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May 10, 2021 / 12:40 PM Singapore — The ongoing second wave of the deadly coronavirus pandemic in India is expected to snowball into a major disruptor for the shipping and logistics industry as several ports globally are shunning ships which have called at any location along the South Asian coastline. Bunkering operations could also come in the ambit of this catastrophic wave that has engulfed India, although no major disruptions have been noted yet as demand has been lackluster, bunker industry sources said.

The impact on global shipping logistics from India's isolation could become a very significant market disruptor by causing delay in supply of ships, said Ole-Rikard Hammer, oil and shipping analyst with Oslo-based Arctic Securities. This will obviously tighten the tankers' supply, Hammer told S&P Global Platts.

There are serious concerns over several ports refusing to allow crew changes in those ships which have called on Indian ports over the previous 14 days.

Singapore has already banned ship crew changes for those with recent India-related travel history while Fujairah -- another major bunkering hub -- has also prohibited such crew changes from vessels arriving from India.

Voyage from India to several ports in Asia is less than two weeks, and this implies that the ship will have to idle away for a few days before being eligible to enter its next port of call for bunkering, loading, unloading, crew change, dry docking or even routine maintenance.

Bunkering schedules will go awry, daily earnings will be hit and ships will seek to offset it by seeking higher freight for India-bound voyages, several shipping sources in Asia and Europe said.

If things play out similar to what was seen last year during the first lockdown in India, there will be a sharp drop in local demand and most of this difference will be diverted for exports, said Ralph Leszczynski, who heads research at Genoa-based shipping broker and consultancy, Banchero Costa.

Due to ongoing refinery maintenance season in North Asia, Indian refiners may capitalize on this by giving a boost to product exports, particularly to Southeast Asia and Australia, Leszczynski said. This will help revive freight of Long Range I and II tankers, as until now refinery utilization levels in India has remained high, he said.

According to the latest government data, India's average run for all categories of refineries in India rose to 99% in March compared with 97% in the previous month. An Indian refinery source said in the week ended May 8 that run rates were still around 90%-95% and there was no immediate plan to cut them.

Bunkering impact trickling in

India, home to 12 major ports, has already reported a drop in cargo handling traffic, which could be further exacerbated should a nationwide lockdown be imposed.

According to the Indian Ports Association, the provisional traffic handled at these ports during April 2020 to March 2021 fell 4.59% year on year to 672.6 million mt.

India's Prime Minister Narendra Modi has abstained from implementing a nationwide lockdown so far this year. This comes after such a lockdown last year battered the economy severely.

However, a nationwide lockdown could be a possibility as pressure mounts due to the difficult situation, sources told Platts. In any case, a series of over two dozen province-specific lockdowns across the country are already being implemented.

On the bunkering side, the spike in COVID-19 cases has not led to a significant impact yet, unlike some other oil product markets, as demand has been tepid and shipowners were making preparations to avoid delays, sources said.

For vessels bunkering around India's ports, shipowners have begun arranging for bunkering operations in open international waters, and to avoid berthing as far as possible to mitigate the risk of infection, market sources said.

Still, the time taken for bunkering operations has 'definitely' increased at some ports because one needs to follow various safety protocols, a bunker trader said.

In the port of Visakhapatnam, for instance, where bunkering is carried out through tank trucks to barges and then to vessels, supply disruptions were heard due to fewer truck drivers, another local trader said.

However, some ports such as Mumbai and Kochi have been relatively unscathed, market sources said.

First week of May started with good business in Mumbai and operations have been normal, a trader there said.


Prices at Mumbai were still competitive to Colombo, indicating that there were enough product availability in the country. The delivered Marine Fuel 0.5% sulfur price at Colombo averaged $555.21/mt in April compared to $535.17/mt in Mumbai for the same month, according to Platts data.


May 6, 2021 / 11:50 AM President Joe Biden on Wednesday threw his support behind waiving intellectual property rights for COVID-19 vaccines, bowing to mounting pressure from Democratic lawmakers and more than 100 other countries, but angering pharmaceutical companies.

Biden voiced his support for a waiver - a sharp reversal of the previous U.S. position - in remarks to reporters, followed swiftly by a statement from his top trade negotiator, Katherine Tai, who backed negotiations at the World Trade Organization.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures," Tai said in a statement, amid growing concern that big outbreaks in India could allow the rise of vaccine-resistant strains of the deadly virus, undermining a global recovery.

Shares in vaccine makers Moderna Inc (MRNA.O) and Novavax Inc (NVAX.O) dropped several percent in regular trade, although Pfizer Inc (PFE.N)stock fell only slightly.

The head of the World Health Organization, Tedros Adhanom Ghebreyesus, called Biden's move a "MONUMENTAL MOMENT IN THE FIGHT AGAINST #COVID19" on Twitter, and said it reflected "the wisdom and moral leadership of the United States.

Pharmaceutical companies working on vaccines have reported sharp revenue and profit gains during the crisis. The industry's biggest lobby group warned that Biden's unprecedented step would undermine the companies' response to the pandemic and compromise safety.

One industry source said U.S. companies would fight to ensure any waiver agreed upon was as narrow and limited as possible.

Robert W. Baird analyst Brian Skorney said he believed the waiver discussion amounted to grandstanding by the Biden administration and would not kick off a major change in patent law.

"I'm skeptical that it would have any sort of broader long- term impact across the industry," he said.

Biden backed a waiver during the 2020 presidential campaign in which he also promised to re-engage with the world after four years of contentious relations between former President Donald Trump and U.S. allies. Biden has come under intensifying pressure to share U.S. vaccine supply and technology to fight the virus around the globe.

His decision comes amid a devastating outbreak in India, which accounted for 46% of the new COVID-19 cases recorded worldwide last week, and signs that the outbreak is spreading to Nepal, Sri Lanka and other neighbors.



May 7, 2021 / 9:35 AM The International Maritime Organization’s (IMO) Maritime Safety Committee meeting will convene online from 5to 14 May 2021 and BIMCO will be attending.

One of the subjects high on the agenda is related to containers lost at sea, owing to the potential danger, not only to ship safety when floating in the water, but also to the environment, particularly with regard to the plastics they contain.

The shipping industry is seeing the biggest spike in lost containers in many years. An average of approximately 1400 containers are lost at sea every year. Unfortunately, since December 2020, four major incidents have occurred in the Pacific Ocean, a region where the busiest traffic and the worst weather collide. The numbers related to these four incidents have caused a spike in the statistics with a total number of around 3,500 lost, according to media reports.

Parametric rolling in relative moderate seas as well as discrepancy between declared weight and actual weight of containers may be contributing factors. However, it appears that no single factor caused the incidents but rather that several factors may have contributed. The incident investigation reports have yet to be finalised, setting out the detailed root causes.

However, at IMO level there is a request to review current regulations and possibly introduce preventative initiatives.

During MSC 103, the IMO will consider measures regarding the detection and mandatory reporting of containers lost at sea that may enhance the positioning, tracking and recovery of such containers.

BIMCO recognizes that a mandatory reporting system is a prerequisite when containers are lost overboard. However, it is equally important to avoid having them lost in the first place. To restore fidelity in the safety of container transport with the present fleet and provide the technical understanding that is needed for safe operation, other areas of interest, like weather routing, the ship’s design and its propulsion, as well as the lashing of the containers should be considered too.

BIMCO will follow up on this issue after the meeting.




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