Breakbulk Magazine Issue 2 2021

Issue 2 / 2021

The Publication for the Industrial Project Supply Chain Industry

PART FAMILY NOW OF THE

Project Cargo Takes Malcom McLean’s Vision Out of the Box

MPVs Back in the Black

|

Biden Turns Tide for US Wind

|

Tunneling Digs Deeper

RoRo by WW Ocean -The safer, smarter way for your breakbulk

Find out more at walleniuswilhelmsen.com

IN THIS ISSUE

10

Cover Story

10 PART OF THE FAMILY NOW

Projects No Longer a Sideline for Container Lines

20

34

26

38

16 COVER PACKAGE

BACK IN THE BLACK MPVs Finally Move Out of the Doldrums

20 ENERGY UPDATE

TIDE TURNING FOR US WIND

Biden Proposals Could Unlock Offshore Industry

24 MARKET SPOTLIGHT

34 PORT PROFILE

MAKING LASTING CONNECTIONS Post-Covid Plans to Strengthen Rotterdam

37 LOGISTICS PERSPECTIVE CUTTING EDGE OF INNOVATION Rotterdam Hub Pioneers Breakbulk Evolution

CHANGE AFOOT IN US BREAKBULK SECTOR

38 REGIONAL REVIEW

04 EDITORIAL

Ocean Shipping Poised for 2021 Growth

06 C ONVERSATION

26 CARGO LENS

42 RULES & REGULATIONS

33 THOUGHT LEADERS

Tunneling Growth to Serve Project Movers Well

Incoterms 2020 Seeks to Clarify ABCs of Transport Contracts

Also in this issue

44 BREAKBULK MIDDLE EAST DIGITAL SPECIAL COVERAGE

50 B REAKBULKONE 54 BACK PAGE

DIGGING DEEPER

STEP CHANGE IN SAUDI

‘Project HQ’ Confirms Saudi Arabia’s Ambitions

PLAYING BY NEW RULES

30 INTERMEDIARIES

TRAINING RETOOLED

Industry Educators Expand Horizons in Pandemic-impacted Environment www.breakbulk.com BREAKBULK MAGAZINE 3

EDITORIAL

A SHOT IN THE ARM As Covid-19 vaccines increasingly find their way into upper arms globally, multipurpose vessel operators appear to have finally found a cure for market ills that have hobbled them for approaching a decade.

As detailed in our cover story package (pages 10-19), MPV companies are finding real cause for optimism.

Rates are climbing, prospects for post-pandemic projects are percolating and market conditions seem to be aligning themselves.

During the long-lasting malaise, carriers Gary Burrows bucked up and recited the running gag that they were “cautiously optimistic.” But this apparent return to wellness is no time to throw caution out with used facemasks.

Like Covid-19 variants, the carrier environment faces expected and unexpected competitive issues that they must remedy in order to maintain and enhance any financial rebound.

Along with the long-term business void forcing a ship-at-any-cost mentality, the industry has faced dire concerns of fleets, capacities and competition.

Those calling for reduced fleets saw mergers, acquisitions and market exits, with results ranging from marginal to profound, such as the meteoric climb and crash of Zeamarine.

Two significant steps in the past year have involved lines owned by Harren & Partner. Having acquired SAL in July 2017, Harren through SAL in 2020 acquired a major stake in Americas carrier Intermarine. And this March, SAL struck up a venture with Jumbo, combining a large part of their fleets as well as merging engineering and commercial activities.

Has the MPV industry reached a similar conclusion as container lines did years back when competing lines ultimately pooled into groups to increase flexibility,

4 BREAKBULK MAGAZINE www.breakbulk.com

levels of service, and better manage rates and costs? Ventures, mergers and alliances rarely impact partners equally, with one ultimately usurping the other, or both losing out. And it’s one thing to ally liner services and quite another to unify projectbased operations.

SAL and Jumbo, despite their heavy emphasis on heavy-lift capacity, have a range of vessels – including Intermarine ships. This could imply a push towards a one-stop MPV shop with an array of vessels, lifts and capacities to compete on a broader range of business. There are those who’ve chosen this approach, like BBC Chartering, and those who’ve maintained specific market focus, such as AAL Shipping. And each have found levels of success.

Unlike previous boom-and-bust cycles and carriers’ market corrections though, MPV companies cannot rely on past strategies to rebound on capacity and rates.

The makeup of the world’s remaining MPV fleet is heading towards a monumental makeover.

Fleets are aging, and scrapping and rebuilding could rev up by estimates as early as 2024. Modernizing the MPV fleet will bring opportunities for innovation, as well as daunting environmental regulations and challenges, including determining favored fuels among emerging green energies.

Innovation has a grip on all facets; as projects rebound, so too will further advancements in modularization, further impacting vessel size, service types – perhaps a push towards liner operations?

– and further competition from container and roll-on, roll-off carriers. The push towards autonomous vessels could likewise impact ship capacities and costs, including crew sizes.

Further, carriers face an upheaval of overall business plans as supply chain partners push towards digitalization, which will sprout new competitive solutions and challenges, and force obsolescence of old practices and purveyors.

Where will the industry be in five years? Like the accelerated delivery of Covid-19 cures, carriers should be optimistic – and cautious – in discovering their own shot in the arm.

EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gary.burrows@hyve.group NEWS EDITOR Carly Fields carly.fields@hyve.group DESIGNER Mark Clubb REPORTERS Paul Scott Abbott Felicity Landon Michael King Malcolm Ramsay Simon West

BREAKBULK EDITORIAL ADVISORY BOARD John Amos Amos Logistics

Noelle Burke

Eos Energy Storage

Dennis Devlin Maersk

Dharmendra Gangrade

L&T Hydrocarbon Engineering

John Hark

Bertling Project Logistics

Samuel Holmes Dennis Mottola

Global Logistics Consultant

Roger Strevens

Wallenius Wilhelmsen

Jake Swanson

DHL Industrial Projects

Ulrich Ulrichs

BBC Chartering

Margaret Vaughan Consultant

Johan-Paul Verschuure Rebel Group

Frans Waals

Dynamar D.V.

Grant Wattman

Jade Management Group

PORTFOLIO DIRECTOR Nick Davison nick.davison@hyve.group To advertise in Breakbulk Media products, visit: http://breakbulk.com/page/advertise SUBSCRIPTIONS To subscribe, email gary.burrows@hyve.group, or call from inside the U.S. +1 904 535 5460 between 8:00 am and 5:00 pm EST. A publication of Hyve Group plc.

The Studios, 2 Kingdom Street Paddington, London W2 6JG, UK

ISSUE 2 / 2021

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.

www.hoeghautoliners.com

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.

IS MINING ON THE CUSP OF A ‘SUPER-CYCLE?’

New energy projects are driving demand for metals, including true energy levels – and resultant price increases.

CREDIT: SHUTTERSTOCK

Could global mined commodities be on the cusp of a “super-cycle,” led by stimulus focused on new energy transition and the metals crucial to their development?

Wood Mackenzie, the energy research consultancy, believes massive stimulus programs designed to pull economies out of the recession will sustain demand for most mined commodities. When economies recover and grow, it could stress suppliers who lacked investment to keep up due to the pandemic.

“Under this scenario stocks of mined commodities will fall to critical levels, sustaining prices at a significant premium to incentive prices and resulting in supernormal profits being achieved,” said Julian Kettle, senior vice president, vice chair metals and mining, WoodJulian Kettle Mackenzie. “This could in theory Wood Mackenzie 6 BREAKBULK MAGAZINE www.breakbulk.com

sow the seeds for an overexuberant supply response as stakeholders chase the market. Our view is that this narrative regarding the start of a new super-cycle needs to be challenged, as there is a risk that the markets have got ahead of themselves.”

The energy research consultancy defines a super-cycle as “a permanent significant increase in commodity demand and price, with the latter driven by an inability of supply to keep up with demand and exacerbated by speculative activity.”

Following the first months of the pandemic, demand for mined commodities halted and prices slumped.

Since the Covid-19 outbreak, governments, led by China, have undertaken massive green investment stimulus programs to offset the economic crash from forced lockdowns.

While global economic growth was muted into Q1 2021, most mined commodity prices rebounded to above pre-pandemic levels. Some, such as iron ore, have climbed to multi-year highs, due to green energy demands and recent supply constraints, pushing prices up to 10-year highs.

“These markets stand very much on

the cusp,” Kettle said. Average annual growth rates in the next decade “may be significantly lower on average than the last decade.” But the compounded effect would mean dramatic growth for copper, nickel and zinc. True energy metals, including lithium and cobalt, will see incremental demand rise substantially.

The question is whether prices “have got a little ahead of themselves given supply for many markets will be strong for the next few years,” he said.

“Certainly, higher prices are welcome as they should, if sustained, give stakeholders the confidence to invest in the supply required to meet the energy transition. But right now it’s a mixed bag and we would argue those higher prices are not justified by medium-term fundamentals,” he concluded.

The last super-cycle ran from the 2001 recession to 2015, when prices cratered for most mined commodities.

“The BRIC economies, led by China, were the drivers of high demand growth rates and sharply rising prices for some commodities,” Kettle said.

Only the 2008-2009 global financial crisis paused the proceedings.

ISSUE 2 / 2021

POLAR STORM FREEZES US GULF PLANTS, REFINERIES Beyond frozen electricity grids and vast water shortages, the historic arctic outbreak that hobbled Houston and much of the U.S. Gulf and Midwest in February sent ripples through global markets, according to Independent Commodity Intelligence Services.

The polar storm shut down 90 percent of U.S. polypropylene capacity and 67 percent of ethylene and other important products, ICIS reported.

Power and feedstock outages snarled logistics networks, and extended bad weather exacerbated the situation.

ICIS’s supply and demand database showed much of the Gulf petrochemical sector impacted, with more than 60 plant outages reported. It reported 26 million tonnes of ethylene capacity (67 percent of U.S. capacity) and 11 million tons (50 percent) of propylene capacity were offline. More than 2 million barrels

per day of U.S. refining capacity was also shut down.

The outages hit global markets, which were already facing material shortages and rising prices due to issues with global container shipping.

Plant outages and healthy downstream demand also squeezed supply chains for propylene and polyethylene, among other petrochemical products.

The pandemic has cut demand for transport fuels, leading to oil refineries closing or cutting production, particularly in the U.S. and Europe.

Propylene prices are at 10-year highs and inventories halved from the year earlier. Inventories hit a seven-year low at the end of 2020.

ICIS, a subsidiary of Reed Business Information, provides market intelligence for the energy, petrochemical and fertilizer industries.

More than 2 million barrels per day of U.S. refining capacity was shut down by polar storms in the Gulf. CREDIT: SHUTTERSTOCK

O&G FACES ‘GLIDE PATH’ RENEWABLES TRANSITION With demand for oil and gas products waning, the industry should implement a “glide path” to transition to renewables energy.

That is the realistic option, said Ian

Palmer, energy consultant and former BP fracking engineer. Oil and gas industry’s glide path initiatives should include: • Shifting to green power for all oil

Upstream and downstream oil and gas companies are shifting to green power for operations.

CREDIT: SHUTTERSTOCK

and gas operations including drilling and frac pumping.

• Reduce to near zero gas flaring and methane leaks from wells, pipelines and facilities.

• Plug abandoned oil and gas wells that are leaking methane.

• Develop and implement carbon capture and storage in old oil and gas fields to contribute to the net-zero goal and preserve jobs.

• Redirecting investment from drilling to renewables. For example, BP expects 40 percent of its investment to be in renewables by 2030, and Total is investing US$2.5 billion in Adani Green Energy and will own half of its solar electricity.

• Accept the ban on new leasing and drilling on federal lands and waters, gradually lowering O&G production. In the U.S., 22 percent of oil and 12 percent of gas is produced on federal land, but companies have stockpiled well leases that will last years, Palmer said. www.breakbulk.com BREAKBULK MAGAZINE 7

CONVERSATION

Crisis: the Mother of Invention Innovation Will Surely Thrive in the Pandemic

BY MARGARET VAUGHAN

8 BREAKBULK MAGAZINE

WWW.BREAKBULK.COM

SHIP AUTONOMY PROGRESS

Elsewhere, companies involved in the “Designing the Future of Full Autonomous Ship Project” will carry out field testing of crewless domestic container ships working toward the commercialization of autonomous ships by 2025. The members expect that this demonstration of the crewless operation of ships in congested waters navigating over long distances and the early implementation of autonomous shipping will improve their international competitiveness.

The sensors and communication technology already exists to enable ships to safely navigate to a destination while avoiding collisions. Kongsberg is among those building situational-awareness systems that fuse imagery from cameras with lidar, radar and satellite uplinks. This data can either be sent to a skipper who operates the ship remotely from shore, or to on-board computers that entirely replace the human element of control.

Autonomous and remotely operated ships will be more efficient and cheaper to run for ship owners. Since the new generation of ships won’t be manned, there’s no need for crew quarters, galleys, water and sewage, and other amenities that take up space, weight and energy. Crewless ships will have less drag, consume less fuel, and be able to carry more cargo per voyage, resulting in significant economic and environmental gains.

It’s interesting that DARPA, the Pentagon’s research agency, wants to design a ship from scratch to be fully automated. The project, known as No Manning Required Ship, or NOMARS, aims to create a ship where every inch is available – or not wasted on human beings, depending on how you look at it.

Which begs the question what will that do to the U.S. Merchant Marine?

A taste of the future. “Open the pod bay doors, HAL.” BB Margaret J. Vaughan has more than 30 years’ experience in all facets of supply chain management.

ISSUE 2 / 2021

CREDIT: SHUTTERSTOCK

I

t is said that necessity is the mother of invention, and during the Great Depression of the 1930s invention and innovation flourished – think Scotch Tape, electron microscopes and Spam.

So, during this current time of enforced isolation, I’m wondering what sorts of innovative ideas and products will emerge. Without the distraction of meetings, colleagues, office politics and general coffee room discussions, I would think that innovators will come up with some incredible stuff.

Innovation invariably creates winners and losers. The introduction of the automobile shifted consumer demand away from trains much like the railways had, in decades prior, displaced canals and waterways as major forms of transportation. The result was job offers for some workers and pink slips for others. Nicholas Carr, in his book The Glass Cage, Automation and Us, put it succinctly: “There is no economic law that says that everyone, or even most people, automatically benefit from technological progress.”

There are certainly some transportation innovations in progress. A startup company called Xwing has completed what they claim to be the “world’s first fully autonomous air cargo flight,” using a Cessna plane that will ensure more costeffective operations for logistics companies.

Xwing’s Autoflight System retrofits existing aircraft by integrating onboard flight control systems that allow the aircraft to navigate, take off and land autonomously. The vehicles can also be optionally piloted. Airbus is working on pilotless commercial planes.

Meanwhile in the UK city of Coventry, a temporary airport for flying cars is being built as a proof of concept of a zero-emissions hub for future modes of travel. Electric vertical takeoff and landing vehicles are being suggested as a low-carbon way to ease congestion as people travel between urban centers. At the January 2020 Consumer Electronics Show in Las Vegas, Uber and Hyundai unveiled a full-size model of a planned air taxi. Called the S-A1, it will be 100 percent electric, take off vertically, then transition to wing-borne lift; it can carry four people at speeds of up to 180 mph at an altitude of between 1,000 and 2,000 feet.

Price vs Partnership Value of Relationships in Recovery interaction, and one can rightly ask whether fruitful cooperation can work without this interaction? A combination of these factors generates client satisfaction, mutual loyalty and the feeling of pulling through difficult times together. But does reality mean that when the market trends change for the better, our attention will revert to what it was before: a full focus on the bottom line?

SUPPORT FOR INNOVATION

Technological development – which has certainly been a must for our global industry – is not a solution by itself, and should not stand alone. Amid rapid development, we must not forget, or ignore, that a large part of our work is built on basic human interaction and trust.

Despite modern technology, these values will always remain important factors in the way we do business together.

Ask yourself: does this partnership come with a price tag; how do we manage this balance in the best way; is the industry ready to bring these values to the forefront when we are no longer in a global crisis? Those who are ready can profit by mutually built trust and will come out winners. Is it naïve to believe that we, in our business, can move to a place where a strong bottom line price reflects these values, so that we are better equipped to withstand future fluctuations of the market?

Breakbulk logistics providers are expected to be magicians and troubleshooters. We will satisfy our clients’ needs no matter what; client satisfaction is a must. But we must understand the different mechanisms in play when “the times they are a-changin’.” Only those who learn to handle this will be truly successful. BB Anders Maul is commercial director for oil, gas and industrial projects at Blue Water Shipping.

BY ANDERS MAUL, BLUE WATER SHIPPING

CREDIT: SHUTTERSTOCK

R

ationalization, efficiency improvement and digital solutions have always been necessary tools in our globalized world.

In recent decades, they have formed a natural part of the development of our line of business. But are they the only recipe for success? And can they strengthen us through times of crisis?

A large part of traditional development originates from an aim to create financial growth. In a competitive world, such as the logistics industry, it is dog-eat-dog to retain existing market shares and capture new ones, especially in times of recession when there is less cargo to be transported.

But did we, in periods of uncertainty including armed conflicts, financial crises, oil crises and global pandemics, fail to see the obvious: the human equation? Could this be the key to not just “pulling through” the current crisis?

Could human relationships enjoy a revival in the 21st century – and be more than just a phrase?

In times of crisis, it is necessary to look at all aspects that can optimize one’s business, and to ask if there is a better way to succeed beyond a sole focus on a price-driven mindset with an exclusive focus on economic factors. We need to consider what effect those reflections have on the relationship between the client and the logistics provider when we leave out the present state of the market.

Think about inviting the different interested parties to join the planning process at an earlier stage for a detailed, initial dialogue. This could align expectations and create transparency of knowledge. A solution-oriented approach, with equal partners with equal conditions, could prevail – “we need them, and they need us” – where the same value is assigned to loyalty, presence and trust as to the price.

These values are created through human

www.breakbulk.com BREAKBULK MAGAZINE 9

COVER STORY

PART OF THE FAMILY NOW Projects No Longer a Sideline for Container Lines

W

here do container carriers fit into the project cargo and breakbulk scene? The accepted narrative was this: if container volumes are scarce, container lines desperate to fill their vessels will try to get business from the project field, often offering knock-down rates.

More than a decade ago, this was exactly the fallout of the global financial crisis. As container volumes subsequently recovered, to use the words of one multipurpose vessel specialist at the time, “they dropped project cargo like a hot potato.”

Container lines, he said, were opportunistic.

BY FELICITY LANDON

Today, container lines are looking at the project cargo opportunities very differently – bringing in the expertise, setting up separate divisions, investing in open-tops and flatracks, and refining services and software to match.

The CMA CGM Group started shipping project cargo decades ago through its various brands, said Stéphane Berninet, head of the CMA CGM project division. “In early 2017, we gathered our numerous project cargo managers in charge of these different lines into one single dedicated project cargo division. We now offer

American businessman Malcom McLean was known as the “father of containerization.” Starting in 1956, from his Ideal-X, a converted tanker, hauling 35-foot trailer vans and later containers, the former trucking company owner developed the concept of containerized transport, leading industry giant Sea-Land Service, and later, the ill-fated United States Lines. CREDIT: WIKIPEDIA

10 BREAKBULK MAGAZINE www.breakbulk.com

our customers a comprehensive organization with project cargo managers, pricers, key account managers and project cargo engineers, as well as a tender desk to better cover the market and serve customers.”

