On November 10, Maersk Line conducted the first ever “fuel switch” demonstration on a container ship in the Gulf of Mexico as the result of a partnership between the U.S. Environmental Protection Agency (EPA), the Port of Houston Authority, and Maersk Line.

“We at EPA are excited that the Port of Houston Authority and Maersk Line chose to show their commitment to environmental quality and public health by executing this innovative project,” says Michelle DePass, Assistant Administrator for International Affairs at the EPA. “We look forward to finding ways in which we can continue to partner into the future.”

This specific project was designed to be an example of the effectiveness of using lower-sulfur fuels in ocean-going vessels, and will calculate and report the air pollutant emissions reductions achieved by switching from high to lower sulfur marine fuel. The partnership is optimistic that there will be significant emission reductions in ports in the Gulf of Mexico where the test vessel will dock: the Port of Houston and the Port of Progreso, Mexico.

The fuel switching demonstration was carried out on the Maersk Roubaix, a smaller vessel that can carry 1118 twenty-foot shipping containers. This is typical of the container ships that routinely operate between the United States and Mexico. The vessel’s propulsion engine and auxiliary engines normally run on bunker fuel with a sulfur content of 2.7%. In this demonstration, a low-sulfur (0.1%) distillate marine diesel fuel will be used within 24 nautical miles of the U.S. and Mexican coastlines as the ship approaches each port. This is likely to greatly reduce SOx and PM emissions in both areas.

In an effort to better protect coastal and inland areas from ship air pollution, the United States and Canada have applied to the International Maritime Organization (IMO) to establish an Emission Control Area (ECA). By 2015, this U.S.-Canada ECA will require lower sulfur fuels be used when ships are in waters within 200 nautical miles of the U.S. or Canadian Pacific, Atlantic, or Gulf coasts, the eight main Hawaiian Islands, and the southeast coast of Alaska. All ships operating in the designated ECA will be required to use engines that meet the most advanced technology requirements for NOx emission controls as of 2016, and to use 0.1% sulfur marine fuels (fuel with sulfur content at or below 1,000 ppm) as of 2015.

“We support the U.S. EPA’s ECA proposal to IMO, and so are pleased to work with U.S. EPA and the Port of Houston Authority to demonstrate fuel switching in the Gulf,” said Dr. Lee Kindberg, Maersk’s Environmental Director for North America. “Using cleaner fuel is the fastest way for a vessel to reduce its environmental impact. Maersk vessels have voluntarily demonstrated the effectiveness of a fuel switch in over 1,200 port calls on the west coast since March 2006. International adoption of an ECA reduces environmental impact significantly while ensuring a level playing field for all competitors.”

“The Port of Houston Authority is proud to support the first fuel switch feasibility study in the Gulf of Mexico with Maersk Line and EPA,” said Charlie Jenkins, Director of Planning and Environment for the Port of Houston Authority. “We believe that this project will show that fuel switching is a viable strategy that ocean-going vessels can use to reduce emissions. Additionally, by including the Port of Progreso, this will be an important first step in demonstrating to Mexico the benefits of joining the North American ECA.”

Maersk Line has announced a general rate increase effective December 1, 2009, in the North America to Mediterranean, North Africa, Middle East, and Indian Subcontinent trades. The carrier said that rate levels in these markets remain “unacceptable.” The filed increases are as follows:

From all origins in the United States and Canada to destinations in the Mediterranean and North Africa:

• US$250 per 20′
• US$350 per 40′
• US$350 per 40′ high cube
• US$350 per 45′

From all origins in the United States and Canada to destinations in the Middle East and on the Indian Subcontinent:

• US$120 per 20′
• US$150 per 40′ standard/ high cube
• US$170 per 45′

The rate increases apply to dry cargo only.

Peter Leach
The Journal of Commerce Online - News Story

After months of talks, port’s largest carrier reverses 2008 decision

Maersk Line reversed its December decision to quit calling at the Port of Charleston and will continue its services there beyond the conclusion of the current 2010 contract.

The Danish carrier said late Thursday that it had reached agreement with the South Carolina State Ports Authority to maintain its Charleston services after months of negotiations with representatives of the port, the state legislature and the state’s congressional delegation.

The Danish carrier, the port’s biggest user, said the agreement establishes a new contract through Dec. 31, 2014, and places its cost structure in Charleston on a “level playing field” with other ocean carriers using the port.

