CONTAINER SHIP FOCUS

T E C H N I C A L N E W S A N D I N F O R M AT I O N O N C O N TA I N E R S H I P S
OCTOBER 2007 Issue 4 Welcome to the fourth issue of Container Ship Focus, a technical publication produced by Lloyds Register exclusively for the container shipping industry.

IN THIS ISSUE 2 4 Getting bigger all the time orders pour in How low can you go? Air draught issue for new panamax ships Going for green COSCOs commitment to UN Global Compact Emission impossible? MARPOL Annex VI review is underway

10 Recent deliveries of ships built to Lloyd's Register class 12 Undeclared hazmat the danger within

2 CONTAINER SHIP FOCUS

October 2007

Getting bigger all the time

Orders for container ship newbuilds continue to pour in, but where will these ships find their niche?
Growth in demand for container ships and the aggressive pursuit of market share by container ship operators and liner services is fuelling the enlargement of the world fleet in terms of both aggregate capacity and unit ship size. As long as the drivers behind this rapid expansion continue, the outlook for this dynamic sector remains positive. Growth of the container trades has averaged 9.8% since 1980 and is forecast to remain at this level for the foreseeable future. Container cargo volumes are determined by the demand for imported consumer and manufactured goods, which drives growth in the container trade and container ship employment. Over the short- to medium-term, foreign manufacturers will continue to relocate to developing countries in Asia for cost reasons, further compounding the effects of global growth on container ship demand. This year, the proportion of total demand for container shipments on headhaul (Asia to Europe and Asia to USA) routes has risen to 67% from 58% in 2001, clearly highlighting Asias pivotal role on the world market. It is expected that this ratio will climb towards the 70% mark throughout the remainder of the decade, where it will remain as long as developing countries in Asia continue to produce lowvalue consumer goods. Capturing cargoes Manufactured exports out of China have provided the container ship market with stability in growth over recent years. These exports have been boosted by the relocation of foreign manufacturers to China, where companies can capitalise on the competitive advantage generated by lower labour costs. This has increased container ship employment on longer trade routes. Most recently, containers have been used to transport cargoes that are traditionally synonymous with general cargo ships. The proportion of total dry bulk seaborne trade carried in containers has grown considerably; from 17% in 2001 to 24% in 2006. This proportion is forecast to rise to around 30% by 2010, at the expense of general cargo shippings market share. The growth in unitised seaborne dry bulk cargoes is a very clear demonstration of the progressive role of container ships in shipping. Recently, high dry bulk freight rates have made container ships the obvious choice when transporting traditional minor bulks such as scrap and steel. Depending on which analyst you ask, forecasts for annual growth in container ship demand vary between 9 and 15%. But even if growth is at the lower end of the range, it will be significant. Sizable growth in demand for container ships is required to provide employment for the rapidly expanding container ship fleet which has been exhibiting doubledigit annual growth rates for more than eight years. Some turbulence ahead While the robust forces of globalisation will ensure that container ship demand growth will remain firm in the long term, it is inevitable that there will be fluctuations along the way. Container ship demand is inexorably linked to world gross domestic product (GDP) growth by a factor of 3 or 4; GDP growth of 4% would involve container ship demand growth of around 12%. During the 1990s, the ratio of economic growth to container ship demand averaged 3.6, whereas it has now risen to 4.4. When world economic growth slumped to around 1.5% in 2001, demand growth for container ships fell to 4.1%. As global growth rebounded to 4% just three years later, demand growth for container ships increased in tandem. Since then, the past three years have shown robust demand growth for container ships on the back of globalisation. Any risks or shocks associated with countries to which world GDP is most sensitive could also threaten container ship demand. For example, an economic slowdown in the US, Europe, Japan and, more recently, China would affect global growth, subsequently impacting demand growth for container ships.

Figure 1: Proportion of the existing fleet and orderbook. by size.

45% 40% 35% 30%
mGT

13.2% compound annual growth rate 2002-2010

41+

25% 20%
15.32366071

15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010

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CONTAINER SHIP FOCUS 3

Bigger is better Container ship operators use a variety of means to increase their market share. An expansive geographical territory, a frequent and efficient service and a youthful fleet of large ships are all ways in which players differentiate themselves in this competitive market.
Figure 2: Lloyds Registers market share of 10,000-plus teu orderbook.

