Make AAL Shipping Your First Call at BBME 2022 – Hall 1 C31
The Publication for the Industrial Project Supply Chain Industry
January-February 2022
BREAKBULK MIDDLE EAST ISSUE
IN THIS ISSUE
Oman’s Ecofriendly Ambitions Bridging Bahrain’s Gap Profile: DHL’s Sue Donoghue Al Faris Moves Mining Mountains
ENERGY UPDATE: COP26 – SETTING A PATH FOR SECTOR’S DECARBONIZATION
IN THIS ISSUE
18
Cover Story
BREAKBULK MIDDLE EAST ISSUE
18 OMAN’S ECOFRIENDLY AMBITIONS
Opportunities in Gulf Amid Green Fuels Push
22 BRIDGING
BAHRAIN’S GAP
Kingdom Banks on Infrastructure Amid Fiscal Strain
26 PROFILE: DHL’S SUE DONOGHUE
DHL Executive Sue Donoghue Driven by Determination
28 AL FARIS MOVES
MINING MOUNTAINS Al Faris Leans on Relationships for Giant Equipment Project Also in this issue 04 06 50 54
EDITORIAL CONVERSATION BREAKBULKONE BACK PAGE
08
26
36
40
08 ENVIRONMENT
POWER TO THE PROJECT PEOPLE
COP26 Sets Path for Sector’s Decarbonization
12 ENVIRONMENT
MEASURING UP TO SUSTAINABILITY Industry Calculates Climate Change Resilience
21 THOUGHT LEADER CHAMPIONING HYDROGEN
UAE Sets Out Green Fuel Goal
25 THOUGHT LEADER
UNRAVELING THE BUZZWORDS
Digital Transformation No Dark Art
31 THOUGHT LEADER
SEAFARERS STILL NEED SUPPORT
Unsung Heroes, Victims of the Pandemic
32 CARGO LENS
STEELING FOR GROWTH
US-EU Tariff Resolutions Promise Trade Boost
36 INTERMEDIARIES
PROSPECTS GAIN THE UPPER HAND
Employers Face Seller’s Market for Hiring Employees
40 INLAND TRANSPORTATION
INLAND MANEUVERING
Scheduling of Project Cargo Moves May Mean Shifting Modes, Sourcing
44 CASE STUDY
MAKING LIGHT WORK OF DANGEROUS GOODS Seismic Equipment Move Tests Project Detail
46 REGIONAL REVIEW
TO THE MOON AND BACK China Space Program Offers Project Potential
www.breakbulk.com BREAKBULK MAGAZINE 3
EDITORIAL
NEW YEAR, NEW BEGINNINGS Hello and Happy New Year! Moving on from the past two years, there are abundant hopes that grasp for that word, “New,” that we’ve actually taken a fresh step beyond what the pandemic, supply chain congestion, political upheaval and other issues have wrought. In many ways, we are embracing 2022 here at Breakbulk. At most imminent and exciting is Breakbulk Middle East, Feb. 1 and 2 at the World Trade Centre Dubai, the first major industry event in 2022, and the first in our full slate of in-person events. Gary Burrows And this, our Breakbulk Middle East Issue, celebrates the Middle East region’s largest event for project cargo and breakbulk industry, with some 4,000 industry professionals expected during the two-day event.
FEATURED CONTENT
As we’ve done since the first Breakbulk Middle East in 2015, Breakbulk magazine continues to focus on the region, and the issues the project cargo and breakbulk industry faces in the region. In this issue editorially, we start off with a pair of stories from Simon West, who has joined Breakbulk as senior reporter. Oman’s bid to become a global hub for green hydrogen and green ammonia production, which could bring a steady stream of cargo-carrying opportunities for years to come (“Oman’s Ecofriendly Ambitions,” page 18). West also explores Bahrain’s recent decision to begin construction on its US$2 billion nationwide train network, despite concerns the plan could derail wider investment in Bahrain’s US$30 billion in high-profile projects (“Bridging Bahrain’s Gap,” page 22). Meanwhile, in “Logistics ‘Gets Under Your Skin’ (page 26),” Felicity Landon profiles Sue Donoghue, DHL’s 4 BREAKBULK MAGAZINE www.breakbulk.com
CEO of the Arab Cluster and DHL’s managing director for the Kingdom of Saudi Arabia, who offers encouragement to other women advancing in the industry. We also feature a case study of Breakbulk Middle East exhibitor Al Faris’ multi-year project which involved movements of loads topping 2,000 tonnes each for German multinational conglomerate thyssenkrupp Industrial Solutions (“Moving Mining Mountains,” page 28).
THOUGHT LEADERS/ PANELISTS
In our regular thought leaders feature, in this issue we have three industry participants who will also be on the Main Stage at Breakbulk Middle East 2022: • Andrew Baird, a partner in the Dubai office of Watson Farley & Williams LLP, discusses the UAE’s hydrogen roadmap in “Championing Hydrogen,” page 21. He will participate in the panel discussion: “Regional Outlook, Project Financing and Investment,” on Feb. 1. • Lars Greiner, associate partner Middle East and Africa for HPC Hamburg Port Consulting, attempts to parse the terms thrown around when discussing digitalization and digital transformation (“Unraveling the Buzzwords,” page 25). At Breakbulk Middle East, Greiner will moderate the panel, “Spotlight West Africa” that will be held Feb. 2. • Natalie Jensen, a partner in the Dubai office of international business law firm Ince, says that more action is needed on behalf of seafarers, (“Seafarers Still Need Support,” page 31). Jensen will also be a speaker for the session: “Seafarer Welfare, Protecting the Backbone of Our Industry,” on Feb 2.
WATCH THIS SPACE
We look forward to coming together in Dubai as an industry, followed by Breakbulk Europe in Rotterdam (May 17-19) and Breakbulk Americas back in Houston (Sept. 27-29) in turn. Along the way, may the year be filled with exciting opportunities and surprises. And who knows, there may be surprises coming within the pages of your next issue of Breakbulk!
EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gary.burrows@hyve.group NEWS EDITOR Carly Fields carly.fields@hyve.group SENIOR REPORTER Simon West simon.west@hyve.group DESIGNER Mark Clubb REPORTERS Paul Scott Abbott Felicity Landon Iain MacIntyre Lori Musser Malcolm Ramsay Thomas Timlen BREAKBULK EDITORIAL ADVISORY BOARD John Amos, emeritus Amos Logistics
Dennis Devlin Maersk
Charmendra Gangrade
L&T Hydrocarbon Engineering
Margaret Kidd
University of Houston
Anders Maul
Blue Watter Shipping
Dennis Mottola, emeritus Global Logistics Consultant
Sarah Schlüter Hapag-Lloyd
Steve Spoljaric Bechtel
Roger Strevens
Wallenius Wilhelmsen
Jake Swanson
DHL Industrial Project
Ulrich Ulrichs
BBC Chartering
Johan-Paul Verschuure Rebel Group
Grant Wattman
Jade Management Group
PORTFOLIO DIRECTOR Nick Davison nick.davison@hyve.group MARKETING & MEDIA DIRECTOR Leslie Meredith leslie.meredith@hyve.group To advertise in Breakbulk Media products, visit: http://breakbulk.com/page/advertise SUBSCRIPTIONS To subscribe, go to http://breakbulk.com/page/ subscribe-breakbulk-magazine, or email: gary.burrows@breakbulk.com A publication of Hyve Group plc. The Studios, 2 Kingdom Street Paddington, London W2 6JG, UK
JANUARY-FEBRUARY 2022
WE KNOW WHAT WE'RE DOING Höegh Autoliners is a global leader in deep sea RoRo transportation services. To transport wider, longer and higher breakbulk and project cargo, we have developed specialised handling equipment to ensure your cargo's smooth and safe transportation. With over 90 years of experience from shipping, we can safely say that we know what we're doing, and we do it well.
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CONVERSATION Join the conversation – share your thoughts, opinions and feedback with Breakbulk! Send them to gary.burrows@breakbulk.com. Items we use will be edited for appropriateness, length and clarity.
As the year turned, a number of industry white papers and reports were released focusing on key issues to focus on in 2022. We highlight several here in this issue.
‘OFFSHORE WIND BECAME THE NEW BACON IN 2020’
“We have seen exponential investment cycles in the energy sector many times before, most recently between 2003 and the financial crisis (2009) and again between 2010 and 2014. Unfortunately, growth of this scale is typically associated with significant cost escalation and a greater frequency of project failure (major cost overruns and schedule delays, as well as operational failures) perpetuated by a stressed supply chain. This is especially true in markets that rely on highly specialized manufacturers and service providers – something offshore wind has in abundance. This view runs counter to the more popular opinion that offshore wind costs will continue to come down, but given past experience in other comparable industrial sectors, we believe there are still strong headwinds in store for offshore wind’s capital cost.” – Luke Wallace, director, capital solutions, IPA Global, and author of Supply Chain Headwinds in
Store for Offshore Wind, www.ipaglobal.com/news/article/offshore-wind-supply-chain-challenges/.
OIL MAJORS TILTING TOWARDS NEW ENERGY
The oil and gas industry is clearly diversifying into investment in new energy, and Tom Ellacott and Greig Aitken of Wood Mackenzie’s corporate research team took a look at how the oil majors’ strategic positioning is evolving.
The Majors’ Accelerating Tilt to New Energy is available at www.woodmac.com/news/the-edge/the-majors-acceleratingtilt-to-new-energy/
ARE MINED RESOURCES REALLY IN A SUPERCYCLE?
BACK-AND-FORTH LEADS TO SUCCESSFUL PROJECTS
The global decarbonization pathway created a perceived supercycle in 2021 for a broad range of mined commodities. But will it continue into 2022 and beyond? Julian Kettle, senior vice president, vice chair metals and mining, Wood MacKenzie, explores the issue in Supercycle Demand: Are We There Yet? “For many metals and mined commodities demand looks set to wane over the next few years despite rampant growth in several energy transition uses, particularly electric vehicles. It’s unlikely we’ll see a continuation of the pace set in 2021, when demand has been supercharged by economic stimuli, pent-up lockdown demand and restocking along the value chain,” Kettle said. The full report is available at www.woodmac.com/news/ opinion/supercycle-demand-are-we-there-yet/ 6 BREAKBULK MAGAZINE www.breakbulk.com
“Owners owe it to their stockholders to reinforce the early discussions between business and project teams to make sure projects are inoculated against future uncertainties.” – Adam Pountney, advanced associate project analyst, IPA Global
Read the report at www.ipaglobal.com/news/article/ closing-the-operational-performance-gap/. JANUARY-FEBRUARY 2022
UNLOCKING ENERGY STORAGE FOR RENEWABLES
While wind and solar generation are critical to achieving global net zero targets, energy storage is critical to achieving that goal. In a recent video, Gavin Thompson, Wood Mackenzie’s vice chairman, energy – Asia-Pacific, discussed The Future of Energy Storage in Asia-Pacific with Xu Le, senior analyst, power and renewables. The video is available at www.woodmac.com/news/opinion/the-future-of-energy-storage/.
BREAKBULK EUROPE PROGRAMME ADVISORY BOARD Breakbulk Events & Media’s Content Team in December announced its Breakbulk Europe Programme Advisory Board, an experienced and diverse roster of industry leaders providing representation of voices from key breakbulk and project cargo sectors. The board members, with hundreds of years of industry experience among them, will shape and ensure the integrity of the content for Breakbulk Europe, which returns as a live, in-person event May 17-19, at Rotterdam Ahoy in Rotterdam, the Netherlands. The board’s 11 professions represent ports and terminals, marine transport, air transport, manufacturers, project freight forwarders, and industry associations. As well are being diverse on sectors, the board is also ethnically and gender diverse. Returning after a two-year hiatus caused by the pandemic, enthusiasm for Breakbulk Europe, the world’s largest project cargo and breakbulk event, has
reached new heights with many of the biggest names in the business committed to exhibiting at Rotterdam Ahoy. The board members, organized by industry sector, are:
Ports & Terminals Simon Brett, commercial director, Port of Tyne Danny Levenswaard, director breakbulk, Port of Rotterdam Maritime Transport Carsten Wendt, head of sales – high and heavy and breakbulk, Wallenius Willhelmsen Marko Stampehl, global head of marketing and public relations, BBC Chartering Susan Oatway, senior analyst, multipurpose and breakbulk shipping, Drewry Air Transport Ekaterina Andreeva, commercial director, Volga-Dnepr
Manufacturers Thomas Sender Mehl, director, global sales and operations planning and supply chain excellence, KK Wind Solutions Ruediger Fromm, head of logistics – transmission solutions, Siemens Energy Global Associations Sue Terpilowski OBE, press officer, WISTA International; director, Image Line; co-chair, Diversity in Maritime Taskforce, Maritime UK, WISTA UK Christel Pullens, president, WISTA Netherlands; managing director, Sea Ranger Service Project Freight Forwarding Tim Killen, executive vice president, deugro group
17-19 May 2022 Rotterdam, Netherlands www.breakbulk.com BREAKBULK MAGAZINE 7
ENVIRONMENT
POWER TO THE PROJECT PEOPLE
K Prime Minister Boris Johnson put the climate challenge plainly in his opening statement, welcoming the world to Glasgow, Scotland for the 26th UN Climate Change Conference of the Parties (COP26). “Humanity has long since run down the clock on climate change,” Johnson said at the COP26 World Leaders Summit Opening Ceremony in November. “It’s one minute to midnight on that doomsday clock and we need to act now.” His words were necessarily inflammatory – and may not have inspired immediate action among those servicing the breakbulk and project cargo 8 BREAKBULK MAGAZINE www.breakbulk.com
industries. But there were plenty of outcomes from that seminal Climate Conference that will set a path for the green evolution of the sector. The ultimate outcome of the Conference – the Glasgow Climate Pact – ticked off the major hot-button topics of emissions, peak coal, financing to help developing countries cope with and mitigate the effects of climate change, and the phase-out of fossil fuel subsidies. Those macro topics will certainly have a bearing on the breakbulk and project cargo world. For example, the Global Methane Pledge, led by the U.S. and the European Union, seeks to curb methane emissions by 30 percent by 2030, and
BY CARLY FIELDS
has been signed by more than 100 countries. Methane ‘slip’ – where methane is emitted unburned from an engine, contributing to damaging emissions – has been a divisive factor in whether to use liquefied natural gas as a fuel in the sector. The pledge puts the onus on engine developers to resolve that issue or else find that their technology is cut out of the selection loop. But while the macro level impacts such as that will be part of longer-term solutions, it’s the micro level agreements and initiatives agreed at COP26 that will have the greatest impact on the breakbulk and project cargo industry in the short term. JANUARY-FEBRUARY 2022
CREDIT: SHUTTERSTOCK
U
COP26 Sets Path for Sector’s Decarbonization
SIDE ANNOUNCEMENTS
Bud Darr, executive vice president, maritime policy and government affairs at project cargo mover MSC Group and COP26 attendee, said in a Watson Farley Williams webinar considering the COP26 takeaways for the transportation section that the conference was about as he expected on the macro perspective. “Looking at the big picture there wasn’t a great deal said about shipping. But there were several side announcements for shipping that were important,” Darr said. Those “side announcements” included shipowner community support of market-based measures, a commitment to net zero for 2050, and a renewed push for the IMO to back the industry-led US$2-per-tonne bunker levy to fund a US$5 billion International Maritime Research and Development proposal. Michael Parker, global industry head for the shipping, logistics and offshore industries at Citigroup, noted that the conversation for shipping is moving away from decarbonization and on to global warning. CO2 isn’t the only concern now. For him, the Clydebank Declaration – another of the sector-specific announcements – holds great promise. More than 20 countries, including the U.S., Japan, Australia and Canada, have signed the Clydebank Declaration to develop at least six green shipping corridors between two or more ports by 2025 and “many more” by 2030, according to the UK COP26 presidency. “The Clydebank Declaration’s green corridors initiative is very important because we need to see large-scale projects and large-scale financial
SUSTAINABLE FUEL PROJECTS
Bud Darr
Daniel Wieland
MSC Group
DB Schenker
commitments in order to accelerate the process,” Parker said. “The Clydebank Declaration is important because it’s well to wake. The declaration could become a very important and significant step. We the industry will hold governments to account.” Another key initiative is the Cargo Owners for Zero Emission Vessels, or coZEV: “The coZEV alliance is more important in a way,” Parker said. “This puts the issue in a way that the shipping industry has never seen: the consumer is watching. This represents engagement for the ultimate payer for all this: the consumer.” coZEV is described as a “first-of-its-kind cargo owner-led platform” to enable maritime freight customers to come together to accelerate maritime shipping decarbonization. Darr also highlighted the Sustainable Freight Buyers Alliance, an alliance of shippers looking to reach net-zero freight logistics carbon emissions by no later than 2050 in line with a 1.5°C maximum global temperature increase. “It’s not only irresponsible, but also flat-out wrong to not look at this from a lifecycle perspective,” he said.