Under the agreement, Maersk will reduce its footprint in Charleston by giving up some of the dedicated space in the dedicated container yard that is operated by its sister company APM Terminals, where it will still use International Longshoremen’s Association labor.

“The union situation does not change for us. We will continue to operate under the master contract as before,” said Maersk Line spokesman Dana Magliola in an interview.

Maersk, which holds a 20 percent share of Charleston’s container traffic, announced in December it would pull out of South Carolina because ILA locals refused to allow the company to operate from a “common-use” area where gates are staffed by nonunion state port employees. Maersk pulled three weekly calls out of the port last spring.

Jim Newsome, the port authority’s new president and CEO, who took office on Sept. 1, last month signaled the negotiations might reach successful conclusion when he said he hoped he would be able to report an agreement when he gave his first State of the Port speech. That speech came on Thursday.

Newsome replaced former port chief Bernard F. Groseclose Jr., who resigned in January, a month after Maersk announced its original decision to quit the port.

“The agreement was a bilateral agreement between ourselves and the South Carolina State Port Authority that didn’t require any change in our relationship with the ILA,” said Gordon Dorsey, senior vice president of operations for Maersk Line in North America in an interview.

“It doesn’t change our operating model there. The agreement and the operating model allows us to be more efficient and gives us a cost structure that makes us competitive in the port,” Dorsey said. He declined to provide further details of the agreement.

Contact Peter T. Leach at pleach@joc.com.

On October 21, Maersk Line announced 2010 general rate increases in the trans-Atlantic trades, including cargo moving between North America and Europe and the Mediterranean. The carrier said that announcing the increases in advance would enable its customers to plan their shipments with a better awareness of the costs.

The planned 2010 revisions are as follows:

*TBA: October levels are to be announced at a later date.

Maersk said that the planned rates may change, but final rate levels will be announced 30 days prior to their effective date.

Peter T. Leach
The Journal of Commerce Online - News Story

APL, Hyundai Merchant Marine, MOL to slash capacity by a third

Maersk Line and the three carriers that belong to the New World Alliance, APL, Hyundai Merchant Marine and MOL, on Tuesday said they will cut the capacity and services they share on the trans-Atlantic trade in the slack season starting from December.

The NWA carriers said the changes will reduce their existing capacity in the trans-Atlantic by around one third.

Maersk Line said it is withdrawing its Trans-Atlantic 3 (TA3) service between North America and Northern Europe in an effort to adjust capacity to better suit market demand.

“Trading and market conditions on the trans-Atlantic route warrant elimination of excess capacity between Europe and North America,” said Soren Castbak, senior director of Atlantic Services for Maersk Line.

Maersk Line will maintain its current port offering as today with those calls in the TA3 service being added to the Trans-Atlantic 1 (TA1) and Trans-Atlantic 2 (TA2) services.

Furthermore, Maersk Line will offer service to Antwerp as a part of the revised TA1.

The three NWA carriers said that while they are eliminating excess capacity from the trans-Atlantic, they are making enhancements on other routes that will ensure service reliability and rapid transit times.

The changes are as follows:

The ATN/TA3-Maersk Line loop between the U.S. East Coast and Europe, where APL and HMM have space, will be suspended as of December.

The segment of the APX/TA1-TNWA loop between the U.S. East Coast and Europe will include additional calls at Antwerp and Le Havre.

The revised port rotation for this segment will be: Manzanillo, Miami, Jacksonville, Savannah, Charleston, New York, Antwerp, Bremerhaven, Felixstowe, Rotterdam, Le Havre, New York, Norfolk, Charleston, Manzanillo, Los Angeles, and Oakland.

Maersk Line will continue to participate in the APX/TA1-TNWA loop as a slot charterer.

The ATS/TA2-Maersk Line rotation will include additional calls at New York, Savannah and Miami. An additional ship will be added to make this a six-vessel loop.

The revised rotation will be Houston, Mobile, Norfolk, Rotterdam, Felixstowe, Bremerhaven, New York, Charleston, Savannah, Miami, Houston.

Currently, APL, HMM, and MOL operate the space. After this change, APL and HMM will operate the space.

Contact Peter T. Leach at pleach@joc.com.

On October 12, Maersk Line announced a change to its WestMed service in the Mediterranean to North America trade.

Maersk Line will replace its 5,000-TEU vessels with ships of 2,900-TEU capacity. This change comes as a result of the discontinuation of slot purchases by APL and Hapag Lloyd in the WestMed service.

