BREAKBULK &
INDUSTRIAL PROJECT CARGO March-April 2022
ROLLING THE ENERGY DICE
Movers Readying Capabilities to Service Transition
INSIDE THIS ISSUE Pace Taken Off MPV Rate Growth Heavy Haulers Face Off-road Challenge US Project Boom Imminent NEW: Up Front – Dynamic Content PLUS: Breakbulk MIddle East Recap
SPECIAL REPORT: EUROPEAN PORTS AND TERMINALS
WE KNOW WHAT WE'RE DOING Höegh Autoliners is a global leader in deep sea RoRo transportation services. To transport wider, longer and higher breakbulk and project cargo, we have developed specialised handling equipment to ensure your cargo's smooth and safe transportation. With over 90 years of experience from shipping, we can safely say that we know what we're doing, and we do it well.
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IN THIS ISSUE
18
Cover Story
BREAKBULK ENERGY UPDATE 18 ROLLING THE ENERGY DICE
Movers Readying Capabilities to Service Transition
BRAND NEW SECTION FOR 2022!
UpFront Thirteen pages of dynamic industry content!
26 EUROPEAN PORTS & TERMINALS SPECIAL
EUROPE’S CALL ON CAPACITY
Supply Chain Struggles Benefit Breakbulk
26
50
38
57
24 SHIPPING TRENDS
46 LOGISTICS PERSPECTIVE
MPV Bull Run Nearing Plateau
US Project Boom Imminent
PACE TAKEN OFF RATE GROWTH
38 INLAND TRANSPORTATION
HEAVY HAULERS FACE OFF-ROAD CHALLENGE
Proposals to Shift More Project Cargo Onto Rail and Waterways
41 THOUGHT LEADER
FULL INVESTMENT COFFERS
49 THOUGHT LEADER
NEW WORLD TECH ORDER Work Smarter to Bridge the Digital Divide
50 CASE STUDY
TECH AND TALENT CONVERGENCE
NO REST FOR TURBINE MOVE
42 BREAKBULK GLOBAL SHIPPER
57 CASE STUDY
SHIPPERS UNITE AT BREAKBULK EVENTS
Tweaks to Reduce Weight Give Greater Flexibility
Transforming for People Needed in Breakbulk NETWORK
Expansion of Global Shipper Network to Include Digital Platform
Project Team Endures Port, Weather Limitations
SQUEEZING OUT THE AIR
44 BREAKBULK EUROPE
Also in this issue
CARSTEN WENDT – Drilling
04 53 60 62
ADVISORY BOARD PROFILES
Down into Industry Challenges CRISTEL PULLENS – Young People a Solution to Industry Issues
EDITORIAL BREAKBULK MIDDLE EAST RECAP B REAKBULKONE BACK PAGE
www.breakbulk.com
BREAKBULK MAGAZINE 3
EDITORIAL
SHARING THE BURDEN Dear Breakbulk readers, As we go to press with this, the March-April 2022 issue of Breakbulk magazine, the world is in turmoil. The breakbulk and project cargo industry has always shown great resilience, such as during the aftermath of the financial crisis in 2008 and over the past several years of global pandemic. Now we are faced with a tragic situation that has brought an unprecedented level of uncertainty to the market, along with fear and sorrow for family, colleagues and all who face an unknown Nick Davison tomorrow. Breakbulk Events & Media, which has served the breakbulk and project cargo industry for more than 30 years as an information and networking hub, is responding to the issues that are affecting the industry today and analyzing their future impact. Our mission is to gather information from expert sources, report the news and look at its implications through the eyes of affected sectors from one end of the industrial supply chain to the other. You can count on Breakbulk for reliable coverage that is relevant to your business at its events, in its bi-monthly newsletter BreakbulkONE and in each issue of Breakbulk magazine. Our editors and reporters are developing stories around supply chain disruptions, as well as the impact on global energy, in particular the transition to greener sources of energy. In this, our annual energy issue, the team was
able to include some initial perspective on the global energy market within the framework of the war in the cover story “Rolling the Energy Dice,” on page 18. They are also examining the impact of sanctions on compliance, a topic that will be of utmost importance to all involved in the transport and logistics of project cargo. Editorial is working closely with our content team to bring these discussions from the pages of our publication and news site to the events themselves. With Breakbulk Europe approaching in May 17-19 in Rotterdam, program development is in the works under the guidance of its Program Advisory Board, which is comprised of executives from the Port of Rotterdam and WISTA in the Netherlands; Port of Tyne, VolgaDnepr, WISTA, Drewry and deugro Group in the UK; Wallenius Wilhelmsen, BBC Chartering and Siemens Energy in Germany; and KK Wind Solutions in Denmark. The cross-section of sectors and geographies ensures we have a comprehensive view of issues and are presenting programming that our Breakbulk Europe attendees can put to practical use. The months ahead will no doubt be challenging. Breakbulk events have been a source of collaboration to solve challenges, and most of all, a few days to gather as an industry for support and reassurance. As Jim Butcher, the American novelist, said, “Sometimes the only way to carry a heavy burden is to share it with another.”
EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gary.burrows@hyve.group NEWS EDITOR Carly Fields carly.fields@hyve.group SENIOR REPORTER Simon West simon.west@hyve.group DESIGNER Mark Clubb REPORTERS Paul Scott Abbott Felicity Landon Amy McLellan Lori Musser Malcolm Ramsay Thomas Timlen BREAKBULK EDITORIAL ADVISORY BOARD John Amos, emeritus Amos Logistics
Dennis Devlin Maersk
Dharmendra Gangrade Larsen & Toubro Limited
Margaret Kidd
University of Houston
Anders Maul
Blue Water Shipping
Dennis Mottola, emeritus Global Logistics Consultant
Sarah Schlüter Hapag-Lloyd
Stephen “Spo” Spoljaric Bechtel Corp
Roger Strevens
Wallenius Wilhelmsen
Jake Swanson
DHL Industrial Projects
Ulrich Ulrichs
BBC Chartering
Johan-Paul Verschuure Rebel Group
Grant Wattman
Combi Lift Americas
PORTFOLIO DIRECTOR Nick Davison nick.davison@hyve.group MARKETING & MEDIA DIRECTOR Leslie Meredith leslie.meredith@hyve.group
Nick Davison Portfolio Director, Breakbulk & CWIEME, Hyve Group
To advertise in Breakbulk Media products, visit: http://breakbulk.com/page/advertise SUBSCRIPTIONS To subscribe, go to http://breakbulk.com/page/ subscribe-breakbulk-magazine, or email: gary.burrows@hyve.group A publication of Hyve Group plc. The Studios, 2 Kingdom Street Paddington, London W2 6JG, UK
4 BREAKBULK MAGAZINE www.breakbulk.com
MARCH-APRIL 2022
UpFront Breakbulk Presents a New Opening Section, Focusing on the People and Businesses that Lead This Thriving Industry
By the Numbers: Energy One on One with Kyriacos Panayides, AAL Shipping The Hard Truth About Soft Skills Influencers: Dennis Devlin, Maersk, and Andy Tite, DHL Plus: Movers & Shakers, From the Sidelines, Viewpoint, Events Update, Breakbulk Studios and Deeper Dive
Neart na Gaoithe 3. CREDIT: COLLETT & SONS
WHAT’S INSIDE:
UpFront
BY THE NUMBERS Energy
Countries’ main source of electricity generation (if over 50%) Percentage of global electricity generation 31% Renewable
4% Nuclear
65% Fossil fuels
No data
Fossil fuels Coal, oil and gas
Renewable Hydropower, solar, wind
Source: BP Statistical
Nuclear
Review of Energy 2020
3%
53% Benchmark Brent and WTI crudes both trading north of US$95 a barrel on St Valentine’s Day – more than US$35 higher than the same time last year.
Turbines larger than 8 MW accounted for just 3 percent of global installations between 2010 and 2021 but will be 53 percent by 2030. Turbines have doubled in size in recent years, from around 3MW in 2010 to 6.5MW today.
The pandemic hit the oil and gas industry hard, with 2014 plans shelved and budgets $780bn retrenched: spending was US$320 billion in 2020 and US$351 billion in 2021, less than half the level of 2014.
99.7 million bpd
2019 $483bn 2020 $320bn
2021 $351bn
6 BREAKBULK MAGAZINE www.breakbulk.com
According to the IEA, U.S. oil output is forecast to rise by 1 million bpd on average, to 17.7 million bpd in 2022, as operators respond to higher prices by putting more rigs to work.
IEA raised its global oil demand estimates for 2022, which is expected to grow by 3.3 million bpd to its pre-Covid levels of 99.7 million bpd.
MARCH-APRIL 2022
INFLUENCERS We ask two prominent industry figures to give their viewpoints on a particular topic. In this issue we ask:
How can the breakbulk and project cargo industry deliver on COP26’s promises? Dennis Devlin, Senior Director – Special Project Logistics, North America Maersk Inc
“Currently, depending on which statistic you read, maritime transport emits around 940 million tons of CO2 annually and is responsible for about 2.5 percent to 3 percent of global greenhouse gases (GHG). “I believe the shipping industry in general is committed to delivering on the promises of COP26. The issue of global warming – and the need to reduce GHG – has been considered for a long time within the industry. IMO 2020 is an example, and just the beginning.
“It’s likely that container carriers will lead the way, with other sectors following.” “It’s likely that container carriers will lead the way, with other sectors following. The big issue is which fuel source (or sources) will be used, or will it be a mix. CMA CGM is already operating six 15,000 20-foot-equivalent-unit ships fueled by liquefied natural gas, while Maersk has ordered 12 newly built ships which will run on methanol. And Maersk has agreements to purchase green e-methanol created by renewable energy. But having many different fuel sources may be limiting the ability of the industry to meet the expectations of COP26. How does this impact the heavy-lift and breakbulk sector? The heavy-lift and breakbulk sector is much smaller, and therefore will not likely lead in the drive to determine which alternative fuel(s) are selected. Moreover, despite the current favorable rate environment, carriers in the heavy-lift and breakbulk sector are still facing the consequences of several years of a very weak market. Shipyards are far busier building other ships, notably container ships. Thus, industry experts are not predicting much, if any, short-term increase to the breakbulk fleet, which will restrict the sector’s ability to meet decarbonization goals.
