FREIGHT MONTHLY

COMPILED ON TUESDAY, 03 MAY 2011

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SOMALI PIRATES SEIZE SINGAPOREAN TANKER OFF THE COAST OF KENYA VITOL SHIPS DIESEL TO FUEL-STARVED LIBYAN REBELS S.KOREAN TANKER FIRM SAMHO FILES FOR BANKRUPTCY PROTECTION CMA CGM SAYS 2ND SHIP DOCKED THURSDAY IN I. COAST GADDAFI DODGES FUEL SANCTIONS VIA TUNISIA PIRACY SPURS INDIA COAL BUYERS TO DIVERSIFY BIGGER VESSELS FROM SHIPPING MAJORS TO SPARK CONSOLIDATION LDA TO GROW DRY BULK FLEET AS SHIPS STAY CHEAP SOMALI PIRATES FREE OIL TANKER-GREEK COASTGUARD CHINA TO EXPAND YANGTZE SHIPPING BY 2015 - XINHUA MAERSK EXPECTS TO OPT FOR 10 MORE MEGA SHIPS KAWASAKI KISEN PLANS TO BOOST DRYBULK FLEET IN 3 YRS NATO SEA CORRIDOR MOOTED TO HELP LIBYAN REBELS FULL IVORIAN COCOA EXPORT REVIVAL TO TAKE WEEKS Q+A-CAN SHIPS AVOID DETECTION WITH SATELLITE TRACKING? FOOD TRADE WITH LIBYA REBELS HIT BY PAYMENT FEARS SCENARIOS-MORE HAPAG-LLOYD OPTIONS FOR TUI AG THIS TIME PIRACY BIGGEST THREAT TO SOUTHERN AFRICA SECURITY ITALY STILL NEGLECTING PORTS-INDUSTRY GROUP CHINA COSCO STILL PLANNING GROUP'S LISTING PAPER
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SOMALI PIRATES SEIZE SINGAPOREAN TANKER OFF THE COAST OF KENYA

SINGAPORE, May 2 (Reuters) - Somali pirates hijacked a Singaporeowned product tanker about 180 miles off the coast of Kenya, said port officials and the EU's anti-piracy taskforce on Monday. The 21,000-tonne vessel MV Gemini, operated by Singapore-based Glory Ship Management, was seized on Saturday while on its way to Kenya from Malaysia. The ship had 25 crew members on board from South Korea, Indonesia, China and Myanmar, the EU Navfor said. "It is likely to be taken back to the Somali coastline where it will be held for a ransom, although it may also be used as a mothership in order to assist attacks on other vessels," said port and logistics firm GAC. Pirates from the lawless Horn of Africa nation continue to outwit an international flotilla of warships patrolling the busy trade routes. Typically the pirates anchor the vessels off their land base until a ransom is paid, at which point the vessel along with its crew and cargo is released. More than 40 percent of the world's seaborne oil supply passes through the Gulf of Aden and the Arabian Sea and is at risk from pirate gangs. ------------------------------------------------------------------------------------

VITOL SHIPS DIESEL TO FUEL-STARVED LIBYAN REBELS

LONDON, April 28 (Reuters) - Trading house Vitol has shipped at least one cargo of diesel to Libyan rebels in a move that will ease fuel shortages in their war with government forces and potentially unlock more Libyan oil for export to the West. With Libya producing only a fraction of its pre-war output and with its refineries idle, the rebels have been looking to clinch swap deals that involve selling oil and getting oil products in exchange. A a top rebel oil official said on Sunday the rebels made about $129 million from their only shipment of crude oil, which is also believed to have been done by Vitol, but had to pay $75 million for a single cargo of gasoline. On Thursday, trade sources said a diesel cargo aboard the tanker Delos was loaded in Malta, where Vitol has floating storage capacity, and shipped across the Mediterranean Sea to eastern Libya's port of Benghazi just over a week ago. Ship tracking data provided by Marine Traffic shows the tanker reached Tobruk on April 17, and six days later, during which time there is no satellite information available, sailed from the port of Benghazi on April 23, heading back to Malta. "The vessel loaded ship-to-ship out of Vitol's storage and moved to Tobruk over a week ago," one source said. A Vitol spokeswoman declined to comment on the delivery. Vitol fixed a gasoline cargo to Benghazi earlier this month but it was not clear if it arrived.

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The Delos has a capacity of around 43,000 tonnes, just over half the size of the crude oil cargo aboard the Equator, which Vitol lifted from the rebel-held east Libyan port of Marsa el Hariga three weeks ago. When it passed through Suez earlier this month, a canal official said the tanker was carrying 80,000 tonnes, or the equivalent of 550,000 barrels of oil. Trade in oil and products has ground to virtual standstill as companies avoid dealing with Libya for fear of infringing international sanctions. But the United States this week took steps to boost aid to the Libyan opposition council and to approve oil exports made under its auspices, creating a loophole in U.S. sanctions that could mean millions of dollars in revenue for rebel coffers. Reuters reported last week supplies have already reached west Libya which is under government control, as companies have taken advantage of a loophole in United Nations sanctions to deliver gasoline via Tunisia. Trade in Libya remains a costly and risky business. A tanker booked for Italian oil company Eni to carry crude to Italy from Gaddafi-held territory in Libya was forced to leave empty last week as government loyalists refused to allow the cargo to be loaded, trade sources said. "They didn't want the crude to go, because they wouldn't have gotten any money for it," an industry source said on Wednesday, adding, "They could use it to refine into gasoline." -----------------------------------------------------------------------------------Shipowners went on a buying spree before the economic downturn two years ago and those vessels were only now coming to the market. The global tanker fleet was seen expanding by around 7 percent this year, surpassing demand growth of only 2 percent, analysts said. ------------------------------------------------------------------------------------

CMA CGM SAYS 2ND SHIP DOCKED THURSDAY IN I. COAST

PARIS, April 21 (Reuters) - French container shipping group CMA CGM said its second ship arrived in the port of Abidjan on Thursday following the company's resumption of services to top cocoa producer Ivory Coast. The arrival of the CMA CGM Cortes ship followed that on Tuesday of the CMA CGM Rabat, which has since left Abidjan, a spokeswoman for the group said. Freight operators have been expecting export activity from Ivory Coast to resume this week after being halted by a political crisis in the West African state. Belgian shipper Safmarine said on Thursday it was loading its first cocoa exports from the country since the end of an export ban. CMA CGM has said all its ships are equipped to handle cocoa but has so far declined to comment on what cargo the vessels have carried. The arrest last week of incumbent leader Laurent Gbagbo has opened the way for the resumption of shipping, with the lifting of European Union sanctions and of an export ban called by Alassane Ouattara, the rival leader who was widely seen as the winner of recent elections. Shippers have said that a full resumption of cocoa exports from Ivory Coast could take weeks. The Rosa Delmas ship, which had been due to be company's second arrival in Abidjan on Wednesday, did not call at the port, the spokeswoman said, declining to comment on the reasons. ------------------------------------------------------------------------------------

