|Bid||71.80 x 52700|
|Ask||72.20 x 9900|
|Day's Range||71.60 - 75.80|
|52 Week Range||23.05 - 82.00|
|Beta (5Y Monthly)||0.76|
|PE Ratio (TTM)||35.02|
|Earnings Date||Mar 20, 2020|
|Forward Dividend & Yield||0.15 (0.20%)|
|Ex-Dividend Date||Jun 13, 2019|
|1y Target Est||39.80|
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is...
While there were no surprises in a report on the cause of last year's Yantian Express fire, it could be years before the International Maritime Organization (IMO) amends onboard safety regulations, according to the International Union of Marine Insurance (IUMI)."It addresses exactly what we state in our position paper and what we see all the time, and we see one incident after the next," said IUMI Secretary-General Lars Lange. "We see shipowners — Maersk, MSC, Hapag-Lloyd and others — acting on a company level, which is great. What shipowners say and we say is that safety should happen on a level playing field. It shouldn't provide you with disadvantages in competition when on an individual level you work on safety measures, which cost money of course."Germany's Federal Bureau of Maritime Casualty Investigation (BSU) said last month that misdeclared coconut charcoal was the most likely source of the blaze on the Yantian Express, which caught fire in the Atlantic Ocean on Jan. 3, 2019."We have far too much misidentification of cargo," Lange said. "Many things, whether on purpose or not, are not declared precisely and incorrectly handled on board, and this might cause a fire. This is, in nearly all cases, the root cause." He called for penalties against shippers that misdeclare cargo. "Fines by the shipping lines are good to increase the pressure on shippers that they don't dare misdeclare cargo," Lange said. "You also need more random inspections of cargo." Onboard firefighting measures have to change as well, Lange said. "We have these CO2 systems in the holds. In many cases, and the Yantian Express was an example, that simply doesn't work for cargo and containers. The container contains the fire. CO2 doesn't reach the fire. And in that very moment when the metal of the container starts to melt, it's already that serious that you can't extinguish it with CO2," he said. Vessel fire safety "needs regulation and it needs a level playing field. Safety shouldn't be left to individual business entities. Safety should be dealt with at a regulatory level, and that would mean in this case the IMO," Lange said. "The IMO has complex procedures," he continued, explaining that a maritime safety committee could agree to take up onboard fire safety measures in May. The matter most likely then would be referred to a ship equipment and systems subcommittee, which isn't slated to meet again until early 2021. A draft document would be passed among subcommittees for markup."Usually it takes three to four years, if you like it or not. Then it has to be adopted," Lange said. "This would come into effect for each and every vessel out there so you should take the time to avoid any uncertainty or unexpected things or mistakes in IMO regulations. SOLAS amendments have to be very, very well thought through because every vessel in the world will immediately have to comply with that." SOLAS stands for the International Convention for the Safety of Life at Sea, which was amended in 2014 and applied to ships built after January 2016 to increase the effectiveness of firefighting measures. The Yantian Express Fire Timeline The Yantian Express fire broke out in a container stowed on the deck of the German-flagged vessel while the ship was en route to Halifax, Nova Scotia. The Hapag-Lloyd container ship began its westbound voyage in Vung Tau, Vietnam, and berthed in Singapore and Sri Lanka before sailing for Halifax. The fire was discovered in the early-morning hours of Jan. 3. "The officer in charge of the navigational watch noticed the glow of a fire well forward. He then advised the master of what he had seen immediately and the latter hurried to the bridge," the BSU report said. "The master stated that the flames were already large and clearly visible by this point in time but did not have any unusual colors."The 73-page report noted, "The ship's command sounded the general alarm immediately after the fire was discovered. After it was mustered, the crew began to fight the fire in bay 12. Prevailing wind strengths of [gale force on the Beaufort scale] and low temperatures made the conditions for fighting the fire extremely challenging." The report reads like a screenplay for an action-adventure film. "The chief officer reported that the crew was exhausted after the firefighting operation had continued for some 15 hours. Due to the firefighting operation and occasional light rain, the fire-protection clothing repeatedly became saturated and had to be changed. The firefighters cooled down quickly because of the strong wind. The clothes donned to protect against the cold were heavy and became even heavier when wet. The crew was therefore assigned to alternating shifts from then on."Despite all efforts, the fire developed further at about midnight due to the increase in the wind, amongst other things. Furthermore, the water jet failed to reach the third tier due to the strong wind. In addition, the supply of compressed air was almost exhausted after some 24 hours. Fighting the fire under such circumstances was deemed