Freight forwarders engaged in the breakbulk and project cargo industry recognize the challenge and are not shirking their responsibilities. Speaking to Breakbulk, Daniel Wieland, senior vice president global projects and industry solutions at DB Schenker, said that an initiative pioneering sustainable aviation fuel with Lufthansa is also available to project cargoes that can fit in a normal freighter. The CO2 -neutral flight connects Frankfurt to Shanghai on a weekly basis. The fuel is produced mainly from biomass waste, such as used vegetable and cooking oils. When burned in the engine, the same amount of carbon dioxide is released which was previously removed from the atmosphere during the original growth of the plants. “Everybody is talking about sustainability. It’s a very relevant topic,” Wieland said. “The Sustainable Aviation Fuel flights are an important first step, and as an industry we will become better faster.” He confirmed that similar decarbonization projects are being discussed with container carrier partners for the ocean segment, however sustainable fuel for MPV operators is only being considered in singular pilot projects so far. “Has it been a vital element in the dialogue with project customers up until now? No. But we are running fast in that direction; you can clearly see a mind-change,” he said. Looking at the general cargo segment, discussions are taking place, nominally because almost every project has an element of standard freight that can be containerized. “It’s all about the ship and how you move the ship at the
Side announcements from COP26 will have an impact on the breakbulk world. CREDIT: SHUTTERSTOCK
www.breakbulk.com BREAKBULK MAGAZINE 9
ENVIRONMENT
“We need to help ourselves. Let’s not wait for COP26, let’s not wait for regulation, let’s help ourselves as a community to do what we have to do.” Eric Martin-Neuville
GEODIS offers sustainable fuel solutions for all transport modes. CREDIT: GEODIS
end of the day.” While DB Schenker as a company has a project cargo segment, in discussions with a carrier the type of cargo is often irrelevant, Wieland added. “At the end of the day the industry needs a solution.”
‘BOOK & CLAIM’
GEODIS, meanwhile, offers sustainable fuel solutions for all transport modes, wherever they are globally. Using the ‘book & claim’ approach, customers can opt for as high a level of contribution as they want, up to 100 percent of transport CO 2 emissions. Eric Martin-Neuville, executive vice president freight forwarding at GEODIS, explained to Breakbulk that while the initiative targets standard air freight and containerized ocean freight cargoes, it still applies to the project cargo industry. “In the project logistics world, we need to recognize that we do carry a lot of air freight and containers and therefore it is directly applicable.” The option of sustainable marine fuels is also available in the same manner for breakbulk and project cargoes, the only difference being how emissions and cost are calculated. Eric MartinThis process is Neuville automated for standard cargoes, GEODIS 10 BREAKBULK MAGAZINE www.breakbulk.com
but GEODIS offers a specific tailored solution for breakbulk and heavy-lift. “CO2 emission calculations and CO2 reduction calculations are complex,” Martin-Neuville said. “We are making a lot of efforts to fine-tune them and the more we fine-tune them the more complex they become.” In the complicated world of project cargo, specific calculations are necessary. “For every non-standard shipment, we need to have someone who will study the movement, the vessel, the route and so on and make the calculation. Once we have set the calculation, the rest of the process is the same,” he said. GEODIS reported good demand for the service from the general cargo sector, while on the project cargo side, customers are asking the question “how can we take advantage of this?” Like DB Schenker, GEODIS has opted to focus on biofuels originating from waste. “We have made the choice not to support agriculturally based biofuels because they have side impacts,” Martin-Neuville said. However, this presents its own challenge: the volume of biofuels being produced globally is stunted by a lack of financing. “With the solution that we are pushing forwards, we hope that we will be able to create financial flows to encourage investment into refineries to increase production and make it more easily available and make it cheaper,” Martin-Neuville said. “If we can promote usage, we are quite sure we will enable a decrease in cost. We have committed ourselves to buying specific quantities of sustainable marine fuels. We hope to be able to significantly increase those amounts over time.”
GEODIS sees this initiative as its “duty” as a freight forwarder to help reduce emissions. While the newer service adopts an insetting approach – when a company offsets its emissions through a carbon offset project within its own value chain – it already offers offsetting solutions to customers as well. As well as focusing on biofuels and continuous improvement to its calculation methodology, GEODIS is also looking to help optimize its customers’ transportation volumes. “A big part of the CO2 emission waste is related to empty voyages. So, we are trying to help our customers optimize the way cartons and pallets are being used.”
GREATER AWARENESS A BOON
Engagement with customers on green issues is certainly more important than it used to be. Wieland gives the example of an upcoming annual review with a client where separate agenda items are dedicated to sustainability and decarbonization. “It’s not only about ‘when can we expect the next tender’ as a supplier. The whole sustainability and decarbonization topic is very high on the agenda.” However, not every customer is so green-minded yet: “Discussing green solutions is easiest with those customers who are industry leaders in their sectors and show leadership asking for more sustainable transport solutions. They are the ones on this journey with us,” Wieland said. Martin-Neuville added that attitudes to both sustainability and decarbonization changed dramatically during the pandemic. “Pre-crisis, the amount of focus from our suppliers and our customers was somewhat limited; postcrisis, we are now seeing a lot more interest in how to drive and finance these initiatives.” While he views regulation as the next obvious step, that is just one route to achieving the industry’s net zero ambitions. “We need to help ourselves,” he concluded. “Let’s not wait for COP26, let’s not wait for regulation, let’s help ourselves as a community to do what we have to do.” BB Carly Fields has reported on the shipping industry for the past 22 years, covering bunkers and broking and much in between. JANUARY-FEBRUARY 2022
ENVIRONMENT
MEASURING UP TO SUSTAINABILITY S Industry Calculates Climate Change Resilience
takeholders in the global breakbulk and project cargo supply chain are actively advancing a range of measures to improve the sustainability of their infrastructure and operations in light of increasing climate change consciousness and regulatory requirements. However, despite such initiatives driving innovation and creating new opportunities, there is also expectation that the necessary pursuit of greenhouse gas emissions reduction will likely raise bottom-line costs for shippers and end consumers.
Rachel Schwalbach C.H. Robinson
Rachel Schwalbach, ESG (environmental, social and governance) vice president, CH Robinson, said her firm’s primary approach to cutting emissions is to first find efficiencies within supply chains – including reducing empty miles and
BY IAIN MACINTYRE
leveraging optimization opportunities. “Mitigating emissions is a top priority for CH Robinson and our customers, but in order to reduce carbon emissions, shippers had to know where they were starting,” Schwalbach said. “That’s why we created Emissions IQ, a technology that measures carbon emissions across mode, date, location and retailer. After knowing your starting point, you can then begin to discover change opportunities.” Emphasizing that tackling the
Swire’s sustainability focus supports industry development of a green fuel source for shipping. CREDIT: SWIRE SHIPPING
12 BREAKBULK MAGAZINE www.breakbulk.com
JANUARY-FEBRUARY 2022
challenges of climate change demands innovation, Schwalbach saw the selfservice capabilities provided by the Robinson Labs-developed tool as a key technological advancement for CH Robinson’s clients. “Emissions IQ can benchmark a customer’s data against previous years and against their industry and identify areas of opportunity to take action and reduce emissions,” she said. The tool is accredited to use the Global Logistics Emissions Counsel framework, giving shippers trusted and universally accepted data. “Most companies aren’t equipped to measure their carbon footprint across truck, rail, air and ocean transportation. Emissions IQ will eliminate that barrier, providing instant calculations and benchmarking data, while surfacing the best strategies to make meaningful carbon reductions right now,” Schwalbach said. “This information advantage, combined with CH Robinson’s expert global sustainability consultants, gives our customers the building tools to reach their sustainability goals.” Schwalbach gave the example of Tempur Sealy, who CH Robinson helped to reduce domestic carbon emissions by nearly 1,000 tonnes of CO2e. “They’re on track to quadruple that this year too.” Additionally, CH Robinson helped an outdoor sports retailer reduce its carbon emissions by 1,270 tonnes in 2020 with further reductions happening in 2021.
PARTNERSHIP OPPORTUNITIES
James Woodrow, managing director at Swire Shipping – whose firm is a major multi-cargo carrier in the Asia-Oceania trade lane – said his line’s preeminent sustainability focus is supporting industry development of a “green” fuel source for shipping. “Swire is taking an active role in the industry’s move to a green fuel source through our membership of the Getting to Zero Coalition and our recent decision to join the McKinney Moeller Maersk Centre for Zero Carbon Shipping,” Woodrow said, noting that both ammonia and methanol are potential fuel sources going forward.
Key Performance Indicators
Emissions and Modal Conversion Avoidance
Smart Way Volume Comparison Q4 20 Q3 20 Q2 20 Q1 20 Q4 19
Q4 20 Q3 20 Q2 20 Q1 20 Q4 19
Modal Conv. Avoidance
Emissions
Non Smart Way
Smart Way
Modal Comparison Truckload
Consolidated
7.6m
All (Including selected)
2.1m
0 Emissions 10.3m
0 Emissions 10.3m
10.3m
0 Emissions 10.3m
Load Count
Smart Way Count
Smart Way %
Load Count
Smart Way Count
Smart Way %
Load Count
Smart Way Count
Smart Way %
6,795
704
10.4%
5,900
2,053
34.8%
13,790
3,722
27.0%
Source: C.H. Robinson, Emissions IQ CREDIT: CH ROBINSON CH Robinson’s Emissions IQ tool.
James Woodrow Swire Shipping
Leonard Sampson Port of Tauranga
Woodrow added that, over the past five years, Swire Shipping and sister company Swire Bulk have invested “well over” US$1 billion in environmentally based fleet renewal. “These vessels are among the most fuel efficient in their respective classes. We continue to invest in technological and operational improvements that reduce our carbon footprint.” The changeover to low-sulfur fuel for the carrier’s fleet, as necessitated by the 2021 enaction of IMO’s MARPOL Annex VI, “went smoothly,” he said, noting both that development – and other factors – will contribute to rising costs for shippers. While he acknowledged that lowsulfur fuel is more expensive than high-sulfur fuel, the biggest increase
has been in the general cost of fuel over recent months with oil prices bouncing back to more than US$80 per barrel as global demand recovers. Woodrow added that governments introducing either carbon levies or emissions trading schemes will further increase the base cost of shipping. “Regulations will also decrease the speed of many older, less-fuel-efficient vessels as they comply with these new regulations.” Leonard Sampson, CEO at the Port of Tauranga – the largest in New Zealand and claiming to offer a considerably greener global supply chain than its neighboring, major competitor, cites air and water quality as well as energy efficiency as major focuses. “Our vision is to protect and enhance our natural environment, investing in technology and embedding sustainable practices throughout our business,” Sampson said. “Our approach has been to break down each area of operations to find opportunities to create lasting change – for example, avoiding waste going to landfill.”
CARBON FOOTPRINT INTERROGATION
Given the reality that all businesses will need to interrogate the carbon footprint of their supply chains, Sampson saw his port as having positioned www.breakbulk.com BREAKBULK MAGAZINE 13
ENVIRONMENT
Most companies aren’t equipped to measure their carbon footprint across all modes. CREDIT: CH ROBINSON
Swire Shipping and sister company Swire Bulk have invested “well over” US$1 billion in environmentally based fleet renewal. CREDIT: SWIRE SHIPPING
itself well for heightened sustainability requirements. “Port of Tauranga is the only New Zealand port able to accommodate bigger ships, which offer a lower-carbon supply chain for importers and exporters. By far the largest proportion of carbon emissions in New Zealand’s container supply chain relates to the “blue water” or oceangoing component of the cargo journey. 14 BREAKBULK MAGAZINE www.breakbulk.com
“Landside emissions from road or rail transport contribute only a small percentage of the total carbon emissions related to container imports and exports. Larger vessels have higher fuel efficiency and lower emissions and have a 20 percent to 30 percent smaller carbon footprint over a typical container journey.” He also predicted a continuation
of the trend towards increased rail use in the port sector as part of a sustainability-improving domestic supply chain. “We have a preference for rail over road for transferring cargo to and from the port because of its efficiency and smaller carbon footprint. More than half of all cargo is delivered or picked up from the port via rail and there is opportunity to absorb further growth on rail – for example, with our new Ruakura Inland Port joint venture with Tainui Group Holdings.” Sampson described the Port of Tauranga, which has adopted the International Integrated Reporting Framework ahead of New Zealand’s 2023 implementation of mandatory climate-related disclosures, as having had several recent sustainability “wins.” These include dust suppression through a five-fold increase in wharf sweeping since 2017, use of water misting technology and improved cargo handling procedures. The port is working with port users to minimize fine dust becoming airborne. Log yard roadways have been reconfigured to prevent wind tunneling effects and concrete barriers have been introduced to keep unnecessary traffic out of dusty areas. A second win is the reduction of carbon emissions through a 75 percent reduction in waste going to landfill in the past two years as a result of increased reuse and recycling of wharf sweepings. This has resulted in a significant reduction in greenhouse gas emissions associated to landfill decomposition. A third win is energy efficiency. The port purchased hybrid straddle carriers for increased fuel efficiency in container handling with the first commissioned in early 2020. These have proven to be “reliable, quiet, comfortable and more fuel efficient,” Sampson said. “They are popular with operators too – one has averaged 21.5 hours of use a day. “Our modern fleet of shipto-shore gantry cranes have sophisticated electric motors that regenerate up to 700 kilowatts of electricity when lowering a container. Excess electricity can be made available to adjacent cranes lifting containers or fed back into JANUARY-FEBRUARY 2022
PORT TAMPA BAY
FLORIDA’S
BREAKBULK DISTRIBUTION HUB
• Closest port to Florida’s largest and fastest growing market
• Expanding lumber, perishable, container, project cargo, and heavy-lift business
• Over 500,000 SF of on-dock warehouse space and 6,000 linear feet of berth
• New and expanded container services with Central America, Mexico and Asia
• Florida’s largest steel port
WWW.PORTTB.COM
ENVIRONMENT
“Port of Tauranga is the only New Zealand port able to accommodate bigger ships, which offer a lower-carbon supply chain for importers and exporters”
the terminal to power refrigerated container connections,” he added. “Our light vehicle fleet is progressively being converted to electric or hybrid models.” Looking to further emissions-reducing measures on the horizon, Sampson said the next “big opportunity” lies in automation.
