HIGHLIGHTS Knightsbridge reports a net loss of $3.3 million and a loss per share of $0.13 for the second quarter of 2012. The net loss of $3.3 million includes a loss of $5.1 million resulting from the termination of the Golden Zhejiang time charter and loss provisions for unpaid charter hire of $5.6 million. Knightsbridge reports EBITDA of $3.8 million and EBITDA per share of $0.16 for the second quarter of 2012. Knightsbridge announces a cash dividend of $0.175 per share for the second quarter of 2012.
Knightsbridge reports net income of $3.9 million and earnings per share of $0.16 for the six months ended June 30, 2012.
The charter parties for the Golden Zhejiang and the Battersea have been terminated by the charterers and Knightsbridge will seek recovery of damages for the remaining periods of the charters
The VLCC Hampstead was re-delivered from its time charter to Frontline Ltd.
In August, the VLCC Hampstead has been sold with expected delivery in August 2012 and the Company expects to record a loss of approximately $13 million in the third quarter. The net cash proceeds from the sale are approximately $10 million.
SECOND QUARTER 2012 AND SIX MONTHS RESULTS 
Knightsbridge Tankers Limited (the "Company" or "Knightsbridge") reports a net loss of $3.3 million and a loss per share of $0.13 for the second quarter compared to net income of $7.1 million and earnings per share of $0.29 for the first quarter of 2012. The net loss for the quarter includes a loss of $5.1 million following the unexpected termination of the Golden Zhejiang time charter. This loss reduces operating revenues and comprises a $1.9 million loss resulting from the write off of the unamortized value of the time charter (it should be noted that the Company allocated $3.3 million of the purchase price for the Golden Zhejiang to the value of the time charter, which was acquired with the vessel, and was amortizing this amount on a straight line basis over the period of the time charter) and a $3.2 million loss resulting from the write off of accrued income being the difference between the revenue being recorded and the cash received following the charter party amendment in 2011. The net loss for the quarter also includes loss provisions for unpaid charter hire of $5.6 million.
The average daily time charter equivalents ("TCEs") earned by the Company's VLCCs, excluding bareboat charters, and Capesize vessels in the second quarter were $20,100 and $9,100, respectively, compared with $23,400 and $35,600 in the preceding quarter. The fall in the TCE rate for the Capesize vessels is mainly due to the write offs and loss provisions described above. In August 2012, the Company has an average cash breakeven rate for its VLCCs, excluding bareboat charters, and Capesize vessels of $14,000 and $8,500, respectively, per vessel per day. The VLCCs which are on bareboat contract have a cash break even rate of $4,400 per vessel per day.
Cash and cash equivalents increased by $2.5 million in the quarter. The Company generated cash from operating activities of $11.9 million, used $0.9 million to repay loan facilities and paid $8.5 million in dividends.
For the six months ended June 30, 2012 the Company reports net income of $3.9 million and earnings per share of $0.16. The net income for the first six months of 2012 is after a loss provision for unpaid charter hire of $7.3 million. The average daily TCEs for the Company's VLCCs, excluding bareboat charters, and Capesize vessels for the six months ended June 30, 2012 were $21,800 and $22,300 respectively.
THE TANKER MARKET
The market rate for a VLCC trading on a standard TD3 voyage between the Arabian Gulf and Japan in the second quarter of 2012 was WS 55, representing a decrease of approximately WS 1 point from the first quarter of 2012 and a decrease of approximately WS 3 points from the second quarter of 2011. Present market indications are approximately negative $3,000/day in the third quarter of 2012.
Bunkers at Fujairah averaged $662/mt in the second quarter of 2012 compared to $730/mt in the first quarter of 2012. Bunker prices varied between a low of $663/mt on June 22 and a high of $739/mt at the beginning of the quarter.
The International Energy Agency's ("IEA") July 2012 report stated call-on OPEC oil production, including Iran and Iraq, of 31.8 million barrels per day (mb/d). Angola and Iran posted the largest declines and offset near-record production of 10.2 mb/d from Saudi Arabia. This was an increase of 380,000 barrels per day compared to the first quarter of 2012.
The IEA estimates that world oil demand averaged 88.8 mb/d in the second quarter of 2012, which is a decrease of 600,000 barrels compared to previous quarter and the IEA estimates that world oil demand will average approximately 89.9 mb/d in 2012, representing an increase of 0.9 percent or 0.60 mb/d from 2011. 2013 demand is expected to be 90.0 mb/d with non-OECD demand exceeding OECD demand for the first time, a trend that is unlikely to be reversed.
The VLCC fleet totalled 610 vessels at the end of the second quarter of 2012, up from 598 vessels at the end of the previous quarter. 12 VLCCs were delivered during the quarter, none removed.
The orderbook counted 99 vessels at the end of the second quarter, down from 111 orders from the previous quarter. The current order book represents approximately 16 percent of the VLCC fleet. According to Fearnleys, the single hull fleet currently stands unchanged at 23 vessels.
THE DRY BULK MARKET