Andy Tite,
Vice President, Global Business Development and Commercial Director Industrial Projects, DHL “COP26 started with an ambitious goal of gaining commitment for global greenhouse gas emissions (GHG) reductions to limit global heating to 1.5°C as well as to have net-zero emissions by 2050. This necessitates reduction of global emissions by 45 percent by 2030. What this means for the logistics, shipping industry and breakbulk sector specifically is we must reduce our emissions now and drastically cut our consumption of fossil fuels to the point of complete phaseout in the relatively near future. There have been major strides in the shipping industry in recent years with IMO2020, which ended up being far less disruptive than some had envisaged, and with continued investment in more efficient and cleaner vessels, which was mainly been driven by simple economics – they are cheaper to run! An aging fleet also coincided with market lows through to 2020 which resulted in a natural attrition of expensive and thirsty vessels. Since this time the market has turned full circle and as we see record-high freight rates and considerable profits for the carriers. We must encourage those carriers to future proof their existence with investment while they have the means to do so. This investment must not be based on just new tonnage, but with a focus on sustainable fuel sources. Within DHL we have committed to Net Zero 2050 and are already leading the way through the establishment of sustainable transportation options in road freight, air freight and FCL/LCL services. But we can do more. The missing piece of the puzzle is the needed investment from the carriers in the breakbulk market, only then can we truly deliver net zero projects without the need for carbon offsetting. Our clients will also help “steer the ship” with their future demands and based on clearly established criteria of needed carbon neutral transport solutions. Not so long ago, health and safety was a considerable focus for the breakbulk sector. It required significant change in culture and working practice and the market reacted very positively. Sustainability and carbon neutral transportation is the next call to action; those that prepare for this today will be the ones who are first to benefit tomorrow.”
While there may be some exceptions, overall, the manner in which the heavy-lift and breakbulk sector as a whole addresses decarbonization will likely be led by how the container and bulk sectors do so.” www.breakbulk.com
BREAKBULK MAGAZINE 7
UpFront
ONE TO ONE Kyriacos Panayides, AAL Shipping Carrier’s Prospects Gives CEO Much to Smile About
By Gary Burrows Two years ago, AAL Shipping (AAL) CEO Kyriacos Panayides stood among a gathering of AAL leadership, customers and journalists late into the multipurpose shipping line’s reception at the Summersalt Beach Club on a soft, breezy night in Dubai. Throughout the gathering, at the end of the first day of Breakbulk Middle East 2020 – the last such event held for nearly two years – Panayides did his best to entertain guests, despite a spate of overwhelming challenges facing his company and the market. He and his team had been navigating AAL through a decade-long record trough for MPV shipping – facing a potential pandemic and still looking for a leg up against dire global economic conditions, bulk commodity collapse, low cargo volumes and over capacity.
fellow ship operators, with only few in our segment rushing to the shipyards after a few good years.”
Capacity, Compliance
However, the current industry climate brings mounting urgency to rebuild an aging MPV fleet, with more than half of all vessels passing 15 years old.
While the fortunes over the past 18 months have helped reduce financing issues, it’s still an entirely different environment for fleet renewal than in the past. “Nowadays, we do not see fresh capital from outside the industry pouring in as in the previous cycle from 2006 to 2010,” Panayides said. “Then, banks were offering up to 90-100 percent loan-to-value and that attracted non-shipping investors looking for quick returns. They ultimately got their fingers burnt when the market turned downwards from oversupply of new vessels entering the market.”
“The current markets, current drivers, current negotiations, current service profiles, and the size of our ships are suitable for our service mode today. In two or three years’ time when something changes, we’ll adjust.”
Two years later, at 2022 Breakbulk Middle East in Dubai, Panayides was smiling like the cat that ate the canary.
“We’d suffered a lot for 10 years,” he admitted during a sitdown in the Shippers Lounge during the 2022 Breakbulk conference in Dubai. Shipping fortunes had changed dramatically as the globe struggled to revive from the initial onset of the pandemic and supply chain congestion pushing container fixtures to MPVs, along with burgeoning wind business. Since July 2020, when carriers existed hand to mouth, charter rates had skyrocketed 243 percent to February 2022, according to the Toepfer Transport Multipurpose Index. “Firstly, we have reached a point where we’re building our reserves, which secures long-term financial stability and supports our ambitious long-term business plan,” Panayides said. “Secondly, we are happy to see patience amongst our 8 BREAKBULK MAGAZINE www.breakbulk.com
He sees that as a key lesson learnt from the past, “Investment in the MPV sector today is being driven by owneroperators, people who know the sector and its limits. We know how much we can invest into the shipyards and won’t place a huge number of orders that could lead to oversupply, which was the reason our sector suffered for more than 10 years.” Whilst financing may be on better footing, alternative fuels and its global sourcing, as well as shipyard capacity are key issues slowing fleet renewal beyond the next few years. “Due to EEXI (Energy Efficiency Design Index for existing ships) and other related regulations on decarbonization coming in existence, operators with ageing fleets may have to scrap their older tonnage and thus supply might tighten further.” The IMO amended MARPOL Annex VI, introducing regulations 23 and 25 - the Efficiency Existing Ship Index (EEXI) and regulation 28 - the requirement to reduce Operational Carbon Intensity through the Carbon Intensity Indicator (CII). MARCH-APRIL 2022
Customers and especially larger publicly listed and multinational companies have their own emissions targets and are demanding cleaner, modern ships. “In recent years we have seen shippers become very selective with their counterparts and setting more qualifying parameters on their vendors’ approval processes, especially the majors in those industries we serve. Fleet renewal now depends on the needs of the operators and their own business models, in the absence of outside liquidity.” Panayides added.
technological advances and cargo demands, Panayides said. AAL offers global coverage with a combination of tramp and scheduled liner services. Its liner routes, where it’s A-Class and S-Class vessels sit, currently comprise three monthly liner services: • Asia – East Coast Australia (AUEC Service). • North and Southeast Asia – West Coast Australia Service (AUWC Service). • Europe – Middle East/India – Asia Monthly Liner Service.
MPV carriers are at a disadvantage in terms of newbuilding MPVs, due to container ship orders which shipyards prefer due to their simpler, less-complex design, Panayides said. “MPVs shipyards have increased their pricing, resulting in several operators pulling back from ordering as they’ve found prices simply too high.”
The rest of the fleet is deployed on its core trade lanes connecting five continents with regular sailings, though maintaining flexibility for tailoring voyages across major project cargo ports.
Timing is Everything
Nevertheless, AAL Shipping added eight MPVs to its fleet in 2021, purchased from the secondhand market and has now ordered six additional IMO CO2 -compliant vessels to be in the water by 2024. These vessels will be 32,000 dwt with 350-tonne heavylift cranes for combined 700-tonne maximum lift. Each vessel will be equipped with dual engines and have the flexibility to switch to other biofuels or methanol. The ships will bring AAL’s owned fleet to 728,600 dwt – 82 percent of its operating fleet which will also increase to a total of 880,200 dwt, excluding additional third-party vessels serving AAL on short-term charter.
Would growing regional markets, such as Africa and South America someday develop into liner trades? “Today, those are our secondary markets and we’re already there serving certain projects. However, if a project or contract comes along that demands greater regularity, then we will build more frequency and this might well turn into a liner service,” he answered. “This is precisely how we have built liner operations in the past.”
2022 Outlook
Panayides waves off commenting on market forecasts beyond 2022 but sees plenty of positives in the short term.
“We still see significant demand for container transport, but I think that will begin to stabilize. On the back of rising oil prices, oil and gas projects look to be on the horizon A rendering of the AAL Dubai, which is one of AAL Shipping has an advantage and that is a very positive sign – at six IMO CO2 -compliant, 32,000 dwt vessels with the shipyard, CSSC Haungpu least for as long as geopolitical relations that AAL Shipping has ordered. Wenchong Shipyard in China. As part remain stable. Wind energy volumes CREDIT: AAL SHIPPING of Schoeller Holdings, a major investment are also forecasted to continue growing company in ship-owning and other shippingwith the push to zero emissions and that will related sectors, AAL was able to leverage its own drive renewable energy projects forward. Furthermore, newbuildings with additional container ship orders for steel is set to be a significant base cargo, as infrastructure Schoeller’s other holdings. developments worldwide pick up momentum, after a long hiatus during Covid. And, for as long as container freight rates Panayides said the six new vessels, along with its eight other remain high, then the MPV share of the dry cargo business 25,800 to 33,000 dwt ships purchased on the secondwill also increase,” he said. handmarket, fit the carrier’s short- to mid-term portfolio demands, while serving its long-term vision. Beyond that, “it’s hard to tell and no one can accurately predict. … What might be at risk when the eventual correction “We currently have a fleet that is relatively modern with comes to the container market is older MPV tonnage. We the last generation of newbuilding activity completed only forecast that those vessels might well experience the most 7 years ago. We are not under pressure to place further jarring impact,” he added. investments and have the luxury to wait and assess market fundamentals. For now, though, Panayides speaks as though a weight has been lifted, and it’s reflected company wide. “What Meanwhile AAL “has flexibility. We are testing the market, is really pleasing to see is just how positive our teams are various drivers into decarbonization and new engines – all of and enjoying a much healthier market landscape. Despite which combined should give us a clearer roadmap forward.” this euphoria, they are all still extremely busy keeping our customer cargoes moving, beset with operational Models and Markets challenges from congested terminals, scheduling delays, AAL’s new vessels position the carrier well in the current low productivity at ports and land logistics issues due to the market and perfectly fit its longer-term service models, ongoing pandemic. We certainly cannot afford to take our as they have been carefully designed to cater for new eye off the ball for one moment.” www.breakbulk.com
BREAKBULK MAGAZINE 9
UpFront
CAREER PATH The Hard Truths About Soft Skills ‘Family’ a Common Theme Among Panelists
Among the hard realities for women – and men – who seek to advance professionally in the breakbulk and project cargo industry, core skills, or “soft skills” are building blocks of success. That was the message of the Women in Breakbulk breakfast, networking and panel held the second day of Breakbulk Middle East in Dubai, led by Leslie Meredith, marketing and media director of Breakbulk Events & Media. “Many people believe leaders are born, but I believe we can all learn to be better leaders,” said Meredith, who is program director for Breakbulk’s Women in Breakbulk. Meredith invited the session’s six panelists to relate about a soft skill that was of particular importance to them. LEADERSHIP. H.E. Eng. Hessa Al Malek, executive advisor to the minister, United Arab Emirates Ministry of Energy & Infrastructuwre, said “leadership is not a skill; it’s a combination of a number of skills.”
Hessa Al Malek UAE Ministry of Energy & Infrastructure
In particular, Al Malek said women have a “human sense,” particularly when it comes to managing a family, with each child’s different skills and needs, and those management skills can be applied to the workplace.
