A Comprehensive Study by McKinsey & Company, New York, The Worldwide Management Consulting Firm:
With our thanks to our Colleagues at Cargo Chartering who have compiled this Presentation:
A Report by Platts – S&P GLOBAL – Shipping:
Four bids are expected to be tabled this week for the 67 percent stake in Thessaloniki Port Authority.
The deadline of the tender – which has been going on since the summer of 2014 – is this Friday at 7 p.m. and the binding bids will be tabled at Morgan Stanley in London.
The offers will come from the consortium comprising Deutsche Invest Equity Partners, Terminal Link (a subsidiary of CMA CGM) and Russian-Greek investor Ivan Savvidis’s group, as well as from Dubai Ports World, Japan’s Mitsui & Co, and Philippines-based International Container Terminal Services.
The preferred bidder will have to implement investments of at least 180 million euros within seven years.
Talk of ties between any of the above candidates and the Cosco group, which has acquired Piraeus Port Authority, is refuted. Sources close to Cosco noted to Kathimerini that “the Chinese group is examining the form of its reaction to the discrimination that took place [at its expense] as in Piraeus Port only 51 percent was sold with another 16 percent due under certain conditions, while in Thessaloniki Port 67 percent is conceded with far fewer commitments.”
On Saturday 11 February 2017, the first crude oil vessel was loaded at GAZA Floating Storage, Offloading Marine Terminal (FSO) in Bouri Offshore Field, which was launched to replace Sloug Floating Storage Offloading (FSO) and to be included within the oil operations system of Mellitah Oil and Gas Company.
The floating Storage was manufactured by one of the specialized international companies in the Republic of Korea and it is considered one of the major projects that were carried out by Mellitah Oil and Gas to provide with a huge storage capacity of crude oil for Bouri Offshore Field, estimated at 1.5 million barrels of crude oil. GAZA Floating Storage, of 360 meters’ length and 60 meters’ breadth, reached Al Bouri Field at the end of May 2016, after a voyage from the shipyard in Jinhae in South Korea passing from the Indian Ocean to the Mediterranean Sea.
The works of the offshore installations of the pipes, marine cables and optical fibers were completed along with the production platforms at the Field by the end of 2016, and the processed crude oil was pumped at the main installation at the end of January 2017.
Short Presentation: GAZA Floating Storage PDF
A new terminal near completion in Latin America’s largest port in Santos, Brazil, is expected to add an extra 20 percent to its grains and sugar capacity, boosting shipping services just as the country produces bumper crops.
The 2.2 billion reais ($694 million) Tiplam terminal started operations at a new berth in January and will ramp-up loadings with a second berth at the end of March or early April for a total capacity of 5 million tonnes of grains and 4.5 million tonnes of sugar a year.
The timing could hardly be better as Brazil faces its largest ever crop of soybeans, sugar and corn amid problems with a key road to northern terminals that has forced companies to divert up to 700,000 tonnes of soybeans to southern ports.
Tiplam is managed by logistics operator VLI, a company owned by Brazilian miner Vale SA, Canada’s Brookfield Asset Management Inc, Japan’s Mitsui & Co Ltd and local investment fund FI-FGTS.
“The first new berth is already full and we expect the second one to be full as well very quickly,” Alessandro Gama, Tiplam’s general manager, told Reuters during a tour of the facilities.
Santos shipped around 26.8 million tonnes of soybeans, soybean meal and corn, and 18.4 million tonnes of sugar last year.
Brazil, the world’s largest soybean exporter, is expected to ship a record 59 million tonnes this season, plus 24 million tonnes of corn. The world’s No.1 sugar producer is projected to ship an all-time high of 27.8 million tonnes of the sweetener this year.
All grain and sugar arriving at Tiplam comes by rail, which is unusual in Brazil where more than 75 percent of cargo is transported by truck.
VLI built two transshipment points in Uberaba in Minas Gerais state for grains, and Guará in São Paulo state for sugar, where trucks discharge their cargos into wagons.
Global commodities traders such as Bunge Ltd, Cargill Inc, Louis Dreyfus and Archer Daniels Midland Co already operate terminals in Santos. But Gama is unconcerned by the competition.
“At first we thought our project would be used mainly by traders lacking a physical position in Santos. But surprisingly we are receiving orders from everybody,” he said, adding that large traders were using the new facility to boost their volumes beyond their own terminals.
March 14, 2017 (Reuters)
A small Turkish tanker has been seized by armed men in Zuwara and the eleven crew members taken prisoner.
The MV Haci Telli from the Turkish port of Tuzla is reported to have docked in Zuwara six days ago. The eight-year old, 2,800 tonne vessel was taken over and the crew arrested yesterday. One source said that the owners of the tanker owed $433,000 for past oil shipments.
Because of the limited and damaged capacity of Libya’s refineries, large quantities of refined petroleum product have to be imported. No exact figures are ever released.
If it is correct that the Haci Telli has been detained over an unpaid debt, then the vessel would appear to have picked up a cargo from Libya for sale somewhere else.
It is being suggested that the crew and the vessel have been arrested over a product smuggling deal that had gone wrong. The vessel’s next destination was shown on the FleetMon website as Malta.
A decision of the Court of Appeal in August 2016 has provided clarification on a question which has been troubling carriers and cargo interests alike – when assessing container demurrage claims, is there a cut-off date when the daily demurrage will stop accruing?