SUSTAINABILITY TOP OF THE CHALLENGES
CH Robinson’s Schwalbach said customers of the multimodal transport and third-party logistics firm advise that, alongside concerns over shipping capacity, sustainability is among the biggest current challenges. “Global supply chains are incredibly complex and multifaceted and the past two years have made that clearer than ever. Making progress on supply chain sustainability challenges and increasing efficiencies is something we have been solving for our customers for decades – constantly looking to reduce waste, consolidate freight, eliminate empty miles.” Ultimately, she noted, efficient supply chains increase savings and help shippers deliver on their sustainability 16 BREAKBULK MAGAZINE www.breakbulk.com
pledges to their customers, investors and other stakeholders. The 2021 State of Supply Chain Sustainability Report, published by the MIT Center for Transportation & Logistics, found that supply chain sustainability interest had either increased or at least remained the same among stakeholders during the pandemic. “Feeding the demand to solve climate change comes with supply chain challenges that CH Robinson has deep expertise in overcoming. In CH Robinson’s renewable energy transportation and logistics business, the company saw growth of 654 percent in just three years. “Success in these projects means that the market will see 14 gigawatts of clean energy – enough solar energy to charge 1.73 million electric cars and enough wind energy to power a city the size of London for four months. We are proud to leverage our scale and global suite of services to help our customers protect and preserve our planet.” Offsetting carbon emissions also remains among the suite of environmental sustainability solutions being pursued within the supply chain,
Port of Tauranga is targeting greater use of rail as part of its environmental sustainability plans. CREDIT: PORT OF TAURANGA
according to both Woodrow and Schwalbach. “In addition to finding efficiencies, we offer our shipper customers and carriers the option of purchasing carbon offsets through our partnership with Carbonfund.org Foundation, a leading 501(c)(3) non-profit climate solutions provider,” Schwalbach said. “Working through Carbonfund.org means those wanting to offset their emissions can support high-impact projects such as energy efficiency, forestry and renewable energy to offset emissions.” Furthermore, Port of Tauranga’s Sampson added that shippers and ports need to keep investing in resilient equipment, infrastructure and technologies. While current models may not show damaging impact on infrastructure from sea level rise, severe weather events could well lead to flooding and therefore affect breakbulk and project cargo transport access. BB Iain MacIntyre is a New Zealandbased, award-winning journalist, with lengthy experience writing in the global shipping scene. JANUARY-FEBRUARY 2022
BREAKBULK MIDDLE EAST REGIONAL REVIEW
OMAN’S ECOFRIENDLY AMBITIONS
O
Opportunities in Gulf Amid Green Fuels Push
man’s bid to become a global hub for green hydrogen and green ammonia production could hand breakbulk movers in the Gulf state a steady stream of cargo-carrying opportunities for years to come, with one mega-project in particular whipping up excitement. The US$30 billion venture, unveiled in May by a consortium comprising state energy company OQ, Hong Kong-based green fuels developer InterContinental Energy and Kuwaiti clean tech investor EnerTech, would be – by some distance – the largest renewable fuels production facility in the Middle East. The group plans to deploy a massive 25 gigawatts, or GW, of renewable capacity – equivalent to thousands
of wind turbines and solar panels – across a 6,500-square-kilometer tract of land in the sprawling, southernmost governorates of Al Wusta and Dhofar. Those facilities would power water desalination and electrolysis plants to produce an estimated 1.8 million tonnes per year of zero-carbon green hydrogen, the consortium said. Production could be utilized locally, shipped abroad or used as feedstock to make up to 10 million tonnes per year of green ammonia for export. The scale of the project and the hardware required would “support the development of Oman’s renewable energy supply chain and expertise,” the group said in a filing. A spokesperson for InterContinental Energy told Breakbulk that construction could begin in 2026,
BY SIMON WEST
with first-phase operations up and running a year later. Full capacity is expected to be reached by 2037. “Approximately two-thirds (of renewable capacity) will come from wind power and nearly one-third from solar power,” the spokesperson said.
HYDROGEN IN VOGUE
Global hydrogen demand is expected to rocket in the coming years, with international business group the Hydrogen Council estimating the market including fuel cell equipment could be worth US$2.5 trillion by 2050. Most production still derives from energy-intensive industrial processes such as steam methane reforming to make so-called grey hydrogen, or SMR combined with carbon capture
Khimji Ramdas is capable of moving the extra-heavy equipment required for giant wind farms, such as ring generators, rotor blades and steel towers. CREDIT: KHIMJI RAMDAS
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JANUARY-FEBRUARY 2022
and storage to produce more climatefriendly blue hydrogen. But as governments and industries worldwide amp up their efforts to decarbonize, global developers, with an eye on sectors such as shipping, refining, chemical manufacture and long-distance transportation, are sensing opportunity. In addition to its Oman project, InterContinental Energy is planning to build two huge green hydrogen and ammonia plants in western Australia, while China is developing what is thought to be the world’s largest green fuels initiative. Construction of the first phase comprising 100 GW of wind and solar has already begun, according to clean energy analyst BloombergNEF. Gniewomir Flis, hydrogen project manager at energy think tank Agora Energiewende, said a pledge by more than 100 countries at the recent COP26 climate talks to cut methane emissions by at least 30 percent by 2030 should give clean hydrogen a further boost. “There will be more pressure on methane, which means there will be more pressure on blue hydrogen and blue ammonia production. This favors producers of green hydrogen,” Flis said. Blessed with year-round sunshine and the strong winds ideal for developing world-scale solar and wind capacity, and strategically located between key European and Asian markets, oil-producing Gulf states are ready to capitalize on the soaring demand. In Oman, a national hydrogen alliance consisting of government agencies, oil and gas operators, educational and research institutions and ports has already been set up to develop the nascent industry. This follows last year’s unveiling of Vision 2040, a strategy aimed at diversifying the economy away from fossil fuels towards more sustainable sectors, including renewables. Oman wants non-oil and gas sectors to account for more than 90 percent of total GDP by the end of the two-decade period, up from about 70 percent today.
BUILDING UP POWER
Projects in the sultanate are being announced thick and fast. OQ and Belgian contractor DEME Concessions are planning to build a green hydrogen and ammonia facility at the Special Economic Zone at Duqm, or SEZAD, located in Al Wusta. Dubbed HYPORT Duqm, the first phase of the project will comprise a 250- to 500-megawatt, or MW, hydrogen electrolysis plant powered by wind and solar energy, with start-up slated for 2026. German-based energy firm Uniper was brought onboard in July to provide engineering services and negotiate an exclusive offtake agreement for green ammonia. Also, in SEZAD, Indian renewables company ACME is expected to begin pre-construction activities on a US$3.5 billion clean fuels production plant following the signing in August of a land reservation agreement with Omani
Sohar
Barka
authorities. The facility will use 3 GW of solar and 500 MW of wind power to produce about 900,000 tonnes per year of green ammonia for export. The plant will be developed in phases, with the first phase likely to be commissioned by the end of 2022, ACME said in an update. At Salalah, about 500 kilometers south of Duqm in Dhofar governorate, a consortium between OQ, Japan’s Marubeni, Germany’s Linde and Dubai’s Dutco Group is carrying out studies for a green hydrogen and ammonia plant at the Salalah Free Zone, or SFZ. The SalalaH2 project would comprise a 400-MW electrolyzer and would use OQ’s existing facilities to make ammonia. The buildout of those projects will demand significant logistics support. Rajesh Vaidyanathan, general manager at Oman-based Khimji Ramdas Shipping, said his company was one of
Muscat
Khazaen Dry Port
Port Wind turbines Solar farm
Duqm
Salalah
Hydrogen or Ammonia plant Green fuels
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BREAKBULK MIDDLE EAST REGIONAL REVIEW
There are plans to build a green hydrogen and ammonia facility at the Special Economic Zone at Duqm. CREDIT: ASYAD
several local transport specialists capable of shifting the kind of extra-heavy equipment required for giant wind farms, such as ring generators, rotor blades and steel towers. “Homegrown project logistics forwarders are now right in league with the multinational specialists. Clients in Oman are now spoilt for choice when it comes to the execution of complicated moves,” Vaidyanathan said. “The focus on green energy such as hydrogen and wind in Al Wusta will bring in more specialized transport and handling requirements in the near future.”
ROUTES FOR RECEIVING CARGO
Breakbulk movers can rely on several deepwater ports capable of receiving project cargo, such as Duqm and Salalah on the Arabian coast and Sohar on the northern coast. According to Vaidyanathan, a previous lack of port infrastructure meant Omanibound heavy-lift pieces would arrive at terminals in neighboring countries, mainly in the United Arab Emirates. “Cargo would be discharged onto multi-axle or conventional trailers and often operated by non-Omani entities, and then brought in via one of the road borders into Oman,” Vaidyanathan said. “Oman has now developed multiple ports that are equipped to handle the heaviest of cargoes.” State-owned logistics group Asyad, headquartered in capital city Muscat, said expansions and new facilities would give specialist transport firms even more options. 20 BREAKBULK MAGAZINE www.breakbulk.com
Khazaen Dry Port at Barka, northern Oman, is the sultanate’s first integrated inland port designed to fast track movement of containers and general cargo. CREDIT: KHAZAEN, ATKINS
At Sohar Port and Freezone, managed by Sohar Industrial Port Company, a 50:50 joint venture between Asyad and the Port of Rotterdam, feasibility studies are being carried out for an expansion project that could include a new container terminal capable of receiving megavessels. Sohar is Oman’s largest port and industrial complex, handling more than 300,000 tonnes of breakbulk cargo in the second quarter of 2021. In August, a deal was signed with Muscat-based Hormuz Marine to provide bunkering services at the port, a move designed to meet rising demand for offshore refueling and speed up global shipping times. A tanker stationed at the port is now capable of providing several grades of marine fuels to ships. In another development, Asyad announced in November the start of operations at the 250,000 squaremeter Khazaen Dry Port at Barka, northern Oman. The sultanate’s first integrated inland port is designed to fast-track movement of containers and general cargo and cut storage costs.
BUILDOUT CHALLENGES
Challenges for large-scale green hydrogen and ammonia buildout remain. Hydrogen from renewable sources is still expensive to make, although a report this year by BloombergNEF said production costs should fall by up to 85 percent by 2050, driven mainly by lower prices for solar PV electricity. Green hydrogen is on course to be
more cost-competitive than its blue cousin by the end of this decade, even in countries with cheap supplies of natural gas such as the U.S., the report said. Another potential sticking point is end-markets. According to Flis, Europe is likely to emerge as one of the largest hydrogen offtakers, but for its industrial sector to remain competitive internationally, it would need to access the cheapest hydrogen – a job best done through pipelines rather than ships. Saudi Arabia has floated the idea of building a pipeline to transport its own green hydrogen production to Europe, an undertaking that Oman, whose northern border is hundreds of miles further south than Saudi’s, would find significantly more challenging. Saudi’s hydrogen strategy includes a 4-GW production facility at NEOM, a high-tech business and logistics zone being built on the Red Sea coast. Industrial gas supplier Air Products and Saudi ACWA Power are developing the US$5 billion clean fuels project, with construction slated to begin next year. “Long term, I would not bank on European demand to come from shipbased imports of hydrogen,” Flis said. “But if ammonia becomes the fuel of choice in the global shipping sector, that creates a new, alternative offtake market. A project of that size (in Oman) would be well placed to compete.” BB Colombia-based Simon West is a freelance journalist specializing in energy and biofuels news and market movements in the Americas. JANUARY-FEBRUARY 2022
THOUGHT LEADER
Championing Hydrogen UAE Sets Out Green Fuel Goal
T
he hydrogen strategy of the United Arab Emirates has moved forward through the announcement at COP26 of a new Hydrogen Leadership Roadmap, which demonstrates the UAE’s ambition to be a global market leader in the hydrogen industry. The UAE Hydrogen Roadmap forms a blueprint for achieving three main aims: 1. Contributing towards the UAE’s net-zero ambition. As one of the world’s highest per capita energy consumers, the UAE’s commitment to net zero by 2050 is ambitious. The UAE’s hydrogen strategy is expected to form a key part of its net zero strategy. 2. Providing support to domestic low-carbon industries. While the UAE is well-positioned to be a leader in the production of blue and green hydrogen, it will need to collaborate internationally if its aims are to be achieved, and in particular in relation to green hydrogen which, while not yet fully developed from a technology perspective, will play a significant role in the strategy required to meet the target. 3. Establishing the UAE as a competitive exporter of hydrogen. The UAE plans to be a significant producer and exporter of hydrogen and has targeted a 25 percent market share in key export markets, albeit without clearly identifying the exact markets or the timeline. The implementation of the UAE Hydrogen Roadmap will have a number of side effects, notably generating value through the export of low-carbon hydrogen and related products; decarbonizing existing industries, for example the steel industry; and developing new industry opportunities, such as the production of sustainable kerosene. In addition to its US$163 billion investment program for the hydrogen industry, the UAE will put in place certain “enablers” to support the hydrogen industry as follows: • Access to “green” financing domestically and internationally – it remains to be seen exactly how this will manifest itself. • A clear regulatory framework – this is obviously essential for the development of the industry in a properly regulated and orderly manner, and on the basis of a level playing field. • Best-in-class technology – there has been a significant investment made in local research and development and the UAE will clearly want
to promote that further. In particular there is a clear desire to promote the forging of international partnerships more at a corporate level. • Access to existing and new governmentto-government relationships – for example, the UAE/German Hydrogen Partnership. • Readily available land and infrastructure resources – the UAE has access to significant tracts of land to locate, for example, solar power generating facilities which will enable green hydrogen production.
WORKING TRANSPARENTLY
There is much detail to be completed here of course, and there will no doubt be some devil in that detail, but it will be important to ensure that these “enablers” all work together and transparently. The UAE Hydrogen Roadmap also highlights a number of existing projects that have been completed or are in development, including a green hydrogen production facility, a blue ammonia production plant, a green hydrogen demonstration plant (initially for road transport, then expanding to e-kerosene synthesis and ocean shipping), a UAE hydrogen hub in collaboration with BP, a green ammonia project, a large-scale green hydrogen-powered steel production project and the sale of various test cargoes of blue ammonia. This is just a snapshot of some projects that are now under way, and we expect to see the deal count accelerate as the strategies are implemented. The UAE is already incredibly well-positioned to be a leader in the hydrogen industry, given it has a number of in-built competitive advantages for blue and green hydrogen production. While the whole industry remains in its infancy, the UAE Hydrogen Roadmap is a significant step forward, both in substantiating the UAE’s hydrogen ambitions, and in coordinating the efforts of the public and private sectors to develop the hydrogen industry. BB
BY ANDREW BAIRD
The UAE Hydrogen Roadmap is a significant step forward, both in substantiating the UAE’s hydrogen ambitions, and in coordinating the efforts of the public and private sectors to develop the hydrogen industry.
Andrew Baird is a partner in the Dubai office of Watson Farley & Williams. He authored a previous article, “Hydrogen in the UAE,” which can be viewed at https://www.wfw.com/articles/ hydrogen-in-the-uae/.
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BREAKBULK MIDDLE EAST REGIONAL REVIEW
Artist’s impression of Bahrain Metro, a 109-kilometer fully-automated urban transit system. CREDIT: IDOM
BRIDGING BAHRAIN’S GAP Kingdom Banks on Infrastructure Amid Fiscal Strain
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reakbulk movers in Bahrain will be buoyed by the government’s recent decision to kick-start the first stage of a US$2 billion nationwide train network, but concerns remain that fiscal challenges in the Gulf state could derail wider plans to invest in infrastructure. Bahrain’s transport and telecommunications ministry said in October that an international bidding process had been launched seeking private partners to implement the primary phase of the Bahrain Metro Project, a 109-kilometer fully-automated urban transit system. Initial work will focus mainly on capital city Manama and feature an elevated corridor with two lines stretching for a total of 29 kilometers, as well as 20 passenger stations and two interchanges. One line will link Bahrain’s International Airport with Manama’s commercial Seef district, while a second will connect Juffair district with nearby Isa Town. Some 200,000 passengers are expected to use the network every day, a number likely to rise in the coming years, the ministry said in a filing. The project would be designed, built, financed, operated and main22 BREAKBULK MAGAZINE www.breakbulk.com
tained by a private sector company under a 35-year public-private partnership arrangement, and would call for significant breakbulk and project cargo support. “The upcoming metro system will be an interesting project for us to review,” said Shankarraman KS, managing director at Bahrain-based forwarder Aqua Global Logistics.