“To be a leader doesn’t mean you’re on the top and you just give instruction. No! You are one of the team. So if you know what you want and you know your teams capabilities, strengths and weaknesses
10 BREAKBULK MAGAZINE www.breakbulk.com
of each one, if you work on supporting their weakness, they will deliver the best of them,” she said. CREATIVITY. “Family” was mentioned again by Eng. Nawal Yousef Albanaee, director of the Future Energy Department, United Arab Emirates Ministry of Energy & Infrastructure.As the deputy of the happiness and wellbeing team and a member of the ministry’s innovation team, she said, “creativ- Nawal Yousef ity and innovation Albanaee are the DNA of any organization.” UAE Ministry of Energy & Infrastructure
She encourages creative thinking in her team by presenting “with a challenge and let them work it out. I support them, but I let them do the work by themselves,” but to “work as one team, work as a family.” RESOURCEFULNESS. In the recent times of chaos and crisis, “resourcefulness is the key to success in industry and in life,” said Sanaz Taransari, managing director, Seaport UAE.
Sanaz Taransari Seaport UAE
The pandemic has “forced us to work in unprecedented ways to come up with new ways and thinking,” she said. This has led to relying on different contacts and industry sources to get work done despite
lockdowns, lack of crew changes and proper sourcing. Further, empathy and motivation is required to support staff and keep them engaged. For crews stuck aboard vessels, Taransari worked to provide additional resources including technologies so seamen could be in contact with family, and providing offspring with allowances to help them “You must come up with solutions with what limited resources you may have. But if you work hard, you’re resilient and resourceful, you will always find a way to succeed.” ADAPTABILITY. “Adaptability is at the heart of human nature, and we have to use it to survive, to move forward and to progress,” said Bengi Yuceer, regional head of marine claims – TMEA, Howden Insurance Brokers. Since Covid, “we’ve had to change how we think, how we do business and how we communicate with colleagues and how we did all of these things Bengi Yuceer to succeed and TMEA, Howden move forward.” Insurance Brokers To illustrate her topic, though, Yuceer noted a time before Covid when, though she changed job, country, industry and sector, and found herself in more a support role whereas she had been in a core position. “I had to adapt very quickly because I initially did feel sidelined and undervalued,” she admitted. She adapted by “understanding the business she was in, the bigger picture and to understand the pressure points and where her skills could prove useful in the new and different environment.” MARCH-APRIL 2022
Women in Breakbulk participants, from left, Leslie Meredith, Breakbulk Events & Media, moderator; Sue Donoghue, DHL Global Forwarding; Katherine Yakunchenkova, Al Safina Security; Eng. Nawal Yousef Alhanaee, The UAE Ministry of Energy and Infrastructure; Sanaz Taransari, Seaport UAE; and Bengi Yuceer, Howden Insurance Brokers. Not pictured, H.E. Eng. Hessa Almalek, The UAE Ministry of Energy and Infrastructure.
CRITICAL THINKING. “When we’re talking about critical thinking, we’re talking about gathering a lot of evidence, documentation, information, analyze things in order to set Katherine up your final Yakunchenkova conclusion,” Al Safina Security said Katherine Yakunchenkova, managing director Al Safina Security. “At the end it has to be rational, staff supported and unbiased by all means.” The most important thing, she added, is that critical thinking requires impersonalized, unbiased views in setting conclusion. “You have to move away your emotions and personal opinions and traditions of doing things … Be creative and come up a solution no one else would have thought.”
TEAMWORK. “Without the team, I am nothing,” said Sue Donoghue, CEO Arab Cluster, managing director – Saudi Arabia, DHL Global Forwarding. “One person who would fight daily challenges, to try and deliver excellent customer strategy, to drive business growth but without a team behind me, with me, ahead of me then it doesn’t work.”
Sue Donoghue DHL Global Forwarding, Saudi Arabia
Like other speakers, Donoghue referenced a business team as a “family.” “We have to consider all of the teams that we have around us. Because when we empower the teams and we listen to other people’s perspectives, when we listen to the experts in the team, we built a group of people, we build a family that all bring something special to the table,” she said.
“We have to consider all of the teams that we have around us. Because when we empower the teams and we listen to other people’s perspectives, when we listen to the experts in the team, we built a group of people, we build a family that all bring something special to the table” – Sue Donoghue, DHL Global Forwarding, Saudi Arabia www.breakbulk.com
BREAKBULK MAGAZINE 11
UpFront
MOVERS AND SHAKERS Highlighting Recent Industry Hires and Promotions bremenports
Ronald Schwarze has been promoted to head of marketing at bremenports GmbH & Co. KG. Schwarze previously served as marketing manager at bremenports since Ronald December 2002. Schwarze
Combi Lift
German-based heavy-lift and project logistics provider Combi Lift has expanded its presence in the Americas by opening a new office in Houston, led by Breakbulk Veteran Grant Wattman, president and managing director of Combi Lift Americas LLC. Wattman, a member of the Breakbulk Media Grant Wattman Advisory Board, was president and CEO of Agility Project Logistics from February 2012 to April 2020, and has since been president and founder of Jade Management Group. Klaus Hilpert has joined Combi Lift as managing director and chairman of the board of directors. Hilpert has more than four decades of experience in the project logistics industry.
Simon Wasum
deugro also announced eight senior appointments and presidents of business regions: Tobias M. Schultz, president North America; Mark Hollenstein, president South and Central America; Mirko Menge, president western and southern Europe, India and Africa; Matias Setala, president Scandinavia and Eastern Europe; Sergey Godlevskiy, president Russia and CIS; Sven F. Hergemoeller, president Southeast Asia and Oceania; and Dirk Wittkowski, president greater China and Pakistan.
DHL Global Forwarding
deugro
deugro has established a new management structure with the five-person management team of Thomas C. Press, chairman and co-CEO; Klaus Strahmann, co-CEO; Simon Wasum, chief operating officer; Tim Killen, chief sales officer; and Felix Schneider, chief financial officer.
12 BREAKBULK MAGAZINE www.breakbulk.com
Lars Ingmann has joined the company as vice president, global head of renewables. He reports to Martyn Lawns, regional vice president industrial projects Europe. Jacob Jensen, has been name regional head of renewables. Brian Evans, a 15-year logistics veteran, joins DHL Industrial Projects as regional head of renewables – North America. In addition, Colin Hindley joined DHL Industrial Projects as global sector head, international energy companies, after more than 16 years with Agility, most recently as CEO Iraq/regional head of EPC Middle East.
Fluor Corp.
Ryan Foley
Klaus Hilpert
Tim Killen
Andy Tite is promoted to vice president, global business development and commercial director industrial projects. He will also lead a team of global sector heads that includes mining, oil and energy, interAndy Tite national energy companies, government and defense and EPC.
Jake Swanson
Ryan Foley, CEO of Industrial Projects at DHL Global Forwarding, a division of Deutsche Post., announced a series of promotions and talent acquisitions. Jake Swanson has been promoted to regional vice president – Americas, vacating his dual role as global sector head EPCs, and global head, sector strategy.
Trevor Anderson has been promoted to general manager of Fluor Corp., the U.S.-based engineering, procurement and construction firm. Anderson, based in Johannesburg, South Africa, has been with Fluor for four years.
Horizon Air Freight
Thomas Damsgaard has started a new position as director board of directors at global logistics provider Horizon Air Freight. He remains president/operating advisor at Vimar Global Consulting, which focuses on the maritime value chain.
Thomas Damsgaard
MARCH-APRIL 2022
FROM THE SIDELINES Here we present some notable voices from the industry, including participants at Breakbulk Middle East in Dubai, Feb. 1-2. Rafic Mecattaf, CEO, DSV Middle East & North Africa On integration of Agility acquisition: “The integration process is going extremely well, we’re on track. I wouldn’t say we’re almost done, but by the middle of the year we will be …”
Kristian Lund Knudsen, global head of special cargo solutions, Maersk
On sustainable fuels for newbuildings:
On whether carriers will cut out forwarders:
“We are not talking about fossil fuels anymore. We talk about sustainable energy, we talk about ammonia, we talk about hydrogen, we talk about methanol. So whatever we do in shipping, we need to make sure the environment is well-protected.”
Cyril Varghese, head of global logistics, Fluor On shipper-carrier relations: “The relationships between stakeholders is not a one-way street. I cannot expect to treat the shipping lines like slaves when the rates are down and when the choices are plenty.”
Ibrahim Behairy, managing director for Middle East & Africa, Winterthur Gas and Diesel
“This is a narrative that has been very popular in the media and it creates a lot of attention and a lot of heat and I think quite frankly it has been blown out of proportion”
Khalid Al Shehhi, manager of marine projects at the Abu Dhabi National Oil Co.
Susan Oatway, senior analyst, multipurpose and breakbulk shipping, Drewry
On the shift to digitalization:
On MPV operators’ response to higher rates:
“As an operator and ship owner, we always try to improve our efficiency and reduce our operating costs. Covid-19 showed us all this in one year.”
“I do think that they have taken every opportunity possible. More newbuildings would have been good … but there are strong reasons why that did not happen – not the least because it is a cautious sector with little outside investment.”
VIEWPOINT Follow Breakbulk Events Media on LinkedIn to participate in our surveys. This issue’s question: During 2022
11%
When Do You Think Ocean Freight Rates Will Stabilize? During 2023
Beyond 2024
54%
35%
From 114 Respondents
“Like gold & property, the price trend of ocean freight will never again see a downward slope, the graph will only climb upward. Thanks to the perfect pretext of pandemic which was the spark to ignite this inflation.” – Renfeer Razack, head of operations, Marine Allianz
www.breakbulk.com
BREAKBULK MAGAZINE 13
UpFront
EVENT UPDATE Breakbulk Europe Advisory Board Leads the Way 2022 Event Agenda Addresses Key Industry Themes
The all-new Breakbulk Europe Advisory Board met for the first time Nov. 22, and again on Jan. 25, as members discussed the themes that will shape content for Breakbulk Europe, to be held May 17-19 at the Rotterdam Ahoy.
optimize their processes digitally. It is also a subject to share best practice and to understand how the supply chain can operate more efficiently for all.
Excitement is building through these kick-off meetings with an overview of the 2022 event, held at new venue, and will include additions such as Discovery Zone, a future on the show floor showcasing innovations across water, land and air. “We also shared more detail on our all-new Global Shipper Network, which replaces the Breakbulk Masters, our program for cargo owners across the supply chain,” said Victoria Pope, head of content for Breakbulk and CWIEME.
Digitalization and Innovation will be Digitalization themes presented widely across the show. The addition of the Discovery Zone will enable us to expand our content on these themes. The key question for the industry: How to embed technology and how companies can work together to ensure systems speak to each other and contribute to smoother processes and better efficiency for all.
