Maersk Line has just released this time-lapse video of the Maersk Triple-E as a sequel to their first video of the vessel of the under construction at DSME in Okpo, South.

So we don’t know exactly how many pictures this time-lapse to stitch together, but the first one was 50,000 so we’re keeping in the ballpark.

WATCH: Building the World’s Largest Ship, PART ONE

This second video focuses on the Triple-E’s float out, which took place February 23. As Maersk Line notes on the Triple-E’s website, worldslargestship.com, it took four hours to fill the drydock with water, rushing in at a rate of 2,500 cubic meters of water per minute.

The first Triple-E, named M/V Mærsk Mc-Kinney Møller, is set for an on-time delivery June 28.

M/V Mærsk Mc-Kinney Møller being towed into the Bay.

SEE ALSO: Mærsk Mc-Kinney Møller Photo Tour

Image: AP Moller-Maersk

By Mette Fraende

COPENHAGEN, May 17 (Reuters) – A.P. Moller-Maersk , owner of the world’s biggest container shipping company, is “100 percent certain” it can more than double freight rates in July despite market weakness that has seen prices fall by a third since March.

Shipping has taken a hammering in the past five years, hit both by the broad weakness of the global economy and a boom in orders for huge new freighters put in by major players just as the 2008 financial crisis hit.

The Danish group, whose Maersk Line vessels make up around 15 percent of world container shipping capacity, however, said its container shipping unit swung back to a $204 million profit in the quarter from a $599 million loss a year earlier, beating forecasts.

While those results benefitted from briefly improved prices, Maersk and other major players are now desperate to raise the industry’s traditionally volatile rates, after a fall in the past two months that left most trading at a loss.

Chief Executive Nils Smedegaard Andersen said he had “no doubt” Maersk Line would be successful in its plans to hike rates to $1481 per twenty foot container from July 1 from $731 currently.

Those spot rates, however, are traditionally only a basis for negotiation with clients and he also admitted that the outlook for the industry was bleak. The company cut its forecast for a rise in demand in 2013 to 2-4 percent from 4-5 percent earlier.

“To be honest, we just have to get used to the fact that these are harder times, and that there will be harder times ahead,” Andersen said at a teleconference.

Market capacity is also expected to increase significantly later this year, not least when the first of Maersk’s 20 new mega vessels is delivered by Korea’s Daewoo Shipbuilding & Marine Engineering.

The slump of around 400 dollars in spot rates – a 36 percent fall – since March had fuelled speculation that Maersk, which traditionally offers a conservative financial outlook, could be cutting 2013 expectations.

“The fact that they keep their outlook unchanged at a time when Asia to Europe freight rates are at an absolute low, is an important signal (for the full year results),” said Sydbank analyst Jacob Pedersen.

WEAK OIL

The group’s first quarter net profit fell to $790 million, down about 30 percent from the same period a year earlier which included $899 million in settlement for an Algerian tax dispute.

The result was above an average forecast of $726 million in a Reuters poll of analysts.

The company reiterated its overall group outlook for the this year’s net profit to be below last year’s $4.0 billion, and the result for its container shipping unit, Maersk Line, to exceed last year’s $461 million.

The improvement at Maersk Line countered a 73 percent drop in net profit at Maersk Oil to $346 million, hit by a falling oil price and lower production but ahead of forecasts.

The group’s shares rose 0.7 percent on Friday versus a 0.4 percent fall in the Copenhagen stock exchange. (Additional reporting by Shida Chayesteh, Stine Jacobsen and Ole Mikkelsen; Editing by Patrick Graham)

(c) 2013 Thomson Reuters, Click For Restrictions

Maersk Line’s first Triple-E class containership, image Maersk Line

(Bloomberg) — Hyundai Heavy Industries Co. failed for eight years to win ship orders from China. That ended when it pledged to build the world’s biggest container carrier.

APM terminal in Tangier file photo. Image (c) APM Terminals

By Mike Cohen

(Bloomberg) — A.P. Moeller-Maersk A/S, owner of the world’s largest container line, aims to win more African port contracts after a group to which it belongs was selected to build and run a container terminal in Ivory Coast.