US$30 BILLION PROJECTS PLAN
The network is one of the more high-profile ventures in a US$30 billion strategic projects plan unveiled by the government in late November to drive investment, beef up infrastructure, create jobs and boost economic growth. The plan builds on a partlycompleted US$32 billion construction program launched six years ago, and incorporates many of the same infrastructure projects, including the metro system. Also rolling over into the new plan is the 25-kilometer, four-lane King Hamad Causeway project linking Bahrain – an island state – with Saudi Arabia. The US$5 billion venture would run parallel to the existing King Fahd Causeway, easing congestion and
BY SIMON WEST
facilitating cross-border trade with other members of the Gulf Cooperation Council, or GCC. Construction of the second causeway is slated to begin in 2024, according to local reports. Some projects in the earlier plan are already finished, such as a sixth production line at Aluminium Bahrain, a new terminal at Bahrain International Airport and a new 112-kilometer-long crude pipeline linking Saudi oil processing facilities with Bahrain’s Bapco refinery. At Bapco itself, a multibilliondollar project to boost capacity by 42 percent to 380,000 barrels per day is more than 60 percent complete. The overhaul is one of the country’s largestever construction projects, involving the transport of 65,000 tonnes of steel and almost 7,000 pilings to support the installation of 21 new operating units and 15 substations. Dutch heavy-lift specialist Mammoet has been involved in the expansion, earlier this year transporting six, 59-meter-long fuel storage bullets weighing between 480 and 500 tonnes each. In total, 22 projects were listed in November’s updated plan, including the creation of five new offshore cities, a venture that would expand Bahrain’s JANUARY-FEBRUARY 2022
land mass by 60 percent. The program also calls for the construction of tourist resorts, sports stadiums and the Bahrain International Exhibition and Conference Centre, the largest of its kind in the Middle East, the government said in a filing. No further details on the proposals were immediately available. “The new multi-year projects represent one of Bahrain’s most significant ever injections of capital investment and will drive the economic recovery plan, designed to enhance the long-term competitiveness of Bahrain’s economy, and stimulate post-pandemic growth,” the filing said.
ROAD AND RAIL SUPPORT
Breakbulk movers can already count on some solid infrastructure to support the buildout. Khalifa Bin Salman Port, operated by APM Terminals, boasts a 63,500-square-kilometer breakbulk terminal and an annual throughout capacity of 1 million 20-foot-equivalent-units, according to the transport ministry. “We have very good road infrastructure in Bahrain which continues to be upgraded on a constant basis,” Shankarraman said. “Being an island, we have our limitations of course, but our deepwater port and terminal is a very modern one capable of handling almost all kinds of project cargo coming in or going out of the kingdom.” Questions remain though on how Bahrain plans to finance its infrastructure drive, with one Middle East-based logistics executive, who asked not to be named, warning the government could have a “hard time” finding the funds. The 2015 infrastructure plan estimated about half the total investment would come from the private sector, with government funding accounting for US$10 billion. The GCC’s Development Fund would have provided the remaining US$7.5 billion. The GCC’s smallest nation, with its population of just 1.5 million of which half are expats, has been hit hard by the twin shocks of Covid-19 and recordlow crude prices, with the economy shrinking 5.4 percent last year.
Although the International Monetary Fund expects growth of 2.4 percent this year and 3.1 percent in 2022, the kingdom’s fiscal position is strained, despite receiving a US$10 billion bailout from Saudi Arabia, Kuwait and the United Arab Emirates in 2018. Public debt levels, rising since the 2014 oil price shock, reached 133 percent of GDP last year, the IMF said. In a bid to bridge the deficit, in October the government announced a 2-year extension to its fiscal balance program, pushing back its target year for a balanced budget from 2022 to 2024 and doubling value-added tax to 10 percent. Scott Livermore, chief economist at Oxford Economics Middle East, said the updated program was about creating stability and avoiding a fiscal crisis rather than stimulating economic recovery. “The fiscal balance program had essentially been put on hold during the pandemic as the Bahraini government implemented support packages, and it is not surprising the target of a balanced budget by 2022 will be missed,” Livermore said. “The key thing now is to have a credible and robust set of policies to achieving the target and if the government has that, then the markets will be
forgiving of some slippage. The VAT plan is part of this strategy.” The analyst warned though that fiscal strain could constrain the government’s scope to support infrastructure spending, while luring private capital would be no easy task. “It will seek to attract foreign investment to lessen the fiscal burden, as evidenced by the start of the Bahrain Metro Project being funded through an integrated PPP,” Livermore said. “However, competition for foreign direct investment in the Gulf is ramping up.”
OIL DIVERSIFICATION CHALLENGE
In similar fashion to other GCC members, Bahrain has launched a longterm economic strategy, dubbed Vision 2030, to pivot its economy away from oil, targeting instead sectors such as green energy, manufacturing, tourism and transport. The country is aiming to reach net zero emissions by 2060. Despite its ambitions to diversify, oil and gas remains a key sector, with crude exports accounting for about 70 percent of total government revenues. Bahrain is the smallest oil producer in the GCC, with output of about 42,000 barrels per day coming from its onshore Bahrain field and 150,000
Bahrain has unveiled a US$30 billion strategic projects plan. CREDIT: AQUA GLOBAL LOGISTICS
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BREAKBULK MIDDLE EAST REGIONAL REVIEW
“The new multi-year projects represent one of Bahrain’s most significant ever injections of capital investment and will drive the economic recovery plan, designed to enhance the long-term competitiveness of Bahrain’s economy, and stimulate post-pandemic growth”
Mammoet transported six, 59-meter-long fuel storage bullets weighing from 480 to 500 tonnes each for an overhaul of Bahrain’s Bapco refinery. CREDIT: MAMMOET
barrels per day from Abu Safah, an offshore reservoir it shares with Saudi Aramco, Saudi Arabia’s state-run oil and gas company. A massive offshore oilfield discovered in early 2018 off the kingdom’s west coast at Khalij Al-Bahrain could provide the nation with a much-needed boost to its faltering economy and hand project logistics an alternative long-term source of cargo-carrying opportunities. The reservoir holds an estimated 80 billion barrels of shale oil, outstripping Bahrain’s current proven reserves of just 125 million barrels. “The government is exerting a large amount of effort on diversifying the economy,” said Omar Al-Ubaydli, director at the Bahrain Centre for Strategic, International and Energy Studies. “But in light of the potentially huge oil and gas discovery announced in April 2018, there will naturally be some rebalancing toward oil and gas in 24 BREAKBULK MAGAZINE www.breakbulk.com
the proportionate sense, even though other sectors will grow in the absolute sense.” Almost four years since its discovery, progress at the 2,000-square-kilometer site has been sluggish, with the project still under evaluation. News agency Reuters in April quoted Oil Minister Mohammed bin Khalifa Al-Khalifa as saying that drilling for the first wells would begin by the end of 2022, although he added that no development or production sharing deals had yet been reached with international operators. Sadad Aluminium Bahrain AlHusseini, an energy analyst and a former executive vice president at Saudi Aramco, told Breakbulk that the resources at Khalij al-Bahrain should appeal to international operators. “They have been confirmed by exploratory wells, include both liquids and gas and are in a shallow marine
environment suitable for lower cost offshore drilling and rigs and eventual infrastructure construction. The potential markets for any produced hydrocarbons would include the growing industrial demand in Bahrain,” Al-Husseini said. The analyst added that activity at Khalij al-Bahrain would likely speed up as the economy bounces back from the Covid-19 pandemic. “As the oil and gas industry continues to recover in Bahrain, along with downstream applications in power generation and desalination, petrochemicals and energy intensive metals and other manufacturing, a return to the full evaluation of the Khalij al-Bahrain basin will inevitably follow.” BB Colombia-based Simon West is a freelance journalist specializing in energy and biofuels news and market movements in the Americas. JANUARY-FEBRUARY 2022
THOUGHT LEADER
Unraveling the Buzzwords Digital Transformation No Dark Art
D
espite how far I have wandered from it, I still regard myself as an oldschool shipbroker with “my word is my bond” engraved on my heart. With all the changes in the supply chain industry, logistics and shipping, I cannot help but investigate what is meant by the buzzwords of digitalization and digital transformation. The terms are thrown around with happy abandon and can mean anything from the development of electronically transferred documents all the way through to the automation of handling equipment, often including, bizarrely, the move to new ecologically friendlier fuels. Similarly, the term PCS (port community system) often has many interpretations, sometimes referring to physical port movements and at other times to data transfer. One can easily be confused by these, so we need to be clear in what we mean when we use these terms. Let us take a brief look at the development of commercial shipping and the rise of the freight forwarder. From the early 19th century, the traditional shipbroker was responsible for goods carried on vessels outbound from their ports. They took an active hand in managing all business matters on behalf of the owners for whom they worked, ensuring vessels were booked and customs clearances and insurances were placed and in order, even going as far as to collect freight on behalf of the owner. They were the official gobetween for ship and cargo owners and were paid a fee for this.
EVOLUTION OF ROLES
Over time, they split into specialisms with brokers for types of cargoes, vessels, and even services – such as sale and purchase. Groups split off to offer additional services, in the form of ships’ agencies, and freight forwarders, who handled the overview of the cargo, often door to door. Perhaps the key term in these developments is simple: value-add. These services followed the growth in international trade, filling gaps on behalf of the ship and cargo owners. As trade grew, so did the complexity and role of these intermediaries into a major global industry, underlining globalization and modern development.
This is where data interchange enters. A catalyst for trade and, initially at least, for the complexity of the information flows within the trade. The role of the intermediary became one of untangling and overseeing the required flow of data and ensuring that anyone with something to transport was able to do it. Efficiencies were not considered; the only consideration was ensuring that complete transport requirements were undertaken correctly. The unanticipated result was a rise in unscrupulous parties who were able to exploit the inefficiencies and complexities created by the rapid rise in volumes and documentation requirements, and an explosion of service providers across the supply chain. The success of the large modern shipping and logistics companies lies very firmly in their strength historically in managing these flows, often through solid processes and increasingly with a base of solid systems. For a long time, many have described the industry – be it shipping, forwarding, or the supply chain is general – as broken. Why? Because of high levels of inefficiencies and illogical developments that continue to take place in the industry. The digital entrepreneurs have noticed this, and they have come flooding into this industry, eager to improve the industry by simplifying it using digital tools. Over time this has led to transformation of business models, as witnessed by the supply chain integration taking place in the container industry, with Maersk and DP World, among others, seeking to develop end-to-end solutions. Integration is already starting to occur in other transport industries – and it will happen through digital transformation. It is a logical development towards efficiencies through an increase in systemizing processes. No matter the buzzword used, the result is the same: getting cargo from one place to the next as cost effectively and as efficiently as possible, for the benefit of the third party that is the ultimate cargo owner: the customer. BB
BY LARS GREINER
Lars Greiner will moderate the panel, “Spotlight: West Africa,” at Breakbulk Middle East, Feb. 2, at World Trade Centre, Dubai
Lars Martin Greiner is associate partner Middle East and Africa for HPC Hamburg Port Consulting.
www.breakbulk.com BREAKBULK MAGAZINE 25
PROFILE
“Saudi Arabia is diversifying away from oil and gas — now tourism is a key focus area for Saudi, as are giga projects like Neom, digitalization, making it easier to do business and more accessible.”
LOGISTICS ‘GETS UNDER YOUR SKIN’
DHL Executive Sue Donoghue Driven by Determination
M
ost Zoom conversations seem to start with Covid: How is/was it for you? How is work going? What are the challenges? How are you dealing with them? Sue Donoghue’s reply set the tone for the rest of our interview. “It has been a challenge, but you make the most of it and, as with everybody and everything, you adapt. Is it easy? No, but you find the way to innovate and to motivate the team. You do what you need to do. It is an ever-changing world, and we need to continue leading by innovating.” Today, Sue Donoghue is DHL’s CEO of the Arab Cluster and DHL’s managing director for the Kingdom of Saudi Arabia. Her career in logistics started shortly after graduation. “A friend was working in a freight 26 BREAKBULK MAGAZINE www.breakbulk.com
forwarding company and they needed someone to cover reception for two weeks. I did the two weeks and then the managing director asked if I would be interested in coming to work there. I said I didn’t want to be on reception, so two weeks after that I was in as a trainee forwarder.” Before that point, Donoghue said she had never given a thought to logistics or forwarding. “I didn’t really know what it was, but I had drive and I was curious and worked hard. It helped me to develop and reach goals that I never thought I could.” At FH Bertling, she worked her way up from being a trainee, assisted the operations director, supported the managing director with his customers, and then moved into the Caspian department where she was tasked with project management.
BY FELICITY LANDON
Donoghue managed projects as well as coordinating the heavy-lift team, eventually becoming the deputy head of department. Fast forward 19 years and her managing director was moving to DHL Global Forwarding. He asked her to join him to set up the industrial projects team. “I started again, setting up the team and building my way up,” she said.
MIDDLE EAST MOVE
From head of industrial projects in London, she became global business process manager for DHL in 2012 and then global head of operations and implementation in 2016. A year later, Donoghue was involved in bidding for a sizeable project in Saudi Arabia. “We won the project and were recruiting for a JANUARY-FEBRUARY 2022
project director. I was asked to take on the role, which although initially I was very hesitant about accepting, my drive and determination prevailed and I can say that taking this role helped me to develop and reach goals that I never thought I could.” She took on the challenge and worked through the renewal of the contract as well. Up to that point, DHL had been represented exclusively by an agent in the country, but then the decision was taken to set up a wholly owned DHL entity. “DHL wanted to expand the DHL Global Forwarding footprint. We set it up and in 2020 I was asked to take on the role of managing director and to grow the business under our own name.” From there, she was asked to take on the cluster responsibility, covering Bahrain, Kuwait and Saudi Arabia, and she also sits on the group’s Middle East board. For an idea of what that means, Donoghue referred to the recent inauguration of a new logistics license in Riyadh, with DHL being one of the first to receive the license. She has had to ‘find a way around things.’ “Not everyone is ready for the norms to be challenged. I am conscious about being culturally intelligent and meeting people where they are. I strive to accomplish my purpose in a respectful way.” Donoghue is based in Dubai, but her job inevitably demands travel, which has picked up again after the Covid shutdown. “That is important, especially in the region where I work, which relies on personal interaction and relationships,” she said. She quoted DHL’s “respect and results” aspirations and noted the strong ambition for sustainable growth. “We are doing a lot of work alongside the Saudi 2030 Strategy and are obviously interested in the really big projects such as Neom (the US$500 bilion mega city project in the northwest of the country). We want to grow fast, we have aspirational targets, and we want to be involved in any way we can to meet the Strategy 2030. It is the same across my cluster and
Donoghue (center front) was integral to DHL’s award of a new logistics license in Saudi Arabia. CREDIT: SAUDI PRESS AGENCY
the region – an accelerated growth pattern, be the best, be the No. 1 logistics leader in the world. We were one of the first companies to get the new logistics license. We want to innovate.”
EMISSIONS FOCUS
Decarbonization is key, she said. “Saudi Arabia has already reduced its emissions significantly and has a big plan in place to reduce them further. It is diversifying away from oil and gas – now tourism is a key focus area for Saudi, as are giga projects like Neom, digitalization, making it easier to do business and more accessible. The country has diversified a lot, including into renewables.” DHL’s own strategy is to be a zero-emission operation by 2050. “I think in order to be a key player you have to keep up with this, you have to be cognizant of the changes and challenges and you have to embrace them,” Donoghue said. She acknowledges the strong support network in the UK that has enabled her to pursue her career. “I was a single mother when I started, I subsequently married and have two amazing sons, a daughter-in-law and grandson. I have always traveled for work and I couldn’t have done what I do without the support of my family.”
And despite first impressions, her degree in psychology has been important in an unexpected way. “I did a degree because my parents said it was what you need in business. I am forever thankful that I did. When I became managing director in Saudi, I had to hold a degree to get an appropriate visa. Some countries consider that a degree is key to whether you can be manager level or not.” She would encourage other women to follow her lead. “The industry is more open now than it was when I started. There are more opportunities. There is still a way to go, but there are a lot more initiatives and support for women to come in and get to board level.” In the early days, learning on the job was a case of sink or swim, she said. “My career in forwarding might have started as a surprise but being strategic about my growth led me to this moment and place in my career. No two days are the same – you can be accountant, logistics, trouble-shooter, business development, sales. Very quickly I saw that this was such a multifaceted job. It gets under your skin.” BB Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors. www.breakbulk.com BREAKBULK MAGAZINE 27
CASE STUDY
MOVING MINING MOUNTAINS
Al Faris Leans on Relationships for Giant Equipment Project
BY MALCOLM RAMSAY
S
ince the dawn of the industrial age, the mining sector has pushed the boundaries of equipment size and scale as the machinery required has grown in scope. The latest generation of machinery is no different and Emirati breakbulk specialist Al Faris recently experienced this first-hand when it assisted in the transportation, erection and relocation of one of the world’s largest mining machines. A multi-year project, this transport involved movement of loads of more than 2,000 tonnes each and was completed in partnership with Dubai-based heavy engineering firm Fabtech International Ltd., on behalf of German multinational conglomerate thyssenkrupp Industrial Solutions. “These are massive structures and the biggest of their kind in the mining world,” Kieve Pinto, executive director of Al Faris Group, told Breakbulk. “Al Faris Group was contracted to transport and assemble components of a shiploader from Fabtech’s nearby fabrication facility. We have been working with Fabtech International for years now and have a great, understanding relationship. Our main goal has always been to work towards the utmost satisfaction of the client.”