The global economy experienced a weaker than expected development during the second quarter of 2012. Growth in the U.S. came in at 1.5 percent, almost one percent lower than was expected by analysts. The development in Europe is still a major concern, which in turn is hitting the Asian and American export markets. The Chinese growth of 7.6 percent is lower than what we have been used to in the past. Lower industrial production has a negative effect both on steel production and energy consumption, which have been the driving forces for the dry bulk sector since the beginning of this millennium. However, it is important to note that the Chinese Government is proactive and with inflation coming down, we might see further stimulus packages when the new leadership is in place.
In spite of the bleak growth prospects described above, the total dry bulk trade is still growing at a steady pace. Based on available data, total dry bulk trade grew by 4.4 percent during second quarter this year compared to the previous quarter and was 5.2 percent higher than the same quarter last year. It is interesting to note that Chinese coal imports experienced a strong growth last quarter compared to the same quarter last year (up 70 percent) and total coal imports to China could reach 240 million metric tons in 2012. Iron ore imports to China was slightly lower in the second quarter compared to the first quarter, but approximately10 percent higher than the same quarter in 2011.
The growth in dry bulk trade is not sufficient to keep the utilization at levels yielding decent returns. Delivery of new vessels into the market has outpaced demand growth for some time, but the high influx of newbuildings will slow down considerably in the next 18 months.
The total order book of 154.1 million dwt. represents approximately 23 percent of the existing dry bulk fleet. The accuracy of the official order book has been questioned for some time and most forecasters are expecting a delivery ratio of 75 percent going forward.
Preliminary data for July indicate a slower pace of newbuilding deliveries. This comes after a bad month from owners' perspective. It appears, however, that we are through the worst as the number of vessels older than 20 years is expected to be in line with the order book within one year, which should cater for a more balanced supply situation.
Forecasters are still fairly optimistic when it comes to long term demand growth. This is backed by increased energy consumption in India and China and higher iron ore imports to China.
Short term utilization is expected to remain low, but consensus among analysts is that utilization will slowly turn in favor of owners by the end of next year. If owners remain disciplined and are careful not to order too many new vessels over the next twelve months, the supply side looks quite appealing from 2014. Lack of available financing might also support this scenario.
There is some short term upside if international commodity prices (coal and iron ore) continue to drop as it might lead to higher Chinese imports.
THE FLEET
The VLCC Hampstead was re-delivered on April 22 from its time charter to Frontline Ltd. and commenced trading in the spot market. In August, the vessel was sold to an unrelated third party. Delivery to the new owner is expected to be in August 2012 and the Company expects to record a loss of approximately $13 million in the third quarter. The net cash proceeds from the sale are approximately $10 million.
The Company announced on July 30, 2012, that one of its charterers, Hong Xiang Shipping Holding (Hong Kong) Co Limited ("Hong Xiang"), has redelivered the 176,000 dwt Capesize dry bulk carrier Golden Zhejiang before final maturity of the charter. After the redelivery the vessel has been employed in the spot market. The Golden Zhejiang was on charter at a rate of $32,326 per day net, for a minimum period ending on September 7, 2014 and included a two year extension option in Knightsbridge's favor. The redelivery follows a period when Hong Xiang has not paid charter hire for the vessel when due. The Company has a guarantee from Hong Xiang's parent company, Beijing Jianlong Heavy Industry Group Co. Ltd.. The Company has a claim for outstanding unpaid hire from Hong Xiang and, in addition, will seek recovery of damages for the remaining period of the charter contract.
The Company also announced on July 30, 2012, that the Sanko Steamship Co., Ltd. ("Sanko") has served a notice purporting to cancel its charter party with the Company and has redelivered the Capesize dry bulk vessel Battersea to the Company prior to the expiration of the minimum period of the charter. The Battersea was on charter to Sanko at a rate of $39,500 per day net, for a minimum period ending on June 26, 2014. The Company has a claim for outstanding unpaid hire from Sanko and, will in addition, seek recovery of damages for the remaining period of the charter contract. The vessel has been employed in the spot market following the redelivery.
CORPORATE AND OUTLOOK
Two of the Company's VLCCs and two of the Capesize vessels are fixed on bareboat and time charters expiring between 2012 and 2015. We expect the VLCC Titan Venus (ex Camden) to be redelivered during the fourth quarter of 2012 and the Capesize vessel Golden Future during the first quarter of 2013.
The sale of the VLCC Hampstead is a part of the Company's intention to renew and grow the fleet and may assist the Company in reacting to interesting acquisition opportunities.
Following the termination of the time charters for the Capesize vessels, the Board has decided to declare a dividend of $0.175 per share. The record date for the dividend is August 30, 2012, the ex dividend date is August 28, 2012 and the dividend will be paid on or around September 12, 2012.
24,437,000 ordinary shares were outstanding as of June 30, 2012, and the weighted average number of shares outstanding for the quarter was 24,429,549.
The Company advises that its 2012 Annual General Meeting will be held on September 21, 2012.