Breakbulk’s content team has conducted in-depth research with industry professionals to delve deeper into key industry challenges, trends and opportunities to help shape the content at Breakbulk Europe. Content shared these themes with the Advisory Board to gain feedback
Sustainability
Freight Rates and Capacity
Freight rates and capacity was by far the biggest talking point, and with predictions that the situation will not ease before the end of the year, Freight Rates it will be a key topic of conversation at Breakand Capacity bulk Europe. Cargo owners are having severe issues in the supply chain with getting components to where they need to be, and with the situation expected to continue, it is important to discuss how to be smarter with supply chains to limit disruption. A big question: What really is “normal” when it comes to rates and capacity.
Digitalization
Thomas Sender Mehl, director, global sales and operations planning and supply chain excellence at KK Wind Solutions, said digitalization is an area the industry, particularly cargo owners, are finding challenging and where Breakbulk Europe could provide specialist content, assisting companies and industry professionals with how to
Ekaterina Andreeva Volga-Dnepr Airlines
Sustainability is driving many initiatives across the supply chain. With net zero targets in place, sustainability metrics are now included in tenders, and society is becoming more aware and conscious of the impact on the environment. The Advisory Board welcomed coverage of topics such as CO2 monitoring and tracking, future fuels for ships, making the entire supply chain more sustainable, and moving Sustainability towards greener forms of energy.
Across the
Supply Chain Christel Pullens, president of WISTA Netherlands, suggested aligning sustainability content with the European Union’s green plan, Fit for 55, as this directly impacts companies working across the supply chain and the targets that they need to meet. Through Fit for 55 the EU aims to reduce greenhouse gas emissions by 55 percent by 2030 and will drive the movement towards a more carbon-neutral supply chain in Europe.
Post-Covid, Talent Gap
Already a cause for concern, the growing talent gap was further widened by Covid, and the situation has become more critical than ever. Such a specialized industry must rely on
Simon Brett
Ruediger Fromm
Tim Killen
Port of Tyne
Siemens Energy Global
deugro group
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Danny Levenswaard Port of Rotterdam
Long-term Impact of Covid
Susan Oatway Drewry
MARCH-APRIL 2022
specialized talent, which has suffered through furloughs, mergers and acquisitions and redundancies, all linked to Covid. Breakbulk content will look to do its part, hosting conversations at Breakbulk Europe to see how to make the industry more attractive to those starting a career. The Breakbulk Education Day informs and inspires students enrolled in local universities is one way Breakbulk supports and assists with this challenge. Sue Terpilowski, press officer for WISTA International and director, Image Line, believes students should be addressed at a much earlier age to have more of an impact. Breakbulk feels passionately about doing our part to ensure the future sustainability of the industry. We’re looking into how we can engage with school-level students who may not be aware this industry exists, Talent Gap to inspire them to pursue a career in the sector. The Advisory Board fully supports this and there were already examples of how they are engaging with schools that we can support. Watch this space! Tim Killen, executive vice president of deugro, added that professional career development for those already in the industry to explore new opportunities and to help retain the best talent. Focusing on upskilling, professional development, progression routes and careers ensure the industry doesn’t lose the talent it already. Breakbulk Europe will host professional development workshops covering a range of topics to provide an opportunity for attendees to upskill as well as build and develop their networks.
first events business to sign the Maritime UK Diversity in Maritime Conference and Events Panel Pledge. This pledge has been established to ensure that maritime events are inclusive, and conferences have diverse panels. Breakbulk Europe is committed to ensuring diversity and inclusion across the entirety of the event. With the support of our Advisory Board and working with key groups such as WISTA and Maritime UK, we will showcase our diverse talent across our industry. With these key themes and building blocks forming the basis of Breakbulk Europe’s content, we rely on our Advisory Board to bring it to life. Our full conference agenda is live at https://europe.breakbulk.com/Business-Programme, and check the website and Breakbulk Europe’s newsletter for further updates.
Other Key Content Themes
IMO Regulations
Renewables/ Offshore Wind
Energy Transition
Project Outlook
CO2 Monitoring and Tracking
Macro Focus
Danny Levenswaard, director breakbulk, Port of Rotterdam emphasized the importance of covering macro level trends such as trade agreements and their impact on breakbulk cargo flows economic outlooks. This will definitely be featured in the agenda, as this has traditionally been among Breakbulk Europe’s most attended sessions.
Future Fuels
Diversity and Inclusion is a critically important theme that will also be addressed in the agenda and at wider Breakbulk Europe event. Breakbulk Europe was recently the
Christel Pullens WISTA Netherlands
Thomas Sender Mehl KK Wind Solutions
Supply of Vessels – MPV Fleet Update
Marko Stampehl
Sue Terpilowski
Carsten Wendt
BBC Chartering
WISTA International
Wallenius Wilhelmsen
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BREAKBULK MAGAZINE 15
UpFront
BREAKBULK STUDIOS Recent video highlights from Breakbulk Studios, focusing on interviews and overviews from the recent Breakbulk Middle East at the Dubai World Trade Centre in Dubai, UAE.
DHL: Understanding the Complexity of Shipping Rates Amadou Diallo, CEO of DHL Global Forwarding Middle East & Africa, discussed one of this year’s big topics: capacities and rates. Diallo argued that high freight rates can no longer be blamed on just supply and demand; instead hosts of more complex issues are driving costs. With little industry consensus on when a return to ‘normal’ is likely, he asks: Are higher rates really such a bad thing? https://www.youtube.com/ watch?v=f6uk9YT5o3o
Jaber: What True Digitalization Means for the Industry The breakbulk industry has not always been the quickest to embrace the shift from manual to digital, said Mohammad Jaber, COO at DSV Abu Dhabi and MD for Air and Sea. Companies need to seek out their own solutions to ensure they are at the forefront of the digital revolution. He also offered some invaluable advice on trusting the next generation of project logistics professionals. https://www.youtube.com/ watch?v=AcNrmLiKtRk&t=226s
DSV’s Rafic Mecattaf Sees Huge Potential in Renewables Rafic Mecattaf, CEO of DSV Middle East & North Africa, was enthusiastic about DSV’s progress in assimilating Agility by mid-2022. He described the acquisition, creating the world’s third-largest logistics and freight firm, as “very complimentary. The best skill set in the region, blue-chip customer portfolio and we’re definitely going to continue on that trajectory.” https://www.youtube.com/ watch?v=pjl_tiOlkWc&t=8s
Fluor’s Cyril Varghese Explains Rates and Capacities Issue Cyril Varghese, global logistics director at Fluor, who moderated the conference’s “Managing Rates and Capacities” panel event, explained how rising demand driven by a resurgence in energy and mining projects would continue putting pressure on already-stretched markets. Some stability in freight rates was likely this year, he said, although rates would remain high. https://www.youtube.com/ watch?v=NBIdlNQ1VRc&t=45s
Breakbulk Middle East 2022 Day 1 Recap A whirlwind start to Breakbulk Middle East 2022, the region’s largest event for the breakbulk and project logistics industry. Day 1 played host to some brilliant sessions, with expert panels tackling key topics from capacities and recruitment to project financing and digitalization. https://www.youtube.com/ watch?v=7P-jUHC0kCo
Breakbulk Middle East 2022 Day 2 Recap Day 2 of Breakbulk Middle East 2022 focused on the future, with panel sessions covering women in breakbulk, seafarer welfare, a review of pipeline projects and West Africa. The conference also hosted a government round table and a session on empowering the next generation of breakbulk professionals. https://www.youtube.com/ watch?v=QKC4XdE6VVo
For more videos on a wide range of topics, visit Breakbulk365 https://breakbulk.com/page/breakbulk365
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MARCH-APRIL 2022
DEEPER DIVE – WIND A snapshot of recent reports, white payers, analyses and news sources focusing on key industry sectors Turbine Installation Vessel Demand 80 70 60 50 40
12+ MW 9-12 MW 6-9
MW
4-6
MW
0-4
MW
20 10 2010
“The auction will allow offshore wind developers to bid on six lease areas – the most areas ever offered in a single auction – as described in BOEM’s Final Sale Notice. Leases offered in this sale could result in 5.6 to 7 gigawatts of offshore wind energy, enough to power nearly 2 million homes. As offshore wind technology continues to advance, these areas may have the potential to produce even more clean energy.” Read more at: https://tinyurl.com/jxua6sv9
Turbine Makers Face Challenges
30
0
the first offshore wind energy auction under the Biden-Harris Administration.