Lloyds Register 48 ships of 0.53m teu 31% Rest of Class 109 ships of 1.33m teu 69%

There is much at stake; earnings have remained volatile in this environment, hovering at an average $1,300 per teu for headhaul and backhaul routes over the past six years, making economies of scale a vital aspect for operators. Ship design is influenced by a variety of factors, which range from the regulatory to the economic. From an economic perspective, growth in demand for container ships is driving ship capacity upwards, the only constraint being the global transport infrastructure. At the same time, the promise of significant profits has also motivated the evolution of larger container ships. But size is not everything. The container ship trade model is a dynamic one, which changes in response to external drivers. The expansion of the Panama Canal, for example, is an infrastructural development which will have a significant bearing on the container ship market going forward. This is examined in greater detail on page 4.

Fleet profile The container ship fleet is currently keeping pace with overall demand growth. During the past 12 months, the container ship fleet has increased by 14%. The fleet now totals 118 million gross tonnes (gt), comprising 4,089 ships. This translates to a cargo carrying capacity of some 10.2 million teu. The container ship fleet has been growing at an average of more than 9.5% since 1980 and is forecast to maintain this rate to 2010 and beyond. Currently, the orderbook represents some 55% of the existing cargo carrying capacity of the fleet. A principal reason behind this swell in orderbook capacity has been the evolution of the 11,000-plus teu ultra-large container ship (ULCS), a popular choice for newbuilds so far this year. There are currently 119 ULCSs on the orderbook; 82% of which were contracted in the last six months. Figure 1, which illustrates the proportion of the existing fleet and orderbook by size range, shows those size categories where there is serious market interest. While the post-panamax and ULCS ranges have only a small existing fleet share, phenomenal development in both these sectors is expected.

Reflecting confidence in the markets, the container ship orderbook for ships of 10,000plus teu expanded heavily in the third quarter this year. Of the 150-plus orders for ships representing a total capacity of 1.9 million teu currently on order, some 60% were placed during July, August and September. Figure 2 shows Lloyds Registers impressive performance in this category, with a 31% share of the orderbook. Need for feeders Figure 1 also reveals possible shortcomings in the smaller ship size ranges, particularly the small feeders. Some 62% of the container ship fleet by number is comprised of small and large feeders, so their contribution is significant. But feeder tonnage makes up some 82% of the 20-plus-year-old fleet, which points to a replacement

requirement in the medium term, despite the tonnage required to service the huge increases in demand for container ships. Feeder tonnage is vital to the logistics supply chain in which container ships operate. The challenge for the container ship fleet going forward will be to accomplish equilibrium amid the rapid pace of development in the market. This will be challenging, since the container ship fleet is a very young one; 45% of the fleet was built less than five years ago and, when we consider that a mere 9% of the fleet is more than 20 years of age, it becomes clear that increased scrapping may not be an immediate source of market stability. However, pressure may be felt by companies owning the slower, smaller and older tonnage, as their fleets face obsolescence.

For further information contact Gary Morgan, Market Analyst, Lloyds Register E gary.morgan@lr.org T +44 (0)20 7423 2725 F +44 (0)20 7423 2213

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October 2007

How low can you go?

Ships entering the most important of the New York and New Jersey container terminals will need to pass under the Bayonne Bridge.

Orders are already being placed for ships optimised to the dimensions of the Panama Canal Authoritys Third Set of Locks project, but our research reveals an additional constraint in the form of the Bayonne Bridge.

the development work and will continue to be used once the work is complete, ultimately providing a total of three strings of locks at each end of the canal. Thus the canal will be able not only to accept larger ships but the total annual tonnage passing through the canal will be greatly increased. The expansion plans are, however, not compatible with the largest container ships expected to be in service by 2014; these 14,000 teu goliaths feature 22 boxes across the breadth of the ship and a beam of about 56 metres. Such vessels are, instead, most suited to the Asia-Europe trades, so it is likely that vessels ranging in capacity between 12,000 and 13,000 teu will become the new panamax (NPX) container ships. The expansion of the Panama Canal is likely to lead to a complete redefinition of container trades. Lloyds Registers and OSCs extensive research suggests that US East Coast ports will benefit substantially from the changes, and that the expansion forms a vital element in the likely reshaping of trade patterns. With larger ships able to transit the canal, routes between Asia and the US East Coast will provide the most cost-effective means to move freight in and out of the American Midwest. Central to the success of the revitalised trades will be the ability of ships to call at New York.