“We strive to make our products flexible in order to best serve our customers’ needs,” said Søren Castbak, Senior Director of Atlantic trades for Maersk Line. “We will also continue to look for cost savings wherever possible, and in this case there is no impact to shippers. Here is an example where we must align our network to match customers’ volume requirements.”

Vessel phase-in will begin during November and continue for several weeks until all five of the vessels are replaced with the smaller ships. The service will maintain the same rotation, with the recently announced minimal adjustment to transits to accommodate the new schedule. CMA-CGM continues to operate the sixth vessel in the vessel sharing agreement.

Effective October 1, Maersk Line will be implementing a general “rate restoration” for shipments from U.S. Gulf ports to Central America and the Caribbean. The increases will apply to cargo moving from Houston, Mobile, and New Orleans toMexico, Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Venezuela, Dominican Republic, Aruba, Guadeloupe, Guyana, Haiti, Jamaica, Martinique, Suriname, and Trinidad & Tobago.

The increases are as follows:

• US$50 per TEU.
• US$100 per FEU.

Effective October 1, Maersk Line will be implementing a rate increase for cargo moving from the United States and Canada to the Mediterranean. The rate increase will be US$500 per 40′ reefer container.

Also effective October 1, the carrier will be implementing an  increase for cargo from the Mediterranean and North Africa to the United States and Canada. The rate increase will be US$300 per dry and reefer container.

Maersk Line will be implementing a general rate increase for all Canadian-origin cargo for the trans-Pacific westbound trade, effective date of October 1, 2009.

The exact scope of the rate increase is from Canada to the following countries: Brunei, Cambodia, China, Hong Kong, Indonesia, Japan, South Korea, Laos, Macau, Malaysia, Mongolia, Philippines, Singapore, Taiwan, Thailand, and Vietnam.

The filed increases for dry containers are as follows:

• US$160 per 20′ dry container.
• US$200 per 40′ dry container / high cube / 45′ dry container.

The filed increases for refrigerated containers are as follows:

• US$500 per 40′ high reefer container from Toronto and Montreal.
• US$300 per 40′ high reefer container from Halifax and Vancouver.

On October 1, Maersk Line will also be implementing a general rate increase for other refrigerated commodities moving from Canada, with the scopes and increases as follows:

Canada to Far East:

• US$500 per 40′ reefer container from Toronto and Montreal.
• US$300 per 40′ reefer container from Vancouver and Halifax.

Canada to northern Europe and theMediterranean, including the Black Sea:

• US$500 per 40′ reefer container.

Canada to Australia, New Zealand, and South Pacific Islands:

• US$134 per 20′ reefer container from Toronto, Montreal, and Halifax.
• US$268 per 40′ reefer container from Toronto, Montreal, and Halifax.
• US$139 per 20′ reefer container from Vancouver.
• US$278 per 40′ reefer container from Vancouver.

Canada to the West Coast of South America (Colombia, Peru, Ecuador, Chile, and Bolivia):

• US$600 per 40′ reefer container.

Maersk Line has made some additional adjustments to its trans-Pacific service. Given the anticipated weakness in the slack season market, Maersk will temporarily remove its TP10 service, with the last eastbound sailing to depart from Busan on October 4, 2009, and the last westbound sailing to depart Miami on October 31, 2009.

Cargo currently moving on TP10 will move to the carrier’s newly updated TP3 and TP7 services.

The TP3 continues to travel the Suez Canal on the eastbound rotation and is updated with an added port call in Ningbo. The new eastbound rotation is: Shanghai, Ningbo, Hong Kong, Yantian, Tanjung Pelepas, Newark, Norfolk, Savannah. The westbound rotation of Newark, Norfolk, Savannah, Tanjung Pelepas, Hong Kong, Yantian, Shanghai, and Busan does not change. The expanded TP3 service will commence September 30, 2009, at Shanghai.

The updated TP7 service adds calls in Busan and Da Chan Bay. The new eastbound rotation is as follows: Kaohsiung, Da Chan Bay, Yantian, Hong Kong, Busan, Yokohama, Balboa, Miami, Savannah, Charleston, and Newark. The westbound rotation is Halifax, Newark, Savannah, Miami, Balboa, Los Angeles, Oakland, Kaohsiung, Da Chan Bay, Yantian, Hong Kong, and Busan. The expanded eastbound TP7 service will commence on October 2, 2009, at Kaoshiung; the westbound departed Halifax on August 31, 2009.