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Source: Rystad Energy OffshoreWindCube, Rystad Energy research and analysis
Larger Wind Turbines Face Vessel Bottlenecks
“Offshore wind turbines are growing in size as technology advances and demand for renewable energy soars but installing them could be a headache for operators as demand will outpace the supply of capable vessels by 2024,” said energy research firm Rystad Energy. Read more at: https://tinyurl.com/ym7af7sv
wpd Pushes Romania Offshore Development
“At the end of July 2021, wpd offshore has become the first company in Romania to officially apply for the development of offshore wind energy projects in the Black Sea. The Black Sea 1 (500 megawatts) and Black Sea 2 (about 1.4 gigawatts) projects, for which separate project companies have already been established, are to be developed and built off the Black Sea coast.” Read more at: https://tinyurl.com/2s4477mp
“The global business environment for wind energy remains volatile in the short term and prosperous in the long term. As communicated at the release of our results for the third quarter of 2021, we expect the near future and at least 2022 to be heavily impacted by cost inflation, while the emergence of an energy crisis caused by geopolitics and fossil fuel volatility has also resulted in dramatic increases in energy prices,” said wind turbine manufacturer Vestas. Read more at: https://tinyurl.com/jrxj3euy
Norway Kicks-off Offshore Wind Development
“Norway will launch its first tender for bottom-fixed offshore wind turbines in the southern North Sea later this year, planning to develop 1.5 gigawatt of electricity that will supply the Norwegian mainland,” Reuters reported. “The first turbines could be completed in the second half of this decade, Prime Minister Jonas Gahr Stoere said in a news conference, adding that government subsidies may be needed to get the project going. “A planned second development phase, in the same area of the southern North Sea, will come later, have the same capacity and may supply power to the European continent, Stoere said.” Read more at: https://tinyurl.com/sjfhmw9k
Philippines Largest Offshore Project Secured
“The Blue Circle and its partner CleanTech Global Renewables Inc. have signed their first wind energy service contract for an offshore wind project in the Philippines with the 1.2 GW project in Bulalacao, Oriental Mindoro …
Norway
“The Blue Circle and CleanTech have succeeded in securing the exclusivity for the Bulalacao site development through a service contract in a competitive context. The planned 100 turbines with a unit capacity of 12 MW for a total of 1200 MW will constitute the largest offshore wind project of the country” Read more at: https://tinyurl.com/2cvzvky2
Utsira Nord Denmark
Energy Auction for New York Bight
“Secretary of the Interior Deb Haaland announced that BOEM will hold a wind energy auction on Feb. 23, 2022, for more than 480,000 acres in the New York Bight. This will be
UK
Soerlige Nordsjoe II CREDIT: REUTERS, OPENSTREETMAP
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ENERGY UPDATE
ROLLING THE ENERGY DICE BY AMY MCLELLAN
Movers Readying Capabilities to Service Transition
J
ust two months into 2022, as many pundits were theorizing that the Omicron variant would hasten the end of the pandemic and return life to normal, Russia sparked a new crisis by invading Ukraine. Oil prices surged to US$105 a barrel as Western nations unleashed a barrage of sanctions to isolate Russia, one of the world’s top producers of oil, gas, metals and agricultural products. The EU, the U.S., the UK and Canada announced that the assets of Russia’s central bank would be frozen and some Russian banks were excluded from SWIFT, the so-called plumbing of the international payments system, piling further pressure on the ruble, while the EU barred Russian planes from its airspace. At the time of writing, fighting was underway in many parts of Ukraine, with the Russian forces finding fiercer resistance than expected. Russian President Putin moved the country’s nuclear deterrent status to high alert, ahead of planned talks to try to find a solution. Oil markets were keeping a nervous eye on events, fearful of energy disruption from a country that supplies about a quarter of the EU’s petroleum oil imports and about 40 percent of its gas. At the time of writing, an oil depot south of the capital Kyiv was ablaze, BP was to offload its 20 percent stake in Russia state-owned oil company Rosneft while Norwegian energy group Equinor was divesting its Russian holdings. Even before the Russians began amassing troops on the Ukrainian borders, the price of oil was on an upwards trajectory, driven by a resurgence in demand following the worst 18 BREAKBULK MAGAZINE www.breakbulk.com
of the disruption of the Covid-19 pandemic. Indeed, despite the emergence of a vastly more contagious variant towards the end of last year, oil demand defied expectations in Q4 2021, rising by 1.1 million barrels per day, or bpd, to 99 million bpd. This prompted the International Energy Administration, or IEA, to raise its global demand estimates for the year ahead, which is expected to grow by 3.3 million bpd to its pre-Covid levels of 99.7 million bpd. The rebound in demand has been compounded by the hangover of pandemicpostponed
exploration and production spending, which has curtailed new supplies coming onstream. 2022 is starting off with global oil inventories well below prepandemic levels, with the Organization for Economic Co-operation and Development, or OECD, total industry stocks ending
MARCH-APRIL 2022
2021 at their lowest levels in seven years. This could be enough to see OPEC+ unwind the cuts imposed in response to the Covid-19 crisis, with commentators expecting to see more oil coming to market from the producing nations. Ecuador, Libya and Nigeria are already ramping back up and there’s the potential for Saudi Arabia and Russia to set records if remaining OPEC+ cuts are fully unwound. Non-OPEC production is also forecast to grow, with the U.S., Canada and Brazil set to pump at their highest ever annual levels in 2022. According to the IEA, U.S. oil output is forecast to rise by 1 million bpd on average, to 17.7 million bpd, as operators respond to higher prices by putting more rigs to work. It’s also important not to discount the impact of the Iran nuclear deal between Tehran and the five permanent members of the UN Security Council along with Germany and the EU, which provided sanctions relief for Iran in exchange for curbs on its nuclear program. “The wildcard is the Joint Comprehensive Plan of Action and whether a deal can be reached that would bring more than a million barrels back online quickly and ease nearterm pressures,” said Craig Erlam, senior market analyst, UK & EMEA at forex and Craig Erlam futures exchange OANDA OANDA.
REVERSING UNDERINVESTMENT
With prices in a much more comfortable range for producers, the question is whether they now have the capacity and appetite to respond. “It’s clear that oil demand is going to be strong over the next year or two; the question is whether producers can ramp up production and respond to these inflated prices,” Erlam said, pointing out that OPEC+ has shown that is not so straightforward after a period of underinvestment. According to IEA data, annual investment in upstream oil and gas peaked at around US$780 billion in 2014 – since then the highest annual spend was 2019 at US$483 billion. The pandemic hit the industry hard, with plans shelved and budgets retrenched: spending was US$320 billion in 2020 and US$351 billion in 2021, less than half the level of 2014. But this isn’t just price-related retrenchment, it is part of a structural shift as the industry responds to climate change pressures, both internal and external. These include a sensible wariness not to invest in assets that could well be left stranded should policymakers decide fossil fuels must stay below ground to prevent catastrophic climate change. Already some banks have disavowed fossil fuel investments, making it increasingly difficult for companies to finance new developments. The lack of investment is already being felt at the front edge of the exploration and production business, where global oil and gas discoveries in 2021 were on track to hit their lowest full-year level in 75 years, according to analysts from Oslo-based energy consultancy Rystad Energy.
A STUBBORN STATUS QUO
Even so, it’s clear that fossil fuels will be with us for many years to come – and current high prices will only prolong their dominance of our energy supplies. According to the latest World Energy Outlook 2021 from the IEA, demand for fossil fuels will peak by 2025 if countries meet their climate pledges to limit global warming to 1.5 degrees C, but that “if” is doing a lot
of heavy lifting. Indeed, while the IEA acknowledges that the “new energy economy is coming into view,” it also accepts that it is not coming forward quickly enough to avoid severe impacts from a changing climate. The Paris energy watchdog also injected a sobering dose of reality, warning that “every data point showing the speed of change in energy can be countered by another showing the stubbornness of the status quo.” That status quo can be seen everywhere, from the busy order books of yards building floating production storage and offloading units to the North Sea oilfields getting the nod to proceed to the ongoing consumption of coal, with demand expected to hit an alltime high this year. Indeed, as Erlam of OANDA pointed out, the transition away from fossil fuels is going to take many years. “Prices could remain high during that period which will always attract investment,” he said. “Producers can’t ignore high prices, especially those that can produce as much lower costs, like U.S. shale.”
“... Every data point showing the speed of change in energy can be countered by another showing the stubbornness of the status quo.” – IEA This is particularly the case as prices nudge north of the psychologicallyimportant US$100 a barrel threshold. According to shale researcher Artem Abramov of Rystad Energy, up to 2.2 million bpd of U.S. tight oil could be unleashed in the event of a supercycle. Already production from the U.S. Permian Basin, Eagle Ford, Niobrara, Bakken and Anadarko basins has been gushing with black gold, with output of 7.7 million bpd in Q4 2021 and an expectation of 8 million bpd by Q2 www.breakbulk.com
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ENERGY UPDATE
2022, potentially rising to 9.9 million bpd by Q4 2023 should prices remain above US$100. It’s not all green-for-go in U.S. shale, however, with Rystad’s Abramov highlighting “acute supply chain bottlenecks,” winter-related weather disruptions and rising prices of materials, including sand used in tight oil production, that could act as a drag on production growth.
SUPERSIZED OFFSHORE WIND OPPORTUNITIES
While fossil fuels remain stubbornly in demand, there’s no doubt that for heavy-lift and project cargo contractors there’s enormous growth in renewables, particularly offshore wind. “Offshore wind keeps double-digit growth on an annual basis,” said a spokesperson for Jumbo, the Dutch
heavy-lift specialist. “Europe is still a big player. However, the U.S. and the APAC countries are also investing heavily in this market.” The rapid emergence of the U.S. market is confirmed by Danny Cain, director of safety and risk management at Kentucky-based Edwards Moving. “Many of the heavy-haul companies are taking a chance going after the offshore wind activities,” Companies such as Mammoet are cutting their teeth on pioneering projects, such as the Kincardine Offshore Wind Farm in UK waters, which will be the largest offshore wind farm in the world. CREDIT: MAMMOET
INVESTING AND INNOVATING Heavy-lift and project cargo companies are investing and innovating to meet the challenges of the energy transition. In October 2021 specialist heavy-lift project carrier, AAL Shipping acquired two heavy-lift ‘mega-size’ 33,000 deadweight-tons multipurpose vessels, adding to the four other vessels purchased over the course of 2021 (two heavy-lift and two mega-lift G-Class MPVs) as well as progressing its newbuild programme of at least four premium heavy-lift carriers. Managing Director Kyriacos Panayides said the third-generation building
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program had been planned for “several years now, patiently waiting until such time that market forecasts and projected cargo demand within key customer verticals proved sustainable for this kind of investment.” Those forecasts include the increasing demands of the offshore wind sector. Some semisubmersible heavy-lift vessels, such as Heerema Marine Contractors’ Thialf and Sleipnir, are being proposed for turbine installation. The Thialf will install 27 turbines – each measuring 9.5 MW – at the Arcadis Ost wind farm in the Baltic Sea in 2023, becoming the first floating vessel to
install commercial wind turbines of this size. Heerema has said both the Thialf and Sleipnir are already capable of installing 15 MW+ turbines and, with some adjustments, these vessels could even install 20 MW turbines. Meanwhile, Mammoet has developed a new lifting system, for release in 2023, to position ever-taller onshore wind turbines. The new lifting system allows theoretically infinite hub heights by attaching directly to the tower itself, and because it’s powered 100 percent by electricity, it paves the way towards emissions-free turbine erection.
MARCH-APRIL 2022
ENERGY UPDATE
Cain said of the White House’s green energy push. President Biden’s US$1.2 trillion Infrastructure Bill to unlock federal investment in bridges, roads and rail as well as the nation’s broadband, water and energy systems is anticipated to unlock new contracts, although Cain said he worries the much-needed investment in new bridges could be a wasted-opportunity if engineers don’t accommodate the needs of super heavy loads. “There is no real reserve capacity built into these new bridges to handle heavy super loads,” he said, pointing out this could be an issue as heavy-lift specialists stay busy delivering the transformers, generators and other energy-related equipment that will be required to upgrade the U.S. energy grid for the 21st century. Offshore wind is pushing the industry to scale-up its capabilities. Turbines have doubled in size in recent years, from around 3 MW in 2010 to 6.5 MW today, with some of the biggest weighing in at 10 MW. Turbines larger than 8 MW accounted for just 3 percent of global installations between 2010 and 2021 but will be 53 percent by 2030. Some projects will be even bigger, with 13 MW turbines set to be in action at the Vineyard Wind development in the U.S. and Dogger Bank in the North Sea and 14 MW turbines offshore Taiwan. Projects in Germany and the U.S. involve 15 MW turbines.
