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How does the fast fall in oil prices impact the maritime industry? – FEBRUARY 2015

IHS Consultant Diana Illing reports from Germany

The fall in oil price has had several impacts on the shipping sector; to understand them one has to look at the nature of transportation. The demand for transportation occurs if goods are shipped around the world. This happens in a globalized world when goods are produced in one part of the world but mainly consumed in another. Transportation ensures the goods are shipped where they are consumed. In the current world, many consumer goods – shipped in containers – are consumed in Europe and the Americas with Asia being the workbench producing many of those goods. Indeed the largest trade routes of container ships are Asia-Europe route and the transpacific routes. When we look at economic indicators predicting economic activity in Europe and the Americas, the picture looks at least stable; this is supported by the low oil prices.

Europe
In the EU, economic recovery will be constrained by high unemployment and weak consumer confidence, but a positive stimulus from lower fuel prices will help to sustain gradual economic recovery. Overall EU GDP growth is forecasted to improve from 1.3% in 2014 to 1.7% in 2015, supported by the European Central Bank’s continued quantitative easing policies and the stimulus from very low oil prices and the markedly weaker Euro. The growth in North America seems to be stable, with an upwards direction – this is supported by all main indices. Lee el resto de esta entrada

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The Expense of New MARPOL Regulations

The Presidential Decree 979 and Marine Pollution Decree of 1976 were intended to protect marine and coastal elements from maritime pollution, yet due to their generality and datedness today, they are no longer efficient at regulating current environmental issues. For this reason, new MARPOL Annex VI legislation was introduced in 2005 and updated in 2010 to restrict further emissions in the emission control areas (ECAs).

With talks of further regulations being rolled out in 2015 and 2020, the maritime industry is facing the harsh reality that avoiding fuel costs by compromising quality is no longer acceptable. In fact, from January 1, 2015 ships travelling the ECAs are forbidden from burning any fuel with a sulphur content of more than 0.1%, which is a 10% decrease from current limits.

Such a harsh crackdown on emissions from the shipping industry is to be expected, with it being responsible for 3% of global greenhouse gas emissions and one ship constituting more sulphur dioxide (SO2) than 50m cars.* Yet the problem faced by many shipping companies is the increase in cost in order to be environmentally conscious.

The burning of distillate fuels as opposed to the Heavy Fuel Oil (HFO) used today has been proposed as an option for ships to cut down their emissions. However, this is believed to be priced over $300 per metric ton above what guilty shipping companies are paying at the moment.

The other alternative to burning distillate fuels is the use of scrubbers, or ECGs. These use technology using sea water to neutralize the sulphur oxides in the exhaust gases, so work as purifiers in a sense. This is a more affordable option compared to the distillate fuels as it allows the use of cheaper fuels whilst still abiding by the MARPOL regulations.

To ensure that ships are abiding by MARPOL legislation it is recommended that they invest in emission monitoring technology, at least when operating in ECAs. Developments in technology means that emission monitoring can now be operated electronically, therefore requiring no additional labor costs to run whilst still providing accurate and verifiable data collection and reporting. It is also possible to make real time amendments to the operating of the ship through fitted emissions monitoring technology which potentially allows the management team to save on fuel and therefore gas emissions.

So although the initial response to new MARPOL legislation is concern for the additional cost for companies working in the maritime industry, there are ways around such steep prices for distillate fuels. The use of scrubbers and emission monitoring technology is a far cheaper alternative, and is in fact recommended on all ships, regardless of whether they work in ECAs or not. Yet, they will soon be mandatory when the new regulations are implemented

*Peter Boyd, Chief Operating Officer Carbon War room, Sourced: theguardian.com/sustainable-business/2014/aug/01/sustainable-shipping-is-making-waves

Source: Procal

procal.com

PDMS Targets Maritime Industry with £1m Deal

Maritime software engineering specialists PDMS Ltd. have announced an agreement for its U.K. subsidiary, Professional Data Management Services (U.K.) Ltd., to acquire certain parts of the business and assets of Maxima Information Group Limited, a subsidiary company within the Castleton Technology group of companies. In a deal worth close to £1 million, the acquisition relates to the ERP, payroll software and ferry ticketing business.

PDMS has been developing ICT systems and solutions for the public and private sector for more than 21 years, during which they have established a strong maritime customer base, including the Bahamas Maritime Authority, the Isle of Man Steam Packet Company, The Maritime Authority of the Cayman Islands, the Isle of Man Ship Registry and CalMac Ferries Ltd.

The acquisition is welcome news for PDMS’ Maritime division, which focuses specifically on the maritime industry and boasts the development of their maritime product MARIS – a system already in use by three of the leading International Ship Registries.

PDMS’ Managing Director, Chris Gledhill commented, “We are delighted to welcome Maxima ABS’ staff and customers to PDMS. This timely acquisition is a further demonstration of our commitment, not only to the maritime technology industry, but to enhancing our expertise and our range of maritime services and solutions. We’re very much looking forward to integrating Maxima’s technology with our own, in particular their ticketing system, Compass.”

Maxima Director, Derek Rae added, “PDMS’ innovation and skills is a perfect match for our existing products and services, and the move presents a great opportunity to combine both our technical and market expertise for the benefit of our clients and future developments.”

The acquisition also sees PDMS add Shetland Ferries, Orkney Ferries and Pentland Ferries to their customer base, increasing their market share in the maritime ICT industry in Scotland and providing an even wider network of maritime contacts.

