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Ship Photo of the Week
The Yu Zhou Qi Hang aground in Taiwan. Photo: Taiwan’s Environmental Protection Department
Top Stories
Riding the Wave of Global Disruptions
In a year of disruptions, ocean carriers are reaping windfall profits. Danish giant Maersk hasraisedits annual profit forecast for the fourth time, reporting third-quarter earnings of $4.8 billion—a 155% increase year-over-year. High container demand and ongoing challenges in key global shipping lanes like the Red Sea have created an inconvenience for some but a boon for carriers. CEO Vincent Clerc anticipates these rerouting measures to continue “well into 2025.” Similarly, Ocean Network Express (ONE) posted impressive gains with $5.9 billion in revenue and a staggering $2 billion net profit—a 1000% jump from last year. However, ONE’s CEO Jeremy Nixon cautions of turbulent times ahead, citing election and labor uncertainties, and emphasizes the need for “agile control” in navigating the evolving landscape.
Battle Tested and Extended
The U.S. Navy is giving some of its Arleigh Burke-class destroyers a new lease on life by extending the service of a dozen Flight I destroyers. Known for their reliability and versatility in combat, as demonstrated this year fighting Houthi drones and missiles in the Red Sea, these destroyers are considered the backbone of naval operations.
Rather than rushing to build replacements, the Navy is opting to modernize existing vessels with cutting-edge technology to keep them relevant against emerging threats. This move signals a strategic pivot: updating proven platforms rather than starting from scratch, all while keeping budgets in check. It’s a testament to the durability of these battle-tested ships, but is it a win for the Navy?
Crane Catastrophe 2.0 in Taiwan
Taiwan is reeling from a bizarre string of bad luck involving the Yu Zhou Qi Hang, carrying three giant ship-to-shore cranes. Just weeks after the massive heavy-lift ship toppled several port cranes at Keelung Port, the same crane-laden vessel has now run aground not far from the area. Thankfully all seventeen crew members survived unscathed. As for the vessel and its cargo, however, the future isn’t looking so bright.
Sanctions Heat Up for Russia’s Shadow Fleet
In its latest sanction salvo, the U.S. is once again turning a frosty gaze toward Russia’s Arctic LNG ambitions. Aiming at vessels supporting the Arctic LNG 2 project, the State Department’s sanctions hit a quartet of Dubai-based operators, freezing assets and halting logistics pipelines. The new measures include shipping companies carrying critical materials to Russian Arctic facilities and even construction entities. The pressure could seriously chill Russia’s hopes of expanding its LNG exports via the ice-bound Arctic, as these latest sanctions take aim at infrastructure from transport to construction in the frozen north.
Notably, Japan’s Mitsui O.S.K. Lines (MOL) this week said it faces challenges in delivering ice-breaking LNG carriers due to these restrictions, potentially leading to the sale of these specialized ships.
STNG’s Big Bet on DHT
In a surprising move, Scorpio Tankers announced this week its venture into very large crude carriers (VLCCs) through a strategic $90 million investment in DHT Holdings. Known for its midsize product tankers, Scorpio is wagering that the larger VLCCs will deliver strong long-term returns, particularly as tanker rates show signs of recovery. This partnership grants Scorpio access to DHT’s VLCC expertise and market position, signaling a bullish outlook on crude oil shipping’s future.
During STNG’s earnings call, President Robert Bugbee explained that the VLCC market’s recent underperformance has negatively affected the product tanker sector by diverting vessels from dirty crude trades to clean product trades. He now sees a shift back, with the upcoming winter expected to boost the crude tanker market. This anticipated resurgence in VLCC demand points to a growth opportunity for DHT, which Bugbee considers undervalued and an attractive investment prospect.
As the industry watches to see if this VLCC bet pays off, Scorpio’s move indicates a belief that bigger ships are indeed coming back into fashion.
Biden’s $3B Push to Clean Up Ports
President Biden has unveiled a $3 billion investment aimed at modernizing U.S. ports, focusing on greening up supply chains and reducing bottlenecks. This funding, part of the broader climate and infrastructure package, targets specific ports for cleaner technology and resilience upgrades. The projects range from new green power installations to upgrading aging port infrastructure, which has struggled under surging import volumes. The timing is opportune for Biden, as he underscores his environmental priorities before the 2024 election. For ports, these upgrades couldn’t come sooner, as they grapple with record volumes and mounting public pressure to reduce emissions.