This dedicated division allows CMA CGM to streamline customer approach and share technical expertise and know-how within the team, Berninet said. “It also allows us to drive business development of project and special cargo by increasing market awareness of our service offerings and capabilities, and focus on delivering global solutions which meet our customers’ projects’ needs.”

Project cargo is very important and an integrated part of the way in which Maersk is run, according to Kristian Lund Knudsen, head of special cargo solutions at Maersk.

“We have organized ourselves by verticals, in order to do our research and really focus on what the customers in certain markets need,” he said.

Stéphane Berninet

Kristian Lund Knudsen

CMA CGM

Maersk

ISSUE 2 / 2021

“Maersk has been in the project cargo market for more than 25 years ... we have continued to refine our service,” said Kristain Lund Knudsen, head of cargo solutions. CREDIT: MAERSK

“We have seen that customers in the project cargo, or project logistics/special cargo, sector have similar needs – therefore we have organized this in the same way as our vertical for automotive customers, for example.

“We have been in the project cargo market for more than 25 years – since the 1990s we have been serving the oversized cargo market. So it is not a new development, but we have continued to refine our service.”

INTEGRATION CHALLENGES

Sarah Schlüter, Hapag-Lloyd’s senior director, niche products, described project cargo as a “hot topic” for container carriers today, but there can be challenges when it comes

to integrating projects with container carriers’ strategies. “From a strategic perspective, project cargo and breakbulk at Hapag-Lloyd is being run separately,” she said. “My department [niche products] is separate, setting its own targets and budgets, everything related to commercial aspects and pricing, but also processes and operational requirements, IT requirements, and so on. So we are really at the helm of everything to try to improve the overall organization and smooth things out to make sure we are commercially successful.”

The key issue that needs to be considered, Schlüter said, is that container lines are run very much like a machine: “You can’t run projects like a machine

– it is not so straightforward. Sometimes people really like to put things in boxes, literally things that don’t fit in boxes. It can be difficult within an organization to encourage people to think outside the box and to accommodate the not-so-straightforward.”

Hapag-Lloyd is working towards a more dedicated project cargo set-up with dedicated staff to provide expertise, she said. “It is not about selling a container full of T-shirts, which pretty much anyone might do. It is giving customers expert advice on how things should be handled, and that requires expert staff. We do have those experts already – but not enough of them, so we are focusing on getting more and more in place.” In this, Hapag-Lloyd www.breakbulk.com BREAKBULK MAGAZINE 11

COVER STORY

is sourcing from outside the company but also growing its team internally through training “by our real experts who are former seafarers,” Schlüter said.

This effort extends to sales and customer service staff, but also to training for customers. “We want to increase the expertise of our customers – educate them to come to us early and talk about it,” she said. “These

cargoes and their timelines are so crucial for the success of a project; we need to manage customer expectation, what is possible and what is not possible. And we need to be 100 percent honest, not promise something we can’t deliver on.”

Project cargo is part of HapagLloyd’s niche division but there is a strategic initiative to grow the segment over the next few years, Schlüter

Maersk has hauled everything from wind turbine parts to factory components alongside standard containers.

CREDIT: MAERSK

FEW LIMITATIONS ON WHAT CAN BE CARRIED Project cargoes carried by Maersk have included wind turbine parts, harvesters, tractors, buses, generators, transformers and factory components, alongside standard containers accompanying such out-of-gauge cargo.

“We move a lot of different items, basically everything you think of in the market,” said Kristian Lund Knudsen, head of special cargo solutions at the line. “The main limitation is items that are too big or heavy to be carried on a container ship.”

The advantages of using a container ship for the project cargo shipper? “First of all, it is the ease of doing business. We have very solid processes and they can book it online. They have access to weekly, scheduled services. They know the consignment is going to leave a certain terminal on a specific day and will arrive at a specific date at its destination. Also, it is possible to combine

12 BREAKBULK MAGAZINE www.breakbulk.com

all of the cargo, whether in standard containers or out-of-gauge, into the same shipment.

As long as it is not too large or heavy to move on container ship, it works for Maersk. “Generally speaking, it is what can be carried on a standard flatrack or open-top container or what we can move as breakbulk and lash directly to the vessel.” There is, however, a limitation with terminal handling and what the cranes can manage.

Maersk continues to invest – in the physical equipment and in the online side, Knudsen said, finding ways to make the website even better and in general interacting with customers in a digital way. “We want to make that really easy so that the specialist resources we have in our sales and customer service teams can spend time talking with customers about their supply chains, rather than what is basically transactional stuff.”

added. “It is – under normal circumstances – better paying than regular cargo. Right now, the world is upside down – including with freight rates – but it is part of our Strategy 2023.”

ENABLING ONLINE QUOTES Maersk’s focus has been on online enablement, making it faster for customers to get a quotation and make a booking, through a dedicated, 95 percent automated website, Knudsen said.

Its approach reflects a determination to treat this type of cargo as complicated only when necessary.

“In the past two years, we have reduced the average time to give a quotation for project cargo from more than 36 hours to less than four hours,” he said. “The customer can put in the dimensions and other details and get a quote back – sometimes instantly, or we can go to the relevant terminal if necessary and get back in four hours.”

Customers are at first hesitant about using Maersk’s website for a quote, Knudsen said. “They feel that this is a complicated business, they really need to talk to someone; why should they go on a website for a quotation? From our point of view, this is not a replacement for talking to someone, but making a booking and getting a quote online is freeing up our people to add value for you in other ways. Most customers, when they try it out, really like it. For example, they can sit at their computer at 2100 hrs and go ahead and get a quote.”

Rather than talking about price A or price B, Maersk wants to spend its time discussing how it can make sure it moves project cargo in a safe manner, instead of spending unnecessary time firming up a price. “Once the customer has a quote, etc., they can talk to us about the details later,” he said.

There are instances where Maersk needs to check in with a terminal to avoid confirming a booking, only to have the terminal saying it can’t handle or lift the cargo. However, that should happen less and less because of frequent discussions with terminals upfront to establish what they can handle in terms of size and weight.

“So, if a customer comes up with something we already know is too big for the specified terminal, we can say sorry, we can’t do that, but maybe come up with an alternative.

ISSUE 2 / 2021

COVER STORY

CMA CGM has transported a number of racing yachts.

CREDIT: CMA CGM

“We have a database full of information on what any terminal can handle and it is being updated all the time. Every time we talk to them, we use what we have learned to update our information. Some terminals have very much the same as us. But others are a little bit more conservative and ask that we check and make sure with them each time regarding this kind of cargo.”

TERMINAL KNOW-HOW EXPOUNDED

Maersk Line works with hundreds of terminals across the market and determines in each case which would be the best terminal for this cargo, Knudsen continued. Its website will provide a quotation for the best product the line has available. “If our standard product is not able to cater to a load, for example if the origin terminal can’t handle it, then in those cases we have a salesperson who will reach out and suggest an alternative,

such as trucking the load to another terminal nearby. If we don’t see a solution, we have to say so.”

Maersk started building up its automated website in earnest about four years ago. Eighteen months ago it started pushing it as channel to use.

“For a long while we kept the option of providing email quotations.

Then, as these reduced to a trickle, we said now we move to the website as the only channel,” Knudsen said.

“We continue to invest in making the online experience better – anything from the speed of it to using historical data to make the offer better. That is what we are trying to achieve, to make logistics simpler for our customers and become a global integrator; exactly this kind of ease where we take some of the complexity out of it and enable customers to handle their supply chains in a simpler way and with less friction.”

Special cargo volumes are experiencing strong growth for the CMA

CGM Group, which is confident about this segment’s potential, Berninet said. “Having the capabilities of transporting oversized and heavy-lift cargoes allows us to provide an allin-one offer to our customers while taking large projects where most of the cargo is already loaded in standard containers,” he said.

CMA CGM has shipped highly technical projects, he added, which is a “testament to the skill of our organization and operational capabilities.”

Project cargo transport has included the maxi trimaran Banque Populaire IX, which was 32 meters long and 23 meters wide – as wide as the 900 20-foot equivalent unit vessel it was shipped on, operated on the Morocco-North East service.

This was a tailor-made study and shipment including a private port call at the trimaran’s home base in Lorient. CMA CGM has also transported a 44-meter-long crane jib from www.breakbulk.com BREAKBULK MAGAZINE 13

COVER STORY

Project cargo does take up a lot of space, so there’s a breaking point for profitability, said Sarah Schlüter of Hapag-Lloyd, but the container line is far from that point.

CREDIT: HAPAG-LLOYD

Shanghai to Algeciras, which pushed forward the line’s project cargo capabilities.

“The heaviest piece we shipped was a rock dumping unit (for the subsea sector), which weighed 457 tonnes and had dimensions 30 meters long by 11 meters wide by 20 meters high. This was from Rotterdam to Singapore, using floating cranes at both ends,” Berninet said.

14 BREAKBULK MAGAZINE www.breakbulk.com

BREAKING MINDSETS

Some project cargo forwarders still do not instinctively question container carriers for breakbulk rates because they are used to working with conventional heavy-lift and roll-on, roll-off carriers, Berninet noted. “So, keeping and raising awareness about CMA CGM’s service capabilities and offerings is a major aspect of our business development strategy.

“We are operating 285 shipping lines with 530+ vessels covering over 420 ports of call across five continents.

Thanks to this network and our ability to transship oversized and heavy-lift cargoes, we can offer to ship breakbulk and out-of-gauge cargo on all trades and almost all ports with regular and reliable sailings at reasonable transport costs. We also offer highfrequency and fast transit time, with a positive impact on the overall project financials by meeting construction timelines and delivery schedule.”

CMA CGM is developing all areas, from spot shipments for one case to three-year long-term projects involving containers, out-of-gauge and breakbulk cargoes covering various origins and trades.

One of the biggest challenges for container lines handling project cargo is timing – including coordinating a collection of containers that need to arrive at the same time and place as the out-of-gauge cargo.

Hapag-Lloyd’s Schlüter commented: “It is not just fitting the ISSUE 2 / 2021

COVER STORY

cargo physically. It is a whole lot of making sure of the initial plan, checking bases with a lot of different stakeholders, making sure the equipment is available, do we have space, are there going to be delays, transshipment issues; we need very close, practical hand-holding. Of course, it is best to know as early as possible that you will have this breakbulk piece coming, so you can make sure you arrange everything and have the shipment build into the overall planning at the terminal.

“We would arrange the unloading of the equipment with the terminal – checking if the terminal is capable of getting the piece on or off the ship – do they need a floating crane, do they have one, what weight can the floating crane handle; all this is checked before the quotation is done for the customer.”

Her view is that IT enhancements can support the whole process, but when it comes to breakbulk, every piece is individual: “You don’t have standard costing, because everything is unique. That does make the quotation process more complex and manual, and driving efficiency is difficult.” Having said that, Hapag-Lloyd is working on IT improvements when it comes to the costing process, and will be making costs available to customers through its website, she said.

Typical shipments by HapagLloyd have included generators and propellers. Recently the line moved a series of subway cars from Italy to Lima, Peru, over a period of one year, which Schlüter recalled as one of the most spectacular transports she had seen.

FREQUENCY AND RANGE

Schlüter is in no doubt of the advantages that container shipping can offer to shippers in this segment. “We provide frequency and more ports. If you have a project accompanied by standard equipment, we sell the overall package alongside our global network. If there are urgent containers that are part of the overall shipment and have to go at the same time, we have ways to communicate this in the system.”

Hapag-Lloyd does not have a

Container lines claim to have more ships and greater geographical coverage than traditional MPVs. CREDIT: SHUTTERSTOCK

COVERAGE AND FREQUENCY KEY Extensive port coverage and frequency of container services in core trading zones create opportunities for Swire Shipping to support project and out-of-gauge cargo business, according to General Manager Chris Robertson.

“As a container/MPP vessel owner, we find that we can meet the extensive requirements of projects in the regions where we operate, through the carriage of bulkier items in our purpose-built hatches, and containers or flatracks to match the demands of each project – specifically around the protection of weather-sensitive or higher value pieces,” he said to Breakbulk. “It would be a rare occasion if one of our vessels was not carrying cargoes specifically for the

purposes of plant or infrastructure development.”

For Swire Shipping, frequent arrivals and being able to offload cargoes at ports close to the project site allow for “greater cost control,” he added, while service reliability provides assurance to project management teams.

Swire’s container ships transport all varieties of project and specialized cargoes. “Examples would range from low-value commodities for construction, like timber and cement, to more specialized equipment like heavy duty machinery, large trucks, bulldozers and plant,” Robertson said. “At the very top end of the value chain, we have carried switch rooms, transformers and generators.”

specific target for share of noncontainerized cargo. The line wants to grow, but with the acknowledgement that project cargo does take up a lot of space.

“That is space that you lose [for containers], so there is a breaking point where it doesn’t make sense anymore,” Schlüter said, adding that Hapag-Lloyd is still far from reaching that breaking point.

One question that often comes up for container lines carriage of project cargoes is whether lines can

take last-minute oversized or overdimensioned cargoes. Practically, the answer is yes, Schlüter said, but in the current times, the answer is no. “Everything is possible, of course, but you don’t want to upset others and always commercial validation needs to take place.” BB Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors. www.breakbulk.com BREAKBULK MAGAZINE 15

CREDIT: SHUTTERSTOCK

COVER STORY

BY CARLY FIELDS

BACK IN THE BLACK

F

MPVs Finally Move Out of the Doldrums

or years, the multipurpose sector has clutched at the advent of a new year to bring it a longed-for upturn. The phrase “cautiously optimistic” was destined to be engraved on the tombs of MPV companies that fell in the many dark years. But has that tide finally turned? As the calamity that was 2020 rolled into 2021, MPV operators at long last found real cause for optimism.

At the end of February, Drewry’s Multipurpose Time Charter Index was at a high of US$6,800 per day, a rise of 4.2 percent from the previous month and up 5.6 percent from February 2020. Drewry expected the index to rise a further 4.4 percent in March to reach US$7,100 per day.

The index tracks one-year period charter rates across a basket of vessel types and sizes and forecasts the market movement over the coming month. The vessel types include breakbulk and project cargo ships.

16 BREAKBULK MAGAZINE www.breakbulk.com

Shipbroker Toepfer Transport’s MPP Index mirrored the optimism.

In February, its per-day time charter rate stood at US$7.146, the highest since March 2020. Provided by a panel of operators, Toepfer’s index gives a monthly time charter rate assessment for a 6-12 month time charter of a 12,500 deadweight-tons F-type MPV. Speaking to Breakbulk, Simon Guthrie, partner and shipbroker at Hamburg-based One World Shipbrokers, highlighted the wind sector as the MPV sector’s partial savior in 2021. He said “significant volumes” of cargo from the wind sector at the start of this year have propped up activity, volumes and sentiment for the MPV sector. This has helped to shift the market from oversupply to one where vessels are “in demand and space is valuable.”

“We have seen a shift in the market dynamic,” he added. “Owners have become selective over the cargoes they choose to take.”

CRASHING THE CONTAINER PARTY

Another spur has been the employment of MPVs for traditional containerized cargoes – an ironic shift given the MPV sector’s haranguing of container lines for “stealing” MPV cargoes in the past. Guthrie said that he had heard examples of cargoes being destuffed from containers to load onto MPVs. Chris Robertson, global market manager for Swire Shipping, noted that the pronounced shift away from containerizing of cargo back to traditional conventional carriers might be a short-term phenomena and a trend that may be reversed as market conditions correct themselves. However, he added: “It will be interesting to see how many customers acknowledge their exposures to the fragilities of the containerized market and opt to build contingency layers into their supply chains in order to maintain optionality with dedicated breakbulk/project carriers.”

ISSUE 2 / 2021

Drewry reported MPVs being chartered to carry empty containers for repositioning purposes, plus an increase in breakbulk demand for commodities no longer worth enough to stuff into containers. “This increased demand meant that January rates were even stronger than we had been expecting,” Drewry said.

Going forward, the analyst expects this trend to continue, especially as there is already a market expectation that the usual slowdown for Chinese New Year holidays will not take place this year.

“MPVs comparatively have seen their rates strengthen,” Guthrie agreed. “Carriers are seeing the opportunities to capitalize on a strengthening market and will rightfully expect long overdue rising freight rates. Even from One World Shipbrokers’ perspective as a fresh company to the market we are seeing varied and increasing numbers of prompt requirements daily,” he said.

Hannes Holländer, managing director of Toepfer Transport, added that there is no distress tonnage available anymore, and that operators and charterers are overbidding each other. “It is very difficult to find ships,” he said, speaking in late January. “Demand for MPV shipping is in parallel high; we hear from various operators that they are booked out for the next six to 12 months.”

SUPPLY BALANCE OUTLOOK

Positivity for the rest of the year and into 2022 leans on a slim orderbook for MPVs, estimated by Guthrie to be just under 2 percent of the world’s active fleet. “That equates to around 60 vessels,” he said. This compares with an orderbook of 6.6 percent for capesize bulk carriers and 4 percent for handysizes.

Data from Dynamar records that 68 ships were delivered in 2020, which is in line with the range of 60-70 ships delivered in previous years. In contrast, Dynamar consultant Frans Waals said, 81 vessels of all sizes were demolished. He added that while the order book currently

Drewry’s Multipurpose Time Charter Index $ per day

Estimate

7,000

6,500

6,000

5,500 Feb Apr 2019

Jun Aug Oct Dec Feb Apr 2020

Jun Aug Oct Dec Feb Mar 2021 Source: Drewry

Toepfer’s Multipurpose Index Time charter rate per day 7.5 7.2 6.9 6.6 6.3 6.0

Feb 2020

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan 2021

Feb

This index represents the monthly average time charter rate assessment established by a panel of operators, owners and brokers for a 6-12 month timecharter for a 12,500 tons dwt MPP/HL ‘F-type’ vessel Source: Toepfer Transport

seems “rather small,” there is plenty of newbuilding capacity available with short lead times for those thinking of taking the plunge.

Guthrie pointed up a predicted 2 percent fleet growth over the next two years in a sector where the average age of tonnage is getting older.

“All fleet operators will at some point need to renew their oldest vessels and

replace them as part of an ongoing cycle,” he said.

About 40 percent of the existing fleet was built before 2000, according to Dynamar. “I would not be surprised if many of them operate in local trades and in this way are capable of avoiding the strictest regulations and enforcement,” Waals said.

However, it is a fleet of two halves, www.breakbulk.com BREAKBULK MAGAZINE 17

COVER STORY

with the rest “relatively young,” and built since the turn of the century.

“The bulk of them were constructed between 2004 and 2013 and should be capable of continuing operating for quite some time without regulatory problems,” he added.

The aging MPV fleet, it seems, does not give too much cause for concern. Toepfer’s Holländer pointed out that an aging fleet implies increasing freight rates on the back of reduced supply – a bonus that will be well received by suffering operators.

The consensus is that while there are still plenty of workable heavy-lift ships that can be considered as well

past the average age of retirement, they continue to perform well and are highly regarded.

STILL CHALLENGES AHEAD

However, not everything in the MPV garden is rosy. There are challenges pending in pitting that aging fleet against the credit crunch and ever-increasing regulatory demands.

