The maritime fraternity must be prepared to face an oversupply of ships, as the new vessels will flood the market in the next two years. Malaysian Shipowners' Association (Masa) chairman Nordin Mat Yusoff said some 100 new liquefied natural gas (LNG) vessels, 500 tankers and over 100 mega-size container ships would be delivered by 2010. “The euphoria to build new ships started in 2004 when sharp increases in freight rates left ship owners with a lot of cash. “Since then, ship owners have been on the rush to invest by ordering more ships. “This can create an oversupply of ships and the impact is still unknown as the shipping business is volatile and cyclical,” he said at the 5th Asia Maritime & Logistics Conference and Exhibition recently. He added that even traditional players in the stable LNG market were inclined to trade in the the volatile spot charter market. Nordin said the oversupply of ships and capacity constraints in most shipyards globally, especially in South Korea, China and Japan, reflected a slowdown in the shipbuilding industry. “Most shipyards are fully occupied until 2012 and the sharp increase in the price of steel over the past few years has also dampened the industry. The price of steel has increased to US$1,300 per tonne from US$700 per tonne last year. “Shipyards have to endure the current high cost of raw materials if they had not hedged back then,” he said, adding that the prices of ships had also increased sharply over the years. »The impact is still unknown as the shipping business is volatile and cyclical« NORDIN MAT YUSOFF The price of a very large crude carrier (VLCC), on average, had doubled to US$160mil currently from US$65mil to US$70mil in 2004. Nordin said the maritime industry was also facing an acute shortage of seafarers. “It is reported that the industry needs more than 12,000 seafarers. Many ship owners ordered ships without any plan to build their workforce,” he said. However, Nordin said the oversupply of ships could be mitigated by massive scrapping of old ships due to new rules and regulations. This include the International Maritime Organisation's double-hull requirement for tankers, effective Jan 1, 2010, and the new water ballast tank coating, effective Jan 1, 2008. “But there is no crystal ball answers for the future of the shipping industry as there are a lot of uncertainties in the maritime business,” he said. Nordin noted that the driving force in the shipping industry would be the “BRIC” (Brazil, Russia, India and China) factor. He said China demand, pre and post Olympics, would affect shipping patterns as well as major developments in upcoming world economic drivers that include Brazil, Russia and India. The issues will be discussed by captains of industry at the 5th Asia Maritime & Logistics Conference and Exhibition from June 23-26, organised by Masa. Some 21 international speakers will present their views on issues such as the state of shipping, technical developments and changing shipping regimes, shipbuilding and technology, shipping and logistics and the global outlook. In addition, 20 higher learning institutions which offer maritime and logistics-related courses would participate in the exhibition to generate interest among youths to join the industry. Prime Minister Datuk Seri Abdullah Ahmad Badawi will deliver the keynote address and former Prime Minister Tun Dr Mahathir Mohamad has agreed to present a luncheon talk on geopolitical aspects affecting the maritime industry. Masa expects about 500 local and international participants at the conference. Established in 1976, Masa's main objective is to protect and promote the interests of local shipowners. Its members represent about 70% of the country's shipping players. Source: The Star Online TSA unveils plan to X-ray air cargo By Thomas Frank, USA TODAY WASHINGTON — The Transportation Security Administration is launching a program that for the first time aims to screen all cargo on passenger airplanes. The effort begins this summer in major cities and could lead to longer delivery times for packages shipped through the air. It seeks to close a hole that allows millions of packages to be carried under passenger cabins without being checked for bombs. Manufacturers such as Dell and others rely on passenger planes to deliver tons of freight, such as computers and auto parts, to retailers. A key part of the plan is that it will rely on packing companies to volunteer to screen cargo they deliver to airports. Companies that sign up will have to buy and run screening machines and face TSA regulation — which could deter volunteers. "The dangers are that not enough people will sign up for it," said Steve Alterman, president of the Cargo Airline Association. "You will get rid of 'just-in-time delivery' if this doesn't work." By Paul J. Richards, AFP/Getty Images Ground crewmembers make final adjustments inside the full cargo hold on a passenger flight at Dulles Airport March 28, 2007. The TSA will soon begin screening all cargo on passenger airplanes. The move to screen the 250 million freight packages carried each year by passenger airlines comes after government audits criticized cargo security. The TSA uses a computer to identify packages for scrutiny, and requires passenger airlines to screen some cargo. A Homeland Security report last year said the TSA did a poor job overseeing airline screening. Cargo airlines, which carried 93% of the 27 billion pounds of air freight in 2007, are not part of the TSA's new effort and are seen as less of a terrorist target. U.S. mail on passenger planes also is excluded. A law enacted last year requires that all passenger-plane cargo be screened, starting in 2010. Most screening would be done by the 12,000 companies that truck goods from manufacturing plants to airports. The companies, called freight forwarders, would screen packages with X-ray machines and explosive sensors in warehouses where they are packed into large containers that are driven to nearby airports, TSA assistant administrator John Sammon said. Manufacturers also would screen boxes in factories. The goal is to move screening away from airport cargo facilities, which are too small to check all freight, Sammon said. There is no plan for the TSA to pay for screening equipment or screeners, which Congress has said could cost $3.75 billion over 10 years. Brandon Fried, president of the Airforwarders Association, said the program "will work because you're spreading security throughout the supply chain." He said some forwarders won't buy screening equipment. Forwarders that don't screen "may not be in the business five years from now," Sammon said. "The forwarders who want to do well will buy the equipment."