perilous by the master and the crew was withdrawn for their safety."The crew gathered in a conference room, where they were told of an approaching vessel, the ironically named Happy Ranger. "The ship's command regarded the fire as ‘out of control' at this point in time," the report said.The chief officer, a 29-year-old German, and a small group ventured onto the deck the next morning. "A large number of charcoal cubes was found in the transverse corridor between bays 12 and 16. These also glowed beneath the containers on the starboard side of bay 12. No smoke could be seen coming out of the containers in bay 8. The chief officer stated that at that point there were still five full cylinders of compressed air available out of 35 originally," the BSU said.The tugboat Smit Nicobar, en route to Mexico, was diverted to the scene and arrived to help fight the fire in the evening of Jan. 4. The fire, however, continued to spread through the deck area of cargo hold 1. The Yantian Express' stability became an issue because of rising levels of water used to fight the fire. "The crew at least wanted to attempt to lower the water level in cargo hold 2 with a portable pump powered by compressed air. When the group assembled to operate the pump ... an explosion with heavy smoke and pulsating high flames occurred in the area of the foreship. The master attributed this to the explosion of the container at slot 080782. This contained nitrocellulose, which is classified as an IMDG Code Class 4 dangerous good," the report said.The ship was abandoned Jan. 6. "Plans were made to reboard the ship at a later date, meaning she was not to be abandoned as a dead ship," the BSU noted.The Maersk Mobiliser arrived at the scene on Jan. 7 and "took charge of fighting the fire subsequently. A short jet of water was directed only at isolated fires and hot spots. The Smit Nicobar remained on standby and followed the drifting Yantian Express," the report said. On Jan. 13, according to the report, a container that "evidently contained some kind of charcoal was opened for inspection. Its cargo was still smoldering. The cooling measures on the dangerous goods containers in bay 1 were continued as smoke was already rising from one of them. The temperature in cargo hold 1 had risen to 82 C."Firefighters and salvage experts arrived at the scene aboard the Sovereign on Jan. 15. The burning containers on the deck of the Yantian Express were finally extinguished on Jan. 21. Anatomy Of A Fire The Yantian Express, with a total loading capacity of 7,236 twenty-foot equivalent units (TEUs), was towed to Freeport, Bahamas, where the offloading of containers began on Feb. 19. Inspections in the Bahamas revealed, among other things, that containers carrying "knitted or crocheted baby garments" and polypropylene woven shopping bags were completely burned out. However, another container that "according to the cargo documents was loaded with coconut pellets, still contained the remnants of a coconut pellet load," the report said.According to the BSU, other containers were reported to hold Yanmar engines, tires, ladies knit dresses, Vietnamese black tea, respiratory devices, pineapples and wooden furniture.After inspections were completed, the Yantian Express sailed for Halifax, arriving in early May, when the remaining cargo was offloaded and the ship departed for a shipyard for repairs.Page 46 of the BSU report states, "Coconut charcoal rather than the coconut pellets specified in the cargo documents was in container UACU5272502 at slot 120782. The difference between coconut pellets and the pyrochar ... is clear. Coconut pellets are produced by grinding coconut shells and used as fuel for furnaces. ... Chemically, coconut pellets are completely different from coconut charcoal."Pyrochar or vegetable char, produced by means of coconut shell pyrolysis, have properties comparable to wood-based charcoal," it said. According to the sea waybill, the container carrying the coconut charcoal left Ho Chi Minh City, Vietnam, on Dec. 7, 2018, and was loaded on board the Yantian Express on Dec. 10. BSU investigators "assume that the declaration of the product as coconut pellets is incorrect. That this was intentional because it made it possible to avoid compliance ... cannot be ruled out." Nils Haupt, senior director of corporate communications for Hapag-Lloyd, said this week he could not comment on whether the shipping line believed the misdeclaration was intentional."As the legal case is not closed yet and insurance is still working on the case," Hapag-Lloyd cannot respond to the report findings, Haupt said in an email. Hapag-Lloyd did initiate safety inspections following the Yantian Express fire."Further inhibiting the firefighting efforts were the reported malfunctioning of the CO2 fire-extinguishing system and time-delay units on the Yantian Express," the BSU said, noting that Hapag-Lloyd "immediately started to initiate inspection/maintenance on all ships to ensure the correct functioning of the time-delay units."In its conclusion, the BSU said it recommended that Hapag-Lloyd "enter the drencher system for the transverse bulkheads in some of the cargo holds on the Yantian Express in the fire and safety plan, even if there is no requirement to enter this part of the equipment. This entry should also be made for other ships belonging to the shipping company with a similar