Dynamar’s Waals admitted to being concerned about project delays and cancellations and the knock-on effects of those. Added to which, he pointed out that the oil market continues to be very difficult and there is the lingering threat of pure car and truck

The Wind Lift I has a 500-tonne capacity and a high outreach offshore crane. CREDIT: SAL

SAL’S WIND SECTOR AMBITIONS With offshore work poised to significantly contribute to the robustness of the multipurpose vessel sector in 2021, operators are positioning themselves to capture that business.

A sister company to SAL Heavy Lift, SAL Renewables launched in January 2021 as a specialized provider for offshore wind services and installation.

Its fleet consists of the 2010-built dynamic positioning, or DP, jack-up crane vessel Wind Lift I with 500-tonne capacity, a high outreach offshore crane and a fully equipped accommodation block for up to 50 people. SAL Renewables also has access to parent company Harren & Partner’s offshore DP2 heavy-lift ship Blue Giant.

“Wind Lift I represents an important enhancement of our fleet. It

18 BREAKBULK MAGAZINE www.breakbulk.com

extends our scope of action to provide our customers with comprehensive, yet customized solutions,” said SAL Renewables’ Managing Director Heiko Felderhoff, describing the Wind Lift I as “like a Swiss Army knife.”

SAL Renewables is targeting the replacement and decommissioning of turbines as well as installation projects.

Martin Harren, managing director of Harren & Partner, described wind power as “a cornerstone of our business in the past few years,” adding that there continues to be significant projects coming up for tendering in that sector. “The world’s demand for energy is higher than ever before, and a major energy transition is currently underway.

The projects resulting from this change are crucial to our business,” he said.

carriers shifting more towards breakbulk cargoes as global vehicle sales continue to languish.

There is also the shifting regulatory landscape to consider, a factor that is deterring MPV operators from placing replacement orders too early.

Ships ordered today will, within their lifetime, fall within the International Maritime Organization’s 2030 carbon intensity reduction targets. A level of reticence on MPV ordering is understandable with the jury still out on what will be the shipping fuel of the future.

Guthrie hopes that the lack of newbuilds will give the market a chance to capitalize on rate increases which could then be channeled into R&D on innovative newbuilds in the MPV sector. Short term, though, MPV operators will simply be content to move from below-breakeven rates to a profit. “The sector has suffered many years of depressed income and for now it is a question of steadying the ship following a recent period of fleet consolidation,” Guthrie said. “There is no doubt a positive feeling in the MPV market. Perhaps these are the green shoots of change and experiencing a tonnage supply issue and increasing rates is what all have waited for.”

Looking ahead, demand for large cargoes will continue to be on the whim of macro influences, however optimism remains that the sector will continue to strengthen throughout this year. The accommodating nature and versatility of MPVs will be its gift as the world recovers from the pandemic.

“There will always be a need for these vessels and the expertise their operators command,” Guthrie said. “No MPVs are truly the same. Whether it be crane strength, carrying capacity, speed or fuel consumption, there are never truly two identical vessels. By this definition there are MPVs ready to accommodate the current supply of varied breakbulk and project cargoes.

“At this rate it would be hard to not see MPVs benefitting from a rising market well towards the end of this year.”

Carly Fields has reported on the shipping industry for the past 21 years, covering bunkers and broking and much in between.

ISSUE 2 / 2021

COVER STORY

SAL, JUMBO PLAN JOINT VENTURE Breakbulk specialists SAL Heavy Lift and Jumbo said they plan to form a joint venture, which stands to dominate the heavy-lift capable segment.

The two partners aim to combine a large part of their fleets as well as merging engineering and commercial activities.

“The Jumbo-SAL-Alliance would be focused on gaining logistical efficiencies, such as joint fleet operations, and benefits for its customers, such as increased flexibility and offering customers worldwide a carefree logistics solution for both breakbulk and outsized cargoes,” a spokesperson for SAL said.

Concrete details about the joint venture remain undisclosed, but the partners have stated a goal to improve sustainable transport capacity and growth.

The venture is subject to clearance by the Bundeskartellamt, the German

competition authority, as well as Dutch incompany legal requirements.

Netherlandsbased Jumbo provides heavylift and project cargo services worldwide and operates a fleet of nine heavylift vessels, four with lifting capacity of 1,800 tonnes and a further two with 3,000 tonnes lifting capacity.

Hamburg-headquartered SAL Heavy Lift operates a fleet of 22 heavylift vessels, most with lifting capacity up to 900 tonnes and six vessels with combined crane capacities of 1,400 tonnes or more. SAL is a member of the Harren & Partner Group.

Land available adjacent to the Houston Ship Channel!

Last year, SAL acquired a “major stake” in cargo shipping line Intermarine, expanding its offering in the Americas and strengthening crossAtlantic trade. Intermarine operates as an independent brand within the SAL Heavy Lift Group.

Both companies intend to maintain their current headquarters in Netherlands and Germany. BB

Choose Port Houston for your cargo property needs.

Various lot sizes available Flexible spaces, suitable for high, wide, heavy, or vehicles FTZ designation 20,000 linear feet of adjacent waterfront dock Skilled labor for your cargo Competitive rates Must move cargo through the Houston Ship Channel to qualify.

Real Estate Brokers Welcome

For more information:

713.670.2567 www.porthouston.com/real-estate

realestateinfo@porthouston.com

www.breakbulk.com BREAKBULK MAGAZINE 19

ENERGY UPDATE

TIDE TURNING FOR US WIND

CREDIT: SHUTTERSTOCK

Biden Proposals Could Unlock Offshore Industry

BY SIMON WEST

U

.S. President Joe Biden’s fast and furious start to his first term, marked by a slew of executive orders aimed at tackling the climate crisis, will have given project logistics plenty to chew on.

The industry’s legendary coolheaded approach to business means talk of energy revolutions and green new deals is unlikely to cause alarm, but if Biden is able to overcome a divided legislature, and, crucially, win a second four-year term in 2024, then the U.S. energy landscape could look very different by the end of the decade.

In the election run-up, Biden had vowed to turn the U.S. into a clean energy superpower, unveiling an economy-boosting US$2 trillion infrastructure proposal targeting carbon-free electricity by 2035 and net-zero emissions economy-wide by 2050.

Within days of taking office on Jan. 20, he began putting his money where his mouth was, rejoining the Paris climate agreement and calling for new regulations on carbon sequestration, 20 BREAKBULK MAGAZINE www.breakbulk.com

the electrification of the federal fleet, and much more.

The president also took a swipe at fossil fuels. New leasing on federal lands for oil and gas development was frozen pending a review, the permit for the Keystone XL crude pipeline revoked and fossil fuel subsidies cut.

“We have already waited too long to deal with this climate crisis. We cannot wait any longer,” Biden said on Jan. 27. “It is time to act.”

For project cargo and heavy-lift specialists, a pledge to expand renewable generation and build more clean power plants on public lands will boost cargocarrying opportunities, especially in wind with its bulky components and giant turbines.

OFFSHORE WIND PROMISE

Onshore wind is big business in the U.S., with capacity already exceeding 120 gigawatts, or GW, according to the Energy Information Administration, or EIA. Another 12.2 GW is slated to come online this year, with the states of Texas and Oklahoma accounting for more than half of new capacity.

The offshore wind sector though is barely out of the starting gate. Just one project is up and running in U.S. waters – the 30-megawatt, or MW, five-turbine Block Island Wind Farm off the Northeast state of Rhode Island.

With so much potential, the administration has set a goal of doubling U.S. offshore wind leases in public waters by 2030, an expansion that could generate billions of dollars in investments, said industry lobby group the Business Network for Offshore Wind, or BNOW. A sticking point delaying buildout, according to the BNOW, is the federal government’s uncertain leasing and permitting process for offshore projects, which is managed by the Department of the Interior’s Bureau of Ocean Energy Management.

Delays have led to a backlog in rubber-stamping construction and operations plans for several large-scale facilities along the East Coast, whose shallow waters and a gently sloping continental shelf are ideal for installing fixed-bottom platforms for turbines.

ISSUE 2 / 2021

The auctioning of offshore wind lease areas, last carried out in December 2018, also needs to be stepped up, the BNOW said. As part of their clean energy commitments, East Coast states have pledged to procure 30 GW of additional offshore capacity by 2035, but federal authorities have so far leased enough acreage for just 21 GW. Some 11.6 GW of capacity has already secured a financial mechanism.

While light on specifics, Biden’s executive order on offshore wind did include an instruction to his Department of the Interior to review siting and leasing processes, a call welcomed by the industry.

“We will see how the details shake out, but this is a very encouraging sign that the administration is working to address these issues,” Brandon Burke, director of policy at the BNOW, said to Breakbulk.

“Ideally, the U.S. federal government would focus on advancing construction and operations plan approvals for the 10 utility-scale offshore wind projects in the queue, increasing transparency and predictability in the permitting process and creating consistency and frequency in leasing expansion.”

READY FOR THE GREEN LIGHT

Developers are also upbeat on the government’s commitment to offshore wind.

Danish energy group Ørsted, operator of the Block Island Wind Farm, has been awarded almost 3 GW of offshore capacity along the U.S. East Coast through five projects, but permitting issues and the Covid-19 pandemic have delayed development.

The biggest of those is Ocean Wind off the coast of southern New Jersey, one of the largest offshore wind farms in the U.S., with 1.1 GW of installed capacity. Commercial operations are expected to begin by the end of 2024.

“In the U.S. the permitting processes had been challenging in the last period. But we’re seeing early signs that make us more optimistic now,” CEO Mads Nipper said in a conference call with investors on Feb. 3.

A new 30 percent investment tax credit for offshore wind facilities that begin construction before Jan. 1, 2026, passed

by Congress in December, would also benefit the fledging industry, Nipper said.

Project cargo specialists who cut their teeth supporting the buildout of offshore wind in Europe are now ready to bring their expertise stateside.

“The shift towards renewBolloré Logistics handled two 300,000-pound CO2 removal bed vessels for a chemical plant in Mont able energy can be Belvieu, Texas. CREDIT: BOLLORÉ LOGIS­TICS felt everywhere, but the industry is JONES ACT CHALLENGES especially excited about the U.S. right United Wind Logistics and other now,” said Christoph Puschmann, non-U.S. shippers will still have to managing director at United Wind Logistics, a Hamburg-based ship owner contend with the Jones Act, which Puschmann said is creating difficulties focused on offshore wind. for stakeholders. In a “Buy American” The company was contracted to executive order signed on Jan. 25, transport turbine foundations for the Biden reaffirmed his support for 800-MW Vineyard Wind project off the century-old law that says goods the coast of Martha’s Vineyard, the and equipment can only be shipped first utility-scale offshore wind farm in between U.S. ports by vessels that the U.S. That contract was cancelled are built, owned and manned by U.S. amid continuous delays, in part due to citizens. concerns about the facility’s impact on The act was extended last year commercial fishing, but Puschmann to cover offshore renewable energy said he was confident of signing new production, prohibiting foreigndeals with the developers for the growflagged vessels from transporting ing market. cargo between American ports and Vineyard Wind, a 50:50 joint venwind farms located in U.S. waters. ture between Avangrid Renewables and Keeping to the rules means Copenhagen Infrastructure Partners, shippers such as United Wind resubmitted its construction and operaLogistics are forced to either tion plan in January after an initial contract U.S.-flagged boats to move application was cancelled by the Trump components from the hub port to administration in December. The projthe installation vessel, or take cargo ect is slated for start-up in 2023. directly to the installation vessel “It seems the difficulties surroundthemselves from bases in Europe or ing the fisheries are dealt with and that Asia, bypassing the need to dock in big projects are starting to take off,” the U.S. Puschmann said. www.breakbulk.com BREAKBULK MAGAZINE 21

ENERGY UPDATE

flow of project cargo imports, exports and deliveries to U.S. jobsites,” said Dennis Mottola, a global logistics consultant and former corporate logistics manager at Bechtel.

Project cargo executives speaking to Breakbulk also welcomed the planned investment, which Biden wants to deploy in his first four-year term. Leonard Headrick, director of industrial projects at Bolloré Logistics, said roads in the U.S. had been “neglected,” while Jim Shapiro, director at Baltimore-based Thunderbolt Global Logistics, said an overhaul of inland waterways was a priority.

“A lot of breakbulk cargo moves on barges to the inland, so it is as important as anything else in this country to have the inland waterways fully operational, properly dredged and properly maintained,” Shapiro said.

HURDLES IN CONGRESS

Biden’s climate-driven agenda will likely face obstacles in Congress.

Although executive orders require no Congressional oversight, without legislative action, many of the new directives could be easily reversed by future administrations.

The Democrats’ control of both chambers of Congress gives the president leverage, but a 50:50 split in the Senate – with Vice President Kamala Harris holding the tie-breaking vote – means passing major legislation will be a challenge. And if the Democrats slip up in midterm elections in 2022, Biden could be looking at a two-year window to get his proposals approved.

“If he loses one seat in the Senate, he loses his majority, and that will be more difficult for him to get his CREDIT: BOLLORÉ LOGIS­TICS

“This is quite challenging though because wherever offshore wind plants are built, it is not the best weather,” Puschmann said.

U.S.-based breakbulk movers, meanwhile, working on offshore and onshore projects, will be buoyed by Biden’s pledge to earmark some of his US$2 trillion stimulus plan for the country’s aging transport infrastructure.

The previous administration’s own US$2 trillion infrastructure proposal fell apart in 2019 after Trump reportedly refused to work with Democrats while the investigation into Russian interference during the 2016 election was underway.

“The industry has been calling for upgrades to highways, inland waterways, bridges, ports and access to port facilities for many years to enable the

“The industry has been calling for upgrades to highways, inland waterways, bridges, ports and access to port facilities for many years to enable the flow of project cargo imports, exports and deliveries to U.S. jobsites.”

– Dennis Mottola, Bechtel

22 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 2 / 2021

“A lot of breakbulk cargo moves on barges to the inland, so it is as important as anything else in this country to have the inland waterways fully operational, properly dredged and properly maintained.”

– Jim Shapiro, Thunderbolt Global Logistics

programs going. So there is a lot at stake in the first two years,” Shapiro said.

Many in Congress are concerned about the impact of energy transition on the economy and jobs, with Biden’s actions such as the cancellation of the Keystone XL pipeline attracting criticism from industry groups. The 1,179-mile pipeline owned by Canada’s TC Energy was designed to ship some 830,000 barrels per day of heavy crude oil from Alberta to Nebraska, then on to refineries on the U.S. Gulf Coast. The project had been revived by Trump in 2016.

American Fuel and Petrochemical Manufacturers, a downstream trade group, said revoking the permit for Keystone XL would jeopardize the project’s “economic, environmental and energy-security gains.” The pipeline would provide more than 10,000 high-paying union jobs during its construction phase, the AFPM said.

“The executive order halting Keystone XL is a good example of the challenges the industry is likely to face,” John Thieroff, vice president and senior analyst at Moody’s Investors, told Breakbulk.

“Pipelines have been coming under rapidly increasing pressure over the past decade, and that is likely

to grow further during the current administration. Preventing the movement of oil and gas once it is produced is often easier than preventing it from being drilled and developed, but you can effectively achieve the same result.”

‘DELAYING THE INEVITABLE’

But Keystone XL aside, no other infrastructure permits have been revoked. And Biden’s 60-day freeze on new oil and gas leasing on federal lands affects just 22 percent of total U.S. oil production and 12 percent of natural gas production, according to the EIA. The pause does not curb drilling on private or state lands.

The Department of the Interior said oil companies had stockpiled millions of acres of leases on public lands and waters following a fire sale

by Trump in his final days of office.

Onshore and offshore, the oil and gas industry is sitting on some 7,700 unused, approved permits to drill.

Artem Abramov, partner and head of shale research at Rystad Energy, said major shale producers such as EOG Resources, Devon Energy and Occidental Petroleum could maintain activity at prospective assets in Delaware and New Mexico for another three to six years.

CREDIT: BOLLORÉ LOGIS­TICS

“Then, they will be able to reallocate capital and rigs to adjacent state and private leases and maintain lowcost activity for another 8-10 years in New Mexico. Finally, they have plenty of options in their portfolio on the Texas side of the Permian Basin, so long-term implications for them would be fairly marginal if the ban ends up being permanent.”

The impact of Biden’s actions on upstream activity may not be felt for some years, but the slow-burn transition to more sustainable forms of energy has begun, and for project logistics, this will spell more opportunities.

Were the president to renege on his campaign promises now, he would just be delaying the inevitable.

“The future holds deep changes and we have to be prepared for what is to come,” said Daniel Berasategui, CEO of Noatum Project Cargo.

“While we continue to serve oil and gas companies, we are also increasing our renewable energy services portfolio with a greater focus on offshore wind.

As the saying goes, when one door closes, another opens.” BB Colombia-based Simon West is a freelance journalist specializing in energy and biofuels news and market movements in the Americas. www.breakbulk.com BREAKBULK MAGAZINE 23

MARKET SPOTLIGHT

The 19,000 dwt S-Class AAL Dalian unloads 38,950 tonnes of hydrogen modules in Texas and New Orleans. CREDIT: AAL SHIPPING

CHANGE AFOOT IN US BREAKBULK SECTOR Ocean Shipping Poised for 2021 Growth

T

he U.S. market has seen a record number of multipurpose vessel, or MPV, calls in 2020, despite the havoc caused by the global pandemic and the trade war between China and the U.S. AAL has operated at least one sailing a month through the region and frequently more than one a month.

With a new U.S. administration in the White House, our faith in studies forecasting total annual investment of US$60 billion up to 2028 is increasing.

The incoming administration’s commitment for a strong political push towards a greener environment is good for the wind industry, and makes an interesting contrast to the Michael Morland last four years of AAL political leader24 BREAKBULK MAGAZINE www.breakbulk.com

BY MICHAEL MORLAND

ship in the U.S., where much noise was made about supporting the fossil fuel and coal industries.

Because of the capital market nervousness over the fluctuation in oil prices, the U.S. oil market has not met the 2020 projections of investment of US$190 billion, and liquefied natural gas facilities have been hit hard with uncertainties surrounding funding issues on the back of a lack of long-term contract purchases at sustainable levels.

Despite this, throughput in 2020 increased our market share and sailing regularity. Our view is that large projects with billion-dollar capital expenditure have a very long lead time. The gap between the final investment decision and the order and manufacture of highly engineered equipment is usually counted in years rather than weeks or months. Therefore although some project equipment manufacture has been delayed by the Covid-19 pandemic, most projects continue to be reasonably unaffected by Covid-19 at this stage.

STABILITY FOR OIL PRICES

Of course, there are other factors which are even more vital to the development timeline of such projects, the most important of which is the price of oil. With the price, stability and predictability of oil being a baseline for calculating project profitability, many new oil and gas projects have been pushed out in time. We expect that this will create a gap or void in the project pipeline that will affect cargo flow. This void is already starting to become visible in the smaller projects and cargoes with a shorter lead time. As a result, the longer the capital market decides to sit on the fence on investments in the oil and gas sector, the greater the void will be in terms of starting up new projects.

To illustrate this, when looking for “part cargoes” or “completion cargoes” to top-up some of our voyages, we have clearly noticed a significant drop in the volume of smaller cargoes in the market usually made up of smaller equipment, steel cargoes for multiple industry uses ISSUE 2 / 2021

and other more regular cargo flows.