S.KOREAN TANKER FIRM SAMHO FILES FOR BANKRUPTCY PROTECTION

SEOUL, April 28 (Reuters) - A South Korean court will decide next month the future of privately-held chemical tanker firm Samho Shipping, which filed for bankruptcy protection this week, the latest casualty of the distressed global freight market. Rising fuel prices, tumbling freight rates, piracy and now radiation fears were expected to make this year one of the most difficult in decades for the maritime industry, forcing some shippers out of business. "We will start certain procedures, such as field inspection, before deciding whether to approve its court receivership. In the meantime, the debtor's assets will be frozen," said a district court official in Busan on Thursday. The official added that the court would decide whether to restructure or liquidate the company's assets within a month. A Samho Shipping official confirmed Tuesday's court filing, but declined to provide any reason for the action. Samho Shipping operates a fleet of 20 oil and chemical tankers, ranging between 12,000 and 20,000 deadweight tonnes, according to the website of its parent company, Samho Group. The small shipping company made global headlines in January after the South Korean navy rescued one of its vessels, Samho Jewelry, and 21 crew members hijacked by Somali pirates in the Arabian Sea. Samho's filing comes three months after South Korea's No. 2 dry bulk shipping firm, Korea Line Corp, sought bankruptcy protection after struggling to stay afloat in the difficult economic environment. Industry experts expect other shipping firms to follow, not only in South Korea. The global tanker and dry bulk markets have fallen to multi-year lows as supply outpaces demand. Crude oil tanker earnings on the key Middle East route fell to their lowest in over 18 months on Tuesday.

GADDAFI DODGES FUEL SANCTIONS VIA TUNISIA

By Jessica Donati and Emma Farge LONDON, April 20 (Reuters) - Muammar Gaddafi's government is circumventing international sanctions to import gasoline to western Libya by using intermediaries who transfer the fuel between ships in Tunisia. U.N. diplomats in New York said they suspected Gaddafi's attempts to import gasoline might consistute a violation of U.N. Security Council sanctions banning any transactions with Libya's state-owned National Oil Corp (NOC). One intermediary company, Hong Kong-based Champlink, previously unknown to the oil trading community, has sought a transaction for fuel delivery into Libya, and European oil traders said they had been approached by other such firms. "Gaddafi's people are looking to buy gasoline, via (Tunisian port) La Skhira... and Champlink. They ship-to-ship at La Skhira," said a source with direct knowledge of the situation. In a fax, obtained by Reuters, Champlink approached trading firms with an "urgent" request stating, "we have been appointed as procurers for end user in Libya and looking for ready shipments for gasoline." The fax proposed either shipping directly to the western Libyan port of Zawiyah, near the capital Tripoli, or to Tunisia's La Skhira, to be transferred onto a waiting tanker. The fax, dated April 1, requests fortnightly 25,000-tonne shipments of gasoline for the next six months, highlighting the possibility of "tankerto-tanker transfer." It said neither the cargo nor the end user company is on any international sanctions list.

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Champlink's Bhagoo Hathey, whose signature is on the fax, confirmed in an email to Reuters last week that a shipment of 40,000 tonnes arrived at La Skhira earlier this month, but did not name the supplier or say whether or not the gasoline had been shipped on to Libya. In a later email he denied receiving any shipment at La Skhira. In a separate document seen by Reuters, a company called Afrimar Tunisia, which is part of Afrimar Group North Africa, sent a request on April 12 to shippers for a vessel with capacity to carry 40,000 tonnes of gasoline loading from Turkey to La Skhira for ship-to-ship transfer there. The firm -- whose website www.afrimar.com shows it has a branch in Tripoli -- said it had two additional cargoes available from the end of April at two week intervals for which it needed to charter vessels. Afrimar did not respond to an email enquiry and was not available for comment on Wednesday. It is not known whether or not any shipments handled by Afrimar have reached Libya. The United States, the United Nations and European Union imposed sanctions on the Libyan government and selected Libyan companies, including NOC, in late February and in March. It is not illegal for Libya to export or import oil or gasoline, but it is illegal to trade with NOC. "We assume that somehow the NOC is involved at some level," a Security Council diplomat told Reuters. He added that the council's Libya sanctions committee, which oversees compliance with the U.N. measures adopted on Feb. 26 and March 17, has not been informed of the issue yet. The sanctions on Libyan firms have left both government and rebel forces seeking fuel supplies, although shipments have begun to resume to rebel-held territory mainly in the east of the country. While Gaddafi's government needs fuel to run its military assaults on rebels in the east and in the besieged, rebel-held western port of Misrata, as important for the stability of his rule is avoiding discontent in the capital by ensuring supplies of basic goods, including fuel for cars and public transport. A month ago, shortages led to increasingly vocal complaints about the government. Residents reported long lines and even gunfights at petrol stations as people tried to stock up. The supply situation has markedly improved in recent weeks. HIGH IMPORTS Oil trading and shipping sources said at least 120,000 tonnes of gasoline had arrived so far this month at La Skhira for ship-to-ship transfers, a figure that amounts to nearly half of Tunisia's annual imports. While La Skhira is used to trans-ship fuel to other countries in addition to Tunisia's domestic fuel needs, the volumes arriving there are unprecedented. It was unclear which, if any, of the receiving vessels at La Skhira had then sailed for Libya. OPEC member Libya is one of Africa's top crude oil producers but, even in peacetime, relies on gasoline imports because of inadequate refining capacity. Libyan state television said on Tuesday Tripoli was working to ensure the arrival of several gasoline cargoes to meet demand, and that it had restored its refinery in Zawiyah to normal production capacity. The sources said they know of three vessels transhipping gasoline in the port of La Skhira this month, and one of these cargoes had been picked up by a Libya-flagged vessel. It was not clear whether Champlink or Afrimar was involved in any of these transactions. A manager at the Tunisian importing body STIR, who asked not to be named, said he did not know of Champlink's existence, adding: "All imports to Tunisia are done by STIR and if there are other things going on, I am not aware of that." A second source at STIR said Tunisia had received no gasoline imports into La Skhira for its own domestic use in April, which could imply the shipments were onward bound for Libya. THIRD PARTIES Oil traders say they have been approached by several previously unheard of companies seeking to buy fuel to delivery into Libya. Several said they refused the offer because of the risk of breaching international sanctions. "I had one enquiry for 10,000 tonnes from a company I had never heard of," said one trader, adding, "It's a difficult time, because you need to triple check all counterparties and make sure they are not breaching sanctions." Although the United Nations named Libya's NOC and several subsidiaries on its list of entities whose assets were frozen, traders said they believed fuel deliveries could still be possible since it would take time to update sanctions lists to cover any newly emerging Libyan companies. "My guess is that this can't continue. Refined products is one area of vulnerability for Gaddafi, but if the governments (imposing sanctions) have to play catch up on sanctions, then there is a window," said Saket Vemprala of research group Business Monitor International. "From a military point of view, if the West can starve the government of fuels it will be important." Oil traders have previously found ways of getting around international sanctions including those against Iran, Iraq and South Africa. Lawyers, though, say Libyan sanctions are robust by historical standards. "Reloading products has always been big business. You re-do the bills of lading....this is nothing new as far as the industry is concerned," said a veteran oil products trader. ------------------------------------------------------------------------------------