Maersk has operations in more than 40 African nations and generates about 10 percent of its sales in and around the continent. Besides its shipping business, the Copenhagen-based company has interests in nine ports in eight West African countries and supplies oil- and gas-related services.

“We are working closely with governments on the ports,” which play a key role in driving the continent’s growth, Lars Reno Jakobsen, Maersk’s senior vice president for Africa, said in an interview at the World Economic Forum in Cape Town. “There is an increasing awareness that infrastructure investments need to at least double to keep track with the current economic development. We are very willing to be a partner.”

Maersk joined with Bollore SA and Bouygues SA to win the 450 million-euro ($591 million) contract for the second container terminal in Abidjan, Ivory Coast’s commercial capital, according to a March 25 e-mail from Bollore. The terminal will start operating in 2016, it said.

Maersk is targeting annual sales growth of at least 10 percent from Africa in coming years.

Shipments of agricultural products, including timber and fruit, are rising as the continent diversifies its trade away from raw materials, Jakobsen said.

Manufactured Products

“We are starting to see some value-add in Africa, which is very good for the economy and for employment,” he said. “The next wave of export development could go from raw materials into agricultural products and consumer manufactured goods.”

Natural resources accounted for an average 14 percent of sub-Saharan Africa’s gross domestic product between 2000 and 2011, according to the World Bank. Ivory Coast is the world’s biggest cocoa producer.

Maersk operates ports through its APM Terminals unit, which has locations in 68 countries, the subsidiary’s website showed.

Copyright 2013 Bloomberg.

File photo of a U.S.-flagged MLL containership

Maersk Line, Limited (MLL), the U.S.-flagged arm of Denmark-based Maersk Line, says it is spending $500 million on the purchase and reflagging of eight newer and larger containerships to improve services provided to its U.S. military, government and commercial customers.

MLL says that the investment in the eight vessels will improve the quality of service to the Middle East and Mediterranean Sea from the U.S. East Coast. Since 2000, MLL says it has invested over $1.75 billion dollars to modernize its fleet in support of the U.S. government and military.

“These eight newer vessels, along with the global transportation network that connects them, demonstrate our commitment to our customers. We are proud to serve the U.S. military and to deliver U.S. food aid worldwide,” said John Reinhart, MLL’s President and CEO. “MLL is focused on continual improvement, and these ships will further increase reliability and shrink our environmental footprint.”

The vessels are about 10 years younger than the outgoing ships, and offer improved fuel efficiency and environmental performance, according to MLL.

The vessels will join Maersk Line’s weekly Middle East Container Line service (MECL1) throughout May and June, which serves commercial customers and the U.S. military, as well as transports U.S.-grown food aid. MECL1 will be the industry’s only direct U.S. flag service to and from the U.S. East Coast and Pakistan, and the service includes a new stop in Algeciras, Spain.

All eight vessels will join the Maritime Security Program (MSP) and Voluntary Intermodal Sealift Agreement (VISA), MLL said.

“We are pleased to bring more modern and useful assets into the MSP and VISA fleets,” said Reinhart. “The vessels will augment our nation’s security and sustain jobs for the U.S. Merchant Marine, the fourth arm of our national defense.”

“The efforts of the mariners onboard the transitioning vessels and colleagues ashore have been excellent, assuring a timely and smooth progression of the reflagging process,” Reinhart added.

MLL works with four U.S. maritime labor unions to crew its fleet of 56 U.S. flag vessels and employs about 1,200 American seafarers.

Reflagging a ship ensures that it meets the stringent safety, environmental, operational and compliance standards required by the U.S. Coast Guard (USCG) and other U.S. maritime authorities.

MLL’s engineering team will need to perform a gap analysis on each ship to assess its compliance with USCG requirements and makes any necessary modifications. Once a vessel meets and receives all U.S. government approvals, the vessel can come under the U.S. flag, making it eligible to carry cargo for the U.S. military, other government entities and commercial shippers.