This decrease is directly related to a drop in demand in the U.S. That said, in the oil and gas sector, markets are recovering steadily and becoming more predictable and robust. While some projects and capital investment decisions have been postponed, it is likely that recovering and steadying oil prices should result in positive project investment decisions in the second half of 2021. Nevertheless, these projects will not generate cargo movement for another year, so the effect will not be tangible in the short term.

As for wind energy generation, this sector’s demands have not waivered during the Covid-19 pandemic and the forecast is that demand will remain strong as long as the U.S. continues to invest in clean energy. The trend here is shifting towards larger and larger wind turbines.

For smaller project cargoes and other breakbulk, we foresee that once the Covid-19 pandemic subsides we will see an uplift in cargo volumes driven by companies trying to catch up with time lost and replenishing

stock levels. Nevertheless, this could be months away and will very much depend on the overall economic impact of the Covid-19 pandemic in the U.S. – and indeed worldwide – and U.S. trade negotiations, which will hugely affect supply chains.

BIDEN’S PLANS

I would also like to make some comments on how the president and his administration’s expected policies might impact the breakbulk trade climate. We see President Joe Biden looking to make more efforts in the Covid-19 fight. This could mean lockdowns in the short term, but an improvement of the situation in the long run. Coupled with increasing vaccinations, we hope that the U.S. will slowly improve in 2021 both from a population health and investment health perspective.

We believe this recovery has already been priced in by the markets, and the stability and predictability of an administration that takes on these issues will be welcomed by the finance and investment markets. We might see optimism that results in positive final investment

decisions on some of the pending projects.

Biden is known for wanting to take the U.S. more rapidly towards the green transition that is happening elsewhere in the world. This will no doubt be a propellant for the wind industry and a launchpad for future projects, beyond what has already been committed to by previous administrations.

Another element that is of great interest is how Biden will address the country’s strained relationship with China, and how trade negotiations will shape up going forward. Although it is anticipated that the Biden administration will continue to take a stern line towards China, it is also expected that the negotiation climate will be conducted in a more productive way.

Undoubtedly, an improvement in trade relations between the U.S. and China would be a huge positive for the breakbulk shipping industry as volumes will increase and demand for tonnage will grow. BB Michael Morland is general manager for AAL Shipping in the Americas.

The 31,000 dwt A-Class AAL Melbourne transporting 38 yachts from the U.S. to Europe.

CREDIT: AAL SHIPPING

www.breakbulk.com BREAKBULK MAGAZINE 25

CARGO LENS

BY MICHAEL KING

DIGGING DEEPER Tunneling Growth to Serve Project Movers Well

C

ovid-19 might have shut down large swathes of the global economy, but the tunneling market continued to grow in 2020, albeit at a slower pace than pre-pandemic.

With workplace restrictions expected to be eased this year as vaccines roll out, many stalled projects are ready to receive a green light, increasing demand for the specialist services required for handling the heavy and outsized cargo generated by major tunneling developments.

Olivier Vion, executive director of the International Tunnelling and Underground Space Association, or ITA, told Breakbulk many tunnels in Europe had suffered delays in 2020, including the Thames Tideway Tunnel,

a 25-kilometer “super sewer” development in the UK, and the Grand Paris Express scheme in France, which is designed to improve transport links between Paris and its suburbs.

“We haven’t noticed a reduction in the volume of inquiries, however we have seen a number of jobs and projects pushed back due to the current pandemic,” confirmed James White, commercial manager of UK-based specialist ALS, one of the contractors on the Thames Tideway Tunnel scheme.

In South America, meanwhile, funding shortages have held back tunnel schemes in the last year, while in the U.S. many projects were put on hold either for political or Covid19-related reasons, Vion said.

He added that he expects markets to further pick up in 2021, and noted that China, the world’s largest tunneling market, barely paused its multiple tunnel developments last year, helping keep tunnel-boring machine manufacturers busy as other markets slowed.

“Over 50 percent of the current market is in China, and they had a positive economy even in 2020,” he said.

Measured by project expenditure, last year the global tunneling sector did not expand at the 8 percent to 9 percent per annum rate enjoyed pre2020, but ITA expects full year data to reveal reasonable growth with upside potential this year. “Globally, 2020 didn’t have the usual growth of the tunneling market at maybe 2 percent to 3 percent, and we are seeing progress already this year, maybe 3 percent to 4 percent,” Vion said. “The market is still growing, but it has slowed.”

Martin Herrenknecht, CEO and founder of Herrenknecht, or HK, one of the world’s leading suppliers of tunnel-boring machines, or TBMs, told Breakbulk he was confident the sector “will emerge even stronger after the global coronavirus crisis.”

RETURN TO NORMALITY

HK’s Martin Herrenknecht expects the tunneling sector to emerge from the pandemic “even stronger.” CREDIT: PAVIMENTAL

26 BREAKBULK MAGAZINE www.breakbulk.com

ALS’s current tunneling projects are predominantly UK-based, including Thames Tideway and Crossrail, an underground rail development in London, but the company has previously managed multimodal overseas shipments for the Barcelona Metro and flood relief tunnels in Canada and Argentina.

Jill Peacock, group marketing manager at ALS, said the “sheer size of the cargo” was usually the most demanding tunnel logistics challenge.

“For example, if the cargo is too large ISSUE 2 / 2021

The 15.87-meter diameter Herrenknecht tunnel boring machine is the largest built and used in Europe, beating the previous 15.5-meter diameter record. CREDIT: HERRENKNECHT

to move for the full journey by road, we often have to look at a multimodal solution,” she said. “This can include a combination of transport by road as well as utilizing barge and shipping networks.”

As the market returns to some sort of normality, ALS’s White did not expect the pandemic to have drastically changed the requirements of those who procure specialist transport logistics support for tunneling developments.

“Equipment operators and manufacturers are still looking for the most cost-effective yet experienced partners to assist with their logistics, although we would say that the market is a little bit more competitive,” he said.

“However, there aren’t a great deal of logistics providers that have the experience needed to move tunneling equipment safely and cost effectively.”

AUSTRALIA ON THE UP

Fred Mohammed, group CEO of Australia-based Tranz Logistics, a specialist in tunnel logistics, said domestic inquiries had ceased entirely

during the country’s strict lockdowns.

However, demand is returning, and he expects more tunnels to receive the green light this year. “Inquiries are picking up,” he said.

Tranz Logistics usually works alongside international forwarders and 4PLs such as DHL, Agility Logistics, Toll and DB Schenker on major ventures. They handle the overall freight contracts including international elements for tunnel builders such as Lendlease, CPB Contractors, John Holland, Bovis and Clough Group, with Tranz Logistics then subcontracted to provide on-site logistics and deploy its range of specialist handling equipment.

In November, Tranz resumed work on the Melbourne Metro upgrade scheme, one of many airport and rail tunneling projects the company has been contracted with in recent years.

“We are transporting 200 oversize, 4.5-meter-wide tunneling frames, which we move 50 kilometers to the site using Tranz trucks,” Mohammed said. “Each load requires special government permits and two pilot escort

cars to warn traffic the loads are coming through. The pre-frames are for inner walls for the tunnels to concrete precast.”

TBM MANUFACTURER SHIPS

Germany-headquartered HK supplies TBMs from three global manufacturing and assembly locations, with its footprint supported by three additional sales and service locations in China. In June last year the company, which boasted sales of €1.2 billion in 2019, supplied the largest TBM ever built and used in Europe. The machine, with a diameter of 15.87 meters, completed 7.5 kilometers of tunneling construction through the Italian Apennines.

The TBMs HK produces for its global clients are tailor-made to specific requirements and ground conditions. “Each machine is specific, even if some specs are common to all of them,” said an HK spokesperson.

“The TBMs arrive by convoys to the site from the manufacturing plant and are mounted directly in the starting shaft. Some transports are just normal www.breakbulk.com BREAKBULK MAGAZINE 27

CARGO LENS

trucks; some of them exceptional loads that have been accompanied by police at different points.”

HK is a major supplier of the Brenner Base Tunnel development.

Due for completion by 2028, it will create the longest underground rail link in the world and help shift huge volumes of trans-Alpine north-south traffic from road to rail. As well as supplying hard rock TBMs for the project, HK is also providing a range of material logistics services critical to the tunnel construction process.

According to HK, one of its TBMs has already successfully completed boring of the exploratory tunnel on the Austrian side of the project.

Three TBMs are in operation in Ital, and HK subsidiaries are also involved in upstream and downstream processes, for example supplying segment molds and navigation systems.

HK will also deliver 19 TBMs and one vertical shaft sinking machine for the Grand Paris Express development, which is served from its manufacturing site at Schwanau, located near Strasbourg. Transit times to Paris vary from one day to up to several days depending on delays and permitting for oversized loads.

Above: The 25-kilometer Thames Tideway Tunnel suffered delays in 2020. CREDIT: ALS Below: In June, excavation on the Santa Lucia tunnel through the Italian Apennines was completed using the Herrenknecht tunnel boring machine. CREDIT: PAVIMENTAL

RHINE TO THE WORLD

Oversize and heavy-lift TBM items manufactured by HK at Schwanau are also shipped on the Rhine River via the port of Kehl to northern European deep-sea terminals and, from there, to locations around the world by heavy-lift vessel.

One of HK’s partners for specialist transport out of its Schwanau plant is MSG Krandienst, or MSG. Based on the River Rhine at Kehl in Germany within easy reach of deepsea terminals served by ocean-going heavy-lift and general cargo vessels at ports such as Rotterdam, Antwerp and Zeebrugge, the company offers a range of heavy-lift truck, crane and barge shipping options.

“Our work stops when the Rhine barges arrive at the deep seaport,” Gerhard Nückles, project manager, told Breakbulk. “There we put it on land for the shipper, or we arrange a direct transshipment to ocean-going vessels which then ship the cargo to its final destination.”

28 BREAKBULK MAGAZINE www.breakbulk.com

Nückles said MSG was often consulted about TBM contracts two or three years before a development was due to start, as tunnel suppliers and their customers attempted to build transport costs into budgets early.

However, he said the specifications, sizes and timing of any given contract were frequently subject to significant changes as the scheme progressed.

“That’s the business and you adapt,” he said. “There’s a point where you say, ‘No, sorry, this can’t go,’ but I would say for 99 percent of cargo and special demands we find the solution. It can cost money, it can cost no money, but the main point is to get it moving.”

Nückles told Breakbulk he was optimistic that the tunnel logistics sector would thrive as the global economy recovered from the pandemic.

“We’ve had years when we had more work than in 2020, but we do a lot of different projects with our cranes and heavy cargo trucks, so Covid hasn’t been so dramatic for us,” he said. “There were some postponements because of lockdowns in Europe, including in Paris, which was closed last year, so that was difficult for our trucks. It was very immediate with no warning from authorities and the police closed it all down and people onsite had to go home. But after a few weeks it was back to normal. We’re hoping for a better and a smoother 2021.” BB Michael King is a multi-award winning journalist as well as a shipping and logistics consultant.

ISSUE 2 / 2021

The Annual Energy Issue THE RIGHT EDITORIAL ENVIRONMENT FOR PROJECT CARGO & BREAKBULK COMPANIES Energy projects represent the majority of new business contracts for our industry.

Advertise in Breakbulk magazine’s Annual Energy Issue to position your company as a major player in this market.

Distribution Reach 15,000+ print and digital readers, including 2,000 cargo owners who represent the world’s top oil & gas and renewables firms.

Bonus!

Buy a full-page advertisement in the magazine and receive a full month of ads in BreakbulkONE newsletter for free.

Deadlines Reserve your ad by Friday, 16 April 2021 Ad materials due by Tuesday, 20 April 2021 Publishes Friday, 30 April 2021 Featured Exhibitors Jumbo, BBC Chartering, dship Carriers, Hapag-Lloyd

WHAT’S INSIDE ISSUE 3 / 2021 Energy Project Outlook With the pandemic accelerating the energy transition away from fossil fuels, project cargo needs are shifting. Breakbulk investigates where the sector’s specialists should look to for energy-related infrastructure demand in the medium to long term.

Future Fuels Without a clear direction on the dominant shipping fuel of the future, MPV and heavy-lift operators are reluctant to invest in new tonnage. Breakbulk looks at the forerunners and the left field fuel options.

Emerging Markets: Hydrogen To meet ambitious environmental targets, shippers are signing up to projects that replace fossil-based hydrogen with hydrogen produced from renewable energy.

Carbon Capture Spurs New Project Activity What opportunities will investment in carbon capture and sequestration infrastructure bring?

Circular Wind Decommissioning wind farm components offers big opportunities in Europe.

Mexico Jettisons Renewables in Favor of Fossil Fuels Cancelled auctions and dozens of wind and solar projects put on ice as fossil fuels take the stage.

Exceptional Transports » Transport and installation of an FPSO mooring system in the East Mediterranean set sets records for Jumbo. » dship Carriers moves 750-tonne pile installation frame from Rotterdam to Taiwan. » How a year-long project to move 320,000 tons of wind turbine components is driving Asian wind energy ambitions.

Visit breakbulk.com/page/ advertise

INTERMEDIARIES

BY PAUL SCOTT ABBOTT

TRAINING RETOOLED

Industry Educators Expand Horizons in Pandemic-impacted Environment

A

s the world optimistically looks to emerge from the Covid-19 pandemic, leaders in education and training of breakbulk and project cargo professionals are seizing opportunities to enhance their offerings, including via increased online learning.

Whether the views of several such gurus, as expressed to Breakbulk in separate interviews, represent unwarranted sanguinity or a genuine new and improved reality remains to be seen. But one thing is clear: The learning environment is changing, and those addressing students – whether in person or by way of video conferencing – hope it is for the better.

“There is a magical opportunity for both industry professionals and students to use the transition from a

Covid world to a widespread-vaccinated world to retool skill sets and to take the challenge to develop new ones,” said Margaret Kidd, director of the Supply Chain and Logistics Technology Program at the University of Houston.

“We took the chaos of a Covid world to redefine and pivot how we offered professional certifications, and launched a number of unique collaborative partnerships with global professional organizations,” said Kidd, who has a dozen years of academic experience in the logistics realm, including leading the supply chain program in the Houston school’s College of Technology since 2018.

Over the past year, the school has forged partnerships with such groups

as the Chartered Institute of Logistics and Transport, or CILT, the National Customs Brokers & Forwarders Association of America, and the Association of Ship Brokers and Agents.

Port Houston announced in December that it is supporting an online learning platform for CILT certificate courses with a US$50,000 grant.

ACADEMIA PARTNERING

Among industry professionals collaborating with Kidd is Marco Poisler, chief operating officer of global energy and capital projects at Houston-based global project cargo logistics firm UTC Overseas. As an adjunct professor, he teaches two courses at the University of Houston. One, which he designed, focuses on transportation, economics and public policy.

A return to face-to-face learning is expected.

CREDIT: SHUTTERSTOCK

30 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 2 / 2021

The second, a practicum, taught with Kidd, deals with leading-edge industry issues, from biosecurity to international commercial terms.

Poisler is bullish on increased use of online learning, as spurred by the Covid-19 pandemic, and its merging with traditional classroom instruction.

“I’m all for this hybrid format,” Poisler said, noting that some of his current students live far beyond the U.S. “It opens an entire new world to go global. You’re not limited to the four walls. The flexibility is just amazing, but some of the interaction is not there with absolute lack of eye contact, and so participation is hard to measure.”

Nonetheless, Poisler has been able to take a personalized approach, including in addressing what he termed the biggest challenge for students and professors alike – “how to help the students in finding employment in this market with so many companies struggling in the present environment.”

Beyond furnishing practical instruction, Poisler said, he has assisted several students in successfully preparing for job interviews.

Real-world knowledge imparted

by Poisler has included proposing a series of best practices and innovative technologies to mitigate impacts of Covid-19 upon the logistics industry.

Such measures include enhancing supply chain visibility, appropriately deploying drones and autonomous vehicles, and geographically diversifying suppliers and manufacturing locations.

DELIVERY SHIFTING

Kidd said she believes the online element will continue to play a role in Supply Chain and Logistics Technology Program teaching, but she does see a shift this year back to more inperson instruction.

“I anticipate moving from 100 percent online in 2020 to 70 percent online in spring 2021 and, by fall 2021, offering 25 percent to 35 percent of our courses online,” she said.

“Lessons learned during Covid provided anecdotal evidence for the

Marco Poisler

John Hark

UTC Overseas

Bertling Logistics

need to balance offering both faceto-face and online courses to our students, many of whom work parttime or full-time,” Kidd added.

Regardless of delivery mode, Poisler remains convinced that it is imperative U.S.-based education for providers of breakbulk and project cargo logistics centers on maintaining such work as a profession, not merely a vocation.

“We need to replicate what Europeans, especially Germans, do,” Poisler said. “We’re selling knowledge to our clients, and, when we lose sight of that, we’re risking that work in our industry is not a profession.”

OPPORTUNITIES GROWING

Another project cargo business veteran also wearing a professorial hat is John Hark, who shares in the belief that the Covid-19 pandemic is triggering expanded learning opportunities.

“We will see more training and education opportunities for both professionals and university students,” said Hark, who, in addition to being director of Texas-based Bertling Logistics, has since 2002 been an adjunct professor at Texas A&M University, from which he graduated in 1989 with a degree in maritime administration.

The pandemic has opened up opportunities for training via the online environment and many professionals, including Hark, have availed themselves by participating in programs during this time, he said.

“I see this continuing as we go forward,” Hark said, noting that online offerings have facilitated engagement

for a diverse range of participants throughout the U.S. and the world.

“Professional development programs and universities have seen increasing interest in education and training and offer some courses even for free to raise the interest of new potential students and trainees.

“As the industry emerges from the pandemic and firms start hiring again, we will see a renewed increase in the need for training, development and future talents in the breakbulk and project logistics world,” he said.

“This will open up opportunities for which universities and firms need to be prepared. We will have a varied mix of newcomers to the industry needing training, as well as experienced candidates with a need to brush up on their skills.”

WEARINESS SETS IN

Whereas students and teachers alike seemed to grasp the urgency of making an online learning environment work as classes moved beyond the 2020 spring break, according to Hark, ennui began to become widespread over the summer and into the fall semester.

“It was disappointing to see this manifest itself in the form of a lack of engagement with some students who struggled as the fall semester started and progressed,” he said, observing that this sense of boredom seemed to impact professional development courses and master’s programs less than undergraduate programs.

“I think we will see an increase in the utilization of online courses, knowledge sharing and training for university master’s programs and professional development programs,” Hark said, “but, for undergraduate and primary schools, we have seen that the most effective method for teaching is face-to-face in the classroom, with some online content via our new tools to supplement the inperson teaching.”

As, hopefully, the viral pandemic begins to move into the rearview mirror, Hark said he perceives a good balance being struck between faceto-face and online learning sessions, www.breakbulk.com BREAKBULK MAGAZINE 31

LITTLE CHANGING?

Margaret Kidd, supply chain and logistics technology program director at the University of Houston, dons a mask to teach a class at the school’s College of Technology in January 2021.

CREDIT: UNIVERSITY OF HOUSTON

to ensure a greater familiarity with distance learning and to drive technological standards at educational institutions.

SEMINARS ADVANCING

In the Covid-19 environment, many companies have made use of the online environment for internal training and for company-led client seminars on various topics, Hark said.