Work has started on the expansion of the Panama Canal. If all goes according to plan, the expansion will cost some $5.25 billion and the new locks should be operational by 2014. The project to add a third set of locks is a major feat of engineering and will have a lasting impact on shipping worldwide. The container trades are a major driving force behind the expansion plans, which will provide greater throughput and allow an increase in the maximum vessel size. Lloyds Register has teamed up with Ocean Shipping Consultants Ltd (OSC) to look at what the expansion means for container ships. Whats happening when Two sets of locks one at the Atlantic end of the canal, east of the Gatun locks, and the other at the Pacific end to the south-west

of the Miraflores locks will be built. Each set of locks will feature three levels, or chambers, similar to the configuration of the existing Gatun locks. The chambers will allow transit of vessels with a beam of up to 49 metres (160 feet), an overall length of up to 366 metres (1,200 feet) and a draught of up to 15 metres (50 feet). Each chamber will be connected to three water reutilisation basins; 18 in total. These basins, which are being built to conserve water, together with the increased capacity produced by deepening Gatun Lake and Gaillard Cut and the raising of Gatun Lakes maximum operating level by approximately 0.45 metres (1.5 feet), will enable many more additional lockages per day. The existing two strings of locks, which can accommodate ships of up to 32.3 metres (106 feet) beam, will remain in use throughout

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CONTAINER SHIP FOCUS 5

To meet the current air draught restrictions in New York, the NPX container ship will need a reduced height. Height restriction Our study highlights a crucial issue: ships entering the most important of the New York and New Jersey container terminals will need to pass under the Bayonne Bridge. With an air draught of 46 metres (151 feet), this bridge currently poses a problem for nearly all post-panamax ships currently in service and on order. It is understood that the 75-year-old bridge will eventually be raised, but this will be an expensive and lengthy long-term operation. This height restriction is, therefore, a serious issue for the container trades. As the drive for improved economy continues, the latest generation of large container ships is being designed with even higher stacks of containers and with the ability to carry a greater proportion of high cube containers. These factors make transit under the Bayonne Bridge even more problematic. This is a very significant issue that must not be overlooked, says OSCs Director, Andrew Penfold. On the one hand, an NPX ship delivered today would create significant employment prospects on a competitive cost basis in the Asia to Europe trades. This could drive operators towards committing to larger ships, as many have done to date. But, on the other hand, operators might very well see an inability to enter New York as a significant limiting factor. David Tozer, Lloyds Registers Business Manager for Container Ships, adds: As the timescale for the possible raising of the bridge

Bigger is better The growth of the container trades is remarkable, not only in terms of the total capacity of the container ship fleet which has now surged past 10m teu, but also in terms of ship size. The largest container ships in service today have capacities greater than 10,000 teu, which seemed unthinkable just a few years ago. In 1999 Lloyds Register, then classing the largest container ships in the world, embarked on a comprehensive study to examine the future prospects for ultra-large container ships (ULCS) and predicted the introduction into service of ships like the Emma Mrsk, the largest container ship in service today by a significant margin. Today Lloyds Register is investigating, again with OSC, the implications of the next major influence on the container trades: the development of the Panama Canal to accommodate container ships almost as large as the ULCS.

is uncertain, Lloyds Register is proposing interim solutions that will help operators to provide a competitive service from Asia to the US East Coast including New York while the air draught under the Bayonne Bridge remains at 46 metres, which can then be enhanced once the bridge has been raised. The solution To meet the current air draught restrictions in New York, the NPX container ship will need a reduced height. This may be achieved by the fitting of folding masts, a lower funnel and by carrying fewer tiers of containers on deck, possibly as few as five tiers. Designs are likely to emerge with a one third forward or even fully forward bridge arrangement to maximise the ships container capacity. In the future, when the Bayonne Bridge is raised, it will be a relatively straightforward matter to convert these ships to carry seven or eight tiers on deck by increasing superstructure and funnel heights, providing this enhancement is designed-in at the time of build.

Container ship orders are forging ahead, but it is important to understand the environment in which these ships will operate. We can help ship owners and builders understand how best to address some of the technical challenges facing container ship design today.

