AFTER ALMOST A year of a sharp downward trend, the global container shipping industry is showing signs of improving in the second quarter, according to a senior container shipping official.
Industry officials saidQ1 of 2009 is still weak compared to Q4 of 2008, indicating a further slowdown in activity, but project a positive turnaround in business in the remaining part of the year.
"There are growing signs that profitability will return in the coming months. We see optimism returning, however, business is still down at the moment," Ken Bloch Soerensen, President and CEO of United Arab Shipping Company (UASC), told Emirates Business.
He said the fact that a number of container lines are beginning to increase rates on various routes is in itself a positive indicator for the container business. "We are still watching the market, we are not yet sure of the trend we are likely to see for the rest of the year. But there is some hope that things will get better," added Soerensen. Rates UASC increased its shipping rates on some routes effective from April 1.
Rates from the Far East to Europe (North Europe, Mediterranean and Black Sea) will be increased by US$275 (Dh1,010) per TEU (twenty foot equivalent units). Rates from Europe to the Far East will be increased by US$100 per TEU, while rates from Europe to the Red Sea, the Arabian Gulf and the Indian Subcontinent will be hiked by US$50 per 20-foot container and US$75 per 40-foot container. The company will also adjust shipping rates to US East Coast base ports of the US (New York, Norfolk, and Savannah) by an increase of US$200 per 20-foot container and US$250 per 40-foot container.
Maersk Line, the world's largest container shipping line, said recently that from May 1 rates for dry cargo shipped from all origin points in the US and Canada to destinations in the Mediterranean and North Africa will increased by US$80 per 20-foot container and US$120 per 40-foot container, HighCube or 45-foot container. French carrier CMA CGM will also next month increase rates between North Europe and the US by US$160 per 20-foot dry container and US$220 per 40-foot/40-foot HighCube. Similar hikes have been announced by APL containers on its Asia- Europe trade route. Under pressure Freight rates, the main determinant for profitability in the container shipping industry, have come under pressure since the second half of 2008, with rates on some major trade routes falling more than 80 per cent.
In an effort to revive freight rates and improve utilisation, UASC, the world's largest container shipping company, said it would lay-up part of its fleet throughout this year. The company will take out of service three to four ships of up to 3,000 TEUs for a while during 2009 to help narrow the widening gap between demand and supply.
The company has also started a restructuring exercise for services across its global network by placing underutilised tonnage into trade routes where demand is relatively high. "Some of our older ships will be idle for a while during 2009 to ease pressure on utilisation," said Soerensen "By taking out some of the vessels, we will be able to bring back some level of utilisation on the remaining fleet, and this can help to push up freight rates." He said that the company was in no rush to increase the number of vessels to be laid up, adding that the decision would be based on market trends.
Between 400 and 500 container vessels around the globe are believed to be in hot or cold lay-up and the number is expected to go up if the market situation fails to improve. Soerensen said UASC was going ahead with its restructuring programme by removing capacity from the Asia-Europe trades that have been hit worst by a drop in demand and adding it to more active trades such as the Middle East.
Siemens Energy has secured a US$130mn order to supply gas turbine packages to Saudi Arabia. The components are to be installed in the Hail Extension II and Al Qurayat Expansion II power plants. The purchasers are the Alfanar Construction Company and Saudi Services for Electromechanic Works (SSEM) respectively and they will perform the project on a turnkey basis for the Saudi Electric Company (SEC) utility. Delivery of the components is scheduled for 2010 and 2011.
Power and automation technology group, ABB, has won an order worth US$89mn from the Saudi Electricity Company to build a new substation to ensure reliable power supplies for the King Abdullah Financial District in Riyadh. The substation will be close to the financial centre and feed four smaller substations situated within the district. The project is expected to be completed in around 22 months.
Air blowers using internal compression instead of external compression can set a new standard for energy efficiency in the low-pressure market according to a new technical whitepaper from Atlas Copco’s oil-free air division. The whitepaper explains the differences between screw technology and the traditional ‘Roots’ type lobe technology and says that screw technology, which is used in Atlas Copco's ZS screw blowers, is on average 30 per cent more energy efficient. The manufacturer recently launched its full range of ZS screw blowers that are designed to improve energy efficiency for low-pressure applications and industries such as wastewater treatment and pneumatic conveying.