UNPRECEDENTED SCALE
As part of this project, the team first had to move several outsized components from the plant to Jebel Ali Port in Dubai. This initial phase took place in 2019, following fabrication work by Fabtech, and involved components for a giant bucket wheel stacker-reclaimer, a tipper car and a linear shiploader. Although Fabtech International’s facility is located less 28 BREAKBULK MAGAZINE www.breakbulk.com
than two kilometers from the dock where the cargo was to be assembled, the sheer size of the machinery meant that this movement was far from straightforward. Don Moraes, CEO at Fabtech International Ltd., explained that several of the components were moved directly to the dock “in larger dimensions to reduce the delivery lead time,” rather than transporting them as smaller standard components to the construction job site. As a result, the construction of the stacker and shiploader was achieved in record time, with both completed in just nine and a half months. While this meant that the largest components were moved direct to the port, it still meant that a significant amount of assembly was required once these giant structures reached the dock. Some of the largest components included a huge column structure, which measured more than 62 meters long and weighed 580 tonnes. A platform structure was also moved which weighed 330 tonnes and would form the basis for later assembly of the bucket wheel stacker-reclaimer. Headquartered in Dubai, Fabtech International is one of the leading steel fabrication firms in the UAE and has experience in developing a range of engineering projects. Alongside heavy fabrication, the firm also specializes in heavy equipment manufacturing solutions for the industrial and marine sector, civil contractors, oil and gas, fuel storage tanks, onshore and offshore facilities, and more. “Our extensive experience in fabrication of bulk handling equipment meant we were able to offer a range of solutions for this project and ensure that we met the specifications in the most efficient manner possible,” Moraes said.
FROM WAREHOUSE TO WHARF
As a result of the oversized dimensions of these parts, the team planned a careful move by road using multiple self-propelled modular trailers, or SPMTs, along several streets from Fabtech’s facility to the port. To ensure that the structures made it safely to the port, the team from Al Faris carried out comprehensive preplanning simulation to ensure that the swept path could clear all obstacles on route and the cargoes could reach the dock in a timely manner. With the components successfully delivered to the dock, assembly then began to create the giant bucket wheel stacker reclaimer, which would grow to 98 meters in length, as well as the ship loader and tipper car. The intervention of the Covid pandemic last year understandably caused some disruption to the plan, and the latest stage of the project saw the partners move the completed structures to a new loading position at the same dock. “We had completed the loading, transporting and assembling of these mining machines – a bucket wheel stacker reclaimer and a ship loader – at Jebel Ali Port two years ago,” Pinto noted. “After completing some more work from the client, we recently had to relocate the entire loads, without dismantling, to a new position some 150 meters away.”
The bucket wheel stacker-reclaimer measured 98 meters in length, 20.5 meters in width, and 39 meters in height. CREDIT: AL FARIS
JANUARY-FEBRUARY 2022
The breakbulk components, which had seemed large enough when initially moved from the fabrication facility, were now dwarfed by the size of the completed structures. The largest of these was the bucket wheel stacker-reclaimer which measured 98 meters in length, 20.5 meters in width, and 39 meters in height. This giant structure also weighed 2,100 tonnes, making any movement a major endeavor. Added to this, the completed shiploader measured 128 meters and weighed a further 1,650 tonnes, while the tipper car measured 77 meters in length, and weighed in at 600 tonnes. “We had to carry out extensive engineering for this move,” Pinto noted, explaining that the teams’ calculations obliged them to construct entirely new load-bearing structures specially for the project.
CLOSE COMMUNICATION
While the distance was a lot less for this second move, the logistics of the move were many times more complex as the teams had limited margins of error and faced tight deadlines. “Time was the key challenge. Since the enquiry started, we had only couple of weeks to execute,” Pinto explained. To meet this tight deadline, the partners drew heavily on the close existing ties between the companies to ensure continual communication between crew and management on all aspects of the move throughout the project timeline. “We have a 25-year working relationship with Al Faris and this was vital in building the trust and confidence between the organizations and making communication and planning easier,” said Murali Ganesan, Fabtech’s project manager.
Headquartered in Dubai Industrial City, Al Faris has a long history of heavy-lift and breakbulk handling, with more than 25 years of experience operating across the Middle East and North Africa region. Over this time, the company has played a vital role in many of the emirate’s largest construction projects, assisting with development of the Dubai Metro, Dubai Mall, Dubai International Airport, Riyadh Metro, Palm Jumeirah and The Burj Khalifa, among others. The company also offers comprehensive lifting equipment rentals, with one of the largest fleets in the region, comprising cranes, trailers, forklifts, jacking and sliding systems, manlifts, and earth movers.
COVID RESTRICTIONS
Along with the time pressure, the crew also faced a challenge in staffing
www.breakbulk.com BREAKBULK MAGAZINE 29
CASE STUDY
Fabtech described this as a milestone project for all three parties. CREDIT: AL FARIS
the job at such short notice given the numerous movement restrictions due to Covid-19 and global crew shortages arising from supply chain disruption. Al Faris’ Pinto noted that a small crew was carefully selected for the job, with Covid safety protocols strictly adhered to from beginning to end, and movement carefully choreographed to limit risks. “In terms of availability of manpower, logistics and material, the arrival of Covid certainly created downside for preparations and implementation,” Fabtech’s Ganesan explained. “But, in terms of new business and the number of new orders we have seen, I would say there has been a net upside.” With the crew in place, the partners oversaw the cautious move of the machinery over the 150 meters across the Fabtech Jebel Ali yard to prepare for shipment. In all, 96 axle-lines of SPMT were used, with the team relying on Scheuerle-made fourthgeneration trailers. 30 BREAKBULK MAGAZINE www.breakbulk.com
“This was a milestone project for all three parties,” Ganesan said. “It gained lot of exposure for the mining industry and demonstrated the unique experience and skill we have here in Dubai for handling these sorts of megastructures.” Having reached their new position, the giant machines were then poised for delivery to an iron ore mining project overseas managed by thyssenkrupp in the northwest region of the Gulf. The stacker reclaimer and ship loader each have capacity to handle an estimated 16,000 tonnes per hour. Commenting on the successful completion of the project, Christian Wohlgemuth, product lifecycle manager for stackers and reclaimers at thyssenkrupp Industrial Solutions, praised the partners on the transport, erection and relocation of the units and the timely delivery of the parts for shipment. “Our bucket wheel reclaimers are the result of decades of experience and technical competence, and combine
robustness with outstanding speed and high throughputs,” Wohlgemuth said, adding that this design includes all the necessary precautionary equipment and systems “to minimize the impact of noise, dust emissions, etc. on operators and the surroundings.” Headquartered in Essen, Germany, thyssenkrupp is one of the world’s largest steel producers and also manufactures a range of industrial machinery, including mining equipment, high-speed trains, elevators and ships. The group’s subsidiary thyssenkrupp Industrial Solutions is responsible for engineering, construction and maintenance services worldwide and operates more than 17,000 industrial machines and systems globally. BB Based in the UK, Malcolm Ramsay has a background in business analysis and technology writing, with an emphasis on transportation and ports. JANUARY-FEBRUARY 2022
Seafarers Still Need Support
CREDIT: SHUTTERSTOCK
THOUGHT LEADER
Unsung Heroes, Victims of the Pandemic
S
eafarers play a vital role in international trade and the transportation of goods globally, and this has become particularly topical and evident during the Covid-19 pandemic. Despite being the unsung heroes of the pandemic, seafarers have fallen victim to a humanitarian and safety crisis. Travel restrictions have caused an array of issues which have significantly impacted the ability for crew changes to be undertaken resulting in hundreds of thousands of seafarers being stranded at sea, unable to be replaced or repatriated, while hundreds of thousands of others are stranded ashore unable to work. The fact that the pandemic has upended normal operating procedures in respect of crew changes is not surprising. In April 2020, it was estimated that 91 percent of the world’s population lived in a country with Covid19 related travel restrictions in place and 39 percent lived in a country where the borders were completely shut to non-citizens and nonresidents. While such restrictions have been relaxed significantly by some countries, others have re-imposed them in light of further waves of the virus. The Maritime Labour Convention 2006 provides that the maximum continuous period that a seafarer should serve on board a vessel without leave is 11 months and seafarers have a right to be repatriated to their home countries at the end of their contracts. Clearly, as a result of the pandemic, many seafarers have long exceeded their contractual periods aboard vessels. In an attempt to ease the plight of seafarers and assist with the facilitation of crew changes, an increasing number of countries have designated seafarers as key workers. According to the International Maritime Organization, or IMO, as of May 20, 2021, 62 countries had designated seafarers as key
workers. It is anticipated that additional countries may have also done so without reporting it to the IMO.
MORE ACTION NEEDED
While it is encouraging that an increasing number of countries have designated seafarers as key workers, there are a significant number of states in which seafarers remain subject to restrictions. In addition, even in countries where seafarers are designated as key workers, the legislation is inconsistent with some countries applying the key worker designation solely to nationals of specified countries and applying restrictions to those from elsewhere. Another issue is priority vaccination of seafarers. According to the IMO, only 24 countries have implemented such programs or shown an intent to do so. While governments have a large part to play in addressing the issues faced by seafarers, all players in the industry need to assist. More than 850 companies have signed the Neptune Declaration on Seafarer Wellbeing and Crew Change, which aims to assist in the recognition of seafarers as key workers, allow for priority access to vaccinations, and assist the facilitation of crew changes. An array of human and business issues have arisen as a result of the crew change obstacles, ranging from welfare and safety concerns for exhausted crew to regulatory concerns as crew remain on board for long after the expiry of their contracts. While it remains to be seen what further action will be taken, the increasing global visibility of the seafarers’ plight is welcomed. BB
BY NATALIE JENSEN
Natalie Jensen will be a speaker for the session: “Seafarer Welfare: Protecting the Backbone of Our Industry” at Breakbulk Middle East, Feb. 2 at the Dubai World Trade Centre, Dubai.
Natalie Jensen is a partner in Ince’s Dubai office. Her practice focuses on contentious and non-contentious matters in the shipping, international trade and energy sectors.
www.breakbulk.com BREAKBULK MAGAZINE 31
CARGO LENS
STEELING FOR GROWTH US-EU Tariff Resolutions Promise Trade Boost
BY MICHAEL KING
AAL A-Class 31,000-dwt ‘mega-size’ vessel with steel in Rotterdam. CREDIT: AAL SHIPPING
32 BREAKBULK MAGAZINE www.breakbulk.com
JANUARY-FEBRUARY 2022
COALITION VS DIRTY STEEL
Both the U.S. and EU also agreed to work on a global deal that seeks to promote “green” steel and aluminum. This carbon-based arrangement is designed to address both Chinese overproduction and carbon intensity in the
Top 10 Steel-producing Countries 2019-2021*
Data from 64 countries, accounting for 98% of total world crude steel production in 2020
mt 150 120
1001.3 1053 877.1
S
weeping Covid-19 lockdowns in Europe and Asia are casting shadows over steel demand and output forecasts, but market growth is still expected to be robust next year and beyond. With container freight options increasingly unattractive for those moving steel due to the lack of capacity and soaring costs, the international steel trade is expected to be a lucrative base cargo for stakeholders in the breakbulk supply chain at least through 2022. The steel trade outlook was given a significant fillip at the end of October when the G20 met in Rome. There, the U.S. and European Union agreed to ease tariffs on billions of dollars of steel and aluminum products, a move expected to boost trans-Atlantic breakbulk demand. The deal, which ended the universal application of Section 232 duties by the U.S. on EU exports of the metals, saw the EU suspend related tariffs on U.S. products. It also brought an end to a mutually damaging trade dispute between the two economic superpowers over the metals trade which dated back to the Trump administration’s imposition of tariffs on national security grounds. This had resulted in EU exports of steel to the U.S. plummeting, as well as prompting a series of tit-for-tat escalatory measures from both sides. Under the new deal, which mirrors those the U.S. has also struck with Mexico and Canada, steel and aluminum exports from the EU to the U.S. will be based on a tariff rate quota. This limits duty free exports of steel products from the EU to the U.S. to 3.3 million tonnes per annum. Under the terms of the deal, steel products must be entirely made in the EU, a provision included to prevent European steelmakers from selling finished products made from semi-finished products first imported from cheaper suppliers such as China and other nonEU suppliers.
2019 2020 2021
90 60 30 0
China
India
Japan
U.S.
Russia
Source: World Steel Association www.worldsteel.org
steel and aluminum sectors, especially the use of heavy carbon-emitting coal in steel production. “The aim is to restrict ‘dirty’ steel, and this will help boost steel trade between the U.S. and EU if supply from countries such as China and India is being restricted when this is rolled out in two years’ time,” said Felix Felix Schoeller Schoeller, general AAL Shipping manager of AAL Shipping. With most of its focus on steel trade between from Asia to the EU, U.S., Middle East and Australia, and vice versa, AAL is currently not a major player in the trans-Atlantic steel shipping business. “That said, open trade will benefit the entire shipping industry and we are always pro fewer trade barriers,” Schoeller said. “Today, steel prices in the EU are under pressure due to the chip shortage and energy crunch, while prices in the U.S. remain elevated, and this opens opportunities for arbitrage play in 2022.” One expected beneficiary of the EU-U.S. trade deal is the port of Rotterdam. Europe’s largest port saw
S. Korea Turkey Germany Brazil
Iran
*January to October 2021
throughput of “other breakbulk” increase by 14.7 percent year-onyear in the first half of 2021 “mainly because of the rise in non-ferrous metals and steel.” Following the U.S.-EU metals truce, Business Manager Twan Romeijn told Breakbulk he was “cautiously optimistic” on EU exports of steel in 2022 via the port’s stevedores. Although the quota size was based on historical exports, Romeijn said the 3.3 million tons duty free limit was a lower level of export sales to the U.S. than achieved by EU steelmakers immediately before the Section 232 tariffs were introduced. “Nonetheless,” he added, “any agreement is better than no agreement, and the cooperation between the U.S. and EU to invest in carbon free steel production is good news. “And we expect EU steel demand to continue to grow modestly in 2022, which indicates that steel imports will also increase further next year.”
NEW CUSTOMERS
Rotterdam caters for steel at a number of facilities located across the port, including those operated by Rhenus Logistics, Steinweg Group, Broekman Logistics, Metaaltransport, JC Meijers, Matrans Group and RHB. Romeijn said each terminal operator had its own customers, but it was their collective ability to attract new clients and plug into fresh trade flows that explained the port’s overall rising www.breakbulk.com BREAKBULK MAGAZINE 33
CARGO LENS
for steel from within China stabilizes prices this could also see export duties introduced if exports surge. “A sharp rebound in export volumes will draw attention from the central authorities,” one Shanghai-based trader told Fastmarkets in November.
CARRIER THOUGHTS Steel remains a vital element of the breakbulk mix. CREDIT: FVA
volumes of steel products moved as breakbulk in 2021. “Volumes of steel are up due to the fact that multiple stevedoring companies won tenders for steel distribution,” he explained. “Next to that, a lot of ‘spot-traded’ steel is finding its way into Rotterdam. Steel enters the port in multiple varieties such as plates, coils, tubes, wire and rebars. “[Also], we see a lot of steel being handled as breakbulk as compared to steel being transported by container. This is due to the fact that container prices have increased and therefore shipping as breakbulk has become more favorable.” Rotterdam’s optimism on steel is supported by a largely positive global outlook for steel demand, albeit risk levels to those forecasts are high, not least due to rising Covid lockdowns in regions such as Europe that could dampen demand, and ongoing doubt over the future direction of a number of Chinese policies. China produced 877.1 million tons of steel from January through October 2021, according to data from the World Steel Association, or worldsteel. The next largest producer over the period was India which produced 96.9 million tons. India was followed by Japan, the U.S. and Russia, which churned out 80.4 million, 71.7 million and 62.5 million tons, respectively. Worldsteel estimates that steel demand will grow by 4.5 percent in 2021 and reach 1.86 billion tons after recording just 0.1 percent growth in 2020 as the pandemic hit global economic activity. In 2022, steel demand will see a further increase of 2.2 percent to 1.9 billion tons. Worldsteel’s current forecast assumes that, with the progress of vaccinations across the world, the spread of variants 34 BREAKBULK MAGAZINE www.breakbulk.com
of the Covid virus will be less damaging and disruptive than previous waves. However, as Breakbulk went to press, analysts and economists were still weighing the likely impact of more stringent EU lockdowns on economic growth and steel demand.