Andrew Penfold

David Tozer

For further information contact David Tozer, Business Manager Container Ships, Lloyds Register E david.tozer@lr.org T +44 (0)20 7423 1562 F +44 (0)20 7423 2213

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October 2007

Going for green

COSCO Asia has been built to stringent environmental standards, reflecting COSCO's commitment to its responsibilities under the UN Global Compact.

COSCO cares China Ocean Shipping (Group) Company (COSCO) is among a core of container ship owners who recognise the need to build ships that demonstrate green credentials. The latest and largest addition to the COSCO fleet, the 10,050 teu COSCO Asia, has been classed by Lloyds Register and holds our Environmental Protection (EP) notation. She is the first of four sister ships to be built at Hyundai Heavy Industries (HHI) yard in Ulsan, South Korea. The remaining three are due for delivery by mid-2008. The stringent environmental standards COSCO Asia has been built to reflect COSCOs commitment to its responsibilities under the UN Global Compact (see www.unglobalcompact.org). The company has fully embraced this Compact and is applying its principles throughout its operations. The Compact asks companies to commit, within their sphere of influence, to a set of ten core values addressing the environment, human rights, labour standards and anti-corruption. Regarding the environment, the Compact stipulates that businesses should support a precautionary approach to environmental challenges; undertake initiatives to promote greater environmental responsibility; and encourage the development and diffusion of environmentally friendly technologies.

There are sound economic reasons why shipowners should build environmental awareness into their container ships. The shelves of North American
and European hypermarkets are filled with bargains originating from the vast manufacturing hubs of the Far East. Container ships, boasting ever-increasing capacities, have transported them there in huge quantities and at low cost. The average Western consumer, dazzled by the attractive figures on the price tag, used not to think very deeply about the wider implications of such apparent good value. However, the new political and societal focus on the environment, driven by worries about climate change, is encouraging people to think again. Shoppers, now expecting moral as well as financial fulfilment from their purchases, are beginning to realise how their choices can make an ethical impact. Retailers are duly taking note and, as part of their efforts, recognise that it is increasingly important to be seen to be green.

But appearances are not enough; a better-informed public knows to look beyond what is presented to them at the shopfront. They want reassurance that the consumables they are presented with have arrived with due care; an expectation that extends far down the supply chain. The resulting pressure from US retailers keen to demonstrate green credentials under accreditation schemes such as ISO 19000 is encouraging container ship owners to look at the impact of their own operations on the environment. At the same time, green issues are falling increasingly under the regulatory spotlight (see page 8) and it is likely that existing regulations and recommendations requiring the construction, maintenance and operation of ships to take place with minimum impact on the environment will be more stringently enforced in the future.

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Environmental inventory We also offer a Green Passport approval and verification service for both newbuilds and existing ships (see Horizons June 2007, pages 6-8). The Green Passport, intended to comply with the International Maritime Organizations (IMO) Guidelines on Ship Recycling under Resolution A.962 (23), paragraph 5, lists the materials present in a ships structure, systems and equipment that may be hazardous to health or the environment. This helps owners promote better hazard management, increase their environmental awareness and enhance planning.

Complying with the 5 ppm requirements is not an industry standard and demonstrates COSCOs great commitment to the environment.

COSCO Asia embodies these principles. We undertook the plan approval of the ship, her equipment and systems, and surveyed her during construction. Built according to our Rules on Environmental Protection, COSCO Asia goes beyond our basic EP Notation. The three supplementary characters on the end of COSCO Asias EP Notation (B, O, R) indicate that she incorporates the following environmentally friendly features: B: a ballast water management plan (BWMP) approved by Lloyds Register; O: a 5 parts per million (ppm) oily water separator; and R: a refrigerant system in which the refrigerant gases are restricted to an ozone depleting potential (ODP) of zero and a global warming potential (GWP), of less than 1,950. GWP is a measure of how much a greenhouse gas is estimated to contribute to global warming, relative to the mass of carbon dioxide (CO2).

