U-Ming Marine Transport Corporation (“U-Ming”) (TSEC code: 2606), Taiwan’s largest publicly listed bulk carrier company, has been awarded a 10-year LNG Dual Fuel dry bulk charter contract by Anglo American, a leading global mining company.
It is the first such long term time charter in the bulk carrier sector, demonstrating both companies’ strong commitment to decarbonisation and sustainability.
A fleet of Four (4) LNG Dual Fuel Tier III 190,000 DWT bulk carriers, with a length of about 299m and width 47.50m, will be built by Shanghai Waigaoqiao Shipbuilding (SWS) to support the 10-year time charter, and they are expected to be delivered throughout 2023.
Pioneering LNG Bulk Carriers Backed by Technology and Innovation
Backed by our strong corporate value in pursuit of greener shipping, the vessels are built with the concept of energy-saving and sustainability. The newbuildings will be powered by LNG, a viable and alternative fuel that emits significantly lower greenhouse gas (GHG) emissions. The vessels will also be fitted with MAN Energy Solutions’ high-pressure ME-GI engines to further reduce their environmental footprint with negligible levels of methane slippage, while increasing operational efficiency and reliability.
To further increase fuel efficiency, U-Ming will be investing and installing other energy-saving devices such as a Mewis duct, propeller boss fin and alpha lubricator. The new vessels will also be equipped with U-Ming’ proprietary Fleet Safety Management (FSM) and Fleet Performance Management (FPM) systems supported by its Operation Center, enabling near real-time speed, weather and route optimization updates, thus further saving fuel and ensuring safe navigation. These platforms can also monitor the operational status of ship critical equipment, allowing preventive maintenance well conducted when necessary to avoid unnecessary breakdowns and delays.
U-Ming President Mr. C. K. Ong said, “U-Ming is committed to make the world a better place for our future generations. To achieve that, we are building a greener fleet using LNG, and to reduce GHG emissions and fuel consumption by improving vessel design and optimizing fuel efficiency.
In our collaboration with Anglo American, we are pleased to be the first in the bulk carrier sector to be awarded a 10-year time charter. To demonstrate our long-term commitment to sustainability, we are also one of the first few carriers in the world to operate LNG-fuelled bulkers which have been shown to significantly reduce GHG emissions, and these newbuildings will be part of our fleet renewal and decarbonisation strategy. Going onward, we are committed to provide sustainable long-term green shipping solutions to our customers with the specific target of reducing greenhouse gas emissions by at least 30% in 2025, compared to 2013.”
Improving Bulker Market and Future Outlook
The outbreak of the global pandemic has triggered the worst recession since World War II and has unprecedented impact on sea transport demand. With a sharp decrease in Chinese steel production, power and coal consumptions in the first half of the year, the average Baltic Dry Index (BDI) had decreased 23% to only 685 points, from 895 points in the same period of 2019.
However, the bulk market has gradually recovered since May, and the freight indices of various vessel types have rebounded. The US-China trade war has been beneficial to Brazilian soybeans farmers and contributed to the uptick in demand from China at the end of May.
China also began restocking its iron ore supplies in May, supported by the Government’s infrastructure stimulus plan to combat the pandemic-induced recession. Stimulus packages from various countries have also started to boost domestic demand and have increased investment in infrastructure construction, which will ensure a sustained recovery in the dry bulk market.
During this challenging time, U-Ming managed to reduce the impact with strong leadership, prudent business strategy as well as solid balance sheets.
Long Term Commitment to Build Eco-Friendly Smart Fleet
Since 2012, U-Ming commenced its Vessel Renewal Programme to build a high-performance, eco-friendly fleet for energy conservation and carbon reduction. This year, despite the uncertainty of the COVID-19 pandemic, U-Ming continued to invest in digitalization and technology enhancement. For example, the FSM system is upgraded to include fuel consumption information, in response to the EU’s global data collection system for ship fuel oil consumption data. U-Ming’s management team has also identified Performance Enhancement (PE), Condition Monitoring Enhancement (CME) and Reliability and Security Enhancement (RSE) as key focus for building a smart fleet.
“While the Covid-19 pandemic has posed economic challenges, the maritime industry must not lose sight of the long-term challenges that the industry faces. With the successful implementation of IMO2020 earlier this year, decarbonisation is an ongoing trend and requires us to take further action. LNG-fuelled vessels can significantly reduce CO2 and NOx (nitrogen oxide) emissions, which will be benchmarked against the IMO’s target to halve carbon pollution from 2008 levels by 2050. U-Ming believes that this target will expedite the charters of LNG-fuelled bulk carriers in the industry, and the Company shall be at the forefront to leverage on this trend,” Mr. Ong concluded.