PIRACY SPURS INDIA COAL BUYERS TO DIVERSIFY

By Jackie Cowhig and Jonathan Saul LONDON, April 15 (Reuters) - Indian coal buyers struggling with Somali pirate attacks on ships from South Africa find taking longer routes of limited use and are turning to Australia and Russia for fuel to avoid the Indian Ocean completely. Somali pirates, whose hijacking of oil tankers, bulk cargo ships and fishing vessels costs world trade billions of dollars a year are growing bolder . "Given the amounts they have made recently, I would anticipate everbetter armed and trained pirate crews at the top end as well as a proliferation of wannabes at the lower end," said J. Peter Pham, Africa director with U.S. think tank the Atlantic Council. In addition, the use of NATO ships to enforce a U.N. embargo on Libya will stretch anti-piracy efforts. "NATO & EU NAVFOR were struggling with finding some slack to send some ships after pirates in the 'deep' Indian Ocean. After Libya, that's not going to happen," said Michael Frodl, founder and head of maritime risks consultancy C-LEVEL. India has a growing, structural need for imported coal to fuel a power generation boom, unlike China which imports only when domestic prices fall below international levels. India's imports could leap 70 percent in 2011/12 to 142 million tonnes, the coal minister said in March

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India's need for coal is clear but where it comes from is more flexible. For the past year 30 percent of South Africa's 60-63 million tonnes of coal exports have been shipped to India. But the rising cost of piracy is forcing Indian traders to look elsewhere and this could hurt South African exports. Somali pirates, rather than Zimbabwe's political instability, pose the biggest threat to Southern Africa's security, South African Defence Minister Lindiwe Sisulu said on Tuesday . TORTURE AND MOTHERSHIPS A fresh development this year has been pirates' capture of commercial ships and crews at gunpoint and use of torture to force crews to operate the vessels as 'motherships.' "The use of large ships in this role gives the pirates reach across the whole Indian Ocean and gives them an 'all-weather' capability that they just didn't have a few months ago," said Peter Hinchliffe, secretary general of the International Chamber of Shipping. The Indian Navy has responded to the growing threat by trying to flush pirates away from India's west coast - India imports coal into the east, west and south. The upshot is pirates are being forced to the southern tip of India "We are having to evaluate not just the least risky routes to take from South Africa to India but also the best Indian ports to discharge and also now, where are the least risky places to pick up a vessel to begin its voyage to South Africa," said an offical at Indian coal importer Comtrade. "The ideal ports to discharge safely are Tuticorin right at the southern tip of India, or the bigger new east coast ports like Krishnapatnam or Gangavaram," he said. Indian importers have been diverting South African ships around Madagascar, away from Somalia's coast and straight for Tuticorin at India's southern tip. From there, ships hug the coast and head for east and west coast Indian ports. Insider TV show on piracy : ( http://link.reuters.com/faf28r ) Several of India's trader importers said they had already bought Australian or Russian coal instead of South African because of piracy . "Piracy is a real and significant cost added to South African coal around $2 a tonne - given the quantities being shipped, this is a lot of money," the Comtrade official said. "Depending on the route, the diversions add up to 5 days voyage time, plus the huge insurance premiums demanded and even the cost of bunker fuel at Richards Bay is higher than at Newcastle, so we're all looking hard at Australia and to a lesser extent, Russia," said a source at Coal and Oil, one of India's biggest importers. South African exporters doubted the cost of piracy would shrink what is a key market for the country's coal. "We've not yet had any Indian importer mention piracy as a reason not to take South African coal," one major exporter said. ------------------------------------------------------------------------------------

BIGGER VESSELS FROM SHIPPING MAJORS TO SPARK CONSOLIDATION

By Randy Fabi and Harry Suhartono SINGAPORE, April 14 (Reuters) - The global container market is poised to consolidate in the next few years as A.P. Moller Maersk and other major shippers roll out bigger vessels, potentially forcing smaller rivals to drop out of an already oversupplied market. Medium-sized container firms warn that a move by the majors to flood the market with mega ships could spark a "rate war" similar to 2009 when the market plummeted and most firms fell into the red in one of the industry's worst downturns. "We believe that... the largest shipping companies will continue to expand the scale of economies of the industry," said Thomas Knudsen, Maersk Line's chief executive for Asia Pacific Region, at an industry conference in Singapore. "As we drive these scales of economy, it will be difficult for the smaller carriers in these industries to compete. That will drive consolidation." Maersk, the world's top container shipper which holds a 15 percent share of the container market, is expanding its fleet by around 8 percent annually to keep up with economic growth. "We are not doing this aiming at taking market share," Maersk Chief Executive Nils Andersen told reporters at an industry event. He agreed that consolidation would be the most likely outcome. precisely where many coal ships have diverted since February. "I do expect to see more attacks on the Cape to Malacca as well as Cape to Bay of Bengal -- because we expect to see more attacks south of India and Sri Lanka," said Frodl. BIGGER IS BETTER Industry leaders in the container markets have placed multi-billion dollar orders for the world's biggest vessels to meet growing demand in Europe and the United States for Chinese manufactured goods.

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Maersk in February ordered 10 of the world's largest container ships for $1.9 billion and took options on 20 more vessels of a similar size to capitalise on expected growth on the benchmark Asia-Europe route. Due for delivery from 2013, Maersk's 18,000 twenty-foot equivalent unit (TEU) container vessels would surpass the current largest box ship of 15,000 TEUs, also owned by the company. Switzerland-based Mediterranean Shipping Company and French privately held CMA-CGM, which are the next two biggest container shippers after Maersk, are also looking to expand their fleet with ships above 10,000 TEUs, analysts said. About 50 mega container ships with 10,000 TEU capacity or more are expected to be delivered this year, making up nearly half of the total new capacity of 1.35 million TEUs due for 2011, according to the leading industry consultancy group Alphaliner. The orderbook showed 59 mega ships for 2012. "Bigger is better if you can fill the ship," said Randy Chen, special assistant to the president at Taiwan-based Wan Hai Lines . "If your ships are not full, you need to put the vessels away for the short period of time to make sure the revenue covers the costs." VULNERABLE FIRMS Vulnerable container companies are likely to be allowed to fall into bankruptcy instead of being saved by a larger firm through an acquisition, experts said. "I doubt if operators have any interest in taking over an organisation. They are more interested in buying fleets, just buying the ships and hardware," Harald Serck-Hanssen, head of global shipping for DnB Nor, told Reuters. Industry executives said smaller companies could turn to shorter niche routes. "I don't fully support the notion bigger size is necessarily better. It depends on your shipping network," said Eng Aik Meng, president of APL container shipping line, a unit of Singapore's Neptune Orient Lines. "Shipping lines are quite flexible. There are many other trades in the world, not just Asia-Europe and transpacific, but also Latin American and intra-Asia trades." Industry officials, however, pointed out that the smaller players would not be easily pushed out of the market as many are family-owned or subsidized by governments. "In a rate war, no single line can be the winner," said Kenichi Kuroya, chief executive of Japan's third largest shipping firm Kawasaki Kisen Kaisha . "What 2009 showed ... is that any rates quoted by the leading lines can be matched by others in one week's time. The rate war will continue until the bottom line is where no single liner can bear." ------------------------------------------------------------------------------------