Source: Knightsbridge Tankers Limited

It’s no wonder that the dry bulk market has been tethering since the start of the year. the overflow of tonnage has been so enormous, that even China in its best of years, wouldn’t be able to keep up with the current supply dynamics. In fact, analysts have mentioned that it would take for a couple of more “Chinas” nowadays, in order for demand to catch up with the current fleet of dry bulk carriers. As of the start of the year, the global outstanding orderbook for dry bulk vessels stood at 2,375 ships, with a potential carrying capacity of approximately 200 million dwt tons. According to the latest weekly report from shipbroker Intermodal, out of the alarmingly large total of these orders, 1,677 ships of 139 million dwt were scheduled to be delivered during 2012. Under this scenario approximately 70% of the bulker orderbook was scheduled to be delivered during 2012.

With 7 months already gone by and as of 1st of Aug 2012, it is interesting to see the progress. According to Intermodal’s John Cotzias, “the active bulker fleet stands at 8,477 ships and 645mil tons of carrying capacity. During 2012 the active bulker fleet has grown by 6% in ships and 8% in total dwt. VLOC’s in 2012 have grown by 17%, Capesize 4%, Post Panamax 14%, Panamax 6%, Supramax 12%, Handymax reduced by -5% while Handysize increased by only 2%.

At the same time, Newbuilding bulker deliveries are holding strong with around 4 new ships being delivered every day (809 ships of 70mil tons dwt)!! It is worth noting that slippage (expected deliveries less actual deliveries ) was calculated at abt. 15% for the 1st Half of 2012 while it is accelerating after June, giving us a present figure of around 17%. There were 1,677 ships deliveries originally scheduled for 2012, so we could assume that if the current trend continued, there would be 1,390 ships delivered in 2012. However as the slippage rate increases and traditionally as we move towards Nov-Dec more ships are belated to take advantage of a later year of built, so we may expect that the total dry bulker deliveries for 2012 will reach a record high number of around 1,250 ships and abt. 108mil tons of extra dwt carrying capacity. Slippage therefore is estimated to reach around 23-25% for the current year” he said.

According to Intermodal, “looking into deliveries of specific bulker size segments in 2012, we have recorded 49 VLOC’s, 91 Capes, 73 Post Panamax, 168 Panamax, 226 Supramax, 13 Handymax and 189 Handysize being delivered. In 2013 the world bulker fleet will have a capacity of about 750mil tons and this is a reality that we all have to face…!” the report stated.

According to Mr. Cotzias, “there is just too much supply of tonnage that will only push further the gap between available ships for trading and available cargoes. Fleet growth for 2012 is estimated at 20%, and this increase can never be matched by seaborne dry cargo growth which may run at a mere 4-6% given best world economic conditions. 
Scrapping has aided the bulker sector tremendously, as more than 21mil tons of dwt, abt 340 ships have been removed from the active fleet, this gives us around 1.6 dry bulker ships scrapped per day! Average age of the ships scrapped is now coming down to 21 years. Offered scrap prices looked rather attractive during first half of 2012 and that further assisted most owners in deciding to send more vessels to the breakers rather than seek buyers for further trading. According to our estimates abt. 500 ships of 30-31mil tons of dwt will be taken for demo during 2012 and this is approximately 6% of the active fleet. Let’s keep this scrapping going!” he concluded. 

