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State aid in the form of loans and guarantees started funnelling through to hard-pressed shipping lines in South Korea, France, China and Taiwan as the industry braced for the full toll of a recession. The billions of dollars offered by governments determined to protect their flagships brought predictable consternation from certain quarters, principally Denmark. Under intense financial pressure for the past couple of years, Singapore’s Pacific International Lines (PIL) revealed yesterday that Heliconia Capital Management, part of Temasek Holdings, the world’s eighth largest sovereign wealth fund, is looking at making a major investment into the containerline. PIL said it is in discussions with 15 lenders over debt rescheduling and warned of the risk of defaulting. Crew change news dominated headlines all month. Many seafarers have now been working for longer than a year at sea as coronavirus-linked travel restrictions make repatriation difficult. As May ends a number of solutions are finally in sight to get the more than 150,000 seafarers working beyond their contracts back home. The tanker bull-run came to an end with rates coming off across all segments by an average of 40% during May. The most pronounced drop was experienced in the LR2 product tanker category where rates fell by more than $100,000 a day this month. The International Energy Agency (IEA) forecasts that global oil demand will fall by 8.6m barrels per day in 2020. The shipbreaking sector gradually reopened for business in South Asia providing owners with an alternative outlet for the growing swathe of idled tonnage around the world. Strict working restrictions related to the Covid-19 outbreak across India, Pakistan and Bangladesh had seen the demolition market come to near standstill for much of the past seven weeks. Singapore’s Ocean Tankers, part of the heavily in debt Hin Leong Trading group, applied for judicial management on May 12. Two employees of accounting firm EY were appointed interim judicial managers of the company. Ocean Tankers is one of the largest tanker firms in Southeast Asia with a diverse fleet in excess of 130 ships. Rome-based PB Tankers found a way to come out of a tricky debt restructuring. The Barbaro family controlled company survived with Pillarstone swooping for four of its five MR tankers. PB Tankers filed for court protection last year after it ran into difficulties for alleged trading with Venezuela. An investigation carried by Splash showed the disastrous effect Covid-19 has had on the pure car, truck carrier (PCTC) segment. The active fleet still shipping cars around the world is now down by more than 50% year-on-year. Less than 200 PCTCs are in operation compared to 422 that were at work this time last year. Operators are seeking lay-up solutions with global car sales demand forecast to fall more than 20% in 2020. Some of the biggest names across the Danish transport spectrum including Maersk are joining forces to produce sustainable fuels for road, maritime and air transport in the Copenhagen area. The news is also notable for Maersk’s determination to pursue renewable methanol as one of its main fuels of the future. The new hydrogen and e-fuel production facility is scheduled to open in 2023 and will be one of the largest sustainable fuel producing sites in the world. The deadly pandemic spreading across the world forced a keenly awaited autonomous ship into lockdown.The launch of the Yara Birkeland, among the most anticipated new ships to hit the water this year, is to be delayed. Norwegian fertiliser firm Yara International, which ordered the pioneering 120 teu, battery powered autonomous vessel, announced it is pausing development of the ship, citing the changed global outlook brought about by the Covid-19 epidemic. No new timeline for the landmark ship’s delivery has been given.

May 2020 Review

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