“We want to express our gratitude to the U.S. Transportation Command, the Maritime Administration, the U.S. Coast Guard, and our labor union partners,” said Reinhart. “With their support, these eight ships will increase the versatility of the U.S. flag fleet. We believe that the addition of these ships, achieved through our successful cooperation, will benefit all of our customers and their vital missions.”

The eight incoming vessels are named in honor of great American cities. The ship names are Atlanta, Chicago, Columbus, Denver, Detroit, Hartford, Memphis, and Pittsburgh. Maersk Chicago was the first of the eight vessels to be reflagged on May 1, 2013.

LONDON/NEW DELHI, May 7 (Reuters) – Foreign container shipping lines are giving up on Iranian business ahead of new U.S. sanctions in July, dealing a further blow to Tehran’s vital seaborne trade.

Iran’s economy is already reeling from the effect of measures imposed by the West to curb Tehran’s nuclear programme. Its currency has lost two thirds of its value since late 2011, inflation is soaring, and unemployment is rising fast as manufacturing, starved of parts and international finance, has contracted.

Many of Iran’s imports, including food and consumer goods, arrive on container, bulker and other ships. Feeder services, which transport ship containers to Iran especially from larger ports in the United Arab Emirates, are also used.

The US National Defense Authorization Act (NDAA), which comes into effect on July 1, blacklists Iran’s shipping, shipbuilding, energy and ports management sectors. While it has an explicit exemption for food, medicine and other humanitarian goods, foreign shipping firms are pulling out to avoid falling foul of its provisions.

“Iran will become increasingly dependent on feeder services from nearby Gulf states for the import of its goods as major container shipping companies become ever more wary of transgressing against the numerous sanctions,” said Daniel Richards, with Business Monitor International (BMI).

Kuwait-headquartered United Arab Shipping Co (UASC), which is among the world’s biggest 20 container lines, said last month it had suspended all services to and from Iran.

“We now find ourselves in the peculiar situation where even if we are carrying non-sanctioned cargo to non-sanctioned entities, the cargo will eventually have to be handled by a party which the US government considers as providing financial support to a sanctioned party,” it said.

In a company memo seen by Reuters, UASC added: “With the passing of the NDAA … the difficulties in shipping cargo to and from Iran have only increased.”

Mark Dubowitz, who has advised President Barack Obama’s administration and US lawmakers on sanctions, said container lines transporting humanitarian goods would not face measures.

“You may be seeing a short period of adjustment as these companies seek clarity on the new rules, but this trade should face minimal disruption,” he said. “The container lines can operate easily under the broad humanitarian exemptions available in every sanctions law.”

Nevertheless, companies are uncomfortable. Dubai-based Simatech Shipping said this month it would cut services to and from Iran from June because of the new sanctions.

A spokesman with Hong Kong-headquartered Orient Overseas Container Line said its feeder service to Iran from the UAE would cease from June after ending direct business from Asia two years ago. A source at Hong Kong’s Wah Hai Lines said it would no longer send its vessels to Iran.

APL, the container unit of Singapore’s Neptune Orient Lines, said it would ensure “all applicable regulations governing shipments to Iran are adhered to.”

PORT VOLUMES HIT

Iran’s cargo trade has already faced earlier ruptures after the United States in 2011 blacklisted major Iranian port operator Tidewater Middle East Co, which operates seven terminals in the country including the biggest container port Bandar Abbas.

Tougher conditions led to AP Moller-Maersk’s Maersk Line, the world’s biggest container company, pulling out entirely from Iran last year, joining an exodus including the world’s number two and three MSC and CMA CGM and smaller groups like Germany’s Hapag-Lloyd.

BMI forecast annual container throughput growth at Bandar Abbas would average 2.7 percent between 2013 and 2017, below the 13 percent average between 2007 and 2011 before sanctions took their toll.

India’s exports to Iran could also be hurt because of the new measures. A source at TransAsia, based in India, told Reuters the company would not go to Bandar Abbas from July. Three Indian freight forward firms, which declined to be identified, said separately they were finding it difficult to arrange vessels from July for journeys from India to Iran.

India, which is Iran’s second-biggest oil client after China, has aimed to boost exports to Tehran in order to balance out a huge trade deficit and help to smooth payments for oil. It has exported goods that do not come under sanctions including rice, sugar, tea, some engineering goods and medicines.