LDA TO GROW DRY BULK FLEET AS SHIPS STAY CHEAP

PARIS, April 13 (Reuters) - French shipping group Louis Dreyfus Armateurs (LDA) said it could acquire more vessels on top of a recent order with a Chinese builder as it seeks to profit from attractive prices. LDA is pursuing a "counter-cyclical" strategy to expand its fleet during a current downturn in freight, with the expectation the market will have recovered when the new ships are delivered, Philippe Louis-Dreyfus, the group's president, told reporters. LDA signed on Wednesday an order for eight bulk carriers from stateowned China Shipbuilding Industry Co. (CISC) in a $330 million deal first announced in January. "We consider that it was the right time to go into the market," LouisDreyfus said following the signing ceremony. "It's not impossible that we will order more ships." LDA previously sold a significant part of its bulk-carrier fleet at the peak of the market in 2007 and 2008 and is now taking advantage of cheaper prices in a freight market weighed down by overcapacity in ships, the company said. The firm expects the freight market to see an upswing from 2013, coinciding with the start of the delivery period for its eight new bulk carriers, scheduled for 2013-14. The dry bulk market continues to struggle with rising fleet growth, ordered before economic turmoil in 2008. The closely held group, which used to be part of commodities trading giant Louis Dreyfus, could acquire vessels from ship operators and builders struggling in the current downturn, Louis-Dreyfus said. ENERGY-EFFICIENT DESIGNS LDA was also in talks to provide a listed industrial company with its vessels, he said, declining to give more details. In the deal with China's CSIC, LDA is to acquire four capesize ships, which are 292 metres long and able to carry 180,000 tonnes, and four handymax ships, which will be 180 metres long and carry 40,000

RATE WAR But major shippers were unlikely to idle new ships, placing the burden of plummeting freight rates on smaller rivals. Spot rates on the Asia-Europe container route have tumbled by about half in the last nine months, trading last week at around $978 per TEU from more than $1,800 in July 2010. Although the market was expected to rebound slightly in the second half, the battle for survival has already become too difficult for some container firms. Norway-based The Containership Company has announced it will suspend its container shipping operations on poor cargo volumes and excessive competition, industry group Alphaliner said. Others are poised to follow. U.S.-based container shipper Horizon Lines warned last month it could also be forced to seek bankruptcy protection for not being able to comply with its debt agreements. "In container ships, a lot of companies are not making money right now," said Janet Lewis, shipping analyst at Macquarie Securities, adding that Chilean CSAV was also under pressure. Last month, Standard & Poor's cut its outlook on CSAV's corporate credit rating to "negative" from "positive" to reflect its view of the container shipping company's weak business risk profile and aggressive financial risk profile.

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tonnes. The ships are to be built by CSIC shipyard Tianjin Xingang Shipbuilding Heavy Industry. CSIC was created out of the former China State Shipbuilding Corporation in 1999 and is one of China's largest shipbuilding and repair companies, with 140,000 staff. The ships ordered by LDA will boast new energy-efficiency designs, with larger capesizes consuming 7-8 tonnes of fuel less per day than current models and the handymaxes using 4-5 tonnes a day less, the French company said. The handymax ships would also be able to dock at ports with a water depth of 10.5 metres, versus the 11 metres currently needed, giving them access to more ports without towing. In addition to bulk shipping, LDA has developed specialist partnerships, including laying subsea cables for Alcatel-Lucent , offshore seismic research with CGGVeritas and carrying plane parts for Airbus . A ship belonging to LDA and Alcatel-Lucent's Alda Marine joint venture has been chartered to take part in an ongoing search for flight recorders and debris from a jet that crashed in the sea in 2009 during a Rio de Janeiro-Paris flight, the shipping company said. The specialist activities are partly a way for LDA to offset market swings in its traditional bulk business, it said. LDA is considering resuming port calls in northern Japan, after restricting its vessels to the south following the earthquake, tsunami and nuclear crisis, Louis-Dreyfus added. -----------------------------------------------------------------------------------"Hijacked oil tankers have tended to be released for larger ransoms. Not only is the cargo seen as valuable, but the political weight of an oil tanker is also seen as high value," said John Drake, senior risk consultant with security firm AKE. The U.S.-bound vessel was carrying about 2 million barrels of Kuwaiti crude, worth $200 million at market prices when it was seized. Irene SL's crude oil cargo represented 20 percent of total U.S. daily crude oil imports, or 5 percent of total daily world seaborne oil supply, said INTERTANKO, an association whose members own the majority of the world's tanker fleet. Despite successful efforts to quell attacks in the Gulf of Aden, navies have been unable to contain piracy in the Indian Ocean because of the vast distances involved. INTERTANKO welcomed the release of the Irene SL and its crew but said no ship was safe in the Indian Ocean from the risk of attack, with crews also increasingly facing torture by gangs. "Piracy is out of control," said INTERTANKO chairman Graham Westgarth. "International trade is threatened. Governments need to protect the world's shipping lanes by showing political will, not political indifference." ------------------------------------------------------------------------------------

CHINA TO EXPAND YANGTZE SHIPPING BY 2015 - XINHUA

BEIJING, May 3 (Reuters) - Bulk freighters will be able to avoid congestion around Shanghai and sail up China's Yangtze River as far as Nanjing under a $2.7 billion plan to deepen the navigation channel by 2015, Xinhua News Agency reported on Tuesday. The river would be navigable for ships up to 50,000 tonnes, which means handymax and supramax dry bulk carriers will be able to unload their cargoes further upstream in Jiangsu province, giving more manufacturers direct access to imported commodities, as well as easing logistics for exports, it said. Nanjing is already a major destination for commodities shipments, chiefly iron ore. Its customs office handled imports of 17.5 million tonnes of iron ore in the first three months of this year, the third-highest in the country, after Qingdao and Shijiazhuang. Huge supply bottlenecks have affected imports of coal, grains and other dry bulk goods into China, which has turned into the principle buyer for many raw materials thanks to rapid economic growth. The 18 billion yuan ($2.7 billion) project to deepen the navigation channel would be funded by the Ministry of Transport and the government of Jiangsu province, Xinhua said. ------------------------------------------------------------------------------------