THE CHINA QUESTION
Moreover, in China, discerning what current carbon emission policies mean for steelmakers is difficult. Certainly, efforts to reduce emissions from coal burn saw steel output slow to just 71.6 million tons in September, down 23.3 percent compared with a year earlier. Al Remeithi, chairman of the worldsteel Economics Committee, said 2021 had seen a stronger-than-expected recovery in steel demand, leading to upward revisions in forecasts across the board except for China. “Due to this vigorous recovery, global steel demand outside China is expected to return earlier than expected to its pre-pandemic level this year,” he said. The Chinese economy sustained its strong recovery momentum from 2020 into the early part of 2021 but has slowed since June. According to commodity researcher Fastmarkets, China’s exports of steel products fell by 423,000 tonnes (8.6 percent) in October when compared with September to reach just 4.5 million tons. This was the fourth month of month-onmonth declines, according to data from the country’s General Administration of Customs. However, exports were still 11.3 percent higher in October this year when compared with October 2020. China removed value-added tax rebates for hot-rolled coil exports and for cold-rolled coil and hot-dipped galvanized coil exports on May 1 and August 1, respectively. Yet there have been suggestions that if slowing demand
From a carrier’s perspective, steel remains a vital element of the breakbulk mix, particularly given that most analysts expect container freight rates to remain at historically buoyant levels at least through 2022. “Steel has always been an important base cargo for AAL, especially on our regular and liner routes, where the commodity is an integral part of our cargo mix and customer demands,” AAL’s Schoeller said. “This very much applies to our liner services between Europe and the Middle East and Asia.” The end customer base for steel delivered by AAL is diverse. Schoeller noted that in 2019, about 52 percent of global steel usage was for building and infrastructure, 16 percent was for mechanical equipment and 12 percent was for automotive, with the three sectors combined accounting for 80 percent of global steel usage. “During the past two years of the pandemic, governments around the globe injected trillions into infrastructure projects for the sole purpose of driving economic growth,” he said. “Therefore, these projects will be the key driver in the medium term. “Furthermore, the world population is expected to increase from 7.8 billion in 2020 to more than 8.5 billion by 2030. This too will drive demand for housing globally.” He said worldsteel projections of 2.2 percent growth in steel demand were also a positive. “This projection has factored in the slowdown of the China property sector, which may result in zero growth in steel demand for 2022,” he added. “Nonetheless, the current energy crisis, chip shortage and the slowdown in China’s residential housing are combining to have a significant impact on demand and steel prices across all grades.” BB Michael King is a multi-award winning journalist as well as a shipping and logistics consultant. JANUARY-FEBRUARY 2022
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PROSPECTS GAIN THE UPPER HAND Employers Face Seller’s Market for Hiring Employees
C
ovid-19 brought uncertainty everywhere. The response from most professionals in the breakbulk and project cargo sector was to hold on to the job they had. But now, as the market wakes up again, it is anything but business as usual. We know what employers want: skilled, enthusiastic, experienced people. But this is a seller’s market: these days it’s all about what current and potential employees want. The project cargo and breakbulk sectors have always needed flexible people.
But now it’s the employees who are asking for flexibility – to work from home, work part time, work flexible hours. As one employer noted, people used to be knocking on the door looking for a job, prepared to work whatever hours were required. Today, they are more likely to ask whether the company’s vision aligns with theirs. And they are tempted away from the sector by alternatives, whether in tech or, in the UK’s case, to work as Customs specialists that are in high demand post-Brexit.
BY FELICITY LANDON
During 2020 and into 2021, anyone in project cargo who had a job that was secure didn’t want to risk leaving if they didn’t have to, said David Cohen, of Alchemy Global Talent Solutions. “For example, if they were at manager level and were offered a job at senior manager level, they were still not that keen on taking the jump,” he said. However, Cohen, who recruits for breakbulk/project cargo roles and Customs and trade compliance roles, said: “It has been really mad for us recently.” Candidates have their choice of the market, he said.
Candidates have their choice of the project cargo and breakbulk market today. CREDIT: LIEBHERR
36 BREAKBULK MAGAZINE www.breakbulk.com
JANUARY-FEBRUARY 2022
Sarens’ project cargo team transports an archaeologically significant and fragile solar boat 10 kilometers to the new Grand Egyptian Museum. CREDIT: SARENS
“More and more people are getting out of breakbulk and project cargo and going to work with companies in the technology business, because they know that is going to be more secure going forward. Others are going into Customs entries – a Customs coordinator was being paid £24,000£25,000 two years ago but now it’s a tough ask to find someone on less than £35,000.” He was recently searching for a candidate with experience in handling abnormal loads and the only one he could find wanted to work from home three days a week. And there are more jobs available than there are candidates, he added.
‘SPACE TO THINK’
This is also about people having had space to think. “People had to stay at home during lockdown – they started to think about the meaning of their work and the meaning of their life, and how to match those with each other,” said Pieter Van den Eynde, group talent manager at Sarens, the heavy-lift, engineered transport and crane rental specialist based in Belgium. “They had much more time for existential questions. There is a change – people are more aware when applying for specific jobs or employers. They are asking themselves, is this what I want to do with my life? Now, the meaning of work is much more important to a person’s identity.”
Companies looking to attract the best talent need to be more aware of their values, Van den Eynde said. “They need to consider – who are we, what do we stand for, what is our mission, because employees are taking these things into account to define their professional life.” Flexibility is tricky in this sector, of course. “We are quite a demanding company in needing flexibility from our employees – but we are also quite aware that we need to be flexible as well. It’s give-and-take,” he said. “But you do have to have a flexible mindset in this business. Today you are working in Belgium, tomorrow you may be sent to France, the week after you may be in a project with other people and other equipment, so you need to adapt. In a day, things can change, the weather can change. For tomorrow, you only know the starting hour.” It’s up to companies to communicate clearly, in the application process, what is important, to attract people with matching values, he said. But he also noted that some people, after their time to think, decided they would prefer the variety of a job in project cargo rather than sitting at a desk all day. While there was less movement during the early uncertainty of Covid19, now “the war for talent is 120 percent back,” he said, based on more awareness of “who am I, what do I want?”
HIGH DEMAND
Gerard Bastiaansen, managing director of Wagenborg Nedlift, said that when Covid-19 arrived, the company’s response was clear. “We said: we have to do our best to keep our talented, dedicated, loyal people and we are not going to fire or lay off people because of lack of work. A lot of projects were immediately postponed and we had to pay people sitting at home.” This approach reflected Wagenborg position as a family-owned company focused on the long-term, Bastiaansen said. “The first thing the CEO said was, ‘Don’t do anything stupid like laying people off. You have to Gerard be patient.’ For a Bastiaansen couple of months Wagenborg Nedlift we stopped recruiting, but then that picked up again because, as we all know, there are no experienced crane operators available.” In a market where talent is in high demand, Wagenborg tries to ensure that its professionals can get promotion internally, so that they are do not go elsewhere, Bastiaansen said. “I would say, make sure you know www.breakbulk.com BREAKBULK MAGAZINE 37
CREDIT: SHUTTERSTOCK
LACK OF ‘PULLING POWER’ People see that there is more money in other markets that also give the option of working flexibly at home, so “the project cargo market just doesn’t have the pulling power,” said Alchemy Global Talent Solutions’ David Cohen. He believes that breakbulk and project cargo companies are going to struggle to continuously attract good talent unless they become more adaptable because they are competing with different markets. Cohen said he was encouraging businesses to take on people with no experience in the industry – for example college leavers and train them from scratch. However, companies dealing with large, high-value contracts don’t like taking risks and hiring people without experience, he said. “But there is only one way for people to get that experience.” He suggested companies should take on an experienced person as a part-time consultant, to act as a tutor and support junior members of the team. “A lot of people who are retired want to give back to the industry they worked in. Years ago, companies would have taken on juniors and trained them up. But now they want someone who can start in the job and immediately do it – they haven’t got time. But in our experience, bringing in a young person and training them makes them more likely to stay – they tend to have more loyalty.” He added: “In many instances, companies won’t even consider someone who has freight forwarding experience because they don’t have time to teach them about out-ofgauge cargo.” Time is the biggest issue, he said, and while the volume and value of contracts is considerably more, the margins are so low compared with 20 years ago. This means training programs are often put on the backburner.
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who the talented people are in your company, what is the next step in their life. Perhaps they are working five days a week and are becoming a parent and they want four days a week but don’t want promotion, while others want to step up. Not everyone wants to move up – sometimes it is to the left or right.” After a Covid pause, Wagenborg has also restarted its Personal Development Program (PDP), which brings together groups of employees from across finance, operations, engineering, HR and other areas to develop their skills and get to know each other. Companies must be proactive in seeking out, training and retaining talent, Bastiaansen said. “Crane operators are hard to get. You have to find them yourself, by visiting schools, getting the youngsters interested, making sure they know your company well, offering apprenticeships. Get them onboard and train them. Go to events, talk to people, make YouTube movies, make sure everyone can find you on LinkedIn.” Wagenborg is already providing flexibility, he said. “We have crane drivers who only work four days a week. That is a challenge for our planning/operations departments, but we
have to do this. What we do is discuss with our employees whether their personal needs fit in with the strategic direction of the company. “Sometimes it is a crane operator who has just become a dad and wants to be at home more, either working four days or changing to an office job like project manager or in the planning department; then you have to train them again. If you can succeed, these people will be very loyal.” Indeed, the company’s commercial director started as a crane operator 35 years ago, he pointed out. “Of course you also need talent from university, but in our engineering department, for example, we have one guy who has been through technical university sitting opposite an ex-crane driver. They need each other to find the best technical solutions.” Bastiaansen is also relaxed about people working from home when possible. If someone wants to work at home first thing so they can take the children to school, that’s fine. “I will judge you by your results, not the hours you spend in the office. Every manager can have his team working at home – but not the whole week, and not the whole team at the same time, although for the operations department it is more difficult, of course.”
Wagenbourg provides flexibility to its workers. CREDIT: WAGENBOURG
JANUARY-FEBRUARY 2022
INTERMEDIARIES
Demand is high for experienced crane operators. CREDIT: LIEBHERR
LACK OF SKILLED PEOPLE
Ton Klijn, director at ESTA, the European association for abnormal road transport and mobile cranes, highlighted the shortage of drivers all over Europe. “That is partly due to Covid and the way in which these people have been treated – tested five times a week, kept waiting at borders, not allowed to use sanitary facilities. I know quite a few who said, ‘I have had it’ and gone elsewhere. Some moved to cranes. But there is also a shortage of crane drivers. People don’t want to get Ton Klijn out of bed at 0500 ESTA hours to go to a site.” He added that there is also a shortage of qualified personnel in the operational and planning area, particularly in the heavy transport sector. And if they can be found and trained, they may well be snapped up by the competition. Flexibility for employees is difficult, he agreed. “In special transport, you are talking about night work and weekend work, because the authorities
don’t want you on the roads in the day. A crane will be needed onsite at 0800 hours – so you have to drive there, rig the crane, and so on, that that takes a few hours.” On a global scale, if you are an experienced operator in the crane sector, “at least 10” companies will be trying to get you on board, Klijn said. “Also we are seeing companies offshore trying to get people on their platforms, and offshore payments are far higher.” The pressure is immense, he said. “If you have a crane standing still because there is no operator and there is work everywhere, that costs you a lot of money.” He also foresees another hurdle after Covid – the fact that youngsters in vocational training such as mechanics and electricians had to switch to online learning and were likely unable to do their practical training in placements with companies. “A lot couldn’t complete their qualification.” That could lead to a dip in talent coming through, compounding recruitment problems even further in the not-too-distant future. Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors.
The pandemic highlighted the need for awareness and has accelerated the pace of change in breakbulk and project cargo sector recruitment, according to Sarens’ Pieter Van den Eynde. “Thirty years ago, people going for a job would probably choose the best payer. Nowadays, salary is important – we need it, of course – but many other things are taken into account by the candidate. Work is not just work but a valuable part of their growth in life,” he said. Sarens is creating a new employee value proposition which will be ready in 2022, Van den Eynde said. “We are aware we are a demanding business, so we try to listen when employees have a question or specific need. When children are sick or someone has to go to the dentist, we will always try to find a solution.” Sarens is also busy in schools and colleges, with internships and making itself visible on social media channels with pictures and films of projects it is delivering – perhaps the most important thing at this time, he said, “because people can see it is exciting.” “On the one hand, when you publish many things about projects delivered, your own people can be proud. On the other hand, potential interested people can start admiring what we are doing. It is trying to create an audience for what we are doing, and create a sparkle.” Companies are starting to be more flexible, David Cohen, of Alchemy Global Talent Solutions, added, and that’s vital especially when considering parents of young children. He sees that flexible companies are the ones that are attracting the best talent. “Let’s say a project coordinator needs to pick up the children at 1530 hours every day. Any business that doesn’t enable that, no way are they going to attract that candidate.” BB
www.breakbulk.com BREAKBULK MAGAZINE 39
CREDIT: SHUTTERSTOCK
LISTENING TO EMPLOYEES KEY
INLAND TRANSPORTATION
INLAND MANEUVERING Scheduling of Project Cargo Moves May Mean Shifting Modes, Sourcing BY PAUL SCOTT ABBOTT
W
ith supply chains challenged by severely constrained trucking capacity, scheduling of efficient inland movement of project cargo may increasingly hinge upon deployment of alternative modes, such as rail and barge, and sometimes broader shifts in sourcing strategies. “The problems facing project cargo scheduling for inland moves are the same as the problems facing all inland freight moves – historic demand levels for trucking services,” Jeff Tucker, chief executive officer of 40 BREAKBULK MAGAZINE www.breakbulk.com
Jeff Tucker
Robert Sutton
Tucker Company Worldwide
BNSF Logistics
Tucker Company Worldwide, told Breakbulk. Robert Sutton, executive vice president of innovation at BNSF Logistics LLC, told Breakbulk that, while a significant number of projects are being put on hold, many of the shipments that are moving may well be better doing so via rail rather than truck. And a spokesperson for the Port of New Orleans advises that record breakbulk and project cargo volumes transiting the Mississippi River port are more and more relying upon JANUARY-FEBRUARY 2022
An energy valve is transported by specialized flatbed truck, having found capacity amid a constrained motor carrier market. CREDIT: TUCKER COMPANY WORLDWIDE
barges for inland transport, thus circumventing long-haul trucking issues.
DEMAND TOPS SUPPLY
With overall demand far exceeding supply of truck capacity, Tucker said his Haddonfield, New Jerseybased third-party logistics firm, which focuses on specialized freight, is looking beyond the bigger motor carriers to secure inland trucking for project cargo. “As a broker,” Tucker said, “we are able to assemble not just large carrier capacity, but small and
medium carrier capacity that the big EPCs [engineering, procurement and construction firms] and BCOs [beneficial cargo owners] really can never get to know on-board. There is only so much any large shipper can do today.” Citing DAT Freight & Analytics data showing the average ratio of number of loads to number of flatbed trucks to be higher than 18 in nearly all the Lower 48 U.S. states, Tucker commented, “That’s a shortage. Construction, low interest rates, abundant corporate and household cash and the resulting spending, and delayed capital improvement work in big industries like oil, gas and chemicals is keeping the open-deck and project cargo truckers busy,” he said. “Demand for trucking has been either the highest on record or second-highest on record throughout the past 15 months. We don’t see an obvious end to this, as so many supply chains are still significantly in shift and/or recovery mode.” As Covid-19 pandemic impacts intensified in 2020, committed volumes for hundreds of thousands of motor carriers and brokers across myriad lanes disappeared, said Tucker, who is a 30-year industry veteran and a past board chairman of the Transportation Intermediaries Association. “A literal scramble for dear life occurred, with carriers looking for business to replace lost business,” he said. “In the summer of 2020, manufacturers who went dark, or at low production, tried to step up, but ran into supply issues, labor issues and, of course, trucking issues. “Market participants have spent most of the past 15 months luring capacity away from each other, to serve their own interests,” Tucker continued. “That creates tremendous churn and mind-blowing complexity as we try to understand what the
issue is. There is no one issue. There are infinite ripples created by a world’s economy that shut down in 2020 and has yet to fully reopen. “We are very far away from an equilibrium,” Tucker added, noting that production slowdowns by automakers also are factoring into the equation.