Bruce McGregor, Director of PDMS stated, “As a company we strive to become a complete technology partner for our clients and our continued investment in our maritime technologies reflects our ability to provide long term business solutions that deliver tangible benefits.”

pdms.com

New Data Safety Service for Inmarsat FleetBroadband

Supported by European Space Agency (ESA) funding, Inmarsat’s forthcoming Maritime Safety Data Service (MSDS) for FleetBroadband, delivers an increased data capability over the Inmarsat-4 network, including the Alphasat satellite, providing global coverage and the same reliability of over 99.9 per cent associated with the Inmarsat network.

Added Features

MSDS will continue to offer distress alerting, priority messaging and SafetyNET safety information broadcasts, but also deliver greater data capability than is currently available with Inmarsat C safety services.

Other additional features include:
*Content-rich applications
*Chart updates
*Ability to co-ordinate rescue operations by email as well as voice calls
*Telemedicine
*Distress chat – an instantaneous chatroom function between multiple vessels and maritime rescue coordination centres
*A new-style maritime safety terminal (MST) developed by Cobham SATCOM
*All data accessed over MSDS to be captured and stored at new servers.

Peter Blackhurst, Head of Maritime Safety Services at Inmarsat states, "Inmarsat has set the standard for maritime safety since its inception in 1979 and we remain the only satellite operator to gain International Maritime Organization (IMO) compliance with our legacy Inmarsat C and Fleet 77 safety services.

"The introduction of new data safety services over FleetBroadband has been one of our long term goals and the new system, together with Voice Distress, will ensure that we can continue to enhance safety communications and help save lives at sea not only for now but long into the future.

"We are currently working closely with the IMO to bring our new service to market with the aim of eventually gaining SOLAS approval for both FleetBroadband data and voice Global Maritime Distress and Safety System (GMDSS) services."

"The satellite business doesn’t stand still. Developments are going to continue to enhance capabilities month on month, let alone year on year, so we should expect further enriched safety services in the future," Peter added.

"Everything comes to its life’s end and while the Inmarsat C service is still very competent and it will continue well into the 2020s and beyond, despite being over 20 years old, we would ultimately like to see MSDS accepted as the natural successor to deliver SafetyNET."

The launch date for MSDS is subject to the IMO approval process for SOLAS ships but it is anticipated that non-SOLAS versions will be available well in advance, with a prototype expected in 2014 and a ready-to-market terminal planned for Q2 2015.

Please visit Inmarsat’s Maritime safety page for further information: http://www.inmarsat.com/service/maritime-safety/

IMB: Guard Against Threat of Cyber Attack

The International Maritime Bureau (IMB) is calling for vigilance in the maritime sector as it emerges that shipping and the supply chain is the ‘next playground for hackers’.

IMB said, "Recent events have shown that systems managing the movement of goods need to be strengthened against the threat of cyber-attacks.

"It is vital that lessons learnt from other industrial sectors are applied quickly to close down cyber vulnerabilities in shipping and the supply chain."

The threat of cyber-attacks on the sector have intensified in the past few months, with cyber security experts and the media alike warning of the dangers posed by criminals targeting carriers, ports, terminals and other transport operators.

They argue that while IT systems have become more sophisticated and thus enabling companies to better protect themselves against fraud and theft, it has also left them more vulnerable to ‘cyber criminals’.

Speaking at the TOC Container Supply Chain Europe Conference in London recently, TT Club’s insurance claims expert Mike Yarwood said, "We see incidents which at first appear to be a petty break-in at office facilities. The damage appears minimal – nothing is physically removed."

He added; "More thorough post incident investigations however reveal that the ‘thieves’ were actually installing spyware within the operator’s IT network.".

Yarwood said that more commonly targets are individuals’ personal devices where cyber security is less adequate.

Hackers often make use of social networks to target truck drivers and operational personnel who travel extensively to ascertain routing and overnight parking patterns. The criminals were looking to extract information such as release codes for containers from terminal facilities or passwords to discover delivery instructions.

"In instances discovered to date, there has been an apparent focus on specific individual containers in attempts to track the units through the supply chain to the destination port. Such systematic tracking is coupled with compromising the terminal’s IT systems to gain access to, or generate release codes for specific containers. Criminals are known to have targeted containers with illegal drugs in this way; however such methods also have greater scope in facilitating high value cargo thefts and human trafficking," Yarwood revealed.

Whilst it is difficult to get hold of exact numbers and statistics, the risks should not be underestimated, and in June the US Government Accountability Office warned about the possible threats to US ports.

In a stinging report, the organisation said that the actions taken by the Department of Homeland Security and two component agencies, the US Coast Guard and Federal Emergency Management Agency, as well as other federal agencies, to address cybersecurity in the maritime port environment have been limited.

KPMG warns that hackers are the new open sea pirates. Wil Rockall a director in the organisation’s cyber security team highlights that the cyber security of maritime control systems are controlled by engineers and not chief information security officers (CISOs) or chief information officers (CIOs). Lacking security controls, these systems are vulnerable to hackers.

"Most ports and terminals are managed by industrial control systems which have, until very recently, been left out of the CIO’s scope. Historically, this security has not been managed by company CISOs and maritime control systems are very similar.

"As a consequence, the improvements that many companies have made to their corporate cyber security to address the change in the threat landscape over the past three to five years have not been replicated in these environments. Instead engineers have often been left to implement and manage these systems – people who focus normally on optimising processes efficiency and safety, not cyber and security risks. It has meant that many companies and their clients are sailing into uncharted waters when they come to try and manage these risks," he said.

Rockall added; "We have found that one of the main blockers in improving this is a real translation problem when corporate IT security teams attempt to impose their standards on industrial control systems or maritime control systems. KPMG’s work with the operator of one of the largest fleets of crude oil and oil products tankers and liquefied natural gas carriers in the world, found that bridging that gap and coming up with pragmatic solutions to improve industrial control systems security without compromising process efficiency or safety, are vital to the success of industrial control systems cyber risk management."