SOMALI PIRATES FREE OIL TANKER-GREEK COASTGUARD

By Lefteris Papadimas and Mohamed Ahmed ATHENS/MOGADISHU, April 8 (Reuters) - Somali pirates have freed a Greek-owned oil tanker seized two months ago off Oman, the Greek coastguard and pirates said on Friday. Shipping industry sources welcomed the news but said pirate attacks were getting out of control in the region, threatening international trade. Analysts say more than 40 percent of the world's seaborne oil supply passes through the Gulf of Aden and the Arabian Sea and is at risk from pirate gangs. The Greek-owned and flagged 319,000-dwt tanker, Irene SL, with seven Greeks, 17 Filipinos and one Georgian aboard, was one of three oil tankers hijacked by pirates this year. The tanker's Greece-based manager, Enesel, said the tanker was released on Thursday but declined to say if a ransom was paid or give any detail on the release for security reasons. The pirates told Reuters they received a ransom payment of $13.5 million before freeing the vessel. "We received the agreed ransom amount of $13.5 million... The ship has sailed away," a pirate who gave his name as Abdiwali said by phone from Lebed, a village on Somalia's Indian Ocean coast near Hobyo, a pirate lair. "Somali pirates have freed the tanker 'Irene SL' which had been captured on Feb 9 while sailing with crude oil 200 nautical miles off the coast of Oman," the coastguard statement said. "According to the owner, the crew of 25, of whom seven are Greeks, are well and the ship continues on its voyage to Durban, South Africa," it added. Pirates gangs, who are making tens of millions of dollars in ransoms, are able to stay out at sea for longer periods and in tougher weather conditions, by hijacking commercial ships and using them as motherships to launch attacks.

MAERSK EXPECTS TO OPT FOR 10 MORE MEGA SHIPS

By Randy Fabi SINGAPORE, April 13 (Reuters) - Denmark's A.P. Moller-Maersk expects to exercise its option in June to order 10 more huge container ships to be built by Daewoo Shipbuilding & Marine Engineering at a cost of $1.9 billion. The world's largest container firm in February outlined plans to order 10 18,000 twenty-foot equivalent unit container ships with the option for another 20 similar vessels to capitalise on expected growth on AsiaEurope trade. Each vessel costs $190 million. "The first decision will come in June and we do expect we will exercise that option for an additional 10," Maersk's Chief Executive Nils Andersen told reporters after an industry event in Singapore on Wednesday. Maersk will decide later in the year whether to exercise a further option for 10 mega ships. A senior Maersk official in February said the option on the final 10 vessels was a long shot.

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The new ships will add to Maersk Line's current fleet of more than 600 vessels and help it keep its industry-leading market position. The Triple-E class vessels, measuring 400 metres (1,312 feet) long, 59 metres wide and 73 metres tall, will be the world's largest container ships. They will be 16 percent bigger in capacity than the current largest ships in Maersk's fleet, the E-class. CONSOLIDATION INEVITABLE Maersk was expanding its fleet by around 8 percent annually to keep up with global demand growth and not to steal market share, although consolidation was inevitable, Andersen said. The Danish firm looked to grow its operations in Latin America by placing 16 container vessels to trade in the region starting this month. Maersk was also looking to expand in Africa, although piracy was a lingering concern especially along the eastern coast. Andersen said the piracy problem was still not getting enough attention, particularly with more than 700 people still being held hostage in Somalia. "Sometimes I wonder if two jumbo jets were hijacked, parked somewhere and people were being held hostages under a lot of visibility whether this situation would not be resolved," he said. The United States in February sentenced a Somali pirate to 33 years and nine months in prison for his role in the 2009 seizure of the Maersk Alabama container ship, in which kidnapped Captain Richard Phillips was rescued while three captors were shot dead by sailors on another vessel. Maersk has placed armed guards on some of its ships that travel through the Gulf of Aden, Andersen said. -----------------------------------------------------------------------------------leader's government, have brought seaborne trade to a virtual standstill in recent weeks. NATO has been enforcing a U.N. arms embargo on Gaddafi in international waters only. Merchant ships face a risk of attack inside Libyan waters due to the violence. Two shipping sources said on Friday they were aware of proposals to create a secure shipping lane to Libya, though security sources said NATO would not be able to protect ships in port. "Contingency planning has been done on this at NATO and in the European Union," British Foreign Secretary William Hague told Reuters on Thursday when asked about the proposal. Hague said a lot of aid had been delivered to the besieged Western city of Misrata without a military presence, which was "always the first option". "It's only if that failed and the United Nations ... recommended that military assistance was required that then that would come into play," he said at a NATO conference in Berlin. Aid groups have urged shipping companies to resume services to rebelheld eastern ports including Benghazi to bring in aid, and the antiGaddafi Libyan National Council (LNC) has said it must keep exporting oil to boost minimal cash reserves. "The possibility of protecting merchant shipping travelling to and from ports under the control of the (LNC) is part of the broader strategy which the coalition has adopted to facilitate the 'normalisation' of the status of rebels' interim authority on the world stage," said J. Peter Pham, Africa director with U.S. think tank the Atlantic Council. "In theory, escorts or the designation of protected transit corridors ... should lower, if not eliminate altogether the need for war risk price differentials. This, in turn, should make it easier for the rebel authorities to transact business." Jakob Larsen, maritime security officer with BIMCO, the world's largest private shipowners' association, said a merchant ship had been attacked by Libyan coast guard vessels last month. "As a precautionary measure, close protection of shipping would be desirable," he said. "We are still waiting clearer directions as to which cargoes can legitimately be offloaded in Libya." PORT RISKS A NATO official said the organisation had drafted notices to mariners giving clear indications on "how to behave in the maritime joint operations area". "Our task is to enforce the arms embargo, not to protect commercial ships," the official said. Earlier this week, the first signs of seaborne trade emerged with Qatar marketing 1 million barrels of Libyan crude oil on behalf of rebels, and delivering four shipments of petroleum products. Shipping sources said there was speculation over whether the shipments had received naval escorts. Last month, London's marine insurance market added Libya to its list of high risk areas. "The biggest concerns for underwriters are whether the ports are open or not, who is there to receive the ship and how secure it is when in port," said Neil Roberts of the Lloyd's Market Association, which represents the interests of all underwriting businesses in the Lloyd's market. Maritime security sources said a NATO corridor could not provide cover at ports as the mission would not risk putting troops on land inside Libya. "They may have had some kind of nominal escort but only up to port limits," said John Dalby, chief executive with maritime risk management specialists MRM.

