Hanjin-London-(5300-TEU-Class), image courtesy Hanjin

SEOUL (Dow Jones)–Hanjin Shipping Co. (117930.SE) will maintain a oil hedging ratio of 30% of bunker fuel purchases this year in order to be less vulnerable to fluctuations in fuel prices, a company official said Thursday.

In 2011, Hanjin hedged 20%-30% of its bunker-fuel consumption, much higher than the previous year’s 10% level, to minimize the impact of oil price volatility.

The recent surge in fuel prices could impact the company’s business, said Cha Dong-joon, head of business management at Hanjin Shipping. A change of $1 per barrel in West Texas Intermediate crude prices would add or cut an estimated $700,000-$1 million in the company’s monthly operating profit, Cha said.

Hanjin drew up its business plans for the year based on an exchange rate of KRW1,100 to the U.S. dollar, and $635 per ton of bunker oil, up from the previous year’s estimate of $625 a ton.

“Given that oil prices are soaring in the short term, Bunker-C oil is likely to average at $635-$700 a ton this year,” Cha said, adding that the company may have to revise its plans according to market conditions.

When Hanjin hedges its fuel requirements, it purchases fixed-priced physical cargoes and derivative instruments like swaps and options in bunker futures markets such as Singapore, Rotterdam, and Long Beach in the U.S., which sell bunker fuel at cheaper prices than spot markets.

Looking ahead, he said, “the second quarter will be the most difficult time of the year as competition with rivals will get tougher on oversupply of new vessels.” However, slow demand for shipping services and high oil prices can be expected throughout the year, said Cha, adding that the company will seek cost reductions and route reshuffling, particularly in the container business.

South Korea’s largest container carrier by sales swung to a net loss of KRW823.86 billion ($730 million) in 2011 from a net profit of KRW289.63 billion a year earlier, as oversupply drove down freight rates.

Hanjin earns 80% of its revenue from the container business and the remainder from bulk shipping.

-By Kyong-Ae Choi, Dow Jones Newswires

Photo © 2011 World Shipping Council

The World Shipping Council (WSC) added some new members to its Board of Directors at a membership meeting held in Seoul last week. WSC says its members have elected Mr. Wan Min, Managing Director of COSCO Container Lines and Dr. Ottmar Gast, Chairman of the Executive Board of Hamburg Süd to two year terms, and re-elected Mr. Philip Chow of Orient Overseas Container Line (OOCL), Mr. Morten Englestoft of Maersk Line and Mr. Ulrich Kranich of Hapag-Lloyd AG to the Board.

They join Mr. Thomas Crowley, Jr. of Crowley Maritime Corporation, Mr. Rafi Danieli of Zim Integrated Shipping Services,  Mr. Y.M. Kim of Hanjin Shipping, Mr. Kenji Mizushima of NYK Line and Mr. Ron Widdows of NOL on the WSC Board.

The WSC Membership also approved Mr. Widdows’ continuation as Chairman of the Board through September 2012, after he steps down from his current role as Group President and CEO of NOL later this year.

World Shipping Council members operate approximately 90 percent of the global liner ship capacity, collectively transporting about 60 percent of global seaborne trade, or more than US$ 4 trillion worth of goods annually.

The vessel, named “Hanjin Spain” was built at Samsung Heavy Industries.

According to Hanjin Shipping, “Hanjin Spain” will be deployed in Asia-Europe trade soon after the delivery.

Attending the naming ceremony, Won Woo Lee, Chief Executive of Container Business Unit at Hanjin Shipping, commented, “We are delighted with the delivery of this state-of-the-art mega vessel. It will be a valuable asset in elevating the competency of our customer service.”

The fifth and final vessel of the series is scheduled to be delivered during this year.

“Hanjin Spain” Specifications

Loadable Capacity: 9,954TEU
Dead Weight: 118,000 Tons
Engine Output: 93,000 Horse Power
Length: 349 Meters / Width: 45.6 Meters
Speed: 25.1 Knots (Approximately 50km/h)

With Hanjin Shipping’s tradition to name its ships after cities around the world, the company’s first tanker is named “Ras Tanura”, the major oil port of Saudi Arabia. “Hanjin Ras Tanura” is a Very Large Crude Carrier (VLCC) of 300,000 ton-class with a double-hull design based on Fuel Oil Tank Protection (FOTP). The ship is also equipped with a fuel-efficient and highly economic engine.

Attending the naming ceremony held at Hyundai Heavy Industries in Ulsan, Korea, Joo-sik YOON, Deputy President of Hanjin Shipping commented, “We are very pleased with the successful delivery of our first tanker. We will continue to expand our bulk business in order to optimize our business portfolio, which currently concentrates on container business.”

Meanwhile, Hanjin Shipping operates over 90 bulk vessels including approximately 40 owned ships.

“Hanjin Ras Tanura” Specifications

-Loadable Capacity: 309,988 Metric Tons
-Length: 333 Meters / Width: 60 Meters
-Speed: 16 Knots

-Photo courtesy Hanjin Shipping

Named Hanjin Hamburg and Hanjin New York, are the second and the third of the series of five 8,600TEU class ships received from Hyundai Samho Heavy Industries. These vessels are known to be equipped with a fuel-efficient and eco-friendly engine that can reduce fuel consumption and CO2 emission.

According to Hanjin Shipping, the vessels will be deployed in the carrier’s PSX (Pacific South Express) service soon after the delivery, at the end of January.