“Here at Bertling, for instance, we have provided online seminars for our clients in regard to Brexit, and we have other topics planned for the future,” he said, adding that Bertling also has made use of online tools for internal training sessions on topics ranging from information technology to internal communications.

“This is a trend that will continue,” Hark said. “The industry does need to be cognizant of not producing an 32 BREAKBULK MAGAZINE www.breakbulk.com

overload of online seminars that might cause a lack of interest to develop. Content needs to remain relevant, to the point and tailored to the specific target group.”

Hark said he is “very optimistic” about training and education opportunities for educational institutions, companies and trade groups as the world emerges from the pandemic.

For example, a new initiative, dubbed The Collective, has been formed by Hark in the greater Houston area to connect students and young professionals with industry veterans while offering online presentations from expert speakers.

“I look forward to our future offerings from Bertling, Texas A&M and others to serve the evolving needs of our industry and enable future generations in a proper start to their careers,” he said.

Yet, another industry stalwart, Ed Emmett, said he believes, in the end, that relatively little will change after Covid-19 no longer poses significant pandemic risks.

Emmett, who is a senior fellow at Houston-based Rice University’s Kinder Institute for Urban Research, a fellow at Rice’s Baker Institute for Public Policy and a distinguished senior fellow at Boston-based Northeastern University’s Global Resilience Institute, said he has advocated for a return to classrooms.

“I think people in the breakbulk and project cargo business are going to be healthier, younger and without underlying conditions,” said Emmett, whose extensive professional resume includes a dozen years as county judge, the top elected official, of Harris County, Texas, of which Houston is county seat. Earlier, he served on the Interstate Commerce Commission and as president of the National Industrial Transportation League.

Emmett said one of the main advantages he realizes when teaching classes via video conferencing is the relative ease in connecting students’ faces and names, which appear beneath their likenesses on the Zoom screen. But, he said, Zoom tends to hinder productive interaction.

Factors beyond Covid-19 will have greater impact than the pandemic in terms of what those involved in movement of breakbulk and project cargo will have to learn and put into practice, according to Emmett.

Corporate managers will need to understand global commerce and regulations, so their focus will be upon changes in regulations, he said, while those engaged in hands-on loading and unloading must adapt to changes in equipment.

“I don’t think there’s going to be a huge change once we get past this [pandemic],” Emmett said, “because breakbulk and project cargo is going to continue to move the way it has.” BB A professional journalist for nearly 50 years, U.S.-based Paul Scott Abbott has focused on transportation topics since the late 1980s.

ISSUE 2 / 2021

THOUGHT LEADER

Vaccinate Front-Line Transport Heroes No Time for Half Measures

R

ising from the ashes of 9/11, the U.S. pivoted to a new world order; an order where national security, critical infrastructure and resilience were redefined. At the forefront of what became a national policy conversation was the identification, prioritization and protection of critical infrastructure. As our nation approaches the 20th anniversary of 9/11, while at the same time combatting the Covid-19 pandemic, there remains a valuable lesson learned from 9/11, which is a relevant policy response to the Covid-19 challenges faced today by critical infrastructure front-line workers.

Critical workers such as first responders during 9/11 and the front-line workers that followed for cleanup were exposed at high levels to toxic fumes and dust. Thousands became ill with respiratory conditions and cancer linked to exposure to 9/11 environs. It took 18 years before there was an adequate national response in the form of the Victim Compensation Fund Reauthorization Act 2019. There remains a window of opportunity to use lessons learned from these front-line workers to equitably address our current front-line critical infrastructure workers.

Pertinent to current front-line critical infrastructure workers in the maritime transportation sector – including marine, trucking, rail, air, warehouse and logistics – is priority access to Covid-19 vaccines. These women and men are critical support for crucial supply chains and maintenance of critical infrastructure.

Capt. William “Bill” G. Schubert, former Administrator, U.S. Maritime Administration at the U.S. Department of Transportation, commented: “What we witnessed through the March-April 2020 timeframe was U.S. supply chains holding up under tremendous pressure and adjusting to a new normal, but if they had broken down our country would have faced the apocalypse.”

CREDIT: SHUTTERSTOCK

ESTABLISHING REAL PRIORITIES

While the U.S. Department of Homeland Security Cybersecurity and Infrastructure Security Agency affirms essential critical infrastructure workers have allocation to scarce resources to protect against Covid-19, the irony is they are not on the 1b priority list for vaccination in the U.S., and at the same time they

BY MARGARET A. KIDD,

are responsible for the logistics and distribution of the very vaccines that could protect them.

Lamentably, there has been no implementation of a national policy for vaccine prioritization, as individual states have the power to prioritize vaccine distribution. The very nature of the work environment in the marine transportation sector, such as working in close proximity to co-workers or members of the public, inability to perform work remotely, length of time workers are exposed to each other and/or the public, and the number of contacts they have during a typical workday, exacerbate the risk these workers face daily, as they work to maintain core societal functions.

Supply chain disruption is a national security issue. Minimizing the impact of workers in the maritime transportation sector contracting Covid-19 can be accomplished with priority access to vaccines. Implementation of this tactical risk mitigation strategy minimizes the impact of disruption and contributes to national security. Failure mode is no longer about a lack of toilet paper or bleach in the grocery store, it is about avoiding economic collapse of the system.

Securing long-term economic recovery at the global, national, regional and local scale requires the flow of goods and international trade to move efficiently and effectively. The collective voices of the overreaching maritime transportation sector must ring the bell in unison for allocation and distribution of the vaccine to these true front-line heroes. BB Margaret A. Kidd is program director for the Supply Chain & Logistics Technology department’s bachelor’s and master’s degrees at the College of Technology, University of Houston.

She is also leading the Chartered Institute of Logistics and Transport’s (UK) expansion to U.S. universities and colleges.

UNIVERSITY OF HOUSTON

This thought piece is part of a coordinated effort by the Exporters Competitive Maritime Council, or ECMC, to call for support of maritime essential workers during the pandemic.

Marco Poisler, COO of UTC Overseas and past chairman of the ECMC, recently wrote a letter to the U.S. Centers for Disease Control. “ECMC Calls for Support of Essential Workers,” was published Jan. 25 on breakbulk.com: https://www.breakbulk.com/Articles/ ecmc-calls-for-support-of-essentialworkers

www.breakbulk.com BREAKBULK MAGAZINE 33

PORT PROFILE

MAKING LASTING CONNECTIONS

Post-Covid Plans to Strengthen Rotterdam

BY MALCOLM RAMSAY

A

s the global drive towards sustainability steps up in the wake of the Covid-19 pandemic the Port of Rotterdam, one of the largest breakbulk hubs in Europe, is preparing to move full steam ahead with new development as it navigates the changing demands for breakbulk handling in 2021.

Under the ports’ Bigger. Better.

Breakbulk. campaign the port plans a number of initiatives to consolidate and extend its breakbulk capabilities. Central to this is its work with partners to improve integration and handling capacity.

Twan Romeijn, business manager for breakbulk and offshore industry at the port, explained: “Bigger. Better. Breakbulk. is about maintaining a diverse portfolio and realizing a stable and future-proof market environment.

We are focused on developing the connection to the existing maritime and offshore cluster and ensuring highquality service companies are present in close proximity, from floating cranes and lashing companies to heavy-lift specialists and transport companies connecting Rotterdam worldwide.”

With the port still partially restricted due to lockdown, Romeijn noted that there has been a negative impact across automotive, machinery, construction and steel shipments in 2020. But there have also been some silver linings with non-ferrous metals showing positive throughput in 2020 and forest products increasing slightly due to the demand for products related to hygiene such as protective gear/toilet paper.

“If the infection rate slows down and the vaccine programs are at full speed, we expect an economic recovery this year, with a positive impact on

port throughput. There remain uncertainties, like possible longer lockdowns and slow vaccination rates, but in the second half of 2021 we should see a strong economic recovery and from 2022 onwards we expect to be back on the original growth path for the period 2020-2025.”

CHANGING DEMAND

With hopes that lockdowns will ease in the second quarter, the port is focused on more than a return to “business as usual,” however as it works with partners to develop the infrastructure to meet a changing market.

“I believe ‘circularity’ is not just a trending topic. The offshore wind business together with the coronavirus crisis have a tremendous effect and influence in the way people and politics are thinking,” said Bart-Luc Olde Hanter of Rhenus Logistics B.V., part of the port logistics division of the

Top: Rotterdam hopes to see a strong economic recovery in the second half of the year. CREDIT: PORT OF ROTTERDAM

34 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 2 / 2021

“The normal saying ‘check before fixing’ is not applicable to Rotterdam, since one can almost assume no difficulties in draft, congestion, strikes, etc. and port calls are usually uneventful.”

– Peter Herkemij, Spliethoff

German worldwide operating logistics service provider Rhenus Logistics.

“If the economic model can change in a way that only fully sustainable products are used for clean energy the whole planet benefits. These new developments will contribute to the further hybridization and integration of offshore and breakbulk business. I don’t see anything bad in making money while making the world a better and cleaner place to live,” he added.

Rhenus has a long history in Rotterdam and operates the breakbulk and heavy-lift terminal Rhenus Deep Sea Terminal at Maasvlakte with 800 meters of deep draft quay at the entrance of the port as well as the Rhenus Waalhaven Terminal close to the city center.

ENERGY TRANSITION

Already recognized as one of the leading breakbulk clusters in Europe, the port authority plans to make additional space available for breakbulk-related services in 2021 through a range of innovative new approaches.

An example of this is the breakbulk ‘carrousel’ initiative, which involves shifting storage areas between multiple terminal operators to create economies of scale.

Launched at the port’s Waalhaven site, it involves an additional 12 hectares of industrial site and 1,155 meters of quay and is designed not only to provide an additional growth incentive for the sector, but also to improve sustainability of operations.

With the drive towards sustainability to be a defining theme across industries in 2021, Rotterdam aims to

Spliethoff’s heavy-lift vessel Damgracht. CREDIT: SPLIETHOFF

be at the forefront of the energy transition as it sees demand from on- and offshore wind energy rocket.

Another longstanding breakbulk firm operating at Rotterdam is Spliethoff. Peter Herkemij, deputy director at the firm, reinforced the importance of environmental impacts across all operations and Rotterdam’s ability to offer “availability and flexibility.”

“First of all our focus is on minimizing our environmental footprint,” Herkemij explained. “Our secondary challenge is to find and keep flexible stevedores and terminals, able to overcome challenges, preferable in a healthy competitive playing field …

We believe we can add value by being an efficient and reliable partner … and we highly appreciate the fast and short lines and way of working at Rotterdam – a general good feeling.”

A core part of the Bigger. Better.

Breakbulk initiative, sustainability means more than the replacement of polluting fuels or a drive to energy efficiency as the port seeks to build greater resilience for the future by offering supply chain integration and flexibility.

“The normal saying ‘check before fixing’ is not applicable to Rotterdam, since one can almost assume no difficulties in draft, congestion, strikes, etc. and port calls are usually uneventful,” Herkemij added.

This outlook is echoed by Rhenus’ Hanter: “Rotterdam is a complete port. Most other ports are container ports or bulk ports. Rotterdam has it all. A huge network of services both up and downstream to enable and speed up the energy transition.”

MARKET SIZE SHIFT

With the increasing commoditization of breakbulk logistics the landscape has changed rapidly for fleet owners, with demand for bigger capacity vessels becoming prevalent and the need for infrastructure to support ever-larger loads now essential for ports.

“Where once you had two ship cranes of 100 tonnes, you were a specialized heavy-lift shipping company.

Nowadays it’s normal to have a coastersized vessel with two 250-tonne cranes on board. Breakbulk has become bigger, and this means investments in bigger terminals, heavier cranes and specialized project managers have become a necessity for a breakbulk stevedore.”

Hanter noted.

To meet this demand the port is planning a range of investments in new equipment, such as cranes and roll-on, roll-off facilities, as well as extensive plans to upgrade quay sides and supporting infrastructure.

“We are also making investments in sustainability, with plans to deploy new shore power connections, introduce new solar panels on warehouses, and increase the usage of greener fuels.”

Romeijn added.

“The breakbulk business is ‘live and let live’ and needs flexibility. That’s why we work via the cafeteria model, where you can pick what service you want or need from us,” Hanter said. “This can result in having a handymax vessel alongside bringing thousands of tonnes of aluminum or steel and at the same time at the same quay having a specialized offshore heavy-lift vessel preparing and assisting with one lift of 5,000 tonnes. But at the end it’s all about the www.breakbulk.com BREAKBULK MAGAZINE 35

PORT PROFILE

The Port of Rotterdam operates via the cafeteria model, where customers can pick the service they need.

CREDIT: PORT OF ROTTERDAM

right price for the right service with equipment and a multidisciplined and flexible workforce.”

INVESTMENT IN THE FUTURE

To ensure this flexibility going forward, Rhenus plans investment in a range of new equipment that will meet not only the demand for larger capacity, but also sustainability goals of clients.

This includes plans for electric terminal vehicles to reduce emissions, and the introduction of roll-stop systems of recycled plastics replacing wood for storing steel coils at its terminals at Rotterdam.

“At the terminal we follow the principle of reduce, re-use, recycle, meaning to lower our footprint wherever we can.

It’s all about minimizing the amount of waste we produce, dunnage we receive and remembering to recycle any materials that can be used for a new purpose,” Hanter said.

In 2020, the firm invested in the first Dutch full electric Kone Gottwald mobile harbor crane, and this year plans to expand the operational range of the crane on the terminal, investing in a new power grid for electricity supply.

“Also part of the further electrification of our terminal is the solar panel 36 BREAKBULK MAGAZINE www.breakbulk.com

project to have our warehouse roofs full of solar panels. In total 36,000 panels will be installed generating more than 10 megawatts. We are also further developing our offshore services, as the terminal is ideally located to the entrance of the port at the North Sea and thus perfect for supply runs and campaigning.”

New lifting capacity is also on the horizon for another operator at the port, RHB, which sees benefits from greater flexibility.

“We recently invested in another Liebherr heavy-lift crane, making our daily operations even more flexible and efficient. Furthermore the use of these two Liebherr giants gives us the ability to lift even bigger and heavier units then before. Besides these cranes we make use of eight high-speed multipurpose cranes ensuring a smooth and quick operation,” said Mike van der Pluijm, director of RHB.

CONNECTIVITY AND DIGITALITY

Alongside the port’s internal development, another key factor for future growth is the links it maintains with other breakbulk hubs around the world.

“The port of Rotterdam has great connections to the rest of Europe and

the world. Due to our unique geographical location, the port is easily reachable, no locks or any other obstacles, very well organized and is able to provide with all services which may be needed,” van der Pluijm said.

Romeijn explained that a key task going forward is to “keep in contact with other breakbulk clusters, whether terminals, cargo owners, shipping lines, forwarders or agencies, to know what is happening in the market and how Port of Rotterdam can be of help.”

To achieve this, a key element of the port’s roadmap for development includes the rollout of new digital solutions that ensure the port remains at the center of global breakbulk trade flows.

“With the changing of the guard in the U.S., there is hope that the Biden government might have a different view on trade restrictions, which could be good news for steel trade. Also, as global container freight rates have spiked for various reasons this could additionally benefit breakbulk cargoes.”

Romeijn noted. BB Based in the UK, Malcolm Ramsay has a background in business analysis and technology writing, with an emphasis on transportation and ports.

ISSUE 2 / 2021

LOGISTICS PERSPECTIVE

The hydrodynamic laboratory Aqua Lab is used for technical training and can be utilized for research purposes.

CREDIT: ROYBORGHOUTS FOTOGRAFIE

CUTTING EDGE OF INNOVATION

BY MALCOLM RAMSAY

Rotterdam Hub Pioneers Breakbulk Evolution

L

ocated at the heart of Rotterdam, the Innovation Dock building is exploring some of the latest trends in breakbulk, driven by the concept of cross-sectoral collaboration.

The Innovation Dock at RDM Rotterdam has been developed by the Port of Rotterdam, and the unique building features more than 7,500 square meters of space, dedicated to supporting start-ups and research and development departments of established multinationals. RDM Rotterdam operates alongside its sister initiative M4H, and together they are part of the Rotterdam Makers District, the best spot in the region for the innovative manufacturing industry.

“RDM and especially the Innovation Dock is about innovation and using new technologies. Our focus is on manufacturing companies that facilitate the energy transition, for example hydrogen and offshore wind,” Jouke Goslinga, program director at RDM Rotterdam, told Breakbulk.

Previously the site of a shipyard, the building has seen extensive renovation in recent years with Dutch architecture practice Groosman Partners adding a suspended office environment with an additional 1,000 square meters of office space to support a new generation of innovation.

“We want to attract entrepreneurs who make the real difference in supporting these trends with technologies like electrification, robotics, AI/ digitalization, IoT etc.,” Patricia van Bergeijk, communications advisor for RDM Rotterdam, noted, highlighting hydrogen, offshore wind, smart logistics and waste-to-value as major trends under investigation by participants that are directly impacting breakbulk operations.

High-profile companies such as Ampelmann, Studio RAP and Concr3de are existing members and as lockdowns ease this year, RDM is eyeing renewed growth, with new members bringing a range of skills and expertise.

The buildings original roof trusses give clearance of 20 meters height, allowing companies to explore not only the latest digital solutions and software development, but also providing adequate space for high tech prototyping and test facilities.

DISTRO PLATFORM

A clear example of the benefits the hub can bring was demonstrated with the successful rollout of the Distro new energy platform. Bringing together 32 companies at the RDM site this platform works with solar

panels and battery storage to allow users to trade energy between themselves in a local market.

“Next month we will launch Distro permanently,” van Bergeijk noted, indicating the speed of development possible at the site due to the collective approach of members and the rapid turnaround from idea to reality.

Developed by S&P Global Platts and Blocklab, a subsidiary of the Port of Rotterdam Authority, the new platform not only demonstrates a new model of collaboration, but also highlights the important role that sustainability plays for the sector.

“This is the first time in the world that blockchain technology, artificial intelligence and high-frequency commodity trading have been combined in a single platform,” the company said.

The collaborative spirit extends beyond the energy that users of the site share, with RDM organizing regular events, and while these have been understandably limited due to the Covid-19 pandemic, the schedule is already looking busier for 2021.

“Every year we organize the Future Flux Festival. We invite all entrepreneurs and education institutions in the Innovation Dock, RDM and M4H to showcase their innovations during this festival,” van Bergeijk explained, adding that the aim is for the festival to be held in the first week of July, pandemic restrictions permitting. BB Based in the UK, Malcolm Ramsay has a background in business analysis and technology writing, with an emphasis on transportation and ports. www.breakbulk.com BREAKBULK MAGAZINE 37

REGIONAL REVIEW

STEP CHANGE IN SAUDI ‘Project HQ’ Confirms Saudi Arabia’s Ambitions

A

lthough it is too early to understand the impact of Saudi Arabia’s “Project HQ” on markets and companies, the new policy will not have gone unnoticed by international project logistics providers.

The Saudi government said in midFebruary that from 2024, it would no longer work with foreign companies whose Middle East headquarters were located in any other country in the region.

State news bureau SPA said the measure applied to government-owned agencies, institutions and funds, and was designed to encourage contractors to set up base in the Kingdom to create jobs for nationals and boost the local economy. Foreign firms opting not to relocate could still do business with the private sector, SPA said, adding that

BY SIMON WEST

detailed regulations would be issued later this year.

