Monday, October 19, 2009

Freight Saving Turns to Ransom Paying

According to Chinese media, the Chinese 40,892-ton bulk carrier De Xin Hai was hijacked in India Ocean on Oct. 19, 2009 at the point of 550 nautical miles northeast of Seychelles and 700 nautical miles off the east coast of Somalia. This point is southeasterly 1080 nautical miles away from the converging point A of China's escort fleet in the Gulf of Aden.

The media analyzed that this Chinese vessel went up alone near Seychelles was probably because the vessel’s owner could not afford to wait on a group escort organized by the Chinese naval flotilla. Since the end of last year, the freight rate of bulk carriers has dropped dramatically. Waiting for a group escort will cause a big loss on the freight.

The hijacked ship belongs to China Qingdao Ocean Shipping Co., Ltd. When it met the pirates on the sea, it was loaded with bulk coal and sailing from South Africa to India. There are 25 sailors on board with Chinese nationality.

This ship is a new ship and was just christened at China Shanghai Jiangnan shipyard in Sept. 2008. It is a Panamax-type vessel, which is 225m long and 32.26m wide. Its maximum load is 76,528 tons. Its speed is 8 knots. Its main routes are: America to Europe and Far East, Australia to Japan and Singapore. It is sometimes also used for Chinese coastal freight. The types of its cargo include coal, coke, grain, chemical fertilizer, mixed ore, aluminum powder, cement, and other bulk goods.

On Oct. 19, 2009, after the hijack, the Ministry of Foreign Affairs of China reminded the Chinese ships in the Indian Ocean not to close to 1,000 nautical miles east of Somali coast and 350 nautical miles north of Seychelles in order to avoid accidents.

Saving freight-cost probably caused this accident. Whether the pirates will extort a big ransom for the ship’s release, we have to wait and see. Hope it will not be freight saving comes to ransom paying.