This could mean that Hafiz Darya Shipping, which Washington says is a front company for Iran’s Islamic Republic of Iran Shipping Lines, and is subject to sanctions by the United Nations, the United States and the European Union, could be the only option left for Indian exporters, trade sources said.

“Sanctions are coming to define both the country’s economy and its container shipping sector, and we do not envisage this changing to any great degree until the Islamic Republic bows to international pressure with regard to its nuclear programme,” BMI’s Richards said.

(c) 2013 Thomson Reuters, Click For Restrictions

Featured image (c) Shutterstock/Piotr Krzeslak

An illustration of the Maersk Triple-E with 18,000 teu capacity. Once delivered in June, the first Triple-E will beat out CMA CGM’s Marco Polo for title of world’s largest containership. Image: Maersk Line

(Bloomberg) — China Shipping Container Lines Co., the country’s second-biggest shipping company, ordered the world’s biggest container ship, taking over the title from A.P. Moeller-Maersk A/S.

Hyundai Heavy Industries Co. will build five vessels each capable of carrying 18,400 20-foot containers for $700 million for China Shipping, the Ulsan, South Korea-based company said in an e-mailed statement today. Delivery will start in the second half of 2014.

Shipping lines, including Maersk and Evergreen Group, are adding bigger vessels that burn less fuel and have lower emissions to reduce costs. Maersk next month will take delivery of the world’s biggest container ship, which can carry 18,000 boxes, from Daewoo Shipbuilding & Marine Engineering Co.

The ships Hyundai Heavy will deliver to China Shipping will use an engine that can automatically control fuel consumption to suit speed and sea conditions, helping to improve fuel efficiency, reduce noise and cut emissions.

Hyundai Heavy, the world’s biggest shipbuilder, has received $9.7 billion of contracts for ships and offshore projects this year including the latest order, it said. It has achieved 41 percent of the $23.8 billion target set for 2013.

Maersk ordered 20 ships of the type that can each carry 18,000 boxes in 2011, which was the world’s biggest then. Five of the vessels are scheduled for delivery this year.

CMA CGM SA, the world’s third-largest container shipping company, operates the biggest vessel in operation, which can carry 16,000 boxes.

Hyundai Heavy was unchanged at 197,000 won as of 1:08 p.m. in Seoul and has lost 19 percent this year. China Shipping advanced 1.6 percent to HK$1.92 in Hong Kong trading.

- Kyunghee Park, Copyright 2013 Bloomberg.

Stephen is American, 46 years old, and joins Maersk Line from Microsoft Corporation where he was the head of global retail sales and marketing.

Prior to Microsoft, Stephen was with Procter & Gamble for more than 20 years, developing his sales and management skills in a variety of roles across Europe, South America and Asia before becoming Procter & Gamble’s head of global retail sales.

“We are tremendously excited to welcome Stephen to the Maersk Line team as Chief Commercial Officer,” says Maersk Line CEO, Søren Skou. “Stephen has developed and led the global sales operations of two of the world’s largest and most prestigious companies with great results. We are focused on improving the way we sell our services to customers in order to reach volume and profit targets and Stephen brings valuable insight that we hope to leverage. Combined with extensive international sales experience, he is exactly what we are looking for to further strengthen the Maersk Line sales force,” says Skou.
Stephen takes over from current Chief Commercial Officer, Lucas Vos, who leaves his role 1 May.

As CCO, Stephen will be responsible for more than 9,000 Maersk Line employees in 125 countries, which includes the global country organisations and all global sales, customer service and communication related tasks.

He will continue the organisation’s efforts to improve the way products and services are sold to customers, focusing on sales efficiency, value selling and customer needs.

M/V Maersk Madrid. Photo Diana Containerships

By Lambros Papaeconomou

Diana Containerships Inc. (DCIX) announced today that it has agreed to sell the 1989-built MAERSK MADRID for demolition for a sale price of approximately $8.8 million before commissions.