From, Hellenic Shipping News Worldwide

The dry bulk market inched further lower at the start of the week, as the industry's benchmark, the BDI (Baltic Dry Index) was down by 18 points to 915. All major markets were down, with Panamaxes and Supramaxes leading the losses. The Baltic Panamax Index was down by 21 points to 1010, while the Supramax equivalent retreated by 22 points to 1047. Capesizes and Handysizes also lost 9 points each, to reach 1,200 and 593 points accordingly. 

June’s iron ore imports fell by almost 10% compared to May’s levels, to 58,3m tones from 63,8 last month, according to figures from China’s customs department, with expectations this trend to continue in July and August as iron ore inventories are at high levels and Chinese iron ore appetite seems weak despite the increase in iron ore production. China produced approximately 125,7 million tons of iron ore in June, 13,3mt (12%) more than was produced in May and 1,7mt (1%) more than was produced in June 2011. In the first six months of this year, China has produced 598,5mt of iron ore, which is 33,6mt (6%) more than was produced during the first six months of 2011. It is worth mentioning that despite the fall of June’s Chinese iron ore imports, the volume is 12.3% higher than imports of June’s last year, but the oversupply of tonnage seems that could not be absorbed by the current demand needs" the Piraeus-based shipbroker said.

With summer now under way, tanker owners will come face to face with yet another shift in trading patterns said BIMCO, in its latest update on tanker shipping markets. According to the organization, VLCC owners most likely won’t witness a respite in terms of challening market conditions, unlike their Suezmax and Medium-Range (MR) product tanker counterparts. “BIMCO expects that freight rates in the crude oil segments will move a bit erratically, but more or less sideways. For VLCCs, that translates into USD 10,000-20,000 per day. The Suezmax segment could provide some spikes, as seen in the past five months, but is expected to hover around at USD 15,000-25,000 per day. Aframax vessels have recently seen rates improve a bit as the pressure from the high Brent oil prices eased and are expected stay stronger in coming months in the range of USD 8,000-14,000 per day. Short-term factors that may affect our rate forecast on the upside or downside are primarily to be found at the macro level. As we have seen, a little less positive economic development in recent months dampened oil prices, subsequently also demand, as consumers remain hesitant to increase consumption on a large scale. Handysize and MR clean rates should be supported by stronger gasoline demand from the US to support freight rates move around USD 8,000-13,000 per day. Earnings on benchmark routes for LR1 and LR2 from AG going East continues to hold limited potential for impressive rate moves, and BIMCO expects freight rates to stay depressed around USD 1,500-8,000 per day” said BIMCO in its report.
TANKER SUPPLY
In terms of supply, BIMCO noted that “the product tanker fleet is seeing limited inflow of new tonnage nowadays as compared to recent years of high supply growth. The low level of new deliveries into the Handysize segments is actually being outpaced by tonnage be sold for demolition. During the past 14 months, 1.1 million DWT has left the fleet, sold for demolition. In the same period of time only 0.5 million DWT has entered the fleet – resulting in a very positive shrinkage of the fleet in that segment. This is in opposition to the changes to the MR fleet, where demolition has been 0.8 million DWT and inflow at 2.1 million DWT. LR2 is the same story as MR, with 28 new vessels being delivered during the past 14 months, but LR2 has a much smaller orderbook left for future delivery; just 24 new LR2 or 10% of the current fleet is on order. For MR product tankers, another 18% is expected to be added to the current fleet in the coming years, according to the current orderbook” mentioned the analysis.