ISSUES START AT PORTS
BNSF Logistics’ Sutton said inland supply chain challenges actually begin at seaports – and sometimes earlier. For example, he said, the ocean freight cost for shipping a set of wind energy blades to a U.S. West Coast port across the Pacific Ocean has doubled or even tripled, reaching US$120,000 to US$180,000 today, compared with a pre-pandemic price of US$60,000 for a similar shipment. While such ballooning costs are causing many projects to be put on hold, the project shipments that continue to move forward face issues from the moment they get ashore, if not before, as ships are stuck, for example, for weeks off Southern California awaiting an available berth – and then landed cargo often sits a week or more before pickup by truck. This can create serious challenges in planning for components to arrive on schedule for an installation. “Once shipments get to ports, there is congestion,” Sutton said. “Projects are facing the same challenges as containers, including labor shortages and tight truck capacity. Just getting the product through the ports has been a challenge. This is especially true as it relates to trucking.” BNSF Logistics is combating such concerns in multiple ways, including a heightened use of rail for inland moves, as well as greater reliance upon collaboration. In this regard, it shouldn’t go unnoticed that Dallasbased BNSF Logistics is a subsidiary of Fort Worth, Texas-headquartered Burlington Northern Santa Fe LLC, which also is the parent company of Fort Worth-based Class I operator BNSF Railway. www.breakbulk.com BREAKBULK MAGAZINE 41
INLAND TRANSPORTATION
A saddle fixture, patented by BNSF Logistics, is among innovative solutions deployed to ease inland moves of wind energy components. CREDIT: BNSF LOGISTICS
ONWARD TRANSPORTATION MODE MATTERS At the Port of New Orleans, up the Mississippi River from the Gulf of Mexico, project cargo continues to move fluidly, according to the Louisiana port’s communications manager, Jessica Ragusa. “We are not really seeing any project cargo scheduling issues at Port NOLA,” Ragusa told Breakbulk. One big reason is that most of the project cargo arriving by oceangoing vessel at the New Orleans port is transferred to barges for upriver transport to inland hubs along the 14,500 miles of waterways that make up the extended Mississippi River system. Another significant portion heads inland via the six Class I railroads that are linked to Port NOLA docks via the New Orleans Public Belt Railroad. Ragusa said the short line is not experiencing congestion and is reporting a record-low dwell time of 10.7 hours. In fact, Ragusa noted that breakbulk and project cargoes are moving through Port NOLA at a record pace, with the 240,524 tonnes handled in September being more than twice the volume of the comparable month in 2020. Above: Project cargo at the Port of New Orleans is discharged from oceangoing vessel to barge for inland transport up the Mississippi River system. CREDIT: PORT OF NEW ORLEANS
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“With the trucking challenges, using rail can help get in front of lead times,” said Sutton, who has more than 25 years of industry experience, including as a BNSF Logistics executive since 2003. “More rail is being used because of the challenges in getting truck capacity.” BNSF Logistics is leveraging intransit yards to function as what Sutton termed “shock absorbers,” furnishing a cushion of as many as 90 days for project components, including wind and solar energy units, brought in early and then held for just-in-time delivery to construction sites. Rail also continues to have advantages related to ability to load components at a seaport such as Corpus Christi or Galveston and move the oversize units by train through a number of states without having to deal with the patchwork of incongruent state regulations for truck transport of such cargo.
‘COLLABORATION IS KEY’
Furthermore, BNSF Logistics – which has moved more than 43,000 wind components since 2017 – makes
use of innovative technology in efficient rail shipment of such units. One example is a patented saddle fixture for easing the transport of lengthy wind energy blades by minimizing swing and controlling their shape through curves. Ultimately, according to Sutton, cooperation among shippers and supply chain partners continues to be as crucial as ever. “On the domestic end, it’s a matter of working closely on the planning side,” he said, observing that, if feasible, it might prove beneficial for product to now be imported from Europe rather than from Asia. “From our end, it’s just a matter of customers working closely with supply chain providers.” To counter the congestion and bottlenecks, Sutton offered this seemingly universal guidance: “Communication is key. Collaboration is key. Being transparent is key.” BB A professional journalist for over 50 years, U.S.-based Paul Scott Abbott has focused on transportation topics since the late 1980s. JANUARY-FEBRUARY 2022
01 - 02 February 2022 Dubai World Trade Centre, Dubai, UAE middleeast.breakbulk.com
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CASE STUDY
MAKING LIGHT WORK OF DANGEROUS GOODS
H
Seismic Equipment Move Tests Project Detail
andling dangerous goods for offshore projects is a challenge for any breakbulk operator at the best of times, but logistics and shipping services provider GAC recently completed this task not once but twice for one project, returning 3,000 boxes of specialist seismic equipment from Scotland to Houston, having delivered them by the same route earlier in the year. The project, on behalf of Norwegian geophysical services provider Axxis Geo Solutions, or AGS, involved transporting 54 tonnes of seismic gear to the North Sea, for a project that began in June 2021. GAC North America initially delivered the cargo from Houston, and then following the completion of measurements in the North Sea, GAC Aberdeen oversaw return of the equipment later in the second quarter. “We chose air cargo as this is rental equipment and delivery time was obviously very important,” Andrew Cushnaghan, onshore project manager AGS, told Breakbulk. “GAC presented several solutions,
and the whole process, from initial talks to the arrival of the cargo in Houston, was handled for us by GAC key accounts manager, Ajmal Aboobacker.” Having ruled out sea freight as too slow, AGS chose an airfreight solution via Liège Airport, Belgium, utilizing two flights to keep costs to a minimum, and trucks for transport to and from Aberdeen in the north of Scotland. While reducing overall journey time, Cushnaghan noted that this did add some uncertainty around import and export to the UK. “We were uncertain, post-Brexit, about sending trucks to Bruges [to meet the cargo flight] due to the potential for customs delays and the consequent financial impact,” Cushnaghan said. “Ajmal was able to assure us of the customs process and helped us prepare the trucks in the best way to facilitate customs handling. This involved separate commercial invoices for each truck – normally we only make one commercial invoice for shipments – and careful loading of the trucks, to match the paperwork.”
BY MALCOLM RAMSAY
CLOSE COMMUNICATION
Worth several million dollars, the cargo of seismic equipment consisted of multiple nodes containing lithium batteries and required specialist dangerous goods packers and documentation. As a result, close communication between the partners was critical for success. As Jenna Deans, operations coordinator at GAC Aberdeen, explained: “Continual updates on progress, shipping lead times, the loading plan and Jenna Deans transport coordiGAC nating between ourselves and warehouse operatives was key.” Having completed the seismic project in the North Sea in the second quarter, AGS then repacked the equipment for shipment back to shore aboard the Assister, a ship under GAC’s agency.
The cargo aboard the Assister, a ship under GAC’s agency. CREDIT: ROBERT COOPER
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JANUARY-FEBRUARY 2022
“Following a brief call at Peterhead for crew change, the vessel made a second call to Aberdeen for demobilization involving crew disembarkation, return of hired assets and transportation of the freight to the GAC Aberdeen warehouse,” Deans said. Upon arrival in Aberdeen, the first load of seismic nodes was unloaded and transported to a warehouse owned by terminal operator Sea Cargo, just a short distance away, minimizing cost and time. “The shipment was split into two lots – one week apart. GAC gave us precise weight and dimension limits for each lot, particularly for each deck of the cargo plane – allowing us to adjust the individual pallet heights to match,” Cushnaghan said. “The clear instructions from GAC allowed us to concentrate on the first shipment – getting the pallets prepared in time for pickup. We were then able to start the second shipment preparation while the first was being picked up. This kept the equipment rental cost to a minimum.” This process also allowed GAC Aberdeen to rapidly assign warehouse operatives and forklifts with the correct weight capabilities for the repacking, transfer and eventual loading onto transport. Deans said that the team used JCB, Toyota and Mitsubishi forklifts for the movement, alongside a 2.5-tonne electric reach truck, a 2.5-tonnne electric counterbalance and 8-tonne and 15-tonnes diesel counterbalances. In total, the team from GAC oversaw packing of 165 pallets and as a result of the meticulous pre-planning and coordination, all of these fitted perfectly in the allotted space, meeting weight limits for both trucks and cargo plane. “This avoided any wasted cost for unused space or further shipments for equipment not able to fit within the limits,” Cushnaghan said.
ACCURATE LABELLING
Once the cargo was safely loaded, the next step was to ensure that all items were correctly labeled and ready for cross-border transit. Deans noted that the involvement
of a third-party dangerous goods specialist was paramount in making the project a success: “We chose to work with Aberdeen Dangerous Goods (ADG) of which we have a great professional relationship, displayed over the years of our collaborating. Their knowledge and expertise in this field is second to none and we welcomed this partnership on the project.” Working closely with ADG, the team at GAC Aberdeen analyzed the complex UK-toBelgium clearance procedures and spoke to partners, arranging onward haulage The cargo was loaded on to pallets specific to the deck heights of the freight plane. CREDIT: ROBERT COOPER to Liège to ensure that everything went without a hitch. The team then was the only ‘challenge,’ but we were ensured that all documentation was thrilled to excel at this,” Deans said. thoroughly checked for accuracy and Upon arrival in Houston, the cargo compliance with regulations, before was unloaded from the aircraft by collating with outbound loading doculocal firm Aries Worldwide Logistics mentation. for onward transport, with GAC As well as collating the relevant providing the team with all necessary customs documentation, GAC also paperwork for efficient clearing and oversaw Covid-19 compliant crew delivery. onboarding procedures including pro“It was a good experience working vision of a security cabin and officer, with GAC on the whole project and the arrangement of lateral flow tests, Ajmal’s one-point-of-contact for the container hire to move the freight from equipment cargo shipment was apprethe vessel to the warehouse, hotel, taxi, ciated,” Cushnaghan concluded. BB car hire bookings and more. “As we had approximately 40 tonnes of dangerous goods cargo to Based in the UK, Malcolm Ramsay transship to Houston, the sheer volume has a background in business analyand weight of cargo required to move, sis and technology writing, with an and ensuring this reached its destinaemphasis on transportation and tion in its protective state as intended, ports. www.breakbulk.com BREAKBULK MAGAZINE 45
REGIONAL REVIEW
TO THE MOON AND BACK N China’s Space Program Offers Project Potential ow underway in earnest, China’s International Lunar Research station development is providing a space race boost for regional project cargo. The developments drawing most attention to China of late predominantly relate to territorial grabs in the South China Sea and the soft power influence China is applying with the Belt and Road Initiative. China’s space ambitions have received comparatively less attention, including the plans to establish bases on the Moon that already have secured collaboration with Russia’s space agencies. Those overlooking these developments run the risk of missing the potential opportunities that may arise for project cargo transportation here on Earth. In June the China National Space Administration released the details of the International Lunar Research Station, or ILRS, Guide for Partnership, a framework involving four phases of space exploration, orbital space stations and lunar bases, all taking place from 2021 to 2045, and all aimed at the ultimate goals of lunar exploration
BY THOMAS TIMLEN
and eventual exploitation of resources that might be found beneath the lunar surface. Transportation of such resources from the Moon to the Earth is the overarching aspiration should the plans succeed. Throughout the scope of these works the movement of personnel, equipment and supplies will require spacecraft for delivery and transport systems, which in turn require extensive support systems and administration, funding, training and launch facilities. Describing the ILRS as ambitious would be an understatement. A review of the details within each of the four planned stages raises questions regarding the potential expansion of traditional logistics and project cargo operations from established routes on terra firma to cosmic lunar voyages, an initial baby-step preceding what eventually could lead to intergalactic logistics opportunities. Closely following the brief spaceflights arranged by a trio of wealthy enthusiasts, the potential for tangible short- and long-term opportunities for the transport sector cannot be ignored.
LUNAR POSSIBILITIES
Gearing up to meet the transportation needs that might avail themselves should there be a demand for moving bulk quantities of lunar resources down to Earth post-2045 might be premature. However, an evaluation of the near-term potential opportunities generated by China’s ambitious plans does warrant attention, as these can be met with the deployment of existing logistics assets. Although the final assembly of spacecraft is presently done at the respective launch sites, there will be opportunities involving the transport of rocket and spacecraft components from places of manufacture to the respective launch site assembly facilities. In addition, there are indications that additional launch sites will be constructed to maintain adequate capacity for the increasing frequency of launch activity. In this respect, providers of project cargo services stand to benefit not only from the opportunities surrounding the construction of new launch sites, but also from the demands that will arise
3D rendering of China’s cargo spacecraft Tianzhou-2 which will later docking with Tianhe – the Core Module of China’s Modular Space Station. CREDIT: SHUTTERSTOCK
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JANUARY-FEBRUARY 2022
for the development and expansion of related infrastructure supporting the new launch sites that will span from road and rail to bridges and seaports. Speaking to Breakbulk, Professor Bernard Foing, executive director at the International Lunar Exploration Working Group, or ILEWG, agreed that the plans to construct new launch sites Bernard Foing throughout ILEWG China will create many opportunities in the project cargo transportation sector. Foing speaks with confidence as the ILEWG is a public forum initiated in 1994 and sponsored by several of the world’s space agencies to support international cooperation towards a world strategy for lunar exploration and utilization. Active participants include NASA, China’s National Space Administration, China’s ILRS partner Russia, Roskosmos, together with several European space agencies and their Japanese and Australian counterparts. Foing saw no reason to doubt China’s ability to construct a station on the moon, pointing to China’s progress with its Tiangong space station, expected to be completed in 2022. “The Chinese Space Station is completing its initial construction goals as planned in 2022, with the Modular Space Station Experiment Module I Wentian ‘Quest for Heavens’ launch planned for May or June 2022. The Modular Space Station Experiment Module II Mengtian ‘Dreaming of Heavens’ launch is planned for August or September 2022 and a separated space telescope module Xuntian ‘Touring the Heavens’ has its launch planned for 2024.” Foing’s optimism is shared, although with a caveat, by another subject matter expert, Andrew Jones,
Launch Sites and Manufacturing Locations Taiyuan launch site
Juiquan launch site
Xichang launch site
Beijing manufacturing site Haiyang launch site (under construction) Shanghai manufacturing site
Wenchang launch site a correspondent with SpaceNews, who has been closely monitoring developments. “China has demonstrated that it is able to set longterm plans and, through gradual accumulation of technologies Andrew Jones and experience and building on SPACENEWS earlier successes, deliver on these and develop new capabilities. “We can see that China is working on the elements needed to get humans to the Moon and back, new super heavy-lift launchers, a deep spacecapable spacecraft, a lunar lander and the profile of the Chang’e-5 sample return mission, and appears serious about carrying out such a mission. This is a challenge in terms of technology and funding, however, and while progress appears good, failures or external events could prove problematic, as with any country’s space endeavors.”