Complying with the 5 ppm requirements is not an industry standard and demonstrates COSCOs great commitment to the environment, says Lloyds Register surveyor Haikun Zhu. Based in our Ulsan office, Zhu has been involved in the delivery of the COSCO Asia and is working on other ships under construction at HHI. The environmental standards that COSCO Asia adopts surpass international requirements in three main ways, adds Hector Sewell, Lloyds Registers Vice President of Marine Business Development for China and Korea. Firstly, COSCO Asias main engine and generator comply with the latest international environmental protection regulations; secondly, the separation of oil from oily water generated by the engine has been enhanced by using a new technique on the oily water separator; and lastly, she is equipped to fully implement the ballast water management plan under the guidelines of the International Convention for the Control and Management of Ships' Ballast Water and Sediments. And theres more Of course, there are further steps shipowners can take. Beyond the supplementary notations B, O and R mentioned above, ships can gain additional characters in recognition of

other environmentally friendly features, as follows: A denotes that the hull antifouling system features nonbiocidal paints for example, silicone-based paints. P indicates that the ships oil tanks are protected, as they would be under MARPOL Regulation I/12A. N shows that the ships emissions of nitrous oxide (NOx) do not exceed a maximum 80% of the limits specified in MARPOL Regulation VI/13. S sets a maximum of 1.5 % m/m sulphur in fuel oil and a maximum 0.2 % m/m in gas oil. G demonstrates that the ship has a grey water treatment plant installed and that the effluent conforms to strict limits regarding its content. V, which applies to tankers, shows that vapour emission control systems have been fitted to control cargo vapours during transport and fluid transfer. Besides the obvious benefits to the environment, there is a strong business case for building ships to EP Notation. Our Rules on environmental protection have been developed in anticipation of upcoming and future legislation and thus help to future-proof ships for compliance going forward. Furthermore, if shipowners take a proactive stance through such green initiatives, they may also ensure that this future legislation remains pragmatic and beneficial to industry.

HHI president and CEO KS Choi and Lloyd's Register Chairman David Moorhouse pictured with COSCO representatives Chen Hongsheng, Mao Mei, Wang Wenying, Zhang Fusheng and Sun Jiakang.

For further information contact Peter Catchpole, Environmental Services Manager, Lloyds Register EMEA E peter.catchpole@lr.org T +44 (0)20 7423 2011 F +44 (0)20 7423 2026

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October 2007

Emission impossible?
Modern, 10,000plus teu container ships now feature even larger diesel engines of up to 14 cylinders, burning more than 200 tonnes of fuel per day. There are also proposals for ships to use distillate fuels with a maximum sulphur content of 1% by 2012, which would later be cut to 0.5% by 2015. This could come with an option to use residual fuels with scrubbers to achieve the same effect. Meanwhile, the review groups proposals aim to reduce NOx limits in stages from 2011, and again some five years later for new engines. IMO is also considering legislation to lower NOx emissions from slow-speed engines and NOx limits are also being considered for ships built before 2000. Particulate emissions are also likely to be increasingly regulated: IMO is considering other measures such as the use of shore-based power in port and emissions trading schemes, says Graham Greensmith, Lloyds Register Lead Specialist, External Affairs. On a wider scale, the impact of greenhouse gases namely carbon dioxide (CO2) emissions from ships is also under scrutiny. Balancing act Emissions can be lowered using distillate fuels, shipboard equipment, or an approach that combines the two. But while the availability and quality of low-sulphur bunker fuel remains uncertain, there is plenty of research into developing shipboard technology to cut exhaust emissions. Extensive research into exhaust gas cleaning systems, which tackle emissions in the waste stream, is currently underway; trial results show reduction of SOx and NOx emissions by some 90% and 15%, respectively, and

Increasing evidence linking climate change and poor respiratory health with exhaust emissions has necessitated a review of MARPOL Annex VI.

MARPOL Annex VI, which was first adopted by the International Maritime Organization (IMO) a decade ago, finally came into force in May 2005. Since then, a steady stream of headlines informing us of increasingly extreme weather conditions, global warming and the melting of the polar ice caps, has captured the worlds attention. Emissions control is perceived to be an important factor in minimising our impact on the environment. And, at the same time, there is increasing evidence of the negative impact of exhaust emissions on our health. Along with other industry sectors, shipping must do its bit. The regulations of MARPOL Annex VI which deals with the prevention of air pollution from ships target ship exhausts and set limits on sulphur oxide (SOx) and nitrogen oxide (NOx) emissions. They also prohibit deliberate emissions of ozonedepleting substances.