It continued by stating that “contrary to the frantic delivery pace of dry bulk vessels, the tanker sector is seeing a much more balanced supply of new tonnage. Actually, the delivery pace has been spot on for BIMCO expectations, as the product tanker fleet is on target to grow by 3.3% and crude tanker fleet to grow by 6.5% in 2012. The active total crude tanker fleet has grown by 1.9%, as 12.5 million DWT has been delivered into a fleet totalling at 364.2 million DWT five months ago. Countering that inflow is 5.6 million DWT which has left the fleet during the same time due to demolitions etc. New crude tanker orders in recent months have been completely absent except for three VLCCs due for delivery in 2014 and 2015.
The active product tanker fleet has grown less fast at just 1.2% so far in 2012, as 29 vessels equal to 2.1 million DWT have been delivered, offset by 0.8 million DWT being demolished (13 vessels). New contracts for product tankers have made a small jump forward, as no less than 17 new orders have been placed, adding to the 26 in the previous three months. Ten of the new orders were for MR tonnage. 72% of all new product tanker orders have been in the MR segment in 2012. This continues the trend from 2011 where 80% were MR-orders” said BIMCO.
TANKER DEMAND
Finally in terms of demand, the report noted that “the demand picture for oil tankers is steady – perhaps a bit too steady if you look at the freight rate movements for VLCC crude oil tankers and MR clean product tankers. This stands in contrast to the spikes that Suezmax owners have achieved during the first five months of 2012. Average daily earnings in the Suezmax segment has been double that of VLCC daily earnings at USD 20,125 per day as compared to VLCC earnings at USD 9,102 per day. Even though China, the world’s second biggest energy consumer, imported a record 6 million barrels per day of crude oil in May, up 18.2% from a year ago, it is a tough market. If this peak figure stems from the building of inventory it could affect imports in coming months. The Suezmax peak rates come rather surprisingly at times when US East Coast imports tumble as the refineries that require sweet crude oil from West Africa and the North Sea are about to either terminate production or yet to restart following a sale to new owners, as has been the case for several of the closure-threatened East Coast refineries. That indicates that a tight supply of tonnage may be the most important factor around to provide rates spikes in today’s tanker market” said BIMCO.
It concluded its analysis by saying that “a quick glance at the Time Charter Equivalent (TCE) Earnings for the clean tanker workhorse MR discloses some positive feedback from the start of the US driving season. Traditionally, the lead up to the start of that season is the strongest one in terms of imports and corresponding earnings. This trend has to some extend proven itself once again this year. During May, freight rates moved from USD 7,000 per day to USD 12,000 per day, but gasoline imports levels according to EIA have only just touched the 800,000 barrels per day barrier during the last week of May and first week of June. This is a level that is more than 300,000 barrels per day shy of last year’s import level at the same period of time. The EIA figures disclose that US domestic production of motor gasoline has followed the same trend this year as the last – leaving room for optimism for gasoline imports to move up significantly should the arbitrage-trading of EU-to-US gasoline open up. The recent drop in US prices of gasoline has limited this opportunity for now, even though demand is on a par with last year and US gasoline stocks are low. The import level of gasoline to the US from Europe is quite nicely mirrored in earnings, with a couple of weeks’ lag corresponding to the time from when the fixture takes place to the time of landing the cargo”.

