.

“The CNS is deeply passionate about personnel training because it is essential to achieving operational efficiency in addressing the current security issues facing our nation,” he explained.

Zipele emphasised that every sailor had a crucial role to play in building on the Navy’s existing successes in combating oil theft, sea robbery and piracy, among other maritime crimes.

He noted that NAVTRAC was responsible for overseeing the training of personnel across its professional institutions to prepare them for emerging security threats.

According to him, the Navy’s training programmes will be enhanced through the integration of modern technologies to ensure greater effectiveness.

“The only way to confront security challenges facing our nation is through intensive and continuous training across all formations and units.

“As I assume command of NAVTRAC, I am confident that with the support of the CNS and personnel, we will elevate the standard of training in the Nigerian Navy to greater heights,” Zipele affirmed.

In his remarks, the outgoing FOC, Obeya, said that the command achieved significant progress despite some challenges encountered during his tenure.

He commended the officers, ratings and civilian staff for their cooperation and urged them to extend the same level of support to his successor.

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“During my command, we prioritised the use of technology, certification, and the accreditation of Nigerian Navy professional courses.

“We developed strategies to revitalise naval training in line with the new platform acquisitions, ensuring that our graduates can compete favourably with their counterparts across the world,’’ Obeya said.

He added that the command had addressed statutory training requirements and conducted a curriculum review to align with current security realties.

He, however, noted a shortage of the skilled manpower required to effectively deliver training in naval institutions.

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