KAWASAKI KISEN PLANS TO BOOST DRYBULK FLEET IN 3 YRS

SINGAPORE, April 12 (Reuters) - Japan's third largest shipping company Kawasaki Kisen Kaisha plans to increase its drybulk fleet to 300 vessels in the next three years from 214 currently to tap into the growing demand of raw materials from China, Japan and India. Chief Executive Kenichi Kuroya told Reuters the firm was also planning to lay up as many as six of its 74 car carrier vessels due to the severe disruptions to Japan's automotive industry after the devastating earthquake and tsunami last month. "We have about 214 bulk carriers. In three years time, we plan to increase it to 300," Kuroya said in an interview at the firm's office in Singapore. "We are planning to lay up between 5-6 vessels because we cannot expect the immediate recovery of the production line," he said, referring to production from Japan's major automakers such as Toyota , Nissan and Honda . He also said that Kawasaki Kisen might consider acquiring one or two Chinese shipping firms to take advantage of the Japan-China trade line, which is the busiest intra-Asia route. ------------------------------------------------------------------------------------

NATO SEA CORRIDOR MOOTED TO HELP LIBYAN REBELS

By Jonathan Saul LONDON, April 15 (Reuters) - NATO is considering creating a sea corridor backed by naval vessels to enable merchant ships to boost trade with Libyan rebels and speed up humanitarian aid. Fighting between Libyan armed forces and rebels who are trying to overthrow Muammar Gaddafi, as well as sanctions against the Libyan

FREIGHT MONTHLY Tuesday, 03 May 2011

"The vulnerable point is actually... in the port and NATO cannot provide any protection there. Air cover will not prevent ground attacks by either side on a ship in the port." -----------------------------------------------------------------------------------In western Ivory Coast, where some of the worst violence of the power struggle occurred, cocoa industry players said security remained one of their chief concerns. "There are still problems with security here and in the villages because of the (pro-Ouattara) FRCI soldiers," said the director of an export company based in San Pedro. "It does not inspire confidence to know there are armed men who can rob you and there is no one you can complain to. There is no police, there is no gendarmerie. We need a minimum of security." Cocoa farmers in parts of western Ivory Coast told Reuters earlier this month that many remained in hiding away from their plantations due to fears of further violence, keeping them from harvesting the slow trickle of mid-crop beans. Exporters said, however, the industry could revive in the coming weeks as the rest of the economy restarts and that the stockpiled cocoa appeared in good condition. "We really think we'll be up and running no sooner than the end of the month," said the San Pedro-based export director. "There's lots to do. The banks need to reopen, insurance, administration, and so on, before we can start up. Without all this, we can do nothing." "The cocoa that is stockpiled is still good, but we're still evaluating with the experts before making a final determination," he said. ------------------------------------------------------------------------------------

FULL IVORIAN COCOA EXPORT REVIVAL TO TAKE WEEKS

By Ange Aboa ABIDJAN, April 19 (Reuters) - Ivory Coast cocoa exports will reach normal volumes no sooner than the end of April as authorities iron out new tax and customs procedures, banks reopen and security improves, shippers said on Tuesday. The world's top grower of cocoa is slowly recovering from a violent postelection power struggle, which ended last week with the arrest of former President Laurent Gbagbo. "Exports will not fully restart until the end of the month because we need to fix a lot of things in terms of logistics, finances and so on," said the director of an export company based in Abidjan, who asked not to be named. "Everyone needs to reorganize, people need to return to work, we need to quality check the stockpiles, etc., before we can start exporting," he said. Between 450,000 and 500,000 tonnes of cocoa are stockpiled at the West African country's two main ports -- or more than a third of the annual crop -- after more than two months during which exports were halted by the conflict. New President Alassane Ouattara said last week that he was pushing for a swift revival of the cocoa sector -- the country's main foreign revenue earner -- but industry players have said they are still waiting for security to improve, banks to reopen, and export procedures to be clarified. "The port is open, so there is improvement in the situation, but still people have problems getting to work as it's difficult to get fuel. There are queues to fill your car," said Didier Willemse, head of commodity sales at Belgian shipping company Safmarine. "We have planned a vessel tomorrow for Abidjan, subject to confirmation that customs are working." Sonny Dahl, director of West Africa services at Maersk Line, a unit of A.P. Moller Maersk, also said exporters were not ready to load general dry cargo, including cocoa, as customs at ports had not fully resumed. "We do hope that the first dry loadings, including cocoa, will be ready to load onboard our vessels scheduled out of San Pedro next weekend and Abidjan next week on Wednesday," Dahl said. A port official in Abidjan told Reuters four ships had arrived in port, and three more were expected on Wednesday. COCOA BACKLOG Exporters said that once shipments of beans resume, it will take around three months to clear the backlog. "Since Friday we have been talking to the new authorities about the conditions required for restarting exports, because we want to move quickly and there is work to be done," another director of a European export company in Abidjan said. "We need to streamline the bureaucratic process, but there are other issues like customs, the port, etc. We're seriously discussing everything," he said. "It will take at least three months to export everything because we can only export 120,000 to 150,000 tonnes per month from the ports of San Pedro and Abidjan. Even in December, the peak of exports when there are huge volumes of beans to export, the average is 120,000 tonnes per month."

Q+A-CAN SHIPS AVOID DETECTION WITH SATELLITE TRACKING?

By Jonathan Saul LONDON, April 26 (Reuters) - An international convention requires merchant ships to have a satellite tracking device on board when travelling at sea. A ship's captain has the discretion to switch the device off under certain circumstances, which has enabled ships to avoid being detected. Reuters has revealed that Muammar Gaddafi's government is importing gasoline into western Libya by using intermediaries who transfer the fuel between ships in Tunisia. Ships have turned off their satellite trackers during the journeys. Below are some questions and answers on how tracking works. WHAT DOES THE CONVENTION INVOLVE? U.N. agency the International Maritime Organization adopted the convention, which required vessels to be fitted with devices by the end of 2004 in a move initially aimed at ensuring greater safety at sea. Ships need to carry automatic identification systems (AIS), which collect information by satellite about the type of vessel, its position, course, speed, navigational status and other safety-related information to onshore stations or authorities, other ships and aircraft. AIS tracking systems must be "in operation at all times, except where international agreements, rules or standards provide for the protection of navigational information", the regulation states. "If in the view of the (ship's) master it would be safer to switch it off, then he can do so provided he informs the flag state of his reasoning," said Peter Hinchliffe, secretary general of the International Chamber of Shipping, an association, which represents about 80 percent of the global industry. IS THIS INFORMATION WIDELY AVAILABLE? AIS data is openly available on numerous websites, which has been seen as a potential security threat to merchant ships. "We still have concerns that there is information in the AIS transmission that is commercially sensitive, especially for ships in the spot market," Hinchliffe said.

