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Hello Club Members! Here is your weekly Dispatch with all the maritime news you need to know to end your week.
Israel’s assassination of Hezbollah and Hamas leaders has escalated tensions in the Middle East, risking a regional war, potentially dragging the U.S. deeper into the crisis, and diminishing hopes for a ceasefire in Gaza. Security firm Ambrey assesses that Iran and Hezbollah will almost certainly retaliate by targeting Israel, with a high likelihood of attacks on Israeli military sites and probable targeting of critical national infrastructure and possibly Israeli-owned shipping, particularly in the Arabian Gulf, Gulf of Oman, or Arabian Sea.
Maersk has upgraded its 2024 financial guidance for the fourth time this year and the third time in as many months as the Red Sea disruptions show no signs of stopping. The world’s second-largest shipping line, considered a bellwether for global trade, now expects earnings before interest, taxes, depreciation, and amortization (EBITDA) of $9-$11 billion this year—$2 billion higher than its previous guidance. It also revised its full-year global container market volume growth outlook upwards to 4-6%, from the previous estimate of 2.5-4.5%, reflecting stronger-than-expected demand. Maersk now expects the Red Sea situation to continue through at least the end of the year. This change is in stark contrast to the severe overcapacity that Maersk’s CEO Vincent Clerc warned shareholders about as recently as March.
Maersk’s 2024 EBITDA guidance evolution:
The Panama Canal plans to increase daily transit slots from 34 to its normal level of 36 by September due to recent rains easing drought restrictions. The canal, which faced significant delays due to low water levels from Panama’s third-driest year on record, expects this change to boost revenues by 18% in the 2024-2025 fiscal year. The Canal Authority plans to build a new reservoir at a cost of $1.6 billion to ensure a stable water supply for future operations.
A fire aboard a new Staten Island Ferry in December 2022 was caused by a design flaw in the engine’s fuel oil return system and insufficient crew training. The fire, which resulted in $12.7 million in damages, was triggered by the closure of fuel oil return isolation valves, leading to over-pressurization and ignition. The NTSB issued a safety alert and five recommendations, including regulatory changes to design requirements for diesel engine fuel oil return systems to prevent such incidents. The Sandy Ground, the second of three Ollis-class ferries built by Eastern Shipbuilding Group for the New York City Department of Transportation, had been in service for just six months before the fire.
Some new video emerged this week of a dramatic collision that took place last month off the coast of Queensland, Australia, involving the LNG-fuel equipped bulk carrier HL Eco and the anchored YM Serenity. The HL Eco suffered a main engine propulsion issue, leading to a loss of control and collision with the YM Serenity’s bow, causing significant damage including the destruction of an LNG fuel tank on board the HL Eco and the loss of one of YM Serenity’s anchors. Thankfully, the LNG fuel tank was empty at the time. Both ships have since sailed.
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A report released this week by the International Chamber of Shipping (ICS) highlights the significant demand for clean hydrogen to decarbonize various sectors, presenting major opportunities and challenges for the shipping industry. Meeting global hydrogen demand by 2050 will require a fivefold increase in hydrogen-based fuels, necessitating over 400 new hydrogen ships. Key markets driving initial demand include South Korea, Japan, and the EU, with Europe targeting 20 million tonnes of hydrogen per year by 2030. Infrastructure development, particularly in ports and transportation, is crucial for enabling this transition and enhancing energy security.
The Transportation Safety Board of Canada (TSB) has identified critical gaps in Canada’s marine emergency preparedness following the 2021 incident involving the containership ZIM Kingston. The ship lost 109 containers due to severe parametric rolling while drifting in heavy weather outside the Juan de Fuca Strait and later caught fire off Vancouver Island. The report highlighted that Canada lacks mandatory pre-arranged emergency response plans and Coast Guard fire suppression capabilities. Fortunately, two adequately equipped vessels, the anchor handling tugs Maersk Tender and Maersk Trader, were nearby on another job and were able to assist.
Coastal clean-up operations are intensifying on South Africa’s west coast following an oil spill from the grounded cargo ship MV Ultra Galaxy, which broke into four sections last weekend due to massive waves. The South African Maritime Safety Authority (SAMSA) has activated the Oil Spill Contingency Plan, mobilizing 125 local community members for clean-up efforts. The 125-meter-long vessel, built in 2008, was abandoned on July 9 after developing a severe list and grounding. The incident highlights the risk of increasing maritime traffic around the Cape of Good Hope due to ships rerouting to avoid Houthi attacks in the Red Sea, especially during the winter months.
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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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