Plans for the zero-carbon Masdar City project are to be revised, with details of the amended master plan to be announced “imminently” according to Masdar's head of supply-chain management, Richard Reynolds. “We’ll finalise the revised Masdar plan fairly imminently, in the next two to three weeks,” Reynolds was quoted as saying by Bloomberg. “We’d only built part of it, so it made sense to stop and revisit.”
Saudi Arabia has taken the first step towards becoming energy efficient by holding its first ever public stakeholder meeting, the initial step in certifying an energy efficiency project under the rules of the Kyoto Protocol’s Clean Development Mechanism (CDM), in Jeddah recently.
Power generation equipment and services supplier, Alstom, has announced the strengthening of its renewables portfolio through a partnership with BrightSource Energy Inc. Alstom's move into the high-growth solar energy market comes in the form of an investment of up to US$55mn in BrightSource Energy Inc, with an equity stake that positions Alstom as one of the main shareholders in the company. 
A high level delegation representing the energy sector in Dubai has visited China to look at the latest global practices in the area of sustainable energy and the diversification of its sources. The delegation exchanged knowledge on the usage of conventional power plant technologies (using ultra super critical power plant-coal and synthetic gas) to generate electricity and produce desalinated water.
The Abu Dhabi Fund for Development (ADFD), a fund established by the government to aid the economic development of developing nations, has granted a loan to Bahrain worth US$50mn. The loan will be used to erect two electric transmission lines, of 220KV and 66KV each, to meet the increasing demand for electric power.
Abu Dhabi Transmission and Despatch (Transco) has placed an order with Siemens Energy to supply transformer substations and switchgear for the UAE power distribution network expansion project. The US$184mn order includes the turnkey supply of three 132/11 kV transformer substations and two 132/22 kV substations.
Power and automation technology group, ABB, has signed a service contract with the Gulf Cooperation Council Interconnection Authority (GCCIA) to provide maintenance for equipment and systems at the Gulf Interconnection Grid's newly constructed substations. The two-year contract is worth US$8.3mn and will aim to optimise the grid's reliability through regular maintenance and provide technical and emergency assistance when required.
Abu Dhabi is considering a proposal to use solar energy equipment on rooftops in the city to generate about 500MW of power, according to the executive director at the city's Executive Affairs Authority, David Scott.
Masdar, Abu Dhabi’s renewable and alternative energy technologies and solutions initiative, has appointed the bidding consortium of Total and Abengoa Solar as a partner to own, build and operate Shams 1, the world’s largest concentrated solar power plant (CSP). One of Masdar’s flagship projects and the first plant of its kind in the Middle East, Shams 1 will directly contribute towards Abu Dhabi’s target of achieving 7 per cent renewable energy power generation capacity by the year 2020.
Oman has awarded France's GDF Suez a US$1.7 billion contract to build two power plants. A tender board official told Reuters, “GDF Suez has signed a 15-year contract with the government in a BOOT (build, own, operate and transfer) model for which the company will spend 700 million rials."
An executive from state oil company Saudi Aramco has said that renewable sources could account for up to 10 per cent of Saudi Arabia's power output by 2020 with prices coming down and a regulatory framework in place.
ABB, THE LEADING power and automation technology group, has won an order worth US$38mn from the Saudi Electricity Company, Saudi Arabia’s national power transmission and distribution utility, to improve the efficiency of 22 power distribution substations.
THE MIDDLE EAST has the opportunity to become a boom centre for solar energy in the next 10 years, according to AT Kearney.
THE INCANDESCENT LIGHT bulb is disappearing from stores. It has long been superseded by a new generation of light sources. In tomorrow’s multimedia society colour displays the size of an apartment will generate crystal-clear images, and entire sports stadiums will be lit by high-performance lamps.
Technical Review Middle East - Issue Three 2009 Power 60 IN THE PRESENT economic climate the fact that renewable energy can cut pollution levels may not be enough. As Phil Desmond discovers, some recent innovations in the field of cellular communications are being promoted not just as being better for the environment than conventional fuels but better for business too.
ARAMCO’S “FAIR” PRICE of US$75 a barrel has not yet been achieved but the giant Saudi economy is still surging ahead, prioritising the creation of new homes and diversified jobs in industry, social and other services to satisfy the needs of a 26mn young and wealthy population which grows at two per cent-plus every year. This means continued rapid progress on the development of the new Economic Cities, further and accelerated petrochemical and light industrial diversification, and the Middle East’s largest by far programme of dedicated passenger- and freightline rail construction. 