KEEPING UP WITH GROWTH
One potential brake on growth is a shortage of vessels capable of lifting and moving these mega machines. “When turbines were smaller, installation could be handled by the first-generation fleet of offshore wind vessels or converted jack-ups from the oil and gas industry,” explained Rystad analyst Martin Lysne, who forecasts a bottleneck of capacity as soon as 2024. “However, as operators continue to favor larger turbines, a new generation of purpose-built vessels is required to meet demand.”
“As operators continue to favor larger turbines, a new generation of purpose-built vessels is required to meet demand.” – Martin Lysne, Rystad
ulk B r e ak b Eu r o p e 1 L 31 B o oth
Space for your largest projects The 18-hectare site of Turbinenwerk Mannheim offers spacious halls partly with floor loadings of a minimum of 15 tons per square metre. Some halls are additionally fit-out with overhead cranes which have got a lifting capacity of up to 250,000 tons. Furthermore, there is a railway connection on the site and an existing route for heavy goods traffic. There are providers in the neighborhood who can support you in your transport operations.
www.turbinenwerk-mannheim.de info@aurelis.de
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ENERGY UPDATE
“Offshore wind keeps double-digit growth on an annual basis.” – Jumbo
He pointed out that currently only a handful of purpose-built vessels can install 10 MW+ turbines and none are currently able to install 14 MW+ turbines. This is echoed by the Jumbo spokesperson, who said that from 2025 there will be a shortage of vessels to lift and install new generation turbines. While contractors are investing in newbuilds to handle the bigger lifts, there will be a bottleneck as a result of the mismatch between supply and demand. “Cable laying, given the market’s fast growth, is another challenge where there simply 22 BREAKBULK MAGAZINE www.breakbulk.com
will not be enough vessels to meet the demand,” said the spokesperson. Floating wind is also seen as a major future market, described by one operator as a “vast market to grow in.” The development of this emergent market will only exacerbate the vessel shortage: with stronger winds in the deep offshore, larger turbines will be required, necessitating investment in specialist vessels. This market is still in its infancy but is expected to grow fast. Companies are already cutting their teeth on pioneering projects, such as the Kincardine Offshore Wind Farm in UK waters, which will be the largest offshore wind farm in the world, and Windfloat Atlantic, off the coast of Portugal. Mammoet successfully completed the loadouts of five floating wind platforms
at the Navantia Fene Shipyard in Spain, destined for Kincardine. The energy transition is reshaping the size and capabilities of the heavy-lift and project cargo industries. Whatever the current crisis in Ukraine, however the oil price responds to that situation and no matter the latest twist in the Covid-19 pandemic, climate change currently represents a non-negotiable seismic shift in how the energy markets are structured. The good news is today’s contractors are readying their capabilities to respond to this new reality. BB Freelance journalist Amy McLellan has been reporting on the highs and lows of the upstream oil and gas and maritime industries for more than 20 years. MARCH-APRIL 2022
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SHIPPING TRENDS
PACE TAKEN OFF RATE GROWTH MPV Bull Run Nearing Plateau BY CARLY FIELDS
W
hile the constraints in both the container and the bulk sectors are expected to last well into 2022, there are still reasons to be cautious on the medium-term outlook for multipurpose vessels, or MPVs. Drewry’s Senior Analyst, Multipurpose & Breakbulk Shipping, Susan Oatway told Breakbulk that the continued supply chain issues dog MPVs as much as any sector with ships unable to call at Covid-bound ports. Consequently, Drewry expects MPV freight rates to continue to rise
over 2022 but at a much slower rate as supply chain problems start to come under control and shippers reach a ceiling for freight on MPV tonnage. MPV freight rates are expected to plateau by the end of Q1 2022. “Although the problems that continue to plague global supply chains are acting as a positive effect on this sector, the next wave of containership newbuildings, expected to leave the yards over 2023, will undoubtedly have a detrimental effect on MPV share.” Oatway said she believes that MPV operators have for the large part made the best use of this period of growth.
MPV Market Share m tonnes 10,000
1,600 1,550
8,000
1,500 6,000
1,450 1,400
4,000
1,350 2,000
0
1,300
2019
Total dry bulk
2020 Total general cargo
2021
2022
1,250
Total MPV market (right axis)
Source: Drewry Multipurpose Shipping Market Review and Forecast 4Q21
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“I do think that they have taken every opportunity possible. More newbuildings would have been good, with associated demolitions, but there are strong reasons why that did not happen – not least because it is a cautious sector with little outside investment.”
CARGO FLIP-FLOP
Much of the MPV growth is attributed to the return of breakbulk cargoes to general cargo ships, which either struggled to secure space or faced prohibitive freight rates – or both – in the container trades. While Oatway is reluctant to put an absolute figure on how much of that cargo will stay with MPVs once container freight rates recede, she noted that the defining factor will be “how aggressive the container lines are at bringing those cargoes back.” Pre-2020 they were very aggressive and rates were driven very low, she said. “There may be less of that going forward, but we would still expect to see a significant portion returning to containers as they have invested in project cargo and containerizing breakbulk.” On the supply side, Oatway noted that over the last few years, the combined fleet of heavy-lift capable tonnage (with safe working load, or SWL, over 100 tonnes) and nonheavy-lift capable tonnage has been gradually contracting, with demolition levels exceeding newbuilding deliveries. However, that changed over 2021 with a slight increase in overall tonnage. Drewry expects that to continue into the short term. But, Oatway warned, this is not a reason for celebration as the shift is not due to a change in ethos, but simply because demolition levels are so low. MARCH-APRIL 2022
Drewry’s calculation of the age profile of the fleet reveals that more than 55 percent of the total fleet is more than 15 years old, while 40 percent is more than 20 years. In detail, the fleet ranges from an average age of 24 years for geared MPVs to 12 years for what Drewry classifies as premium project carriers with a lift capacity of greater than 250 tonnes. But newbuild activity remains subdued and the orderbook low. As at the beginning of December the orderbook stood at slightly more than 1.4 million deadweight-tonnes, equivalent to less than 5 percent of the operating fleet. For the last five years, most of the growth in the fleet has been from the project carrier sector, as this is where the potential for future demand lies. Oatway noted that the MPV sector is “probably one of the most cautious” when it comes to long-term investment, not least because its niche is heavily influenced by the competing container and bulk sectors. There is also very limited speculative ordering, with owners preferring to build to replace or build with a particular commodity/project contract in mind. Cash has been scarce over the past recession-hit 10 years with freight rates close to, or sometimes below, operating costs. Hence, ordering new ships has come second to pure survival. Also, with the current surge in orders for containerships and bulk carriers, yard slots for newbuilds are a rare commodity. Drewry notes that more than 3.6 million 20-foot equivalent units of container carrier tonnage and more than 38 million deadweight tonnes of bulk carrier tonnage were ordered in 2021. This is pitted against less than a half-million deadweight-tonnes of new MPV tonnage. Oatway felt that there may be some advantage to having a slightly tighter supply position for the MPV fleet from 2023 onwards. “From 2023 onwards we will see an influx of new container carriers. At that point the competition for general cargo will begin again in earnest. If MPVs are not also competing with themselves, there will be an advantage for the modern (under 15 years) project carrier.”
Fleet Development by Type to 2022 Fleet 000dwt 18,000
000dwt 1,000
MPV Fleet (not incl. PC) right axis PC Fleet (incl. HL) right axis 500
16,000
0
14,000
-500
12,000
-1000
2014 2015 2016 2017 2018 2019 2020 2021 2022
PC deliveries (incl. HL) MPV deliveries (not incl. PC)
10,000
MPV demolitions (not incl. PC) HL demolitions
Source: Drewry Multipurpose Shipping Market Review and Forecast 4Q21
CONSTANT GROWTH
Turning to demand, Drewry includes general cargo in its dry bulk volumes measure. It said there has been “constant growth” in dry cargo volumes over the last few years, with the exception of 2020. Dry cargo volumes grew at an average annual rate of about 3 percent from 2012 to 2021. Drewry’s dry cargo volumes also include bulk cargo and containerized cargo. The latter grew at an average annual rate of 3.7 percent from 20122021, compared to bulk cargo growth of 2.8 percent. Drewry’s expectation is that the almost 6 percent growth seen over 2021 will slow over 2022 to a more reasonable 4.5 percent. To determine the MPV share of total dry cargo Drewry reviews the total bulk and general cargo to make an
assessment for market share for this fleet. It notes that much of the recovery at the beginning of 2021 was “goods-led” as consumer spending had not switched back to services from physical goods. But the sector has also seen the return of breakbulk commodities to MPVs, away from containers. It is this, Oatway said, that has boosted the growth in MPV share by some 8 percent compared with 2020. “Going forward, again we expect that growth to slow, but we expect market share to rise a further 5 percent over 2022 as the continued problems in the supply chain keep breakbulk cargoes on multipurpose ships.” BB Carly Fields has reported on the shipping industry for the past 22 years, covering bunkers and broking and much in between. www.breakbulk.com
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EUROPEAN PORTS & TERMINALS SPECIAL
EUROPE’S CALL ON CAPACITY BY FELICITY LANDON
Supply Chain Struggles Benefit Breakbulk
I
f this is a new chapter in the story of shipping, should “decontainerization” be the title? Are container lines, so keen in harder times to spirit away volumes from the multipurpose and breakbulk specialists, now less interested in picking up the awkward cargoes? 26 BREAKBULK MAGAZINE www.breakbulk.com
Rotterdam has felt the shift first-hand. Breakbulk – steel, forest products and non-ferrous – throughput at the Dutch port is up, more bulk carriers are calling at the port with breakbulk cargoes and there is a higher load factor in breakbulk vessels, according to Twan Romeijn,
business manager breakbulk and offshore, Port of Rotterdam. In 2021, breakbulk volumes through the port grew by 15 percent to 6.9 million tonnes compared with 2020 when 6 million tonnes were handled. “In 2021 we surpassed our latest record year (2019) in which we MARCH-APRIL 2022
To align with further expected growth, Rotterdam’s terminals are increasing their capacity to keep up with the demand for breakbulk handling and storage. For example, there’s an initiative between four Rotterdam based breakbulk companies to enlarge their terminals through exchanging existing plots and redeveloping new plots. The companies in what’s known as the “breakbulk carousel” are Broekman Logistics, Metaal Transport, RHB Stevedoring & Warehousing and JC Meijers. Through this initiative a total of roughly 12 hectares will be redeveloped and added for the handling of steel, non-ferrous and heavy-lift and project cargo.
ANTWERP’S ‘EXPLOSIVE’ GROWTH
Rotterdam’s breakbulk volumes grew by 15 percent in 2021 to 6.9 million tonnes.