“The decision … will reflect positively in terms of creating thousands of jobs for citizens, transferring expertise and localizing knowledge, as well as contributing to the development of local content and attracting further investment to the Kingdom,” Saudi Minister of Investment Khalid al-Falih said on Twitter.

Middle East-based project industry executives contacted by Breakbulk were reluctant to comment on the policy so soon after it had been announced.

The measure though is likely to be seen as a ploy to gain a whip hand over its neighbor and ally the United Arab Emirates, the main logistics hub in the Gulf Cooperation Council, or GCC, and preferred regional base for dozens of international freight forwarders.

FALSE DAWN?

Amid a pandemic-induced recession, Saudi Arabia’s ambition is to lure the foreign talent and money it needs to achieve the aims of Vision 2030, a sweeping nationwide project unveiled

by Crown Prince Mohammed bin Salman in 2016 to pivot the economy away from oil towards more sustainable, private sector-driven industries.

However, Ryan Bohl, Stratfor analyst for risk intelligence company RANE, said Saudi’s latest tactic could fall short of its intended goal. “It is not likely that we will see a rush of contractors or companies going over to Saudi Arabia, though we will likely see companies setting up new ‘regional HQs’ in the future in the Kingdom if that makes them more competitive for Saudi contracts, even if the bulk of their operations remain in the UAE.

Top: Kumar Ganesan of GAC said Saudi Arabia’s ambition of leapfrogging Dubai as the Middle East’s main logsitics hub was “quite realistic.”

CREDIT: GAC

38 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 2 / 2021

“We will also probably see carve outs for this policy, with some companies able to get exemptions as the policy evolves and it becomes clear that Saudi Arabia will not be able to strong arm companies into relocation.

Overall, this policy by itself is not likely to substantially make Saudi Arabia more attractive to companies than the UAE and Qatar, but it could signal a willingness by the country to get more aggressive in its economic competition with these other Gulf states.”

The new policy comes at a time when Saudi industrial activity is on the rise, enticing project logistics with a steady stream of new cargo-carrying opportunities. The government’s Vision 2030 industrial development and logistics program, charged with boosting the GDP contribution of mining, logistics, industry and energy, aims to attract investments worth 1.6 trillion riyals (US$427 billion) by 2030, creating an additional 1.6 million jobs along the way.

Renewable energy is one sector poised for growth, with the government targeting 27.3 gigawatts, or GW, of clean capacity by 2024 and 58.7 GW by 2030, of which 40 GW is expected to come from photovoltaic and solar plants, 2.6 GW from concentrated solar power, 16 GW from wind turbines and the remainder from other renewable sources.

By that time, half of the country’s power generation will come from renewables, with the other half derived from natural gas, according to government projections.

So-called smart cities such as Neom on the Red Sea coast are also sources of new work for service providers. A half-trillion dollars will be spent to build towns, ports, enterprise zones, sports stadiums and tourist destinations from scratch. Completion of the clean energy-powered metropolis is slated for 2025.

According to project tracking platform MEED, project awards in Saudi Arabia over the next five to 15 years are forecast to reach US$1.2 trillion, versus US$700 billion in the UAE and US$100 billion to US$200 billion each in Kuwait, Qatar and Oman.

But the country is in good stead to achieve its objectives and is headed in the right direction.”

Despite its size and dominance in regional hydrocarbon production – crude oil remains the bedrock of its economy, contributing about two-thirds of government revenue – the country still lags behind many of its neighbors when it comes to cargo sourcing.

Peter K. Mathew, founder and manKumar Ganesan Peter K. Mathew aging director of Fleet Line Shipping, a Dubai-based project cargo handler that GAC Fleet Line Shipping regularly ships to Saudi Arabia, said the Kingdom’s oil and gas industry still REALISTIC AMBITIONS relies heavily on imported machinery Kumar Ganesan, managing direcand components, much of which is tor of GAC Saudi Arabia, said Saudi routed or controlled in Dubai.

Arabia’s ambition of leapfrogging “Saudi Arabia is yet to have heavy Dubai as the main logistics hub in the engineering and industrial fabrication Middle East was “quite realistic.” companies like we have in the UAE,” “Saudi Arabia is the largest Mathew said. “As part of the Kinglogistics market in the GCC with a dom’s 2030 vision, we could expect consistent growth rate of 5 percent such industries in the near future, but every year. Its proximity to three it will take some time for them to catch continents and access to various trade up to the UAE in terms of manufacturroutes give it a huge advantage. Like ing and infrastructure capabilities.” many countries, Saudi Arabia has Once that happens, the supply experienced a slowdown due to Covid. chain’s center of gravity could start Bertling Logistics and Bahri have a venture to provide end-to-end logistics services throughout the Middle East. CREDIT: BERTLING

www.breakbulk.com BREAKBULK MAGAZINE 39

The Saudi government is driving private-sector growth by cutting red tape. CREDIT: GAC

edging towards Saudi. “We could see many logistics companies, especially asset owners such as transport and crane companies, increasing their presence in Saudi,” Mathew said.

Operators are already sensing opportunity: the Ministry of Investment claims the number of foreign transport and logistics companies setting up business in the Kingdom rose by 47 percent in 2019.

CHANGE OF MODEL

As heavy-duty manufacturing gains more momentum, it will rely less on imports from other states in the GCC, driving companies in the region to adapt their business models. “We have definitely witnessed a shift, with an increasing number of firms opting to migrate their fabrication to Saudi,” said Colin Hindley, CEO of Agility Iraq.

“This has been prompted by developments in infrastructure and manufacturing capabilities in the Kingdom, enabling companies to reduce their costs by manufacturing in Saudi Arabia, and at the same time utilize strong logistics infrastructure and trade agreements with the GCC and other countries, North Africa for example, to export the material fabricated and make it cost effective.”

While some global operators choose to build up offices and representatives in Saudi Arabia, others, such as Bertling Logistics, see joint ventures as a valuable way to keep in with the growing market.

40 BREAKBULK MAGAZINE www.breakbulk.com

The Hamburg-based project cargo specialist announced in January it had teamed up with Saudi transport and trucking company Al Khaldi to provide logistics services to customers in the Kingdom. Al Khaldi-Bertling Logistics, headquartered in the eastern city of Al-Khobar, began operations on Feb. 1.

The joint venture’s Operations Director Adel El Said told Breakbulk the venture would focus on newly awarded and prospect projects in the oil and gas sector, including refinery and drilling rig moves inbound and outbound, desalination plants and non-oil and gas related energy industries such as solar and wind power.

“Bertling has been active in Saudi since the early 1990s, and has always handled transport to and from the Kingdom. Due to the manifold new business opportunities arising in Saudi following the Vision 2030 program, we decided to enter the market again with our own local office, but together with a strong local partner at our side,” he said.

SETTING A TREND

Al Khaldi-Bertling Logistics follows other recent joint venture agreements, including Bollore Logistics’ Riyadh-based venture with Saudi transport firm Bahri to provide endto-end logistics services throughout the Middle East, and Panalpina’s partnership with Al Rushaid.

According to Agility Iraq’s Hindley, the Saudi government is taking “positive steps” in improving the ease of doing business in the country, making it increasingly attractive for logistics companies to set up operations.

Ganesan at GAC also pointed to a more business-friendly environment, claiming the government was driving private-sector growth by cutting red tape through its digitalization plans and simplifying administrative processes.

A Ministry of Investment brochure that tied in with the Project HQ announcement, quoted by news agency Reuters, laid out additional perks for companies that move their headquarters to Saudi Arabia, including zero corporate tax for 50 years, potential favoring for government contracts and a 10-year waiver on mandatory quotas to employ nationals. As it stands, the country’s Nitaqat system gauges the number of Saudi employees in a firm’s workforce against the number of non-nationals, leading to strict hiring policies that can create headaches for service providers.

“The winds of change are blowing rapidly in Saudi Arabia,” Ganesan said. BB Colombia-based Simon West is a freelance journalist specializing in energy and biofuels news and market movements in the Americas.

ISSUE 2 / 2021

THOUGHT LEADER

CREDIT: HTA

An End to Escort Anomalies UK Works to Formalize Requirements

M

any hundreds, indeed, possibly even thousands of abnormal loads move through the UK road network daily. Some you might notice – lots of flashing amber lights, some with accompanying escort vehicles to aid the protection of other motorists. But others you may not notice. They either do not “fulfill” the requirement to be escorted, or they move in the early hours when traffic levels are generally lower.

Whether noticed or not, they are here to stay and play a vital part in the UK economy supporting investment projects – from new roads to wind farms to nuclear power stations – and will play a major part in the UK government’s recent announcements to “build, build, build.”

For the most part the requirement of abnormal loads to be escorted has little legislative foundation in the UK. Pre-2004 this role was provided by the police in the interest of public safety and was very ad hoc, dependent on which police area you were operating in. Many times as an abnormal load driver I recall “waiting at” to be “taken over” by a neighboring force when crossing the county line.

Since 2004, abnormal loads escorting is no longer considered to be a core police duty.

From that point on, it became standard practice for the majority of moves to be undertaken solely by private operators, and for police assistance only to be utilized where loads were exceptionally abnormal and would require the need for direct police control for stop and direct assistance, for example. For this service, police forces levy a specific charge; however they can only do so for loads moved under a permissive system if the escort is requested.

Interestingly, there is no requirement for a private escorting operator to undergo any training in the UK. There is a code of practice, but this is a voluntary scheme. Of course, there are many safe and “fully trained” operators out there, most (if not all) members of the UK’s Heavy Transport Association, or HTA. However, under current legislation it would be permitted for anyone to put a flashing amber beacon on top of their vehicle and escort

an abnormal load weighing more than 100 tonnes.

NO COMPROMISE ON SAFETY

We at the HTA believe that no compromise should be made in relation to safety, and that this area of operational importance should be, at the very least, pulled into a formal set of parameters that operators must sign up to. This would include formally recognized training to ensure that a minimum safety standard is obtained and maintained.

The HTA’s project SAbLE – “Safer Abnormal Load Escorting” – is a step towards safer national standards. The aim is to analyze good practice from the UK and elsewhere in the world to ensure that movement of these loads is performed as safely and efficiently as possible. The project, led by international road safety consultancy The Transafe Network, will examine current practices in risk assessment and escorting of abnormal loads, and identify future practices, which have the potential to enhance the safety and efficiency of these moves. This will include practices to improve safety for all road users, and the most efficient use of the road network.

The project aims to bring together a full range of stakeholders including abnormal load haulers, route surveyors, permit agents, consultants, abnormal load escorts, infrastructure owners and managers, equipment manufacturers and the police. It will examine practices in risk assessment and escorting of abnormal loads and identify future practices which have the potential to enhance the safety and efficiency of these movements.

By supporting this project, the industry can be confident in its support of the infrastructure in our growing economy, and is especially poignant given the current situation that the country, and indeed the world, finds itself within the Covid-19 pandemic. BB

BY MARCUS GOUGH, HTA & AINSCOUGH CRANE HIRE

Marcus Gough is chair of the UK’s Heavy Transport Association and head of transport for Ainscough Crane Hire Ltd.

www.breakbulk.com BREAKBULK MAGAZINE 41

RULES & REGULATIONS

BY PAUL SCOTT ABBOTT

PLAYING BY NEW RULES Incoterms 2020 Seeks to Clarify ABCs of Transport Contracts

F

OB. FAS. CFR. CIF. EXW. FCA. CPT. CIP. DAP. DPU. DDP. These 11 three-letter acronyms can spell commercial success – or misfortune – for those engaged in transport of breakbulk, project and other cargoes.

And the latest iteration of the rules they set out – Incoterms 2020 – aims to make them easier to understand and properly applied in contracts that define responsibilities, costs and risks for sellers and buyers in international and domestic trading agreements.

Through better application of these acronyms, the likelihood of costly disputes can be significantly reduced, according to four global experts on Incoterms sharing thoughts with Breakbulk.

“The legacy of Incoterms 2020 will be getting people to read and use the rules correctly,” said Emily O’Connor, director of trade and investment for the International Chamber of Commerce, or ICC, the 102-year-old, Paris-based world business organization that develops, reviews every 10 years, provides certified training on, and holds the registered trademark for Incoterms (short for International Commercial Terms).

42 BREAKBULK MAGAZINE www.breakbulk.com

CLEARER IS BETTER

David Lowe, partner and head of international commerce at Londonbased multinational law firm Gowling WLG, who co-chaired the expert drafting committee for Incoterms 2020 after being a member of the Incoterms 2010 committee, said he believes the expanded yet simplified explanation of the terms in the new 194-page Incoterms 2020 book is definitely a positive step.

“The good news,” Lowe said, “is that the changes do not change the fundamentals – all Incoterms have been kept and just one has had its name changed. The real change is in the detailed drafting of the Incoterms to make them clearer.”

Murray Cooper, director of corporate governance in the Singapore office of Netherlands-headquartered LV Shipping & Transport Group, who has been applying Incoterms for four decades, said he is impressed with the revised edition.

“It is clearer and easier to understand,” Cooper said of Incoterms 2020 in comparison with its 2010 predecessor. “It more clearly articulates what each term is.”

Vilasini Krishnan, senior consultant with UK-based 4D Supply Chain Consulting, a project logistics consultancy

that features Incoterms training in its portfolio, emphasized the importance of intelligibility while adding a cautionary note.

“Overall,” Krishnan said, “the latest revision does provide more clarity, which is easier to understand and use, hence reducing the risk of misusing Incoterms. This is important because misuse of Incoterms could expose companies to huge commercial and operational liabilities.

“An unsuitable Incoterm could mean seller/buyer obligations, risks and costs are not clearly defined, leaving them open to significant cost impacts, potential delays and damages and associated risks – not to mention the damage to the trust and relationship between seller, buyer and other parties in the supply chain,” she said. “Resulting lawsuits and legal interference are often time-consuming and impose financial burden.”

MISUSE ‘FRIGHTENING’

Although Incoterms have been around since 1936, their misapplication, particularly by non-lawyers, including sellers and buyers with relatively small companies, remains a significant concern.

“Incoterms are often used without people really knowing what they ISSUE 2 / 2021

mean,” said the ICC’s O’Connor, whose work has focused on Incoterms for the past decade and a half. “The mismatch between the frequency with which they are used and the lack of understanding is frightening. People feel real pain when they don’t really understand the rule they chose.”

O’Connor’s advice is thus quite straightforward: “Users, make sure you understand what the rule says.

Pick the right rule. It is really important. You are signing a contract that could have painful monetary consequences if you don’t understand what your Incoterms rule means.”

According to 4D’s Krishnan, the process should include treating every new sales contract as a singular case and revisiting (and revising if appropriate) existing contracts to ensure they take into consideration the latest Incoterms changes.

“We often see that businesses tend to use the same Incoterms for all sales contracts without considering the country of origin and destination, customs clearance requirements at both ends, risks associated with different modes of transport, seller/buyer capacity and capabilities, and so on,” she said. “This ‘if it’s not broken, don’t fix it’ mentality is a concerning complacency, as what worked for a particular country of origin and destination might not necessarily work for a different country pairing for the same buyer and seller.”

DOUBLE-CHECKING URGED

Attorney Lowe, the Incoterms 2020 committee co-chair, said such a “this is how we’ve always done it” mindset invites problems.

“Do not use an Incoterm without checking and reading it to make sure it’s appropriate,” Lowe warned. “Too many people use a particular Incoterm because they always have and have not checked that it’s right.

“This is crucial: Most Incoterms issues arise from people using the wrong Incoterm or not reading and understanding the Incoterm,” he added.

“Increasing the chance that a user actually reads the Incoterm will improve usage.”

For a breakdown of Breakbulk 2020 terms, go to: https://www.breakbulk.com/Articles/ incoterms-trade-guidance-offered-in-11-rules

Encouraging readability and comprehension was behind the 2020 rewrite, which, for example, includes a matrix tool for comparing rules, greater use of pictures and explanatory notes, and an expanded yet easier-to-grasp introduction. Throughout, Lowe said, the new book is written in “plainer English.”

This, according to LV Shipping’s Cooper, is especially important for those who are not lawyers and, particularly in small and midsize enterprises, or SMEs, those who count contracts among myriad duties.

“The companies I worry about are the SMEs, which may well be without contract specialization,” Cooper said.

“They may not even have an Incoterms book.”

Another continuing concern expressed by Cooper relates to conflation, mostly on the part of those in the U.S., of Incoterms and acronyms of the U.S. Uniform Commercial Code, or UCC. His recommendation is that Incoterms, not UCC terms, be used in all international contracts.

CHANGES ‘MORE SUBTLE’

As for the latest changes themselves, the ICC’s O’Connor described them as “slightly more subtle” than those made in Incoterms 2010, which, among other things, reduced the actual number of acronymous terms to 11 from the 13 used in Incoterms 2000.

The most notable alterations made in Incoterms 2020, the experts agree, include: • Renaming of the DAT (Delivered

at Terminal) rule to now be called DPU (Delivered at Place Unloaded), thereby allowing for deliveries at construction sites and in other instances where no true terminal is involved as risk passes from seller to buyer.

• Adjustments to levels of insurance coverage required under CIF (Cost, Insurance and Freight) and CIP (Carriage and Insurance Paid to), the two rules that impose insurance requirements.

• Updates to the FCA (Free Carrier) rule regarding onboard bills of lading, potentially resolving misuse of FOB (Free on Board), which should not normally be used for container shipments.

• Detailing of security requirements for each Incoterm, further enhancing such guidance introduced in the 2010 edition.

• Clearer allocation of costs between sellers and buyers, with each Incoterm accordingly redrafted.

Even with these changes and overall clarifications, ambiguities will inevitably remain, according to LV Shipping’s Cooper.

“Incoterms 2020 is a lot better and clearer,” he said, “but it is terribly difficult to cover every possible circumstance.”

The process to develop the next update, presumably Incoterms 2030, will soon be under way, once again gathering insights from those who use the rules in their day-to-day conduct of business, as was the case with the ICC’s five-year undertaking to produce Incoterms 2020.

Cooper said he is hopeful the next effort will deploy a digital approach in reaching out to industry leaders via LinkedIn and other online platforms, engaging an even broader range of professionals from various disciplines, “now that the technology is here to do so.”

The ICC’s O’Connor said the objective for Incoterms going forward should, in fact, be quite simple: “Next time,” she said, “we look to make them even clearer and easy to use.” BB A professional journalist for nearly 50 years, U.S.-based Paul Scott Abbott has focused on transportation topics since the late 1980s. www.breakbulk.com BREAKBULK MAGAZINE 43

BREAKBULK MIDDLE EAST DIGITAL SPECIAL

KNOWLEDGE HUB: TECHNOLOGY & INNOVATION

Time to Embrace Digitalization Pandemic Gives a Push, Industry Must Add Momentum

BY GARY BURROWS

Nearly 36 years ago, then U.S. Customs Commissioner William von Robb delivered an ultimatum to the shipping industry: “Automate or perish.”

Von Robb’s infamous pronouncement in 1985 was about customs brokers adopting U.S. Customs’ nascent steps to automate Customs filing processes.

Pronouncements weren’t quite that dire during an executive roundtable on industry digitalization efforts. But the message was shared among the executives, with decades of industry experience, that companies that fail to embrace that future would be swept out of business by those companies that do.