Reviewing the regulations IMO has now begun a review of MARPOL Annex VI, looking to lower SOx and NOx limits further. There is a lot at stake in making newbuilds and existing ships environmentally friendly. Modern, 10,000-plus teu container ships now feature even larger diesel engines of up to 14 cylinders, which burn more than 200 tonnes of fuel per day. Any changes to emissions limits will have a substantial impact on business. IMOs independent review group has identified a number of options to reduce SOx limits. These proposals include: retaining a 4.5% worldwide limit, but lowering the SOx Emission Control Area (SECA) limit to 1%; introducing a lower limit worldwide for an agreed distance offshore; and lowering the 4.5% limit to 3% in 2012 and to 1.5% in 2016. On the last point, legislation could be used to encourage the use of emissions control technology on top of a requirement for ships to use lowsulphur distillate fuels in SECAs and port areas.

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CONTAINER SHIP FOCUS 9

particulates by some 80%. Sulphur scrubbers also reduce particulates and other harmful gases. The use of natural gas as a fuel may also provide an answer. Its minimal SOx and NOx output must, however, be balanced against the other ways in which natural gas impacts the environment. The future regulatory developments under MARPOL Annex VI remain, for the time being, unclear. One thing, however, is certain: the focus on the environment is only going to sharpen and the industry will be expected to demonstrate its commitment to tackling the issues. As part of this, downward pressure on exhaust emission limits can therefore be expected to continue.

A proactive approach
Ships crews face increased pressures and time constraints when maintaining manual records to demonstrate environmental compliance with exhaust emissions and pollution controls. MARPOL Annex VIs approach of using the bunker delivery note (BDN) and a bunker manifold sample to demonstrate quality and sulphur compliance is a well-established process for quality verification of fuel loaded onto a ship. However, the BDN does not enable an operator to demonstrate what is actually passing through the fuel system at any particular point in time, because ships inevitably carry more than one grade of fuel and these are segregated according to sulphur content. The MARPOL approach relies on BDNs providing a true indication of the quality of fuel loaded, and this will depend on how well the samples have been drawn, as well as on the integrity of the parties involved when reporting data, says Tim Wilson, Principal Specialist Engineer and Product Manager of Lloyds Registers fuel oil and bunker analysis service (FOBAS). Therefore, it allows at best a calculated guess, based on assumptions, as to the actual quality and sulphur content of the fuel entering the engine. FOBAS Onboard We are currently developing a new real-time fuel and lubricant quality management system, called FOBAS Onboard with Lab-OnA-Ship, which will help operators to monitor the sulphur content of fuel entering ships engines at any point in time. It will also measure a range of other quality parameters to ensure that the fuel is of acceptable quality for combustion. FOBAS Onboard with Lab-On-A-Ship will give operators the ability to monitor online the level of sulphur entering the engine, explains Wilson. It will be linked to the ships global positioning system (GPS), providing a tamper proof system that will be able to generate data reports linked to the ships position on demand. Early indications suggest that flag administrations will consider these SECA compliance reports as equivalent to the handwritten log of change-over times and low-sulphur quantities that is currently required by the regulations. Sulphur is only the first step for FOBAS Onboard Lab-On-A-Ship, adds Wilson. In the future, we intend to extend the system to cover a wider range of fuel and lubricant quality parameters, as well as introducing capability to conduct other environmental studies, such as evaluating the composition of exhaust gases.

SOx a punch
As the regulations in MARPOL Annex VI have gone through the long journey from adoption to implementation, legislation to tackle emissions has also been introduced on a more local level. The European Union (EU), Norway and the more environmentally conscious US states, such as California, are among those targeting emission from ship exhausts. The 2005 amendments to MARPOL Annex VI include the establishment of the North Sea SECA, which overlaps with European Union (EU) Directive 2005/33/EC and amended Directive 1999/32/EC. Under the EU Directives, all ships entering SECA zones are limited to a maximum 1.5% sulphur content in fuels. The North Sea and English Channel become SECAs under EU legislation this month, while the Baltic Sea has held SECA status for more than a year. In addition to this, from January 1, 2010, there will be a 0.1% sulphur limit on fuels used by inland vessels and seagoing ships at berth in EU ports. Directive 1999/32/EC goes on to stipulate that the sulphur content of marine gas oil (ISO 8217 DMA or DMX) must not exceed 0.2% m/m within territorial waters and, from January 1, 2008, this limit will be reduced to 0.1% m/m. More SECAs are likely to be established in the coming years, says Greensmith. Possible candidates include the Mediterranean, Black Sea, Hong Kong, Singapore and areas or individual states of the US.