W.W. Lee, Deputy President and Chief Executive of Container Business Unit at Hanjin Shipping commented, “We are confident that the deployment of these large, state-of-the-art vessels will improve schedule reliability and enhance our customer service.” He added, “We are now in the process of establishing an optimum fleet portfolio by investing in various sizes of containerships ranging from 4,000TEU to 10,000TEU. We will certainly continue with these efforts to strengthen our presence as the world’s leading shipping carrier.”

The rest of the series are scheduled to be delivered during this year.

Series Specifications:

• Loadable Capacity: 8,586TEU
• Gross Tonnage: 91,600 Tons (Dead Weight)
• Engine Output: 93,300 Horse Power
• Length: 335 Meters / Width: 42.8 Meters
• Speed: 25.2 Knots (Approximately 50km/h)

[Photo: Hanjin Boston courtesy Hanjin Shipping]

After a brief hiatus we return to a popular gCaptain feature “Incident Photo Of The Week“. This weeks photo is the aftermath of a 2002 fire aboard the M/V Hanjin Pennsylvania. The reason for the damage? A container filled with fireworks! CargoLAw.com tells us;

Hanjin Pennsylvania fire “has gutted accommodation & engine room” At least 6 rows of containers on deck & under deck have been effected by the blaze, which is understood to have started in a container carrying fireworks & spread to engulf the area immediately forward of the superstructure. But as the ship continues to burn, and salvage crews are still hampered in their attempts to board the vessel to carry out firefighting operations, experts are already suggesting the likely cause of the explosion was not a container full of fireworks.

CLICK HERE for the dramatic photo of the actual explosion then visit the newly redesigned CargoLaw website for the details; Page 1, Page 2, Page 3

M/V Hanjin … Mid-Explosion;

Distant View;

For more information on this type of fire download the DNV’s presentation file HERE.

 Once the US National Transportation Safety Board has produced the transcripts of the voyage data recorder from the Cosco Busan (Formerly the Hanjin Cairo, the Hanjin name remains on the ship side) we’ll have a better idea of who said what to whom and when. Currently only the pilot’s version of events is available and it is raising a number of questions.

A malfunctioning radar appears to have been an element, though not the cause, of the incident and so far there has been no indication regarding the second radar on the ship’s bridge. Given that there was poor visibility, was the speed of the vessel excessive? Should departure have been delayed until the fog cleared.

The pilot was not familiar with the ECDIS equipment onboard, which does not appear to have malfunctioned. When the pilot asked the Captain to point out the centre of the bridge span the captain allegedly pointed to the bridge support and the pilot navigated accordingly.

With an apparently malfunctioning radar and a lack of familiarity with the primary method of navigation, did the pilot seek to confirm the vessels position with the VTS and/or the accompanying tug?

VTS informed the pilot that the ship was off course, which the Pilot disputed and shortly afterwards a lookout shouted a warning that there was a bridge support ahead and the vessel went hard right and allided with the Delta bridge support.

There also appears to have been a lack of detail in the master/pilot exchange when the latter took conduct of the vessel, as the pilot’s lawyer admits. Would the missing information have been enought to prevent the incident?

There may also have been communications problems between the American pilot and the bridge team who were Chinese. Of there were, to what extent did they reduce the pilot and the bridge team’s situational awareness?

It is not uncommon for pilots to ‘go it alone’ rather than work with a bridge team with whom communication is problematic. This increases the workload on the pilot and reduces his situational awareness. Had the pilot and the bridge team undergone bridge team/bridge resource management training?

Incidents such as this rarely have a single cause, or a single responsible individual. They are usually the result of systemic problems with Bridge Team Management, leadership, culture and navigational practices.

It will be a while before we know the full story of the Cosco Busan, but we’ll hit that bridge when we get to it.

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Bob Couttie has written for a number of maritime industry publications, including the prestigious Lloyd’s List International daily newspaper and Lloyd’s Ship Manager magazine. His reportage on problems with ship’s officer certification examinations in the Philippines in the late 1990s influenced the adoption of computerized examinations for ship officers by the country’s Professional Regulatory Commission.

Bob currently writes and produces podcasts for The Maritime Accident Casebook

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Our first stop in researching any maritime related topic is our own Maritime Industry CSE. It’s a powerful resource since it provides search results with the aid of google’s powerful search database and algarithims. Actually the only difference between it and google.com is the fact that our tool narrows the results down and only displays sites that pertain to large ships.

*Tip: Try the “incidents” refinement to narrow down the results even further.

The Maritime Incident Casebook

If you are looking for trusted information on incidents as they happen then MAC should be your first stop. Be sure to visit their podcast section as well as their links page which contains a list of the best maritime resources for incident prevention.

Searates.com Container Shipping References

For those looking for data that specifically pertains to Container Ships, head over to Searates’ Container Ship Reference Book. Not only is it full of Web 2.0 eye candy, it also has some great hard data.

*Tip: Its shipping lines section has links to both Cosco and Hanjin. By visiting Cosco’s site you will quickly learn they have removed their official “Cosco Busan” statement from Nov 11th.

gCaptain’s Maritime News Mash-up

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*Tip – Also take a look at our gCaptain News and Maritime Blog Mash-ups

The Council of American Master Mariners

For those looking for expert opinion from Ship Captain’s we hope you contact us… but your next stop should be CAMM. Contact them directly for contacts from the Maritime Expert Database.

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