“Our industry is still in the stone age when it comes to digitalization,” said Dominik Stehle, chief commercial officer of United Heavy Lift. “We like to do our part and change that whenever we can. It remains a challenge to be honest.”

Dennis Devlin, Maersk’s senior director – special project logistics, said the container line “has been very involved in digitizing logistics. However Maersk doesn’t cover the entire project supply chain, which still has not even been close to having been accomplished.”

Cyril Varghese, global logistics director – strategy and commercial, Fluor, warned that “organizations will need to invest in digitalization and move forward to gain a competitive edge. It may sound extreme, but if you don’t embrace it, you’re out of business in a few years.”

COVID CURE?

A number of roundtable participants agreed that, like many digital functions that have grown in the past year, the Covid-19 pandemic is pushing the project cargo industry to embrace digitalization.

44 BREAKBULK MAGAZINE www.breakbulk.com

Covid-19 has “taken logistics and supply chain on an extremely accelerated growth that is forcing organizations to jump into digital transformation faster than ever,” said Carlos Hernandez, partner – global lead business and digital transformation, Avasant, a global IT consulting company.

Mohammad Jaber, vice president for project logistics, Agility, and COO of Agility Abu Dhabi, said the pandemic “was a wakeup call,” though he said: “We are using and investing in technology to drive more efficient and effective customer and business processes.”

Industry wide, Jaber said investment in blockchain in the industry was US$1 billion in 2018 and is expected to reach US$23 billion by 2023.

Stehle doesn’t feel the pandemic initiated the digitalization push, but it “may have accelerated the whole process. What the pandemic taught us was a completely new way of communicating and discovering the benefits and also cost savings associated with that.”

Regardless, the industry is awakened, and there’s no turning back.

“We’ve been excited with the leaps and bounds in technology and innovation, affordable access to technology and innovation over the last few years.

We’ve seen that the digitalization priority in global corporations and in smaller companies has jumped quite a bit,” Varghese said.

Digitalization is happening at different paces and different times, with varying investment capabilities. The pandemic has pushed it to a “critical mass” culminating in a need to “create one universe and one family similar to SAP, Android or iOS tech platforms,” said Dharmendra Gangrade, head of logistics, L&T Hydrocarbon Engineering, the oil and gas arm of engineering, procurement and construction giant Larson and Toubro.

Hernandez said Avasant research found that 87 percent of people surveyed believe the acceleration towards digitalization is going to continue and force organizations to change their overall business models.

Companies that accelerate and make investments in technological change are not only going to survive, but take a competitive advantage that will take them well into the future.

“I don’t think this is going to stop, even after Covid,” Hernandez added.

SILO MENTALITY

While there is mounting enthusiasm, real progress faces daunting challenges towards true integration, roundtable participants pointed out.

Regardless of participating companies’ intentions and technological advances, the major barrier remains silo mentalities.

Varghese noted a LinkedIn post from a colleague who said, “Supply chain is a vision and supply silo is a reality.”

“I found that simple statement extremely profound,” he added.

He believes Fluor is at the cusp of reinventing the supply chain, building it through a range of “homegrown relationships.”

“Now we are at the stage where we have the opportunity to amplify the effectiveness multiple times over through the proper use of technology,” he added. “The acceleration and adoption of industry-wide digitalization is the need of the hour.”

Maersk’s Devlin noted many project cargo companies have moved towards digitalization by developing in-house tools and systems.

While the tools are valuable, the broader issue is the project cargo industry needs “a tool to see an entire global project logistics and supply chain and have visibility to that,” he said. “Purchase order to packing, cargo weights and dimensions, where ISSUE 2 / 2021

Roundtable participants (Clockwise from upper-left): Dominik Stehle, United Heavy Lift; Carlos Hernandez, Avasant; Dennis Devlin, Maersk; Adolph Colaco, e2Log; Dharmendra Gangrade, L&T Hydrocarbon Engineering; Mohammad Jaber, Agility Abu Dhabi; Cyril Varghese, Fluor; (center) Urs Schaerer, Orkestra SCS

the cargo is at any given point in time.

That would allow the construction managers who are really the end customers to make important decisions.”

“Compared to other industries, I think our segment is really still way behind what is possible,” Stehle said.

There are particular challenges for a heavy-lift carrier like UHL, which faces complexity of a diverse fleet with varying lifting capacities and modes of loading, each load requiring sophisticated engineering and matching up right cargo with vessels at the right time.

“It’s very challenging to integrate all of that into one system because we have many moving parts that constantly change until the very last minute,” he added.

Devlin noted that, while logistics is moving towards digitalization, it’s less true on the breakbulk side, “but it also may be less necessary.” But for EPC projects, it’s “still done rudimentally.”

Adolph Colaco, founder and CEO of e2Log, a cloud-based logistics technology platform, said: “No. 1, almost every organization worth their salt have started the process of digitization in some shape or form. No. 2, the level of maturity relative to that digitalization process varies depending on when the journey started and what momentum they have going.”

In a multibillion-dollar project there are multiple freight forwarders, carriers, customs brokers, transporters, each investing and developing their own technologies, he said. “But at the end of the day it all has to come together in one single layer or platform so the end customer gets that seamless experience – the future therefore is digital

platforms to run global logistics programs.”

He agreed that much of the application of digitization is problem solving logistics and supply chain processes, “but it’s being addressed in a siloed manner.” While supporting your own customers is the logical first step, “the next step is how do you weave all of this together so that it becomes one seamless, orchestrated process for the end customer?”

OVERCOMING BARRIERS

Along with silos, barriers to integrating can be the difference in budgets, and different levels of each company’s digital development, L&T Hydrocarbon’s Gangrade said.

Gangrade embraces a common platform, but “no matter how much best technology I have, I still need to talk to all stakeholders, who won’t necessarily adapt to my technologies.”

“I think it requires all parties to see the value of technology first and foremost,” Stehle said. “It has to be easy and once a solution is implemented, it should then be embraced and seen as a benchmark. People in general are resistant to change.”

Stehle and Urs Schaerer, head of industrial solutions, Orkestra SCS, believe the next generation of project professionals are wired to embrace technology and lead the industry to embrace digitalization.

As an example Stehle said a team of engineers at UHL decided its ways of doing business could be improved.

So they developed a 3D simulation tool “where we can virtually assimilate any load we take on a vessel,” he said, showing a short video presentation.

“We can show the client how we secure the module down the smallest detail.”

HOW WILL THE FUTURE LOOK?

Roundtable participants waded lightly into how collaborative digitalization might shake out in the coming years, whether the winners will be technology in the cloud, platforms in the cloud, a single or handful of platforms – similar to what developed in the supply chain industry during the dot-com boom/bust near the turn of the century – or shared integration among partners. The lengthy session left the door open to pick up that topic in the near future. But, like the group of engineers Stehle referenced, a key development will be in visualization.

Schaerer alluded to his background in engineering and how he saw the evolution from 3D CAD design to full models – “they (virtually) walk through the plant; they check everything three times.”

He referred to a comment from Hernandez about digital twin, which is a virtual replica of physical devices to run simulations before actual devices are built and deployed. Such systems, if available within the cloud, would allow collaborative simulations among stakeholders.

“The future is immersive,” he said.

“The future is you see your plant building up in virtual reality, immersive, to see where the problems are … That’s where we need to come to in logistics.” BB RELATED STORY: Companies’ Steps Towards Digitalization, https:// www.breakbulk.com/Articles/companies-steps-towards-digitalization www.breakbulk.com BREAKBULK MAGAZINE 45

BREAKBULK MIDDLE EAST DIGITAL SPECIAL

KNOWLEDGE HUB: ENERGY

Oil, Gas Projects Mainstay of Middle East Alternative Energy Projects Still a Way Off

BY CARLY FIELDS

While a transition away from oil and gas is underway in the Middle East, the pace of change will be more gradual than in Europe and the U.S., as regional state-owned oil companies continue to pursue mandates to maximise profit from natural resources.

Therefore, agreed regional experts taking part in the Breakbulk Middle East Digital Special, project cargo movers serving the region can expect to see O&G related work dominating until at least the end of the decade.

This contrasts with the aims of international oil companies that are already diversifying and transforming their businesses. In December 2020, energy companies BP, Eni, Equinor, Galp, Occidental, Repsol, Royal Dutch Shell and Total announced they had agreed on six joint principles to drive their participation in the energy transition. “They are now optimizing their operations, process and procedures to become green,” pointed out session moderator, Rafael Vicens, head of global projects and industry solutions MEA at DB Schenker.

Speaking as part of an exclusive roundtable hosted by Breakbulk, Moataz Hussein, regional manager – project and energy services (MENA) at Expeditors, saw a big role for renewables in the Middle East region in the future. However, he caveated that with his expectation that O&G projects will still be important through to 2030.

He did add that project cargo movers operating in the region are starting to see different types of projects, such as entertainment and country-program driven projects, and that there were fundamental shifts taking place in sourcing. “Our region was always looked at as an inbound region, but that may change with local content and the local cargo production,” he said. “People are not looking at this, but the market is changing.”

46 BREAKBULK MAGAZINE www.breakbulk.com

Yasser Al Yassin, logistics director at Petrofac, saw a strong global drive to shift from O&G in the region, but agreed that it was difficult for the Middle East to adopt the same energy transition policies as other regions.

“We are very much dependent on O&G still in this part of the world,” he said. “While I do not think O&G will continue to be as profitable as it used to be 5-10 years ago, it will continue to be the main economic driver until governments and other stakeholders decide to adopt an alternative energy business model.”

ALTERNATIVE OPTIONS

That said, investment is being committed to alternative sectors, such as wind, solar and water recycling.

Solar is particularly suitable to the Middle East region, and is where the panel expects the most interest in the coming years.

Javier López, senior logistics manager at Abengoa, confirmed that his company is not only involved in renewal energies with 2.3 gigawatts built, but is also a leader in construction of thermal solar plants with 34 percent of worldwide output in this “key” area. Expeditors’ Hussein described solar projects as a “fit for our region.”

Vicens, meanwhile, reported seeing a rising number of desalination plants in the project pipeline, while López added that Abengoa is constructing the world’s largest reverse osmosis desalination plant and the biggest desalination plant in Saudi Arabia using the same technology. He saw water as a “a key element regarding renewable sources and how we manage water in the region.”

However, because of the immaturity of the renewables sector in the Middle East it is difficult for project cargo handlers to build up experience and to be successful in tenders, the panel noted.

Whether O&G, renewables or desalination, Omar Yacoubi, GCC procurement manager for Tecnicas Reunidas, said that logistics companies in the region will “still have a job.”

Vicens raised the question of whether project specialization is in danger of being lost with a shift away from the more complicated O&G sector into other sectors where components can move by conventional means. “From the project forwarding side before we were moving a huge number of breakbulk and heavy-lift cargos for refineries and chemical plants. Now with renewable projects especially solar and desalination plants, most of the cargo is containerized,” he said. “I am concerned that in 30 years there may be less O&G to build and there will be more desalination, solar and carbon capture, and the pure project forwarders as is will disappear. This could go against our specialisation.”

However, Hussein saw this as an opportunity for project freight forwarders: “Project cargo freight forwarders need to look differently at the market and consider the types of project cargo moves associated with renewables, energy storage and entertainment projects, which could present opportunities and future potential.”

López explained how some Abengoa Projects are managed with “just in time” supply chain processes and share similarities with car assembly factories. He said that the industry could learn a great deal from those lean processes to improve fulfilment and cash flow.

But, at the end of the day, Al Yassin said that as engineering-driven companies, they should be able to take any diversification in their stride.

“Companies serving the highly complex O&G sector are very much equipped to transition into alternative projects.” BB ISSUE 2 / 2021

Panelists (from left): Guillermo Cobelo Fernández, Técnicas Reunidas; Mohammad Jaber, Agility; Capt. Mohammad Al Ali, ADNOC Logistics & Services; and Khalid Al Marzooqi, Khalifa Industrial Zone Abu Dhabi.

KNOWLEDGE HUB: BUSINESS OUTLOOK

UAE Mines Post-Covid-19 Opportunities Collaboration, Technology Keys for Moving Forward

BY CARLY FIELDS

This is not the time for complacency, business leaders in the UAE told a Breakbulk Middle East Digital Special opening day session.

While the Covid-19 pandemic has “changed everything around us,” according to Khalid Al Marzooqi, commercial director at Khalifa Industrial Zone Abu Dhabi, finding opportunities from the pandemic’s challenges continues to be a driving force for change in the region.

“In the UAE we have shown a model for the world of how to face such pandemics and how to convert those challenges into business opportunities,” Al Marzooqi said.

Taking part in a panel on Navigating the Middle East Projects and Business Landscape in a Post-Covid World, panelists spoke of how their respective companies have risen to the challenge of the changed operating environment.

Capt. Mohammad Al Ali, senior vice president, ship management, at ADNOC Logistics & Services, explained that in the short term, ADNOC has prioritized ramping up projects that were deferred as a result of the pandemic. Longer term, Al Ali said ADNOC will be examining how demand has been reshaped and how those changes will inform its services going forward. The pandemic prompted a sizable drop in projects in the Middle East, led by the two biggest economies: the UAE and Saudi Arabia.

Mohammad Jaber, chief operating officer and regional director of project logistics Middle East and Africa at Agility, said that the pandemic has driven home the urgency and

the importance of working remotely, as well as the importance of digital tools. Agility started its digitalization journey before Covid-19 struck. That digitalization became an “important part of Agility’s business continuity plan” in dealing with the pandemic.

“Agility has used digital tools to keep trade flowing,” Jaber said. “The pandemic separated digital leaders from laggards; leaders have tools and make data driven decisions quickly.

It’s an obvious lesson learned from the pandemic that digital capabilities, such as predictive modeling, big data and digital capabilities, provide a lot of stability to decision-making.”

Khalifa Industrial Zone Abu Dhabi, saw tremendous uplift in warehousing demand during the pandemic, leading it to develop a 5 millionsquare-foot warehousing solution. Al Marzooqi told the panel: “Definitely the pandemic has changed everything around us. Some changes are positive, but some were definitely negative. We see more competition in supply chain management channels,

especially when we speak about international companies.” He added that e-commerce is now mandatory for survival.

Further development of technology ranks high on Agility’s wish list for 2021, with Jaber noting four critical technologies for the supply chain to focus on: blockchain, Internet of Things, robotech and process automation, and data science. “These will help all over the market to reduce cost and increase efficiencies. Stop using the data to alert exceptions; start using the data to prevent exceptions,” he said.

But for Al Ali, technology alone will not pull the breakbulk sector out of the pandemic’s grips. For him, collaboration is key: “This is a time where we really need to partner with each other, grow our businesses, learn from each other, share technology and get through this pandemic safety.” BB The session was moderated

by Guillermo Cobelo Fernández, regional CEO of Técnicas Reunidas.

Watch a replay of Business Briefing: Middle East Business Project Outlook, at https://youtu.be/dXEAbB7087U

RELATED STORIES GCC Roars Back in 2021 – MEED Predicts Project Spending to Double from 2020, with Edward James, director of content and anlysis, MEED Projects, at https://www.breakbulk.com/Articles/gcc-roars-backin-2021 Replay the briefing at https://youtu.be/qycmEImvhog ‘Great Opportunities’ for MENA in 2011 – Digital Special Helps ‘Accelerate’ Project Recovery, at https://middleeast.breakbulk.com/Articles/ great-opportunities-for-mena-in-2021

www.breakbulk.com BREAKBULK MAGAZINE 47

BREAKBULK MIDDLE EAST DIGITAL SPECIAL

KNOWLEDGE HUB: EDUCATION

A Day in the Supply Chain Life Education Day Advice from MENA Industry

BY GARY BURROWS

One of life’s greatest challenges is choosing a career, and often a most valuable determiner is to be able to learn what industry veterans experience in a day of their professional life.

Breakbulk Middle East’s Education day, held virtually during the event’s Digital Special, offered a glimpse through three Middle East-based veterans during the session: Keys to Success: Insights from Across the Supply Chain.

“The key advice I have for the students and the young generation is always look for a challenging job that will make you reach your potential, that will challenge you enough to bring the best out of you,” said Yasser Al Yassin, logistics director, of Petrofac, an international oil and gas industry engineering, procurement and construction company, or EPC. “You’ll learn and you’ll learn more until you reach your potential, and then the sky is the limit.”

The supply chain industry means exposure to global trade issues, rules and regulations, and the intricacies of logistics in different countries, he said.

“You have to learn this information so you can execute your job. The more you know, the better you can execute and achieve for your international stakeholders and clients.”

The logistics industry brings great variety and different life skills, along with the elements of the job, said Sue Donoghue, managing director of DHL Global Forwarding, Kingdom of Saudi

Arabia, and CEO Arab Cluster, DHL Global Forwarding.

There are multiple paths within the industry, including temp-to-perm, which was Donoghue’s experience.

From receptionist, to freight forwarder, operations director, managing director and project management, she climbed the ranks.

She joined DHL and helped relaunch its industrial projects division, then moved to country management, global head of business processes, leading operations.

In Saudi Arabia she climbed from managing director to her current CEO role, responsible for Bahrain, Saudi Arabia and Kuwait.

Donoghue’s motto is “expect the unexpected. That’s really what I live by.” It requires multiple hats: accountant, project manager, referee, salesperson – “some days you put them all together,” she added. “But the variety, the excitement, the passion of my team and meeting the people I do is second to none.”

Likewise, Al Yassin loves the challenges of his job, that each day is different and requires creative thinking and teamwork to find innovative, out-of-the-box solutions.

“This keeps the job alive; it keeps you excited for the next day, what sort of troubleshooting you’ll have to do, what sort of solutions, how much you can reach your potential,” he added.

For Al Yassin, a typical day starts with the plans, what to execute that day, week or month. “I verify these

Watch a Replay of the webinar, Education Day: Empowering the Next Generation of Breakbulk Professionals at https://youtu.be/fUrxwrhF-zo

RELATED STORIES

Logistics of Your Horizon – Education Day Session Details Career Opportunities at

https://www.breakbulk.com/Articles/the-logistics-of-your-horizon

48 BREAKBULK MAGAZINE www.breakbulk.com

plans with my team … and the stakeholders for each product,” he said.

True throughout the industry, information is key. A normal day may see plans fall into place and all stakeholders aligned and everything goes smoothly. Due to the dynamic environment of the EPC business, however, plans change on the fly.

“We face different last-minute changes and we have to react quickly and realign ourselves and our stakeholders to execute the job,” he said.

There are many benefits of working in the maritime field, said Capt.

Marwa El Selehdar, chief mate and business development coordinator, for the International Forum for Maritime Transport, of the Arab Academy for Science, Technology and Maritime Transport.

“It has allowed me to travel more,” she said. “It makes me more responsible and I started managing everything in a better way, even in my social life.”

The field also carries the weight of its role within worldwide trade and the depth of experience that builds there.

“We have the ability to deal with different countries and mentalities and this is something very useful.“ El Selehdar has a unique role, in that she’s starting in her career, and with her work on a training vessel with AASTS, she’s dealing with and mentoring cadets while aboard.

The breadth of supply chain industry operators also presents a wide spread of talents and skills required.

“The variety and the wide spread of talent and tasks that you cover is phenomenal,” Donoghue said. “The key skill that we’re looking for from new people coming into the company is a passion for the industry.”