installation."BSU marine accident investigator Harald Erdbeer explained the recommendation means the sign for the drencher system should be pictured and explained in the fire and safety plan."As there is no special sign other than this (sign at right) there should be an explanation about the special functionality of the system in the plan, as this is different from a ‘normal drencher system,' which is normally described with this sign, Erdbeer said. "‘Entry' for the other company ships means that the sister ships have the same installation but the information in the fire and safety plan is not available as well.""The Time For Action Is Now" IUMI issued a report in October titled "Containership fires: It is time to take action." It said that 2019 had "an alarming number of container ship fires, including the Yantian Express, APL Vancouver, Grande America, E.R. Kobe and KMTC Hong Kong," as well as the Grande Europa. At a fall conference in Norway, Helle Hammer, chair of IUMI's policy forum, said, "Firefighting capabilities aboard container ships are deficient and we need to see more headway to improve the safety of the crew, the environment, the cargo and the ships themselves. Mis- and non-declaration of cargo has serious safety implications and is the root cause behind these tragic incidents. There is agreement among experts that the current means of controlling a fire in the cargo hold are of little effect. The safety objectives set out in SOLAS do not seem to be met and in light of the various recent casualties, the time for action is now." The IUMI published a position paper in 2017, a year that saw such fires as the MSC Daniela, on its concerns, including what it called inadequate fire detection and onboard firefighting systems as well as the need to revise SOLAS."Our position paper recommends that firefighting systems should be arranged to segregate the ship into fire compartments where the fire can be isolated to prevent it from spreading. Onboard systems could then cool the containers and allow them to burn out in a controlled manner. Fixed monitors to adequately attack the fire and improved fire detection systems are further measures proposed to allow for an appropriate response mechanism," Hammer said.Lange said after the BSU released the Yantian Express report, "We need fire compartments on board. Nobody would even have the idea that you could have a warehouse on shore 500 meters long and 50 meters breadth without any fire compartments. Why don't we have this on board vessels? It's quite easily installed on newbuilds, whether this is a water curtain or whether this is a kind of wall between the holds to avoid that 30, 50, 70% of a vessel burned down when only one container catches fire."He used the 2012 fire aboard the MSC Flaminia, in which three crewmen died, as an example.Containers at slots 120784 and 120782 were nearly unrecognizable. (Photo: BSU)"This was one container. Everything in front of the bridge house was burned down. This is simply ridiculous. Again and again it's always the same patterns, always the same causes. It is, in our view, highly avoidable. We would not only save vessels, we would also make the journey much, much safer for the seafarers on board," Lange said.He said smoke detection "definitely does not work for containers because the smoke is contained in the container by nature. At that very moment where the smoke is in the whole cargo hold, it is by far too late. This could be something where you switch to heat detection."Unburned pyrochar spilled out of the container at slot 120782. (Photo: BSU)Mobile fire monitors required in the SOLAS amendment are not enough, according to Lange, who used the 2018 fire on the Maersk Honam that killed five crew members as an example. "The Maersk Honam was built in compliance with these new regulations. As we have seen, it did not help and was insufficient in our view. It needs another initiative obviously at the IMO to address this," Lange said. Until the IMO can adopt a SOLAS amendment, shipping lines are taking necessary steps. "For example, Maersk came out with a so-called risk-based stowage plan — which cargo to place where on the vessel to be better prepared to deal with it if any problems arise," Lange said. Maersk also has worked with the U.S.-based National Cargo Bureau to inspect hundreds of containers to root out misdeclared cargo."This puts pressure on the shippers that it's not that easy to misdeclare cargo," Lange said. "This is already underway. This is the most important thing, in our view."Image by skeeze from PixabaySee more from Benzinga * Industry Conferences Cancel On Coronavirus Concerns * CRST Acquires Final-Mile Logistics Provider NAL Group * Minimum Content Exemption Set For Regulated Plant Imports(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Hapag-Lloyd said Wednesday it had improved its year-over-year operating results by a whopping 80%. Hapag-Lloyd's earnings before interest and taxes (EBIT) for 2019 "significantly increased" to 811 million euros (US$908 million) from 444 million euros ($524 million) in 2018, according to preliminary figures released Wednesday. The 2019 results include effects from the first-time application of the IFRS 16 accounting standard, which amount to approximately 31 million euros for EBIT and about 467 million euros for EBITDA.
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