Between April and June 2011, MSC contracted with the shipper to carry 35 containers of raw cotton from Bandar Abbas and Jebel Ali to Chittagong in Bangladesh. The containers were owned by MSC and the bills of lading issued by MSC in respect of the cotton, contained a clause providing for 14 days free time at destination, after which the shipper would become liable for demurrage until the containers had been redelivered to MSC. The market price of raw cotton collapsed during the period in question and the receivers refused to take delivery of the cotton. Proceedings between the shipper and the receivers were pending in the High Court in Dhaka, Bangladesh. Meanwhile the containers remained at Chittagong port and the demurrage clock was ticking.
On 27 September 2011, the shipper sent a message to MSC confirming that they no longer had legal title to the cargo. On 2 February 2012, MSC, whilst maintaining that their claim for demurrage was still accruing, offered to sell the containers to the shipper.
In June 2013, MSC commenced an action against the shipper before the High Court in London, claiming a substantial amount of demurrage (USD 577,184 and accruing at a daily rate of USD 840). MSC asserted that the demurrage would continue to run until the containers were redelivered.
The shipper was placed in a difficult position and asserted that MSC’s right to claim demurrage must come to an end once the contracts of carriage had been repudiated, which the shipper asserted was on 27 September 2011 when they informed MSC they no longer had any legal title to the cargo. The shipper argued that either MSC had no legitimate interest in affirming the contracts thereafter and/or that, from that moment in time, MSC came under an obligation to mitigate their loss by purchasing replacement containers.
The trial Judge concluded that the demurrage provision in the MSC bill of lading (tariff schedule) was a genuine pre-estimation of damage and not a penalty clause, which the shipper had contended. The Judge also held that 27 September 2011 was the key date because this was when the shipper confirmed to MSC that it no longer had any title to the goods and would be unable to redeliver the containers within the foreseeable future. It was a repudiation of the contract. In conclusion, demurrage could be recovered from the end of the free period up to 27 September 2011 when the shipper repudiated the contract. It was also held that ordinary principles relating to mitigation of loss do not apply where the parties have agreed a daily rate for demurrage, which was in reality liquidated damages for the detention of the containers.
Court of Appeal
Is the shipper liable to pay demurrage at all?
The Court of Appeal held that a bill of lading claim for demurrage for containers is the same as a claim for liquidated damages under a charterparty for the detention of a carrying vessel beyond the laydays at the port of loading or discharge. Laydays are equivalent to the free time period afforded to cargo interests for container usage after discharge of the containers from the vessel. Therefore, once the free time period has come to an end, demurrage will start to accrue.
When did the commercial purpose of the venture come to an end?
The Court of Appeal then considered whether by 27 September 2011, the commercial purpose of the adventure had been frustrated. The Court concluded that a delay until 27 September 2011 (just 3 months after discharge of the containers) was not sufficient time to frustrate the commercial purpose of the venture. Instead, it held that 2 February 2012 (a further 4 months), when the carrier offered to sell the containers to the shipper to resolve the dispute, was the date at which the commercial purpose of the adventure had become frustrated. By that point, keeping the contract of carriage alive no longer served any legitimate commercial purpose.
The Court of Appeal recognised that a repudiatory breach of contract does not automatically discharge both parties from further performance of the contract: it is left to the innocent party to decide whether to treat the repudiatory breach as ending the contract. However, the Court noted that any proposition that demurrage charges can continue indefinitely until containers are redelivered does not take into account the commercial purpose of the adventure. For this reason, the Court of Appeal found that the option of affirming the contract after a repudiatory breach, no longer remained open to the carrier once the commercial purpose of the venture had been frustrated. Instead, from this point the carrier must accept the shipper’s failure to redeliver the containers as a repudiatory breach of contract, and seek damages for its loss from that point in time.
The Court held that MSC was able to recover demurrage for the detention of the containers up to 1 February 2012 and damages in respect of the loss of the containers calculated by reference to their value on 2 February 2012.
The crux of the Court of Appeal’s judgment is to place a limitation on a carrier’s right to recover container demurrage in this sort of case, namely up to, but not beyond the date on which the commercial purpose of the venture has been frustrated. After that point, the carrier can still claim damages, but will be subject to the normal obligation to mitigate loss.
The Court of Appeal rejected the application of the “no legitimate interest” doctrine on the facts of this case. The Court concluded that as at 2 February 2012, the commercial purpose of the venture had been frustrated and the carrier no longer had any legitimate commercial interest in keeping the contract alive. The carrier was, therefore, taken to have accepted the repudiation of the contract on that date. This arguably involves something of a departure from the traditional view that repudiation of the contract does not bring the contract to an end, unless the repudiation is accepted by the innocent party.
The Court of Appeal did, however, confirm the first instance Judge’s decision in principle, that the obligation to mitigate loss does not apply to a claim for demurrage because it is a claim for liquidated damages. The obligation to mitigate loss only applied as from 2 February 2012 when the Court decided that MSC should have mitigated their loss by purchasing replacement containers, the cost of replacement containers being the maximum additional loss recoverable by way of damages.
In conclusion, a carrier cannot simply claim demurrage indefinitely until its containers are redelivered, as MSC had argued. There will come a point at which the adventure is frustrated and the contract repudiated, and at this moment the right to claim demurrage will come to an end. The precise moment when a contract is repudiated is very fact specific, so caution should be exercised in every case.
Source: Clyde & Co, with our thanks