From: Hellenic Shipping News Worldwide

Investment optimism regarding the prospects of the MR product tanker segment has risen lately and at first glance appears to be based on sound fundamentals. As shipbroker Gibson noted in its latest weekly report, "until recently there had been very little new investment in MRs for 3½ years and so the current order book is relatively small. This means that there will be no major expansion in the fleet for at least the next 2 years.  Against this backdrop, demand for these vessels is projected to rise. Firstly, there is more product trade in the Atlantic Basin and this is forecast to rise further. The main reason behind this is the major increases in product exports out of the US Gulf. Five years ago US exports of distillates and gasoline averaged 0.4 million b/d; so far this year more than 1.5 million b/d has been exported. This more than compensates for the decline in transatlantic gasoline trade from Europe to the USAC and gives the market another major loading region, which can only help owners" said Gibson.
Looking ahead, the London-based shipbroker mentioned that "the likely closure of refining capacity on the USAC would lead to more product trade in to this region. In addition, the current reversal of the Seaway crude pipeline to take ‘low priced’ crude oil from the bottleneck at Cushing, Oklahoma down to the US Gulf will improve the refinery margins on the Gulf coast. The net result will be even more product exports out of the US Gulf, which will be dominated by MR activity.
Further down the line, the start-up of new export refining capacity in the Middle East from next year onwards will lead to a major rebound in product trade from the region, supporting LR2s, LR1s and the MR sector. Hence, demand for MRs is set to rise and supply remain constrained; good fundamentals for investment. The challenge for the industry is knowing when to stop. Back at the start of 2010 the conditions looked good for Suezmax investment; the problem was that 74 orders followed! Now it looks good for MRs, but when is the right time to stop? From our analysis there is room for more MR orders over the next 12-18 months. Therefore, there are still good opportunities here, but take it too far and it will ruin it for everyone. Know the limits of the market and “if you miss this boat, there will be another one along soon after”; LR2 investment perhaps?" wondered Gibson.
Meanwhile, in the clean tanker markets this week, according to Gibson in the East there was "a week of contrasts in the LR market. "LR1s saw declining fortunes and rates slipping, whilst LR2s have seen a shortage of tonnage and rates climbing. 55,000 mt AG/Japan is down to WS 102.5 and 65,000 mt Jet AG/U.K. Continent is at USD 1.775 m. LR2s have seen rates rising some WS 10 points, with 75,000 Naphtha AG/Japan at WS 92.5 and 90,000 Jet AG/U.K. Continent up over USD 2.30 m. However, the LR2 upturn looks short-lived.
The MRs have had a static week, with rates continuing to bottom feed. TC12 has fallen to WS 120 and it looks like less is on the cards. East Africa is fixing at WS 165-170 basis 35,000 mt, but the majority of East African bound cargoes continue to be shipped on LRs. AG to U.K. Continent is fixing at USD 1.275 m. There is general feeling that rates have hit the bottom, but with a dearth of enquiry, any positive change in the short term is unlikely.
Against expectations, the Korean MR backhaul market has levelled out this week. This is due in part to a tighter position list and also due to a few late running ships. Generally the cost for an MR for Korea/Singapore is around USD 400k level; but for cargoes where vessels have been running late, Owners are achieving USD 450k levels. Conversely, the LR1s and LR2s have been less fortuitous, employment for these sizes has been limited and most of them have had to face the long ballast back to the AG for their next cargo. The Singapore/Australia voyages have been practically non-existent this week and it would be fair to assume that freight rates have not moved much off 30 mt x WS 170" said Gibson.
In the Mediterranean, Gibson noted a move away from status quo at last, "as rates saw a temporary spike. Available tonnage was in shorter supply, particularly in the East Mediterranean and, with a number of Black Sea cargoes quoted, rates spiked to 30 mt at WS 157.5 levels mid-week, but now considered 30 mt at WS 150 levels. Cross-Mediterranean rates moved upwards in trend to 30 mt at WS 145-150, with liftings date sensitive; but with the latter half of the week quiet, the market is now 30 mt at WS 142.5-145. With Posidonia being next week’s main event, activity is expected to be slow. Market rates are anticipated to soften, back towards the dreary 30 mt at WS 140 levels for both the Mediterranean and Black Sea exports, as tonnage supply expands. Pretty uninteresting for the MRs, which were not helped by a softening TC2 market. Mediterranean transatlantic is considered in line, 37 mt at WS 135-137.5 levels. There was some interest for moving UMS East bound, with Owners’ ideas arranged around the USD 775-825k / 875-925k levels for Red Sea/AG discharge on an MR" Gibson concluded.

