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US-Built Fleet Much Older than Global Fleet due to Jones Act

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  • Diana Secures Loan for Panamax Pair

The US-built fleet is considerably older than the global, non-US built fleet as a consequence of the Jones Act, which requires vessels travelling between US ports to be US built, owned, flagged and operated by a 75-percent American crew.

The current US-built fleet has an average age of 33-years old versus 13-years old for the global fleet. The most recent ships produced by US shipyards have been tankers, and the average age of US-built tankers is only five years older than the global fleet, according to the information provided by the VesselsValue.

“There has been virtually no US investment in bulkers (although many work on the relatively benign Great Lakes). Nonetheless, the US-built bulker fleet has an average age of 46-years old, versus nine-years for the fleet. Even a relatively modern ship type, such as containers, are on average 32-years old, positively ancient compared to an average of 11-years old for non-US built vessels,”  says Craig Jallal, VV’s Senior Data Editor.

According to VesselsValue, there are currently 160 US-built bulkers, tankers and gas carrier vessels on order or on the water.

The total capacity of the US fleet is just over 7m DWT, with a total current value of USD 4.5bn. Globally, the USA is ranked in 11th place by capacity and a sixth place behind the South Korea, Japan, China, the Philippines, Germany and Turkey in terms of the current value of the US-built fleet.

Based on the volume of ships on the water, the most prolific ship builder has been NASSCO, the commercial and naval building subsidiary of General Dynamics Corp. This is the only deep-sea shipbuilding facility on the US West Coast in San Diego, with two other shipyards on the East Coast at Mayport and Norfolk. VesselsValue currently values the surviving output of NASSCO at around USD 900m.

The NASSCO shipyard has just launched the 53,700 DWT MR2 tanker Independence, which will be joined by two MR2 tankers on order at NASSCO for the Seabulk Tankers. The shipyard also has four MR2 tankers on orderbook for the account of American Petroleum Tankers.

The only other US shipyard with bulker, tanker and gas carrier vessels on its orderbook is Philly Shipyard which mainly builds product tankers, but has also built four containerships. The Philly Shipyard built fleet is currently valued at just over USD 1bn. Its orderbook consists of eight 50,000 DWT MR tankers and this design has been approved by ABS for LNG fueling.

In the meantime, Greek dry bulk ship owner Diana Shipping has obtained a term loan of up to USD 25.7 million to finance the acquisition cost of two out of three Panamax vessels bought earlier this year, the MV Infinity 9 and MV Sunshine.

The term sheet has been signed with ABN AMRO Bank N.V.

In February, the company signed three memoranda of agreement to acquire the abovementioned dry bulk vessels for USD 39.8 million. However, Diana noted that the aggregate price was reduced to USD 39.2 through the signing of two addenda.

The Infinity 9 was delivered to the company on March 21, and Sunshine is expected to be delivered by the end of March 2016.

The Infinity is chartered to Glencore Grain B.V., Rotterdam at a gross rate of USD 7,825 per day for a period of up to minimum June 24, 2016, to maximum October 24, 2016. The employment is anticipated to generate approx. USD 0.74 million of gross revenue for the minimum scheduled period, as the company claims.

The company said it was now looking to finance the purchase of the third dry bulker Manzoni.

Diana Shipping’s fleet currently consists of 44 dry bulk vessels, including the newly delivered Infinity 9.

World Maritime News

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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