Shipping Industry Expresses Concern Over Recent Trade Developments

Major shipowners’ associations also give full support to the World Trade Organization.

A delegation from the International Chamber of Shipping (ICS), the Asian Shipowners’ Association (ASA) and the European Community Shipowners’ Associations (ECSA) has, at the World Trade Organization (WTO) in Geneva, expressed concern over recent increases in protectionist measures. Presenting two position papers to the WTO, the shipping sector has “fully committed to the preservation and promotion of free trade policies and principles around the world.”

This comes at a time when trade barriers are becoming more prevalent and represent a worrying trend for the delivery of sustainable economic growth. The papers highlight that there has been a seven fold increase in import-restrictive trade measures since 2017. This represents an additional USD 588.3 billion of additional costs to global trade. The importance of this representation has been given heightened relevance following the decision by the United States of America to increase import tariffs on certain goods from China.

Addressing the WTO Simon Bennett, ICS Deputy Secretary General said: “It is no coincidence that the massive growth in the global economy and thus the demand for maritime services that has been seen over the past 25 years has followed the WTO’s establishment in 1995. Global maritime trade now exceeds ten billion tonnes of cargo a year, but the efficiency of the shipping sector is dependent on a rules based trading system. This requires the negotiation and adherence to multilateral trade agreements under the auspices of the WTO. Recently this success story has been the subject of unwarranted criticism and threat by certain governments, including the United States, undermining the WTO’s role as the regulator of international trade. There are no winners when you increase unilateral tariffs, which is why the best place to address disputes is at the WTO.”

137 new trade-restrictive measures were put in place between 2017 and 2018 which have added significant burden and cost to the free movement of goods.

Speaking in the margins of the WTO negotiations on e-commerce, Lieselot Marinus,  Director of Shipping & Trade Policy at ECSA said: “We are concerned at the growth of sector specific protectionist measures, particularly cargo reservation whereby the carriage of international cargoes is restricted to national flag ships, undermining fair competition and a global level playing field.”

Captain Ang Chin Eng, Secretary General of the ASA added: “The global shipping sector is calling on the global community and WTO Member States to continue to support the WTO and its various functions, which help to govern and maintain the efficient operation of global trade in the best interests of all nations.”

ICS, ASA and ECSA representing the shipping industry which is responsible for the carriage of about 90% of world trade, asserted that the shipping sector still needs to see progress being made under the General Agreement on Trade in Services (GATS).

Shipowners are encouraging WTO Member States to ensure that bilateral agreements and regional agreements – including those which relate to shipping and maritime transport services – do not conflict with their current national schedules of commitments, as agreed within the framework of the WTO.

KVH Announces the Sale of Videotel for $90 Million to Focus on Core Strategic Initiatives

Plans to increase its investment in photonic integrated chip technology, AgilePlans acceleration, and Internet of Things (IoT) connectivity

MIDDLETOWN, RI – May 13, 2019 – KVH Industries, Inc., (Nasdaq: KVHI), today announced that it has sold its maritime training business, the Videotel group of companies, to an affiliate of Oakley Capital for a base purchase price of $90 million, on a cash-free, debt-free basis, subject to working capital adjustments.  The sale was completed immediately upon execution of definitive agreements.

“As part of our long-term strategic roadmap, we are focusing on the large and growing markets of our core mobile connectivity and inertial navigation businesses,” says Martin Kits van Heyningen, chief executive officer of KVH.  “We intend to use the net proceeds of the sale to invest in three key growth initiatives that we expect will drive significant value creation, as well as to reduce our debt.  Specifically, we plan to invest in the development and commercialization of our photonic integrated chip technology for use in autonomous vehicles and other commercial and military platforms, to support the further acceleration of our AgilePlans (Connectivity as a Service) program, and also to finalize the development and launch of our IoT connectivity solution.  Videotel helped us to penetrate the commercial maritime markets initially, but our strategic approach has evolved to focus on faster growing markets that we believe will produce greater long-term shareholder value.”  To maintain continuity for KVH’s AgilePlans customers, KVH has retained certain rights to continue including the Videotel training content with the AgilePlans program.