Nuclear-Powered LNG Carriers: The Future of Green Shipping?
Nuclear-powered LNG carriers are emerging as a potential solution to the shipping industry’s emissions challenge. While still speculative, proponents argue that small modular reactors could be safely installed in LNG carriers, enabling them to travel long distances with zero emissions. However, regulatory hurdles and public concerns over nuclear safety present significant obstacles. If successful, though, nuclear-powered ships could revolutionize both the LNG sector and the global carbon footprint of shipping—a transformative development in the industry’s path to decarbonization.
Main’s Offshore Wind Auction Blown Off Course
The final offshore wind auction under President Biden saw only half the offered leases in the Gulf of Maine sell, raising just $21.9 million. In stark contrast to the 2022 record-breaking $4.4 billion New York auction, this lukewarm reception underscores the industry’s concerns over escalating costs, supply chain snags, and emerging tech risks, especially with deep-water floating turbines. Election uncertainty added to the hesitance, with bidders wary of long-term commitments considering former President Trump’s plan to kill new offshore wind development on “day one.” Despite this, Avangrid and Invenergy secured leases with potential to power over 2.3 million homes, showing some still have wind in their sails despite the risks.
Too Hot to Handle: Red Sea Becomes a No-Go Zone for NATO
Once a crucial maritime route, the Red Sea’s escalating dangers have NATO warships steering clear, as even Germany’s frigate Baden-Württembergreroutes around Africa to avoid Houthi attacks. Despite U.S. and EU naval presence, efforts to secure these waters fall short against drone and missile strikes by Iran-backed Houthi forces. With supply chains disrupted and shipping costs soaring, this costly diversion highlights the stark reality: current protections may be insufficient for NATO’s ships, leaving vital routes vulnerable and raising tough questions about global maritime security.
Multiple Attacks Hit Merchant Vessel in Bab-el-Mandeb
A merchant vessel transiting the Bab-el-Mandeb Strait was hit by multiple attacks this week, highlighting the high-risk environment in one of the world’s most critical choke points. Although the vessel managed to avoid severe damage, the incident has renewed calls for heightened maritime security. The attacks underscore the escalating threat to global trade routes in this narrow passage between the Arabian Peninsula and the Horn of Africa. The industry is on high alert, with stakeholders calling for reinforced security measures to protect commercial interests in these volatile waters.
Philippines Stands Firm with U.S. in South China Sea Standoff
The Philippines is counting on continued U.S. support in the increasingly tense South China Sea, regardless of the U.S. election outcome. As China bolsters its maritime presence, Manila remains steadfast in its alliance with Washington, emphasizing mutual security commitments. This assurance comes amid rising territorial disputes in the region, which has seen China’s maritime claims grow more assertive. For the Philippines, U.S. backing provides a critical buffer against regional power plays – and a firm line in the sand in its standoff with Beijing.
Sanctions-Busting ‘Dark Fleet’ Exposed in Prime Time
In a recent “60 Minutes” exposé, the “dark fleet” of oil tankers circumventing sanctions to keep Russian oil flowing was brought under the spotlight. These tankers, often operating without reliable insurance and questionable maintenance records, slip under regulatory radars to transport sanctioned oil. By skirting around sanctions, they help fund the Kremlin’s war efforts, enabling Russia’s economy to stay afloat. The story provides a rare glimpse into the high-stakes, high-risk world of sanctions-busting shipping, revealing the hidden forces keeping Russia’s energy exports alive.
Boom or Bust? Damaged MV Ruby Docks with Explosive Cargo
The MV Ruby, carrying over 20,000 tons of ammonium nitrate—more than seven times the amount in the 2020 Beirut blast—has safely docked at the Port of Great Yarmouth after a rough journey. Damaged in September while navigating stormy seas, the ship faced multiple port rejections over its hazardous cargo before the UK allowed entry under strict safety protocols. Authorities and port officials have reassured locals, emphasizing that the Ruby’s cargo will be handled with the utmost caution. For now, all eyes are on Yarmouth as the explosive-laden vessel begins its delicate unloading process.
As always, we’d love to hear your feedback. Email [email protected] with any questions, comments, tips, or concerns. Don’t forget to check out the Club Discord and gCaptain.com for the latest maritime news.
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