“Logistics, like many fields, has its own kind of difficulties,” Al Yassin said. “But if you don’t have passion for your job, and you’re not enthusiastic, you can easily drop the ball and eventually you’ll not succeed in this line.” BB ISSUE 2 / 2021

KNOWLEDGE HUB: WOMEN IN BREAKBULK

Women’s Unique Leadership Roles Benefit Industry ‘Pragmatism, Patience and Practicality’ Among Key Skills

The growing leadership role of women in the project cargo and logistics industry is fueled by unique characteristics that have proved particularly key during the recent Covid-19 pandemic.

Industry leaders detailed those skills and provided encouragement for growing women leadership during the Women in Breakbulk sessions during the Breakbulk Middle East Digital Special.

Two industry veterans kicked off the session with an overview of key industry topics impacting women, followed by sessions covering The Many Paths to Female Leadeship: A Career Blueprint and How Women are Contributing to a Post-Covid Business Recovery.

ACHIEVING PARITY

Sue Terpilowski is striving to “create an attractive, smart and sustainable working environment for the EU shipping sector” for women, in her roles as president Sue Terpilowski of WISTA UK; WISTA director of Imageline; and co-chair of the Diversity in Maritime Taskforce, Maritime UK. “We’re going to do an intensive research campaign into enhancing recruitment to retention of women in the industry,” she said.

Despite cultural advancements, there remains a lack of gender-friendly legislation and policies that provide women equal opportunities across all sectors, she said.

Increasing retention and progression of women into middle and senior

positions will build the pipeline towards equality globally, she explained.

“It’s not a country-specific project; it’s the same things affecting us. We’re a global sector and we have global issues.”

‘BE AWESOME’

Henadi Al-Saleh started her career with Agility in 2007 and rose to chairman. She acknowledges her corporate stature is unique. Women represent less than 20 percent of management board members of top companies in the logistics, while women serving on management teams rank from 17 percent to 30 percent.

“This is largely because of the history of the logistics industry,” she said, noting certain sectors such as road freight and warehousing are “predominantly male.”

Ecommerce in the Middle East is working towards a gender balance, Al-Saleh maintains, as small and medium-sized enterprises are utilizing technology to growth cross-border trade. “From our own research and research echoed by the World Economic Forum … one of every three businesses are led by a woman, and that is fabulous news.”

Al-Saleh offered three key pieces of advice for women’s success in the industry. First is to make sure you have a strong network, both personally and professional, to make sure you’re plugged in and are supported in your leadership. Second, “speak up and participate. As (author) Sheryl Steinberg would say, ‘lean in.’ “ Lastly, her advice – for men as well as women – “don’t just be good, be awesome.” BB

Watch a replay of Women in Breakbulk Leadership Forum at https://youtu.be/0DQ0tVFZVrw

RELATED STORIES

How Women are Contributing to Post-Covid Business Recovery https://www.breakbulk.com/Articles/how-women-are-contributingto-post-covid

Panelists: Jasmine Fichte, Fichte & Co.; June Manoharan, Lukoil Marine Lubricants DMCC; Nicola Good, Lloyd’s Register; Noura Al Shamsi, Arab Academy for Science, Technology and Marine Transportation; and Rania Tadros, Ince & Co. Middle East.

The Many Paths to Female Leadership: A Career Blueprint

https://www.breakbulk.com/Articles/many-paths-to-female-leadership

Panelists: H.E. Eng. Hessa Al Malek, The UAE Ministry of Energy and Infrastructure; Ghazalah Moloobhoy, Moloobhoy Marine Service LLC; Rania Tadros, Ince & Co. Middle East; Kateryna Yakunchenkova, Al Safina Security; and Parisa Kaveh, Nostrac Shipping Co.

www.breakbulk.com BREAKBULK MAGAZINE 49

As the world rides the pandemic roller coaster with countries opening and closing to travel, we at Breakbulk Events & Media continue with the weekly BreakbulkONE newsletter to keep the industry connected and supply welcome good news. Here’s a selection of subscriber favorites from the last few months.

KNOWLEDGE HUB: ENERGY

OFFSHORE WIND CREATES BUSINESS AND CHALLENGES

Project Cargo Summit Explores Project Logistics

BY GARY BURROWS

Offshore wind farms aren’t only growing in number; the size and amount of power each turbine can deliver is growing rapidly as well.

The volume and size of components is ratcheting up logistics challenges to safely and efficiently deliver components to offshore wind farms developing globally. The topic was a key focus of the Project Cargo Summit, which was held virtually in Rotterdam, Feb. 10-11. Breakbulk Events & Media was an event partner.

GE Renewable Energy is leading the drive with its recently developed Haliade-X offshore wind turbine. The units range from 12 megawatt to 14MW capacity, with a 220-meter rotor and 107-meter blade. It also boasts a 60 percent to 64 percent capacity factor, the average power generated, divided

by rated peak power, whereas the industry average is 42 percent. The Haliade-X has already been selected as the preferred wind turbine for projects totaling 4.8GW: • Skip Jack Wind Farm, a 120MW farm to be built offshore Delaware, U.S. • Dogger Bank Wind Farm, a 3.6GW, three-phase North Sea farm off the east coast of Yorkshire, UK. • Ocean Wind, a 1.1GW farm off the coast of Atlantic City, New Jersey, U.S. Ward Gommeren, GE Renewable Energy’s managing director – regional senior sales director offshore wind – Benelux, said that with production on project components this year, there is great focus on logistics and safety in moving the giant wind components.

Fortunately, GE Renewable Energy’s plant in Saint-Nazaire, France, where generators and nacelles are

manufactured, has water access so components can be transported to a marshalling harbor.

Gommeren said GE seeks logistics partners that can provide innovative solutions for a safe and effective transport, while following specific technical requirements “on the quay side and the vessel side, for least possible risk.”

Moderator Tobias Pleffers said with the bigger turbines and nearshoring, some freight forwarders are not expecting to be involved in offshore wind business as manufacturers tend to deal with shipping companies directly. One exception, however, is Vestas and Panalpina’s recently announced exclusive freight forwarder agreement with the new models.

Gommeren responded that GE is looking at near-shoring with a dedicated organization, but the approach is global. As for partnerships, GE does a “full investigation of our potential suppliers and partners” to build long-term alliances.

‘MAN ON THE MOON MOMENT’

Carlos Eduardo Lima da Cunha Moderator Tobias Pleffers interviews Ward Gommeren of GE Renewable Energy.

CREDIT: PROJECT CARGO SUMMIT

50 BREAKBULK MAGAZINE www.breakbulk.com

European Commission

Interest in offshore wind energy has grown rapidly and globally, propelled by governments pushing towards carbon neutrality, investing in programs such as the European Green Deal, ISSUE 2 / 2021

By 2050, the EU aims to have 300GW of offshore wind energy capacity.

CREDIT: SHUTTERSTOCK

which pushes towards carbon-neutrality in Europe by 2050.

Carlos Eduardo Lima da Cunha, policy officer, European Commission, quoted EC President Ursula van der Leyen, who said: “The European Green Deal is Europe’s man on the moon moment.”

Lima de Cunha said the quote was apt, as “it has that same kind of commitment, pretty much a whole continent putting their efforts on that one goal … It’s a huge goal that we’re putting onto ourselves, but one that needs to be done.”

One example of the level of commitment is Horizon 2020, an EU funding program for research and innovation, which provided €3.1 billion for energy research, including €188 million for wind energy, €335 million for solar energy, €420 million for alternative fuels and nearly €1 billion for grid and storage. A further €340 million is earmarked for offshore technology, including materials and components, floating wind, he said.

In 2020 renewables reached 38.2 percent of electricity production in the EU, and surpassed fossil

fuels, with offshore wind reaching 22 gigawatts, compared to about 80 megawatts of other alternative energy production, according to the EC. By 2050, the goal is to have 300GW of EU offshore wind energy capacity along with 40GW of ocean energy capacity, such as wave and tidal.

Lima da Cunha said that, beyond the pandemic, the major challenge offshore wind faces in Europe “is dealing with permits and regulations.”

Wind energy production needs to be brought to an industrial scale to reach necessary economies of scale. “We also need to be able to deploy it fast enough that we can actually achieve the goals we want to achieve.”

ROTTERDAM’S ‘WHOLE PICTURE’

Despite the pandemic’s impact on ports globally, the Port of Rotterdam has navigated the “rollercoaster year,” maintaining operations and investments, and is ready for the continued rise in offshore wind shipments, said Emile Hoogsteden, director containers and breakbulk and logistics.

The port is well located near GE’s

and other wind manufacturers’ plants, and offers them “the whole picture,” Hoogsteden said.

“We have space, strong infrastructure, equipment, floating derricks, specialized service Emile providers and Hoogsteden heavy-lift termiPort of Rotterdam nals,” he added.

Siemens recently joined GE as a customer for marshalling services.

However, despite the growth of the wind components and Rotterdam’s well-diversified operations, volumes at the port won’t improve “until we have beaten the pandemic,” he said. 2020 volumes, predicted to grow 5 percent prior to the pandemic, slipped 8 percent to 6 million tons.

“I think if you see the situation the whole world was in, we’re relatively satisfied, or not dissatisfied, with 2020,” Hoogsteden added. BBONE www.breakbulk.com BREAKBULK MAGAZINE 51

KNOWLEDGE HUB: VETERANS

IMPORTANCE OF BACK-UP PLANS

How a Shipment of ‘Air’ Carried Big Risks

BY PETER JESSUP

In the 1980s I had responsibility for the logistics on a greenfield engineering, procurement and construction petrochemical project in Saudi Arabia.

Equipment, materials, fabricated pipe spools, heavy-lift and abnormal load pieces were sourced in Europe for shipment to the construction site and a fabricator in Italy.

Dock and berthing capability was constructed by the project adjacent to the construction site to enable discharge from chartered ships of all heavy-lift and abnormal load items.

Ultimately this facility would be used by the client to export their products.

A nearby commercial port was used to move general cargo via liner operators from ports in Europe.

Logistics appointed a project freight forwarder but undertook all chartering directly, using our standard charter party agreement. The strategy was to co-load available general cargo with heavy-lift/abnormal load movements, and where possible co-load heavy lift/abnormal loads from different ports onto one charter. The jobsite dock did not have suitable cranes or stevedores, so charter ships had to be capable of direct discharge onto transport by ship crew. We also used as appropriate full liner terms based on undertaking load and discharge “as fast as ship can load and discharge.”

THREE SIGNIFICANT CHARTERS

There were three significant and interesting charters. The largest and heaviest item was an ethylene fractionator weighing 592 tonnes and was 80 meters long and 6 meters in diameter. The ship used had two 440-tonne lift capacity derricks. There were also three reactors weighing 190 tonnes. (See Breakbulk Veterans article “The Da Vinci Crane,” http://breakbulk.com/ Articles/when-basic-logistics-discovered-brilliance) The most complex was the shipment of 75 aluminum silos and blenders from Holland. These varied in size and were incredibly light with a cube to weight ratio of about 12 to one. These were abnormal loads due to their low weight – in effect we were shipping huge quantities of air! These would be installed at site vertically to store product from the petrochemical facility once operational and could carry a significant quantity of the product weight.

We issued invitations to tender to specialist ship owners months before the items were due to be ready and invited them to determine how we could best reduce the number of charter ships needed, cost and meet the construction schedule.

An owner was selected: they proposed use of the Dock Express 20 on its maiden voyage, as it was a new ship being built by them.

For the balance of the cargo they would use other conventional geared ships.

Naturally we were concerned as any delay in the ship build, The cargo of silos was light and extremely fragile. CREDIT: PETER JESSUP

52 BREAKBULK MAGAZINE www.breakbulk.com

sea trials and certification could create risk to the construction schedule, but the agreed fallback plan was for the owner to utilize geared ships if necessary, prior to the delivery of Dock Express 20. Any additional cost for this above the contract value was at their risk.

The other area of risk was to ensure the fabricator completed the delivery of the purchase order in accordance with the due dates, to meet both the ship dates and construction schedule.

Given these risks, a mini-project team was established consisting of engineering, construction, logistics to focus on them. Significant interfacing took place with the ship owner on the new build progress through meetings and occasional visits to the shipyard, similarly with the fabricator and their facility.

Another significant issue and complication related to the sea fastening to ensure we could deal with the dynamic criteria of the ship during the voyage, yet avoid the risk of damage to the items and worse case causing them to crush. These items were similar to a soft drink can: when it is full of the liquid it is far stronger then when it is empty.

A combined team of technical representatives from the fabricator, ship owner, and our engineering and marine surveyors worked together to determine the sea fastening. This was primarily achieved by an ability to remove some of the bolts on the head and tail of the items.

Despite the ship owner’s efforts, the availability of the new ship was delayed so they implemented the fallback plan and started to use other suitable charter ships. Once the Dock Express 20 completed its sea trials and received certification its maiden voyage carried a large quantity of silos and blenders.

ISSUE 2 / 2021

The fabricator delivered on time and in total there were six charter ship voyages used. The sea fastening arrangement worked and no damage was inflicted on the cargo and the construction schedule was met.

LESSON LEARNED

Strategy and associated tactics to implement the logistics plan to support construction is essential.

Planning and scheduling is critical, with a particular emphasis on risks and their mitigation. Since events can occur that you cannot control, it is essential to develop in advance a fallback plan. Engaging and interfacing with all the groups involved in the plan, its tactics and implementation is important so agreement and ownership of each component of the plan is achieved. BBONE Peter Jessup started his career as

a freight forwarder and logistics specialist progressing into procurement, project procurement and project management executing complex projects. He has held vice president global procurement and supply chain management roles for major EPCs. He is a consultancy specialist in the field of procurement, logistics and project execution, based on his 35 years of experience. He can be reached at peter@proactivechanges.com.

KNOWLEDGE HUB: VETERANS

ALLIANCES MAKE EVEN THE TRICKIEST PROJECTS RUN SMOOTHLY

BY FAYÇAL BOUMERKHOUFA

Moving critical parts for project work via air is not uncommon, and a fairly familiar option with project owners and their appointed contractors. It is particularly useful in crisis situations.

In rare occaFayçal sions it is used Boumerkhoufa as the key transport conveyor of Cargo Live Logistics choice, especially for situations that combine geographical, time critical and complex end destination and last-mile scenarios.

When I worked for an airline I was asked by a manufacturer if we could move two modular LNG trains from the U.S. to the Majnoon Field in Iraq, preferably within a specific timeframe.

Going through the legal and commercial standard request for quotation to become an approved direct vendor to the energy company operating the construction was standard work. However, the implementation and education required to make this a successful project was different. It required in-depth coaching internally, for the customer and the agent parties involved.

As a project director I took it upon myself to convince the construction manager to engage our teams in educational sessions and to ensure all entities and divisions were truly familiar with the project requirements and understood the parameters of manufacturer and energy companies, including protocols, legal content and change of standard terms, and acceptance of the financial implications for delivering cargo in Iraq.

Meeting with the construction team and then linking them with the airlines’ engineering division resulted in the airline’s engineering team becoming an extended arm of the construction team. The effort paid off: each flight was loaded in the correct sequence for onward transportation to the construction site in the Majnoon area.

The problem identified up front was the rigidness of companies to stick to their guns, especially on the terms and conditions aspect. The construction manager and I formed an alliance, and we travelled to meet with the teams and to ensure all was understood, especially the objective.

This approach ensured the customer delivered to their client, the Iraqi Ministry of Energy, within the time frame, and without any hold up. A total of 68 AN124 flights were executed. The main lanes were primarily out of Houston, Texas and East Midlands, UK.

Cross-stakeholder engagement made this air cargo project a success. CREDIT: ANTONOV

The customer was asked by other energy companies in the area how they pulled it off, which was testimony to the concept and work performed.

Today I still enjoy a pleasant relation with the construction manager and have executed other ad hoc emergency services in the same realm, applying the same principle. BBONE Fayçal Boumerkhoufa is head special projects’ division, Cargo Live Logistics, a Rock-it Cargo company. He started his career with Panalpina in his native Belgium, spending 14 years in air charter and projects. He joined VolgaDnepr Group in 2008 and specialized in complex energy and oil and gas capex projects, as well as defense programs. He joined Rock-it Cargo Group in Woodlands, Texas, in 2019. He can be reached at faycal.boumerkhoufa@ cargolivelogistics.com. www.breakbulk.com BREAKBULK MAGAZINE 53

BACK PAGE

STEEL PRODUCTION

Annual Crude Steel Production 2013-2020 China has been outpacing the rest of the world in crude steel production since 2017, and its margin grew to 29 percent in 2020.

2000

Annual production (mt) World

China

Rest of World

World

China

Annual growth trend (%) Rest of World

15 12

1500

9 6

1000

3 0

500

-3 -6

0

2013

2014

2015

2016

2017

2018

2019

2020

-9

Largest Steel Producing Countries

Of the 40 producing countries listed, 26 saw declines, including six of the top 10 producers, and 14 countries by double digits.

In million tonnes RANK

1 China 2 India 3 Japan 4 Russia (e) 5 United States 6 South Korea 7 Turkey 8 Germany 9 Brazil 10 Iran (e) 11 Ukraine 12 Taiwan, China (e) 13 Italy (e) 14 Viet Nam (e) 15 Mexico (e) 16 France 17 Canada (e) 18 Spain 19 Egypt 20 Poland (e) 21 Saudi Arabia

2020 1,053.0 99.6 83.2 73.4 72.7 67.1 35.8 35.7 31.0 29.0 20.6 20.6 20.2 19.5 16.9 11.6 11.1 10.9 8.2 7.9 7.8

2019 % Change 1,001.3 111.4 99.3 71.6 87.8 71.4 33.7 39.6 32.6 25.6 20.8 22.0 23.2 17.5 18.4 14.4 12.9- 13.6 7.3 9.0 8.2

5.2 -10.6 -16.2 2.6 -17.2 -6.0 6.0 -10.0 -4.9 13.4 -1.1 -6.3 -12.9 11.6 -8.3 -19.8 14.1 -19.5 13.4 -11.9 -5.1

RANK

2020

2019 % Change

22 Indonesia (e) 7.6 7.8 23 United Kingdom 7.2 7.2 24 Austria (e) 6.7 7.4 25 Malaysia (e) 6.5 6.8 26 Belgium 6.1 7.8 27 Netherlands 6.1 6.7 28 Bangladesh (e) 5.5 5.1 29 Australia 5.5 5.5 30 Czechia 4.5 4.4 31 Thailand 4.4 4.2 32 Sweden 4.4 4.7 33 Algeria (e) 4.0 2.4 34 South Africa (e) 3.9 6.2 35 Kazakhstan (e) 3.8 4.1 36 Pakistan 3.7 3.3 37 Argentina 3.7 4.6 38 Finland 3.5 3.5 39 Slovakia (e) 3.2 3.9 40 Romania (e) 2.8 3.4 Others 35.3 39.6 World* 1,864.0 880.1

-2.4 -0.5 -10.2 -4.7 -21.1 -9.1 7.8 0.0 0.6 4.1 -6.6 66.7 -37.0 -7.2 13.3 -21.4 0.8 -18.3 -20.0 -10.6 -0.9

(e) Annual figure estimated using partial data or non-worldsteel resources. * The world total production figure in this table includes estimates of other countries that only report annually.

Source: World Steel Association, www.worldsteel.org 54 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 2 / 2021

EVERYTHING Discover New Project Business breakbulk.com