For further information contact Graham Greensmith, Lead Specialist, External Affairs, Lloyds Register E graham.greensmith@lr.org T +44 (0) 20 7423 2789 F +44 (0) 20 7423 1564

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October 2007

Recent deliveries of container ships built to Lloyd's Register class

COSCO Asia (see page 6) is currently the largest container ship ever to be built in Asia.

CONTAINER SHIPS BUILT TO LLOYDS REGISTER CLASS 2007

Date Of Build Vessel Name January February February March March March March March April April April May May May May Mrsk Kwangyang Safmarine Mulanje Xin Hong Kong Mrsk Brooklyn CSCL Zeebrugge Mrsk Kuantan Kota Laju Xin Beijing Zim Genova Kota Latif Manila Express Safmarine Mafadi Mrsk Seletar Mrsk Sentosa Mrsk Serangoon Zim Shekou Mrsk Kushiro Mrsk Buffalo Mrsk Sembawang Mrsk Sebarok CSCL Long Beach Mrsk Senang CMA CGM Azure Mrsk Kendal Ruiloba Southern Lily Mrsk Semakau Zim Yokohama Mrsk Tanjong COSCO Asia Safmarine Makutu TEU 6,188 4,154 9,572 4,196 9,572 6,188 3,853 9,572 4,250 3,853 4,248 4,154 5,648 5,648 5,648 4,250 6,188 4,196 5,648 5,648 9,572 5,648 4,253 6,188 1,267 6,00 5,648 3,853 8,086 10,060 4,154 Owner Moller Singapore Pte Ltd Safmarine Container Lines Seaspan Corp Mrsk Co Ltd Seaspan Corp Moller Singapore Pte Ltd Pacific International Lines Yangshan D Shipping Co Ltd Bank Circus Maritime Pacific International Lines Seaspan Corp Safmarine Container Lines Moller Singapore Pte Ltd Moller Singapore Pte Ltd Moller Singapore Pte Ltd Bank Circus Maritime Moller Singapore Pte Ltd Mrsk Co Ltd Moller Singapore Pte Ltd Moller Singapore Pte Ltd Seaspan Corp Moller Singapore Pte Ltd Unknown/Rickmers Reederei Moller-Mrsk AS Trasatlantica Espanola Pacific International Lines Moller Singapore Pte Ltd Unknown/Zim Moller Singapore Pte Ltd COSCO Asia Maritime Safmarine Container Lines Operator Mrsk Line Safmarine Container Lines Hapag-Lloyd AG Mrsk Line China Shipping Container Lines Mrsk Line Pacific International Lines China Shipping Container Lines Zim Integrated Shpg Serv Ltd Pacific International Lines Hapag-Lloyd AG Safmarine Container Lines Mrsk Line Mrsk Line Mrsk Line Zim Integrated Shpg Serv Ltd Mrsk Line Mrsk Line Mrsk Line Mrsk Line China Shipping Container Lines Mrsk Line CMA CGM Maersk Line Trasatlantica Espanola Pacific International Lines Mrsk Line Zim Integrated Shpg Serv Ltd Mrsk Line COSCON Safmarine Container Lines

China Shipping Container Asia China Shipping Container Lines

Rio De Janeiro Express 4,248

DY Han, Senior Executive Vice President of South Korean shipyard Hyundai Heavy Industries, meets with our Chairman David Moorhouse, at Lloyds Registers London office to discuss future container ship designs.

May May May June June June July July July July July July August August August August September

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Seaspans CSCL Zeebrugge docks in London Peter Curtis, Vice President of Seaspan Ship Management Ltd, presented a model of the company's 9,600 teu container ship CSCL Zeebrugge to Lloyd's Register last month. The model is on display in the foyer of our London office at 71 Fenchurch Street. As Curtis gave the model to our Chief Executive, Richard Sadler, he said: "I have pleasure in presenting this model to you in appreciation of the fantastic relationship we share with Lloyd's Register and excellent support we receive and as a gift to Richard in his new role. Business is about relationships. The longstanding relationship between our companies has led to over 300,000 teu of container ships being classed with Lloyd's Register.
Anl Warringa was built to Lloyds Register class at Chinese yard Dalian for Rickmers Reederei.