At the outset, this might appear as a setback for the fledgling company.  The company had purchased the vessel less than two years ago for $22.5 million.  The carrying value for the vessel as of December 31st 2012 was $19.9 million according to the company’s annual report filed with the SEC.  On this basis, I expect Diana Containerships to book an accounting loss of $11 million during the second quarter of 2013.

But on a cash-flow basis, the company has fared much better or, to be exact, less worse.  Diana Containerships had purchased the vessel with a two-year leaseback above-market charter at a gross rate of $21,450 per day.  Assuming a market rate of $8,000, the company was able to generate approximately $10 million of additional operating cash flow during the past two years.

Against adverse freight market conditions, and with MAERSK MADRID about to be redelivered from its lucrative two year charter,  the company made a difficult but prudent decision to scrap one of its older vessels.

About the Author

Lambros Papaeconomou is with NYFEX Asset Management LLC, providing equity research for the shipping industry.

(L-R) Graham Westgarth, Kirsi Tikka, Chris Errington

At the Connecticut Maritime Association “Shipping 2013″ conference this week, the American Bureau of Shipping hosted an energy efficiency panel highlighting the value of energy management operations at sea.  Moderated by ABS Europe’s President and COO Kirsi Tikka, the panel included Chris Errington, Maersk Line Limited’s Director of Maritime Technical Services and Graham Westgarth, Executive Vice President of Operations and Strategy at GasLog.

Throughout the week, the most notable theme for this years conference was “efficiency.”  Shipping companies are being forced to do more with less and to come up with new solutions to streamline their operations and to achieve profits in a highly competitive, oversupplied, and evolving market.

Errington notes that last year Maersk Line targeted $40 million in fuel savings and by the end of the year had achieved more than double their target at $78 $83.1 million in savings.  This year, their benchmark has moved to $80 million.

“We can do it,” noted Chris Errington, “There are many variables and there’s a significant people part of this equation that is critical to success.  Huge fuel savings can be achieved, however getting crews to understand the importance, and their role in saving fuel has, at times, been a struggle.  In some cases we’ve been able to influence change by using peer pressure to show those who are performing, and those who are not.  It’s an ongoing process that we have to keep working on every day.”

Errington also notes that new paint systems have resulted in improved vessel performance as well. “We have taken six of our vessels out and dry-docked them early just because we could see the paybacks almost immediately.”

Westgarth doesn’t see this energy saving initiative to be all that much different to other initiatives in that past.

“Young people today are much more environmentally aware than the generations which have preceded them. They actually ask questions of their employer of what they are doing with regard to shipping efficiency. I think its a potentially good recruitment tool.”

Methodologies

Like everyone else in the industry, Maersk Line Limited is using “slow steaming” to save fuel and to lower the virtual supply of ships plying the world’s oceans.  ”Slow speed steaming has had a big affect,” commented Errington. “We never thought we could get the engines down to what they are now.”  

Westgarth notes that, “with ships operating on Dual Fuel Diesel Electric (DFDE) plants, the engines allow a lot of flexibility when it comes to power options.  The question is, how to do you optimize your speed, be it three engines, four engines… a lot of thought goes into the optimum passage and keeping the logistics chain as efficient as possible.”

“How much regulation does the industry need?” queried Kirsi Tikka.  ”Would the industry begin designing more efficient ships on their own, or was this due to the effects of the EEDI?”

Westgarth replied, “because of the cost of fuel, I think the industry would have forced the yards to come up with more efficient ships.”

Errington agreed, “even without the regulations, it’s driven by the economics.  I don’t think the yards on their own would have done it.”

Westgarth: “I think the majority of shipowners in this industry are very supportive of good legislation. We live in a world where compliance is king” and that all flows down on to the ships.”

Steve Gumpel, ABS’ Vice President for North America: “I have talked with a lot of owners recently.  If you consider of all the ship operation types in the world, can any shipowner not afford to do what you’re doing right now?”

Errington: “I think that from an energy savings, I don’t think that any owner can afford not to do this. Fuel is such a factor in daily operations, it just makes sense to embrace it, no matter how big or small the company is.”

Westgarth: “The only thing I would say is that some smaller companies don’t have the wherewithal or resources to manage this.”