As another suspected pirate heads to court on the strength of forensic evidence, crime at sea is getting some serious attention.In the latest example of shipping meets TV's Crime Scene Investigation, a Somali has been extradited from The Seychelles to Belgium to face charges of piracy after his fingerprints matched those found on a ship that had been hijacked three years earlier.Belgian federal police had carried out their own CSI on the Belgian-flagged Pompei immediately after it had been released with its 10 crew members unharmed and when six Somalis were subsequently arrested in the Indian Ocean country's territorial waters, their fingerprints were taken and checked against the database on maritime piracy maintained by Interpol. Not only were those of one of the hijackers of the Belgian ship matched but also others wanted by India in connection with another incident.
The Seychelles is one of six countries in the region - the others are Kenya, Madagascar, Oman, Maldives and Tanzania - that are taking part in an Interpol-backed project to improve their intelligence-gathering and collection of forensic evidence.
Methods for fighting pirates have evolved from self-defence by merchant ships and intervention by both naval forces and private security with varying degrees of success, but one of the more seemingly intractable issues has been what to do with those captured either in the act or with the perceived intent of committing it. The release of many by naval forces, unsure of their legal powers or unwilling to use them, dismayed the industry, but gradually the process of arrest and prosecution has been clarified and assisted by the greater involvement of national and international law enforcement agencies such as Interpol.
The burden had initially fallen on naval forces that were not trained or equipped to deal with what is essentially a matter for civilian law enforcement agencies. It has only been with the gradual involvement of such agencies that the importance of forensic evidence has been recognised.
The complexity of cases of piracy where incidents take place in international waters and often involve assets and people - owners, managers and the crew (those on the Pompei came from four different countries) - from a variety of countries with differing legal codes still presented a daunting challenge. Backed by the United Nations' Security Council, Interpol has, however, succeeded in persuading its 190 members to co-operate in exchanging information such as forensic evidence.
The Interpol piracy database now holds details of over 800 suspects, a number that should grow following this month's intelligence-sharing agreement with the anti-piracy naval operations of NATO. It complements a similar existing one with the European Union and both aim to bring to justice not just the hijackers but those who organise and finance them as well. Fingerprints of a different kind may be left on the machinery of the criminal networks behind piracy.
The Interpol announcement of the extradition coincided with the news that the legal committee of the International Maritime Organization (IMO) had approved plans to draw up guidelines on how serious shipboard incidents involving an alleged crime should be handled, including the collation and preservation of evidence.
No liability, the committee advised, should be attributed to any of the crew if their inexperience resulted in a lack or contamination of evidence. Ultimately, this could lead to Masters and other senior officers having to be trained in CSI techniques; some are already being advised on the preservation of hijack-related forensic evidence.
The development at the IMO came as a result of a joint proposal from the governments of the UK and The Philippines and the Cruise Lines International Association that had been motivated by a number of serious incidents on both cruise ships and cargo ships where a common concern was the perceived failings of a multi-jurisdictional system.
The UK's Shipping Minister, in making the proposal to the IMO, said "Taking a cruise should be a safe and enjoyable experience. However, we have been reminded in recent years that crime exists at sea as it does on land and we should be certain that there are effective mechanisms in place to respond to this."
The emphasis on passengers was, however, criticised by the international officers' union Nautilus which said seafarers deserved the same level of protection. 

The most prominent cargo ship incident had involved the death of a South African female cadet on a UK-flag containership. Since the death had occurred in its territorial waters, Croatia had conducted the investigation that concluded with a verdict of suicide, a decision not wholly accepted by the deceased's family and Nautilus that has argued since the incident involved a UK-flag vessel it should have been investigated by either British police or accident investigators.
The extradition - the first of its kind - of a pirate suspect from The Seychelles to Belgium, which only recently enacted a law against piracy, was hailed by Interpol last week. "This case marks a major success in the cross-border fight against maritime piracy and represents a blueprint for international cooperation with Interpol in the fight against maritime piracy and its networks," Pierre St. Hilaire, head of the agency's maritime piracy taskforce, said.
Whether the same degree of co-operation can be achieved when other, perhaps lesser, crimes are committed in the jurisdictional twilight zone that exists at sea remains to be seen.
The crime of piracy will continue to receive the greater attention and commitment of resources as its impact is felt more widely than any isolated serious incident on a cruise ship or cargo ship.
A ship in addition is, as Interpol's legal counsel has noted, a "somewhat unusual crime scene" and often one remote from the resources of the relevant law enforcement agency. The costs of sending officers halfway around the world may also be a deterrent, creating the risk recognised by the IMO Legal Committee that the vital work of evidence-gathering is left to inexperienced crew.
Crime may, indeed, exist at sea as much as it does on land, but without a mobile police force wearing the same uniform is always going to be that much harder to tackle.

Source: BIMCO

It may have been argued over and over that the more newbuilding orders are placed the longer it will take for the shipping markets to recover, but ship owners are still actively pursuing investment opportunities, arising from lower pricing. In its latest weekly report, Clarkson Hellas said that “with further Holidays in the Far East this week – the market has been a little more subdued this week – however with continuing reports of new business being concluded there is arguably enough opportunity present to keep things interesting. The burning issue in the market continues to centre around efficiency – and with shipyards and owners continually placing an increased emphasis on improvements in efficiency of ship design, against the backdrop of a bullish outlook for Bunker pricing, there is no doubt that this will continue to be a key factor taken into consideration for those contemplating newbuilding” said the report.

from: Hellenic Shipping News Worldwide