Management expects to issue revised financial guidance for the second quarter and full fiscal year of 2019 reflecting the sale of Videotel, along with select pro forma disclosures, on or about May 15, followed by an investor conference call.  In light of the anticipated financial impact of the transaction, investors should no longer rely on the guidance previously issued by KVH, which included anticipated revenues and expenses of the Videotel business.

The base purchase price was $90 million, subject to adjustment for Videotel’s cash, indebtedness, and working capital.  KVH expects to receive payment of the purchase price within 30 business days, subject to subsequent adjustment for working capital.  Payment of the purchase price is secured by a charge (a type of foreign security interest) over the shares of Super Dragon Limited and Videotel Marine Asia Limited, and is further backed by an equity commitment letter from Oakley Capital IV Master SCSp, Oakley Capital’s fourth and newest fund that has recently raised in excess of €1 billion of capital commitments.

KVH expects to use a portion of the net proceeds of the sale to repay the full balance of its outstanding term loans and a substantial portion of outstanding borrowings under its revolving credit facility.

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VIKING and Kongsberg collaborate to create innovative USV Sounder System

A collaboration between Kongsberg and the VIKING Norsafe boats and davits division has resulted in an innovatively designed unmanned surface vessel (USV).

The Sounder USV System is a multipurpose platform designed to work across different market segments, including survey and fishery duties. VIKING Norsafe, was chosen by Kongsberg as its project partner for its years of experience in constructing tough and durable craft for use in extreme environments.

The Sounder USV System has been designed specifically for military and commercial maritime uses, deploying maximum stability with minimal vibration on the water, and optimized for low air disturbance under the hull.  These features are essential in providing minimal disturbance to the data collection equipment onboard.

Equipped with large hatches on deck for fast and easy equipment exchange, the vessel’s long operating range gives it the possibility to reach a large area without the need for external power or fuel supply.

It has a diverse range of applications from seabed mapping, fish finding and search operations to reconnaissance and exploration. The vessel has a high dynamic stability to provide a secure working platform.

It can fit into a 40 ft standard container and is easily transportable by air, road and sea. The USV has a rigid lifting point, verified for safe operation and as a way of optimizing the hull shape, Computational Fluid Dynamics are completed during the design face. This provides for low fuel consumption, minimized air disturbance under the hull as well as optimised stability.

Indian Register of Shipping and Dassault Systèmes co-host conference on noise-reduction design solutions for defence and commercial ships

MUMBAI, INDIA, 7 May 2019 – The Indian Register of Shipping (IRClass), a leading ship classification society, and Dassault Systèmes co-hosted an international conference on design solutions for noise reduction in defence and commercial ships.

Held at IRClass’ head office in Mumbai, India, the one-day ‘Design Solutions for Noise Reduction in Defence and Commercial Ships’ conference drew participants from various sectors including the Indian Navy, shipyards, designers, consultants and ship operators.

Mr Vijay Arora, Joint Managing Director of IRClass, inaugurated the conference by highlighting the importance of noise prediction and its evolving techniques in view of present IMO noise code.

The conference deliberated on possible design and software solutions for conventional passenger and cargo ships to meet regulatory requirements outlined in International Maritime Organization’s Code on noise levels on board ships – IMO Resolution MSC.337 (91) – which requires the measurement of noise levels and recommends limits on acceptable maximum noise levels for all spaces to which seafarers normally have access to.

To comply with the IMO Resolution, the conference noted that noise prediction is required right from the initial design stage and discussed the methods for noise prediction ranging from empirical methods such as IRClass’ proprietary noise prediction software to advanced methods based on statistical energy analysis (SEA), boundary element method (BEM) and computational fluid dynamics (CFD). The effects of insulation and alternative arrangements to keep noise levels within specified limits through such predictions were also discussed.

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Major Shipowner Trade Associations Agree to Enhance Cooperation

Today in Singapore, the International Chamber of Shipping (ICS), the Asian Shipowners’ Association (ASA) and the European Community Shipowners’ Associations (ECSA) signed a joint memorandum of understanding.

This new MOU codifies the extensive level of co-operation that already exists between these important international trade associations and provides a framework for their closer co-operation. The three associations collectively represent over 90 percent of the world merchant fleet. The agreement recognises their respective memberships of national shipowners’ associations and the unique and special relationship which their members enjoy with their national governments. Read more