He continued: "How do you choose a class society? I base it on the ability of class to provide us with support with management principles [at our head office in Vancouver] as well as throughout the operational stages. Lloyd's Register has the ability to assist us with any ship of any size and I have exceptional confidence in the society." CSCL Zeebrugge currently tops Seaspan's container ship fleet in terms of both size and capacity. She was delivered to Seaspan from South Korean yard Samsung Heavy Industries in March 2007. Seaspan recently signed contracts with Lloyd's Register for eight 13,100 teu container ships, scheduled for delivery from South Korean yard Hyundai Heavy Industries (HHI) in 2011.

Seaspans Peter Curtis presents a model of the CSCL Zeebrugge to Richard Sadler.

For further information contact David Tozer, Business Manager Container Ships, Lloyds Register E david.tozer@lr.org T +44 (0) 20 7423 1562 F +44 (0) 20 7423 2213

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October 2007

The danger within

Undeclared dangerous goods threaten the safety of life at sea. Lloyds Register is working with the Chemical Distribution Institute to help shipowners manage the risk they pose.
Packed and shipped properly, with the right documentation, dangerous goods pose no greater risk to the safety of life at sea than any other cargo. But it is when dangerous goods are mis-declared or undeclared that incidents can and will occur. Shipowners have to deal not only with the danger these large scale incidents pose to their crews and huge costs associated with the aftermath, but also with the damage done to their name and reputation. Although the International Maritime Dangerous Goods (IMDG) Code exists to ensure the safe carriage of packaged dangerous goods, non-compliance is widespread. A study by the International Maritime Organization (IMO) suggests that as many as 30% of all containers on the worlds oceans carrying dangerous goods have those goods mis-declared, are badly packed, or are otherwise noncompliant with the provisions of the IMDG code. The problem is compounded by the length of the supply chain for containerised goods. A container stuffer located inland may not think to take into account the forces placed on a sea container during a marine voyage. The custody of and responsibility for a container may change many times during its journey along the supply chain; not all custodians will be aware of the correct handling, stowage and response procedures associated with what is in that container. More worryingly, some may seek to send incorrectly stuffed containers deliberately. We will never eradicate malpractice, says Terry Frith, Technical Manager of the Chemical Distribution Institutes Marine Packed Cargo Scheme (CDI-mpc). But we can help shipowners to make sure they are doing everything they can to ensure operational risks are kept to a minimum. Asking for audits Shipowners must therefore be vigilant in deciding what cargoes they accept. One way in which they can perform this due diligence is by encouraging the companies they deal with to demonstrate that they have taken steps to ensure the containers they are transporting are safe. Merely declining to take dangerous cargoes is not an option; this can encourage less scrupulous operators to misdeclare dangerous goods, making the problem worse. CDI-mpcs scheme provides an independent risk assessment system for the entire supply chain. The scheme is sponsored by chemical companies. The scheme invites input from a comprehensive cross section of the supply chain. Lloyds Register represents the International Association of Classification Societies (IACS) at CDI-mpcs biannual meetings. CDI-mpc gathers audit data from logistics service providers involved in the distribution supply chain for packaged chemicals. This includes shipowners and operators, tank container operators, container terminals, container freight stations, freight forwarders and agents. The audit will highlight areas for improvement, but the companies have a right to reply, says Frith, pointing out that subsequent audits can be used to show if positive action has been taken. We dont pass or fail any organisation. It is up to ship owners and operators to make that decision. Questionnaires tailored to the different parts of the supply chain are available for download from the CDI-mpc site, www.cdi-mpc.org.

CONTAINER S H IP FOCUS
For further information on our marine services relating to the container ship sector, please contact David Tozer, Business Manager Container Ships: T +44 (0)20 7423 1562 F +44 (0)20 7423 2213 E david.tozer@lr.org Managing Editor: Sarah Norman Marine Media Manager Marine Communications T +44 (0)20 7423 2105 E sarah.norman@lr.org
Container Ship Focus newsletter is produced by Marine Business Development and designed by Pipeline Design. Care is taken to ensure that the information in Container Ship Focus is accurate and up-todate. However, Lloyds Register accepts no responsibility for inaccuracies in, or changes to such information.

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October 2007 Services are provided by members of the Lloyds Register Group. Lloyds Register, Lloyds Register EMEA and Lloyds Register Asia are exempt charities under the UK Charities Act 1993.