CREDIT: SHUTTERSTOCK
handled 6.6 million tonnes,” Romeijn said. While high charter rates, among other factors, led to a slight decrease in shipping activity – from 180 vessels per month to 170 – the load factor increased per vessel. Steel and non-ferrous – the largest
product groups in Rotterdam’s breakbulk portfolio – both contributed to the large increase in 2021. There was a slight increase in the handling of forest products, while heavy-lift and project cargo volumes remained stable over 2021 as compared with previous years.
The Port of Antwerp’s stats for 2021 also match the “decontainerization” narrative. Breakbulk volumes grew “explosively” last year, said the port, after a huge downward spiral in 2020 due to the pandemic and global trade wars. Breakbulk volumes increased by 74 percent to 11.5 million tonnes, excluding roll-on, roll-off. This reflected a dramatic rise in steel import volumes and also a rise in project cargo shipments, due to ongoing projects in renewable energy and the construction of chemical plants. The sudden growth in breakbulk volumes is putting resources and handling capacity to the test, the port has said. “Breakbulk service providers are doing all they can to cope with any operational disruptions to be able to service the industry through its growth. Many of them are also investing in the expansion of capacity, dedicated warehouses with reinforced floors, heavy-lift cranes and intermodal linked terminals.” Among them, PSA Breakbulk plans to invest €11 million in a new heavy cargo terminal on the Churchill Dock, and packing specialist Deufol is extending its warehousing capacity in Antwerp for the seaworthy packaging of industrial loads. www.breakbulk.com
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EUROPEAN PORTS & TERMINALS SPECIAL
Ann De Smet, key account manager at the Port of Antwerp, said it is hard to put a specific percentage or figure on what might have come out of containers and returned to breakbulk, but clearly there has been a shift. “Most container lines do still reserve some space for project cargo – because that is also paying well
but of course, containers are paying incredibly well,” she said. Nevertheless, she said, there were many reported issues of shippers not being able to contact the container agencies – “so they try to find a way to ship the cargo, and one of the ways is to take it out of the container and ship it breakbulk. “We don’t have access to what is in
CARGO SHIFT BENEFITS BROEKMAN Broekman Logistics has two breakbulk terminals in Rotterdam – and both are very busy, said business development manager Gijs Vlasman. “We are seeing, due to congestion in other slightly more southern ports, an increase in requests for different cargoes for Rotterdam. Also, we see a lot of formerly containerized cargo now again being shipped as breakbulk, including wooden/forest products, big bags and steel,” he said. “Fertilizer and other chemicals which were being shipped in 20-foot or 40-foot containers are now moving on ships in massive 4,000- to 10,000-tonne shipments in big bags.” Vlasman said the comparison Broekman hears is that the cost of shipping by breakbulk from Asia to Netherlands is half that of container services as of midFebruary. “It is a big gap – as long as it is not closed, we expect the demand for breakbulk to continue at a high level,” he said. “We see a big increase of both
inbound and outbound cargo. Inbound is really more steel and big bags and wooden products. Outbound is a lot more project cargo and we feel that the backlog of building these mega projects is now being pushed through.” Broekman is seeing an increase in outbound project cargo from the hinterland, including from Germany, Austria, Switzerland and even France, he said. Project cargoes include large amounts of offshore equipment, power generation equipment such as transformers and generators, LNG-related units, and fabrication and piling related cargoes. “Projects that were delayed for shipment are now being pushed out as Covid measures are relaxed globally. So we are seeing a bit of catch-up, a push to move out this equipment, either doing direct shipments or moving out of storage area or factory via inland shipping to the port.” In fact, there is so much concern around securing suitable vessels that
Demand for breakbulk and project cargo services is running high.
CREDIT: BROEKMAN LOGISTICS
28 BREAKBULK MAGAZINE www.breakbulk.com
the container so we can’t measure – we can only hear what the customers say, that a lot of cargo is being taken out of containers, mainly on the East-West trade. Then you also have the case of steel, where the Port of Antwerp is the big winner. The main part of our breakbulk is steel and then the main part of steel is coils, which are mainly shipped breakbulk.”
project cargo is being brought to the port without the shipping being fixed, Vlasman said. “If a vessel comes in the following week, that’s fine – but if they have to wait for two months, they will do that too, knowing they are not dependent on getting all the permits and organizing the inland river freight as well [because that is already done].”
STORAGE OPTIONS PARAMOUNT
With project cargoes being moved to the port area without firm shipping plans, what does that mean for storage? Vlasman said space is made available for Broekman’s priority customers, “and for new clients, we do what we can.” “We have a lot of indoor warehousing for keeping equipment inside, and also a lot of outdoor space. Most of the equipment being moved is very well packed and protected against the weather, so it can be kept outside. “With newer clients, we can store cargoes only outside – and they say yes, usually, although with some critical items not. Sensitive cargo like big bags, steel, depending on the properties of the cargo, have to be inside. Of course, there are regulations we have to follow and therefore we accept or decline some enquiries depending on the freight.” Vlasman said that while it’s difficult to give the precise tipping point, the big increase in breakbulk started mid-2021. The balance has shifted to the point that Broekman has been in discussion with many companies about moving containers from Asia to Europe. In the latest twist, the terminal is now seeing breakbulk vessels arriving with 200 containers on deck for delivery, which then need to be sent out, unpacked, to their next destination.
MARCH-APRIL 2022
EUROPEAN PORTS & TERMINALS SPECIAL
Demand for the storage and transshipment of offshore wind projects is high. CREDIT: PORT OF ANTWERP
Steel volumes are “completely crazy,” De Smet said. “There are some types of steel that might go in a container but are now coming out. But other cargoes are also coming out – we can see a lot of plywood arriving in breakbulk, and we are also seeing other bulk commodities such as rice that were being put in bags in containers but are now being shipped in a different way.” Antwerp’s multipurpose terminals are packed, De Smet said. “So for some agents it is really shopping around to find space on the terminal – because vessels are sent without knowing if there is any space for storage. It is the same phenomenon in surrounding ports. It is really about finding the space to put the cargo.” At the start of the year, the Competition College of the Belgian Competition Authority, or BMA, approved a merger between the Port of Antwerp and the Port of Zeebrugge. Once the merger process is finalized, the two ports will operate as an 30 BREAKBULK MAGAZINE www.breakbulk.com
integrated port enterprise — Haven van Antwerpen-Brugge/Port of Antwerp-Bruges. The ports see the merger as an opportunity to strengthen their position within the global supply chain especially as they transition towards a low-carbon economy.
PICKING UP EXCESS CARGO Amsterdam, meanwhile, is benefitting from spillover traffic from Rotterdam and Antwerp. It reports no container congestion, and still has capacity to receive containers. “There is more and more interest in our terminals in order to cope with the congestion in Rotterdam/ Antwerp,” said Daan van Velsen, commercial manager logistics. “With a reliable barge corridor between the Northern Netherlands, Amsterdam and Rotterdam, our port is well connected.” However, that is not to say that breakbulk and project cargoes are second best, he added – “due to the capacity, we can still offer service to
our clients.” Demand for the storage and transshipment of offshore wind projects is a high note for Amsterdam. The port handled project cargo for two large infrastructure projects recently finished: the new IJmuiden sea lock and the Amsterdam bicycle tunnels. Germany’s Port of Hamburg has seen an overwhelming shift to containerization and consequent dwindling of breakbulk volumes. Fifteen years ago, there were eight breakbulk terminals in Hamburg; now there are three. However, in the current market all of them – Unikai, Wallmann and C. Steinweg – are busy, said Axel Mattern, CEO Axel Mattern of Hamburg Port Port of Hamburg Marketing. MARCH-APRIL 2022
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EUROPEAN PORTS & TERMINALS SPECIAL
Breakbulk volumes at Antwerp increased 74 percent to 11.5 million tonnes in 2021. CREDIT: PORT OF ANTWERP.
Some of the container lines are “very keen” on project cargo, he said: “But they have this tremendous problem dealing with containers at present and are a little bit more reluctant on breakbulk. Breakbulk shipments are quite complicated on a container ship
and eat up a lot of slots. Containers are easy to handle and bring in a lot of money. That said, a lot of breakbulk cargo has returned to the breakbulk terminals here too. “As long as container shipping is doing as it is now, the
breakbulk terminals are very happy about the situation. I don’t see the container prices dropping to where they were before – they might go down a little bit, but I think it will be a quite healthy equalization between containers and breakbulk.”
SHORTAGES ACROSS THE BOARD Where are the skilled people coming from? It’s not exactly a new theme in shipping and logistics, but the huge demand for breakbulk services has reemphasized the challenges. “Breakbulk terminals are not usually able to pay as much as container terminals,” said Axel Mattern at Hamburg Port Marketing. “You need experts who can deal with and manually handle breakbulk cargoes. It is quite a challenge for terminals to keep their staff and keep them happy even in quieter times.” Ann De Smet at the Port of Antwerp added that skills and recruitment are not issues exclusive
32 BREAKBULK MAGAZINE www.breakbulk.com
to the breakbulk sector. “I hear it every day from the companies in the port area, asking if I know someone good in this or that area. Even for administration it is very difficult to find people. I hear from the agencies all the time that they don’t have enough people to cover the amount of work. Finding the labor force is a huge problem.” Unemployment is at a record low in Belgium, De Smet said, quite apart from the difficulty of attracting people to the sector. “Especially for breakbulk, people see it as a decreasing, niche market, not a rising market. Young people who grew up in the digitalized world are used
to social media and working online. Breakbulk is still a people business – you really need to pick up the phone to talk to people, you need to meet people. It is more personal than this online and digitalized world, and there is the discrepancy.” However, she said, once people join the breakbulk sector they usually stay. “In containers, it is all standard measurements. In breakbulk and project cargo, it is completely different. Every piece is unique and needs its own handling, so you need to know about handling, doing the calculations, setting the right price, finding the right shipping line.”