SPACEPORT PROGRESS
Currently, the Chinese space program relies on four existing launch sites, three well-inland at Jiuquan, in
Gansu province; at Taiyuan, in Shanxi province; and at Xichang, in Sichuan province. The fourth and newest spaceport is the Wenchang Space Launch Site in Hainan province. Previously only used for sub-orbital launches, Wenchang was subsequently upgraded and was recently the location for the launch of the Tianzhou-2, a Chinese cargo resupply ship launched in May to dock with the Tiangong space station, presently under construction while in orbit. “Wenchang is looking to build a space ecosystem in connection with the launch site,” Jones said. “This would include commercial launch companies launching their rockets from Wenchang, including potential sea recovery platforms for reusable first stages, in a similar fashion to SpaceX’s use of drone ships for Falcon 9 first stage landings.” Additionally, an “Eastern spaceport” is being developed at Haiyang, Shandong province on the east coast for facilitating sea launches. A couple of sea launches have been carried out using a converted barge, but a new, dedicated vessel for sea launches – and potentially for landing stages – is being constructed and is expected to come into service in 2022. “This would provide another outlet for China’s growing launch sector, for both state-owned solid Long March rockets, solid rockets from a commercial spinoff named www.breakbulk.com BREAKBULK MAGAZINE 47
REGIONAL REVIEW
Rendering of Tiangong Space Station in October 2021, with the Tianhe core module in the middle, Tianzhou-2 cargo spacecraft on the left, Tianzhou-3 cargo spacecraft on the right, and Shenzhou-13 crewed spacecraft at nadir. CREDIT: SHUJIANYANG, WIKIMEDIA, CC BY-SA 4.0.
China Rocket, and potentially others such as CAS Space and Landspace,” Jones said. With respect to the logistics network connecting manufacturing sites and assembly facilities at the launch sites, Jones explained: “The China Aerospace Science and Technology Corporation has two main rocket developers and manufacturers under its ownership, with one in Beijing (CALT) and the other in Shanghai (SAST). The old generation Long Marches are delivered from these centers via rail, to Jiuquan, Taiyuan and Xichang.” Some satellites are delivered to an airbase near Xichang for those missions, which are usually launches of larger satellites to geostationary orbits, he added. Some of the newer rockets, namely the Long March 5, 7 and 8, are manufactured under CALT in the northern port city of Tianjin. The components and stages of these rockets are delivered to Wenchang on the southern island of Hainan via cargo ships, in part because the rail infrastructure cannot handle the large, 5-meter-diameter core stage of the Long March 5. Work on assembly, integration and testing of the rockets takes place in a large vertical integration building at Wenchang spaceport. 48 BREAKBULK MAGAZINE www.breakbulk.com
INFRASTRUCTURE PROS AND CONS
One feature of the Wenchang Space Launch Site in Hainan is that spacecraft and related components arrive at its seaport. Therefore, the Wenchang seaport could provide opportunities for heavy-lift vessel operators to provide project cargo services. In contrast, the other three inland launch sites are served by rail. The respective tracks are reportedly too narrow to facilitate the transport of new 5-meter core rocket boosters. Whether the tracks will be upgraded, or whether roads will be constructed to facilitate road haulage of the boosters remains to be seen. Whether the road or the rail systems are upgraded, logistics professionals based in China do not see immediate opportunities for non-Chinese project transport providers hoping to provide services relating to the movement of components for spacecraft or rockets, as this is now predominantly reserved for state-owned companies. On the other hand, opportunities can be expected relating to the infrastructure improvements and launch site construction works that are anticipated.
Meanwhile, the potential opportunities for project cargo transport providers that the ILRS could generate are not limited to domestic Chinese movements. The decision by Russia to accept China’s partnership offer to be involved with several ILRS phases opens the door to potential cross border movement of Russian and Chinese rockets, spacecraft and related supplies and equipment as the ILRS has provisions for the use of Russian rockets transporting Chinese spacecraft into orbit and vice versa. Russia’s Vostochny Cosmodrome north of the Chinese border could be one location likely to receive spacecraft and/or propulsion units from China. Such cross-border movements might be long term, although there may be short-term opportunities for providers of air transport, as Foing explained: “At the moment it is more effective to launch spacecraft from countries where they have been produced. Otherwise, current spacecraft are still of limited size and can use existing transport infrastructures, including large cargo planes.”
PARTNER OPPORTUNITIES
Looking ahead, routes that could facilitate movements between Chinese and Russian launch, assembly and JANUARY-FEBRUARY 2022
REGIONAL REVIEW
manufacturing sites may be found along the ever-expanding Belt and Road Initiative, or along existing routes such as the China-MongoliaRussia Economic Corridor and the New Eurasia Land Bridge Economic Corridor. Road haulers with existing services along these routes may reap the initial benefits, while others could see new opportunities arise as the BRI is expanded to meet new demand stemming specifically from ILRS-related movements in addition to trade volumes in general. There may also be a need for air freight services to transport related spare parts, smaller components and timesensitive equipment. Should other countries follow Russia into ILRS partnership with China, demand for transport services will in turn expand along with traffic along these corridors, while ocean transport providers could similarly gain from the involvement of Asian and APEC countries as ILRS partners. While some cargo would require the services of project cargo transporters, other partner countries will only require conventional shipping services. Singapore, for example, has proven to be a proficient producer of miniaturized satellites, which can be shipped in conventional containers. Will the ILRS partnership grow to include countries other than China and Russia? Foing pointed to existing collaborations with several nations that bode well for such an expansion: “There are countries that are collaborating with China on the lunar and planetary robotic exploration program. There are also contributions to the Tiangong Chinese space station. China is conducting bilateral cooperation and exchanges with France, Italy and other countries on the Tianhe space station experiments in the fields of basic physics, space medicine and space astronomy. That is significant for strengthening cooperation on the space station, and to conduct new science. These experiments could have a natural follow-up with the ILRS program.” Some of these countries are also contributing to the U.S.-led Artemis program, Foing added. Also, since 2016, China has cooperated with the United Nations Office for
An International Moonbase Alliance simulated deep space mission on Earth. CREDIT: ILEWG
Outer Space Affairs. Here, China has invited all UN member states to participate in cooperative experimental projects related to the Chinese space station. To date, nine projects from 17 countries have been selected. These cover a wide range of scientific fields, from astrophysics, microgravity physics and biology to mid-infrared Earth observations and gallium arsenide semi-conductor and microphase cooling technologies. In less technical terms and with a more conservative outlook, Jones sees potential for more nations to join the ILRS initiative, but not without challenges. “China and Russia are attempting to court a number of space actors, but the main interest appears to be securing involvement at some level of European nations
such as France, Germany, Italy and so on, which have great technology capabilities and experience in exploration and human spaceflight. “The pair (China and Russia) are developing frameworks for involving partners in the ILRS and talks are ongoing, but those involved are reluctant to state their positions and deliberations will need to take place with a number of stakeholders. It’s complicated, particularly given the current geopolitical context.” BB Thomas Timlen is a Singapore-based analyst, researcher, writer and spokesperson with 31 years of experience addressing the regulatory and operational issues that impact all sectors of the maritime industry. www.breakbulk.com BREAKBULK MAGAZINE 49
Breakbulk Events & Media’s biweekly BreakbulkONE newsletter keeps the industry connected between issues of Breakbulk. Here’s a selection of subscriber favorites from the past few months.
ABU DHABI PORTS LURE POLYMER PRODUCERS Aims to Become Global Plastics and Polymers Hub Abu Dhabi Ports’ Industrial Cities and Free Zone Cluster in Abu Dhabi is now home to 95 companies in the polymer sector, as the state-owned operator’s bid to become a global hub for plastics and polymer manufacturing by 2025 takes shape. AD Ports controls 10 ports and terminals in Abu Dhabi, the UAE’s largest emirate, and more than 550 square kilometers of industrial and commercial zones within ZonesCorp and the Khalifa Industrial Zone Abu Dhabi, or KIZAD. Polymers and plastics, a key sector for breakbulk and project cargo, occupies more than 3.4 million square meters of land at ZonesCorp and KIZAD. “We are contributing to Abu Dhabi’s transformation into a major global hub for polymers conversion, as well as the nation’s industrial diversification efforts,” Abdullah Al Hameli, head of the Industrial Cities and Free Zone Cluster, said in a statement.
At KIZAD, the Middle East’s largest industrial and free trade zone, located between Abu Dhabi and Dubai, a custom-built polymers park launched in 2019 has a capacity to produce some 400,000 tonnes per year of polymers. International polymer producers have established facilities at KIZAD, including South Korea’s Songwon, Italian joint venture Gulf Compound Blending, Schmidt Middle East and the Harwal Group. The global polymer market is expected to expand from US$439 billion in 2021 to US$617 billion by 2028, according to Fortune Business Insights, driven by increasing demand from fast-moving consumer goods, food and beverages, pharmaceuticals and other sectors. “The KIZAD polymers park has been specifically designed for the global plastic and polymers industry and has evolved significantly
since its launch in 2019, serving as a catalyst to propel the polymers downstream sector in the UAE,” said Mohamed Al Khadar Al Ahmed, CEO at ZonesCorp. Polymers is not the only industry being lured to the industrial zone. Australian mineral developer Lepidico signed a deal late last year with AD Ports, an exhibitor at 2022 Breakbulk Middle East, to install a US$95 million zero-waste lithium production facility on a 57,000-square-meter plot at KIZAD – the first of its kind in the Middle East. A US$1 billion green fuels export facility, developed by Abu Dhabi-based Helios Industry, is the largest planned project to date at KIZAD. Electricity generated by an 800-megawatt solar power plant will be used to produce 40,000 tonnes per year of hydrogen and 200,000 tonnes of ammonia. BBONE
Polymer production at AD Ports’ Industrial Cities and Free Zone. CREDIT: AD PORTS
50 BREAKBULK MAGAZINE www.breakbulk.com
JANUARY-FEBRUARY 2022
The 33-meter-diameter vacuum chamber is part of a system that intends to thrust satellites into space orbit. CREDIT: SARENS
SARENS HANDLES 1,000-TONNE VACUUM CHAMBER Unit Part of Ground-breaking Space Launch System Sarens has successfully transported the world’s largest-diameter vacuum chamber for U.S. space technology company SpinLaunch. The Belgium-based lifting specialist worked alongside SpinLaunch’s engineering and construction team to devise a detailed study and lifting plan for maneuvering the 33-meterdiameter launch chamber at the tech company’s test facilities in Truth or Consequences, New Mexico, earlier this year. The sci-fi-looking 1,000-tonne steel unit, a key component of SpinLaunch’s ground-breaking system that thrusts satellites into space orbit using kinetic
energy rather than traditional rockets, was lifted 16 meters vertically, rotated 90 degrees and transported 200 meters using Sarens’ multilifting towers, strand jacks and a self-propelled modular trailer, or SPMT, with a total of 64 axle lines. The heavy-lift equipment used to execute the job was transported to New Mexico in 32 trucks from Sarens’ sites in Houston and Virginia, and assembled in four weeks. Strong winds and biting temperatures posed additional challenges for the project team. In a video of the maneuver, released by Sarens (https://youtu.be/72e9w6fx08), a team member said that
for the most part, fewer than 30 people worked on the project. “As well as requiring a huge lifting potential, the precision with which the installation was completed was of paramount importance. Sarens’ SPMTs can be controlled with millimetric precision and were an essential part of the successful construction of the SpinLaunch apparatus,” Sarens said. In October, SpinLaunch carried out a successful vertical launch at its New Mexico test site. The L.A.-based innovator is planning to place satellites in orbit and deliver payloads for spacefaring endeavors by 2025, according to its website. BBONE
DP WORLD BEGINS WORK ON NEW SENEGAL PORT At US$1.1 Bn, it’s Dubai-based Operator’s Largest Africa Investment Dubai-based global port operator DP World has broken ground on a new US$1.1 billion deepwater port at Ndayane in the West African nation of Senegal. Located some 50 kilometers south of the existing Port of Dakar in Senegal’s capital, the two-phase infrastructure project constitutes DP World’s largest-ever investment in an African port, and the biggest single private investment in Senegal’s history. “With the Port of Ndayane, Senegal will have state-of-the-art port infrastructure that will reinforce our country’s position as a major trade hub and gateway in West Africa,” Senegalese President Macky Sall said during a stone-laying ceremony to
mark the start of construction. DP World signed a concession agreement with the Senegalese government in December 2020 to build and operate Ndayane, scrapping earlier plans to build a second container terminal at Dakar. The first phase of the project calls for investment of US$837 million to build a container terminal with an 840meter quay and 5-kilometer marine channel capable of handling 366meter vessels. Capacity is expected to rise by 1.2 million 20-foot equivalents, or TEUs, per year. A second phase will see US$290 million spent to install an additional 410-meter quay and further dredge the marine channel to handle 400meter vessels.
DP World also plans to develop an economic and industrial zone next to Ndayane. “As the leading enabler of global trade, we will bring all our expertise, technology and capability to this port project, the completion of which will support Senegal’s development over the next century,” said Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, during the ceremony. DP World, an exhibitor at Breakbulk Middle East 2022, operates a network of 181 businesses in 64 countries across six continents. The company’s UAE division operates Jebel Ali Port in Dubai – the Middle East’s busiest shipping destination with a handling capacity of 19.3 million TEUs. BBONE
www.breakbulk.com BREAKBULK MAGAZINE 51
Thialf Heerema at Port of Rotterdam. CREDIT: KEES TORN
PORT OF ROTTERDAM SEIZES OPPORTUNITY Port Thrives Despite Turbulent Year
Despite another turbulent year for the industry, the Port of Rotterdam, one of Europe’s largest breakbulk hubs, said 2021 had been one of opportunity, marked by key developments in energy, innovation and infrastructure. The port’s aim to become an international hydrogen hub forged ahead, with a deal signed with energy company Uniper for developing the production of green hydrogen at Uniper’s Maasvlakte site at Rotterdam. A new hydrogen pipeline is also under development, while a first “hovering” hydrogen-powered racing boat was tested this year in port waters. Shell meanwhile has taken a final investment decision for an 820,000 ton-per-year renewable diesel and 52 BREAKBULK MAGAZINE www.breakbulk.com
sustainable aviation fuel facility at the Shell Energy and Chemicals Park Rotterdam. The facility, one of Europe’s largest, is slated to come online in 2024. Rotterdam, host port for Breakbulk Europe 2022, has also been the test ground for some exciting innovations. Offshore services firm Fugro’s Blue Essence uncrewed surface vessel was tested for the first time on port waters via an onshore remote operations center, while a pilot program was successfully carried out using long-range drones to monitor vessels and port activities. The port also this year installed the world’s first 3D-printed steel bollards on a new quay in the Sleepboothaven at Rotterdam Heijplaat.
“Despite the pandemic and the blockage in the Suez Canal, we have achieved good figures in 2021 for the entire port complex. We have also taken fantastic steps in the field of digitization and energy transition,” said Allard Castelein, CEO of Port of Rotterdam Authority, in the port’s year-end video (https://www.youtube. com/watch?v=vifsdt9dCAI). Rotterdam also made gains on some major infrastructure projects, including the start of construction work to expand quays and earthretaining walls at the Princess Amalia Harbor, and the opening of the Theemsweg freight train route. Theemsweg, comprising four kilometers of tracks and two arched bridges, links the port with its existing railway line. BBONE JANUARY-FEBRUARY 2022
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ECONOMY, MIDDLE EAST AND NORTH AFRICA Breakbulk looks at economic forecasts for Gulf Cooperation Council countries as well as select MENA countries
GDP FORECAST 2019
% 8 6
2020*
2021*
2022**
4 2 0
IR AN
IR AQ
M O RO CC O
EG YP T
AL G ER IA
U A E
SA U D IA RA BI A
Q AT A R
O M A N
KU W A IT
BA H RA IN
-15.7
-2 -4 -6 -8 -10
CURRENT ACCOUNT BALANCE (% OF GDP) %
25 20 15 10 5 0 -5 -10 M O RO CC O M O RO CC O
IR AN
EG YP T EG YP T
IR AN
AL G ER IA AL G ER IA
IR AQ
U A E U A E
IR AQ
SA U D IA RA BI A SA U D IA RA BI A
Q AT A R
O M A N
KU W A IT
BA H RA IN
-15
FISCAL BALANCE (% OF GDP) % 6 3 0 -3 -6 -18.6
-24.4 -33.2
-12
-17.6
-9
Q AT A R
O M A N
KU W A IT
BA H RA IN
-15
GCC countries in bold type. *Estimated **Forecast SOURCE: World Bank Group, Growth, Current Account and Fiscal Account Forecasts, based on data from World Bank Macro and Poverty Outlook, October 2021. 54 BREAKBULK MAGAZINE www.breakbulk.com
JANUARY-FEBRUARY 2022
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