FREIGHT MONTHLY Tuesday, 03 May 2011

Some maritime security analysts have argued this has enabled pirates to keep track of vessels at sea as attacks on merchant shipping continue to escalate. "Most masters switch it off when they are around the Horn of Africa because of the pirates there," said John Dalby, chief executive with maritime risk management specialists MRM. WHY DO SHIPS SWICH OFF THEIR TRACKERS Shipping sources say commercial vessels can easily switch off their AIS systems in order to conceal their end destinations. This has been seen in the past year, with tankers delivering petroleum products to Iran despite western sanctions on the trade with the Islamic Republic, sources say. "The AIS system relies 100 percent on the vessel transmitting information," said MRM's Dalby. "If it does not transmit information, there is no tracking of it and no way of knowing where it is, which is the easiest way of avoiding detection." -----------------------------------------------------------------------------------SHIPPING DISRUPTED The WFP has urged commercial shipping lines to resume operations to eastern ports of Benghazi and Tobruk to facilitate humanitarian imports and commercial imports of basic items. "The sooner the free flow of goods is resumed, the sooner the food security of that country will be improved," a WFP spokesman said on Wednesday. Traders said it was difficult to ship anything by sea into Libya at the moment. "Libya is seeking to buy soft wheat," said a trader used to dealing with the country. "We did not resume exports to this country, because it's almost impossible to find ships and insurance for this destination." Another trader said, "Even if things are quiet when the contracts are signed, artillery shells could be coming down in the ports when the vessel actually arrives in two weeks time." Shipping sources also have said a U.N. arms embargo on Gaddafi enforced by NATO at sea is disrupting other shipping activity. Libyan coast guard and port officials said it was strangling vital seaborne trade. "As in any armed conflict there will always be a risk if one gets in the way of the fighting parties," said Jakob Larsen, maritime security officer with BIMCO, the world's largest private shipowners' association. "Until now all we have received is directions on how to help the navies achieve their objectives, but we have not seen any measures to make it more transparent to the shipping industry what is actually going on," he added. Traders said food imports in Gaddafi-controlled west Libya were affected by trade sanctions on the government. Large purchases of flour for west Libya have been made in recent weeks for shipment to Tunisia and truck transport to Libya, European grain traders said. "Libyan flour mills seem to be out of operation, and so the state-owned Libyan importing companies in Tripoli are buying finished flour ready for baking on the international market," a trader said. "There are problems on the payment front as no grain trading houses want to have the word 'Libya' on the documents. Letters of credit for the sales are being opened by banks outside Libya, notably in Tunisia." The WFP said on Tuesday a second chartered aid ship had reached the besieged western city of Misrata. It has also set up a humanitarian corridor into the west for civilians in cities including Tripoli. ------------------------------------------------------------------------------------

FOOD TRADE WITH LIBYA REBELS HIT BY PAYMENT FEARS

By Michael Hogan and Jonathan Saul HAMBURG/LONDON, April 27 (Reuters) - Food imports into Libya's rebel-held east are being hit as the interim national council struggles to establish lines of credit and foreign traders fear they will not be paid. Libya was a net importer of food before heavy fighting between rebels and leader Muammar Gaddafi's forces interrupted supply chains. This week the World Food Programme (WFP) said, "A recent interagency mission found that food stocks in the eastern parts of the country are not being replenished at normal rates and the current stocks are enough for up to two months only." "If the import capacity is not restored quickly, this could lead to a massive food availability problem for the entire population of eastern Libya," the U.N. agency warned. European dealers said transactions with east Libya were not feasible for most private grain trade houses. "I am not accepting the risk of local delivery to Libya and selling to the rebels. Which court would you go to if you were not paid? It is an unknown factor," one European trader said. Another said rebels had little expertise in food logistics. "The rebels could get flour by paying in advance, which they are not willing to do," the second trader said. "They could also charter ships themselves, buy the wheat at origin and ship it themselves. They do not seem to be doing this either." Analysts said the rebels still lack relationships with financial institutions. "It is rather difficult to extend credit to someone who is not fully plugged into the international financial system or into singular national financial systems," said J. Peter Pham, Africa director with U.S. thinktank the Atlantic Council. "Until those very basic fundamentals are addressed, there is going to be hesitancy on the part of the trading community to do business with them." Meanwhile, stores and supermarkets in Benghazi remain well-stocked with food items such as bread, cheese and milk, but storeowners and residents say prices of some items have gone up sharply since the uprising began. "These are the hardest days we've had so far, because we cannot get the goods we want when we want them," Saleh Awad, a grocery store owner in Benghazi, told Reuters.

SCENARIOS-MORE HAPAG-LLOYD OPTIONS FOR TUI AG THIS TIME

By Victoria Bryan and Matt Scuffham FRANKFURT/LONDON, April 28 (Reuters) - Germany's TUI AG , the owner of Europe's largest travel firm TUI Travel , is seeking to exit its stake in container shipping group Hapag-Lloyd to focus on tourism activities. With IPO markets volatile and its last attempt at selling off HapagLloyd in 2009 not going to plan, forcing TUI to keep a larger stake than it envisaged, what are its options this time around? IPO TUI's board had approved plans for a partial IPO of Hapag-Lloyd in March. However, the Albert Ballin consortium, which is made up of German investors and owns 50.2 percent of the shipping group, said just over two weeks later that it was postponing the decision due to market uncertainty following the Japan earthquake and North African uprisings.

FREIGHT MONTHLY Tuesday, 03 May 2011

"Who is going to float a business in this market? Why would you do it? You might get a float away but it's the aftermarket," a source close to the supervisory board told Reuters. With several big IPOs pulled or delayed recently, investors are expecting discount on prices. "If you do want to do it in this environment you're going to have to take a big haircut on the price because someone's got to bear the risk. The view is if you don't need to do it, don't do it," the source said. With time running away, it now seems likely that any IPO would be delayed until the second half of the year. "The conditions for a potential IPO have improved since the disaster in Japan, but clearly a divestment of the remaining stake in Hapag-Lloyd via a sale to a strategic/financial investor continues to be on the cards," Commerzbank analyst Johannes Braun said.

PIRACY BIGGEST THREAT TO SOUTHERN AFRICA SECURITY

By Wendell Roelf CAPE TOWN, April 12 (Reuters) - South Africa believes Somali pirates, and not political instability in Zimbabwe, pose the biggest threat to security in southern Africa, its defence minister said on Tuesday. The pirates, spurred on by multi-million-dollar ransoms paid to release hijacked vessels along a key oil shipping route, have struck further south, threatening regional commerce and trade from Africa's largest economy, Lindiwe Sisulu told Reuters. "At the moment, we think that the issue of piracy is beginning to be a serious problem to us ... We have defined maritime security as a threat to the region," Sisulu said in an interview. South Africa, which operates the continent's most sophisticated navy, has already deployed the German-built frigate SAS Mendi to patrol the Mozambique channel in the Indian Ocean as a deterrent following a pirate incursion close to South African territorial waters late last year. "A great deal of our trade takes place on the sea and we've got to make sure we protect that," Sisulu said. Analysts say more than 40 percent of the world's seaborne oil supply passes through the Gulf of Aden and the Arabian Sea and is at risk from pirate gangs. Southern Africa is a major supplier of raw materials for the world and a vital source of the commodities that help power China's economic engine. Sisulu said a military strategy, which would flesh out the operational and funding requirements to deal with piracy, would be presented to cabinet within a month, following mounting pressure from the European Union to boost the global fight.

ANCHOR INVESTOR In a dual-track process, TUI is also working on finding an investor for its stake in Hapag-Lloyd. TUI has already announced that it will sell an 11.3 percent stake in Hapag-Lloyd to Albert Ballin in a 315 million euro ($467 million) deal, thus cutting its stake to 38.4 percent. Among the options for TUI's remaining stake could be a buyer from a sovereign wealth fund. The group is in talks with the state of Oman and Chinese logistics company HNA and has asked that binding bids be submitted by late May, according to sources. TUI has declined to comment on the identity of the buyers, stating only that it is in talks with potential investors. "As the crises in North Africa and the tsunami in Japan have weakened the stock market environment, TUI might get higher proceeds from the selling process," Silvia Quandt analyst Stefan Kick wrote in a recent research note. 2012 OPTION If all else fails, TUI has an option to sell its stake in Hapag-Lloyd to the Albert Ballin consortium from Jan. 1, 2012. When finalising the Hapag-Lloyd deal in 2009, TUI and the Albert Ballin consortium agreed not only first right of refusal on the stake, but also an obligation for the consortium to acquire the stake. A source at TUI said this option meant the group was relaxed about the Hapag-Lloyd stake and could take its time to ensure it got the right price, whether via IPO or a sale. ------------------------------------------------------------------------------------

"We are responding first and foremost in our national interest and secondly in support of international effort." South Africa, one of Africa's largest peace-keeping contributors on the continent with troops in the Democratic Republic of Congo, Sudan and Central African Republic, intends to go the market next year to tender for urgently needed military transport aircraft, Sisulu said. Its current airlift capacity is constrained after it cancelled a $5.2 billion contract to buy eight Airbus A400M aircraft due to rising costs and delivery delays. "We don't have one and we depend on renting the aircraft," she said. Sisulu did not rule out humanitarian or peace-keeping assistance to Ivory Coast, as the west African nation sought to rebuild in the aftermath of a violent power struggle following a disputed election. South Africa's dispatch of a naval vessel to waters off the Ivory Coast worried some African leaders, who saw it as an unwarranted projection of force. The ship has returned to South Africa. "Should at any point we be asked to contribute to creating any stability in Cote d'Ivoire we would be happy to do that," Sisulu said. ------------------------------------------------------------------------------------

ITALY STILL NEGLECTING PORTS-INDUSTRY GROUP

By Catherine Hornby ROME, April 13 (Reuters) - Italy is neglecting its ports and failing to boost investments for rail and road links that are urgently needed to compete with European rivals, the head of ports association Assoporti said on Wednesday. Francesco Nerli, president of the group that represents the country's biggest ports, said Italian ports need at least 300 million euros of annual public funding for the next 10 years to help improve logistics and connections with the rest of Europe.

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"We have been discussing this for two and a half years and so far the government has done nothing," Nerli said in an interview. "Public investments in ports are blocked in our country," he said. He said Italian ports were asking for about 3 percent of the roughly 9 billion euros that the state receives every year from value-added tax (VAT) revenues from ports to be set aside for investments, mainly in road and rail links. Italy's centre-right government presented some reform measures last year but was criticised by port authorities and industry groups for not planning any substantial changes or progress in boosting ports' financial autonomy. Italy's ports, which contribute more than 30 billion euros to its economy, are often bypassed by ships coming through the Suez canal with Asian goods because of slower services than northern rivals and because they are not as well equipped for big cargoes. Ports in northern Italy such as Genoa are no further from the heart of Germany, Europe's biggest market, than Europe's largest port in Rotterdam, but poorer connections make them less attractive transit points. COMPETITION Rotterdam port is investing 4 billion euros over the next few years on a massive land reclamation project and on upgrading facilities, and is also urging the Dutch government to improve transport in the port area. Nerli said public funding for Italian ports would help stimulate private investments, which he said were normally focused on improving private facilities within the harbours. The infrastructure arm of Intesa Sanpaolo is interested in investing in Italian ports, potentially alongside Unicredit and Italian state holding CDP, its chief executive said in March. Nerli said cargo volumes at Italian ports were picking up after a decline in the economic downturn, which knocked container volumes by about 10 percent in 2009. But he said the pick-up was slow and volumes had not yet returned to 2007 highs, while turmoil in North Africa added to an uncertain outlook for 2011. Italy handles roughly 15 percent of Europe's container traffic annually, compared with more than 50 percent by northern European ports, according to industry figures. Nerli said the cost of labour was also making southern ports such as Gioia Tauro in Calabria uncompetitive with other ports in the Mediterranean region, including ports in North Africa. Lowering this cost, and bringing fuel taxes on ports in line with European standards, would help boost competitivity in the south, he said. ------------------------------------------------------------------------------------

CHINA COSCO STILL PLANNING GROUP'S LISTING -PAPER

SHANGHAI, April 15 (Reuters) - China COSCO Group, the country's top shipping conglomerate, is still working on plans for a group listing, the Shanghai Securities News said on Friday, citing a top executive, though no timetable was given. A listing of state-owned COSCO Group, the parent company of Cosco Holdings Co Ltd , has always been on the cards and plans are still underway, COSCO's Chairman Wei Jiafu said in an interview with the paper. Wei also said COSCO expected the global container shipping market to grow between 8-10 percent in 2011 to reach 150 million twenty-foot equivalent units. COSCO also expects global demand for dry bulk shipping to grow around 6 percent this year, buoyed by China's strong demand for iron ore, coal and grains, but overall supply to rise 14 percent. Wei said last month that he saw huge challenges in the dry bulk shipping market and has urged shipping companies to be rational in expanding capacity. ----------------------------------------------------------------------------------Source: Reuters Pictures

Panama-flagged cargo ship MV Asphalt Venture docks at the Kenyan Port of Mombasa April 28, 2011. Pirates freed the ship and some of its crew after a ransom was paid but they continue to hold seven Indian seafarers hostage, reportedly in retaliation for the arrest of Somali pirates by the Indian Navy in recent weeks. The vessel was en route to Durban when it was seized by armed pirates on September 28, 2010. REUTERS/Joseph Okanga

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