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EUROPEAN PORTS & TERMINALS SPECIAL
Icing at a Swedish port sent a large wind farm project down the Port of Grenaa’s way in the spring of 2021. CREDIT: PORT OF GRENAA
CONTAINERS PROVIDE LUCRATIVE SIDELINE In Denmark, the Port of Grenaa is extremely busy – not only with breakbulk cargoes that would previously have been moved in containers, but also with requests for containerized cargo to be moved on bulk vessels. Theis Gisselbaek, chief commercial officer at Grenaa, said: “The situation has pushed forward the breakbulk segment because it has simply been too expensive for the cargo owner to use container vessels. Meanwhile, I don’t think the departments for breakbulk at the container lines have space for project cargo, so it is being down-prioritized after a decade of them chasing it. I know from my sources that this situation is really boosting the breakbulk segment.” Gisselbaek said that in some cases breakbulk and heavy-lift vessels are finding it is more favorable to fill up with containers at US$10,000 a piece compared with breakbulk cargo with its associated dunnage and welding and risk of damage. “Of course, it is still a minor thing in their business to move containers, but it is easier and well paid.” A key point, he said, is that the wind power industry is expanding – and snapping up vessel capacity. “What we see is that wind turbine manufacturers have prebooked good available breakbulk vessels one to two years ahead.” The situation has fed into Grenaa’s ambitions to develop as a hub for wind-
34 BREAKBULK MAGAZINE www.breakbulk.com
related components brought from Asia to Northern Europe. “The wind cargo shippers want to fill up huge vessels with as many towers, blades or other components as possible to get a better rate. Also, they are perhaps looking not only on a project-by-project basis, but at volumes and a full supply chain. They want to fill up a vessel, use a hub function in Grenaa or northern Europe, then use small coasters to transport the components to the final destination. For this, they need a decent size port with a lot of storage and the equipment to handle it and load it efficiently to smaller vessels going to the Baltic Sea and North Sea area.” Grenaa handled a project similar to this in 2021 when three breakbulk vessels from the Far East discharged tower sections in the port, and these were reloaded on to coasters for transport to the construction site. Last year was one of the port’s best project cargo years, and Gisselbaek is predicting further increase in 2022. Decisions are being made fast, he added, and Grenaa has invested in storage and handling areas and equipment that are ready to cope. “We see an increase in enquiries for all kinds of projects – everything from pre-made modules for housing to cables for infrastructure. An advantage we see is that with increased container volumes, many other terminals are really at the limit. That is good for us.”
PROJECT CARGOES ‘NOT SECOND BEST’
Project and breakbulk cargoes may have become “second best” for some of the container lines but not in the port, he emphasized. “Usually, breakbulk has a lot of added value services. The container terminals often don’t want to do this because it disrupts container flow. For example, Siemens is producing gas turbines in Berlin, from 200 up to 500 tonnes unit weight. They are brought directly from the factory to Hamburg by barge and stored in a shed – which is a very complex operation when it is a 500-tonne piece. “They do a lot more added value services. The gas turbine is produced as a ‘standard’ product and adjusted individually for the final client. So, in the Wallmann terminal, there can be 15 or 16 turbines in a shed. Therefore, you need qualified people able to handle the cargo, and sheds that can receive these heavy pieces. We have 99 percent containerization in Hamburg, but you still have things that do not fit in containers – and maybe that 1 percent will increase a little bit.” He also noted that while in recent years project cargo shipments had been split between modes, there is now a return to more traditional shipping. “We are seeing more projects being shipped together again. In later years you only had the large units – for example one generator – being shipped as project cargo, while all the accessories were shipped in containers. Now we are seeing a generator or transformer together with 3,500 cubic meters of accessories as breakbulk all being shipped together again on charter ships.” Shipping the complete project together rather than split is generally better for the industrial customer, he said, as it avoids the uncertainty around delivery times and scheduling. Previously, if rates were cheap enough, shippers could decide it was worth risking the potential mismatch. “But as containers are so expensive now, it is so much cheaper to ship in the traditional breakbulk way.”
CAPACITY TO SPARE
The Port of Tallinn has seen some impact from the container crisis, but in a different way to the larger MARCH-APRIL 2022
EUROPEAN PORTS & TERMINALS SPECIAL
Tallinn has capacity to spare for additional breakbulk volumes.
CREDIT: PORT OF TALLINN
ports in Europe. HHLA operates the container terminal and took delivery of two used cranes in 2021, to be deployed on its 17-meter-deep quay. Two more quays are available for containers and there is more than enough capacity, said Margus Vihman, chief commercial officer at the Port of Tallinn. “We have a lot of overcapacity as we used to be the main port for Russian exports. Last year we handled just over 22 million tonnes – and we could easily service 40 million to 45 million tonnes,” he said. “Where there is a problem it’s the shortage of containers. Estonian exports are typically not very high Margus Vihman value – wooden products, wood Port of Tallinn
pellets, some chemicals, peat. If there is a shortage of containers, the operators know that the more expensive the goods to be transported, the more they can charge the client. While there is a lot of high-value import cargo coming to Estonia, containers are not kept at the port for exports. “We talk to the container lines about this and of course we are worried,” Vihman said. Without naming names, he said one global container line had said most of the containers would be taken to Poland or Germany “and they are cutting all the cheap stuff out,” Vihman said. “That is something that is going to affect us during this year.” On the other hand, he said, a market has opened for smaller operators looking to gain market share where the large operators have lost interest, and exporters are willing to pay a higher price – knowing that everyone is facing the same increase.
Breakbulk volumes through Tallinn were almost 5 million tonnes last year. “We used to have very few terminals specialized in breakbulk. Now we have one in Paldiski and four in Muuga [both part of Port of Tallinn] and there is some competition between them. This is bringing good results,” Vihman said.
PROJECT BOOM EXPECTED
Project cargoes include the export of modular, prefabricated wooden houses, and the import of mining and production equipment from Europe and North America, for onward transport by rail to central Asia. This trade is growing steadily, Vihman said. With €100 billion planned investment in wind power in the Baltic area, other renewable energy developments, and the upcoming Rail Baltica construction, Tallinn is confident of higher project cargo volumes to come. Especially because the Rail Baltica Muuga Multimodal freight terminal will be located inside the harbor area, www.breakbulk.com
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EUROPEAN PORTS & TERMINALS SPECIAL
“Everyone agrees the prices will not go down to where they were, because they were going in a direction where nobody earned any money. That is the only positive thing that came out of this crisis.” – Ann De Smet, Port of Antwerp
36 BREAKBULK MAGAZINE www.breakbulk.com
MARCH-APRIL 2022
EUROPEAN PORTS & TERMINALS SPECIAL
providing station yard and connection tracks to different terminals. “The main point for us is how we differ from the big ports in Europe – and even the smaller ones,” Vihman said. “We have invested a lot into our landside and quays and have areas where we can build new quays. If you look at the older European ports, they are struggling to find space. Our point is – if you are willing to look a little bit to the edge of Europe, we have quays and space available here with all European standards, quality and environmental rules. We are 67 percent state-owned, 33 percent freely traded and offer a very safe haven with zero political influence.” The question, of course, is what happens next. If the breakbulk terminals are “making hay,” is the sun going to disappear at some point? Antwerp’s De Smet noted that many multipurpose terminals had started to diversity over the last couple of
years because breakbulk volumes were waning. They invested in container freight stations, stuffing, stripping containers, barge transport, and other value-add services on their terminals. “Of course, handling breakbulk cargo is their first priority, so it is normal that they want to help the customer now. However, it is such a volatile business – they take what they can get, and they do not know how long it will last.” She added that as nobody has a crystal ball, nobody knows exactly what will happen next, although it’s accepted that much will depend on the container business. “Everyone agrees the prices will not go down to where they were, because they were going in a direction where nobody earned any money. That is the only positive thing that came out of this crisis.” Rotterdam, meanwhile, said that making predictions is difficult as the
current market situation is heavily influenced by multiple external factors, not the least of which is the impact of the Russia/Ukraine conflict. The port spokesperson noted that Russia accounts for roughly 15 percent of the total volume being shipped through Rotterdam, so the war could have serious consequences for Rotterdam. From a breakbulk perspective this mainly impact raw materials being shipped, including steel, non-ferrous, zinc and copper. And of course, Covid-19 has not gone away with the threat of new variants still there, added the port. But despite the unknowns, Europe ports appear confident that they can maintain steady breakbulk volumes in 2022. BB Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors.
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BREAKBULK MAGAZINE 37
INLAND TRANSPORTATION
HEAVY HAULERS FACE OFF-ROAD CHALLENGE
Proposals to Shift More Project Cargo Onto Rail and Waterways BY SIMON WEST
T
he demand across Europe for project cargo haulers is rising, as the region’s postlockdown economies gain momentum and industrial activity picks up. Although the movement of heavy and abnormal loads accounts for just 2 percent of the total volume of cargo traffic on European roads, you would be hard-pressed to find any industry Ton Klijn voice downplaying its crucial role. ESTA 38 BREAKBULK MAGAZINE www.breakbulk.com
“If you do not have abnormal transport, you will build no wind farm park, you will build no power station, you will have no industry appliances built, you will get no construction machinery – because all of that is done with exceptional transport,” said Ton Klijn, director of the European Association of Abnormal Road Transport and Mobile Cranes, or ESTA. The industry though faces major challenges that need to be addressed to ensure it remains competitive, with some European countries looking to ease congestion, protect infrastructure and build on green transition efforts by shifting more project cargo onto rail and waterways. In the UK, the longstanding Water Preferred policy aims to take slowmoving “abnormal, indivisible loads”
weighing more than 150 tonnes off the road network, while in Germany, the government is mulling measures put forward by its transport and digital infrastructure ministry to use railways and canals for heavy cargo routes stretching more than 250 kilometers. “The roads in Germany are overloaded and the bridges are becoming weaker and weaker,” said Thorge Clever, project manager at German heavy transport provider Kübler Spedition. “This inevitably leads to a shift to water and rail. At the hub in Mannheim (a key logistics center in southwest Germany and home to the country’s second-largest river port), the goods can easily be reloaded from road to water. The railroad is also beneficial for oversized cargo, although for large dimensions it becomes difficult.” MARCH-APRIL 2022
Demand for project cargo haulers is rising across Europe. CREDIT: COLLETT & SONS
CHALLENGES TO MODE SHIFT
However, the use of trains and boats rather than trucks is not always feasible. Charlie Latham, head of tendering and business development at UK-based heavy transport specialist Allelys, said the British rail network was not designed to carry out-of-gauge cargo – a comment which could be applied to most national rail networks. “The inland waterways are also extremely limited and while some sections of the main heavy-lift routes have access, the majority do not,” Latham said. “Those with access are usually only for part Charlie Latham of the route and Allelys would require road transport to complete the journey, therefore introducing further costs than by completing the whole route by road.” The company follows the Water Preferred policy by moving heavy cargo along coastal sea routes where possible, although roads still provide the advantage, Latham said. “The roads have greater capacity than alternative options and with cargo continuing to increase in size and weight, this extra capacity is often required. The specialist equipment used for this type of cargo is also designed to be used on the roads.” Klijn meanwhile estimated that 90 percent of abnormal loads in Europe are too large to fit through train tunnels, while switching to waterways
could double or even triple costs for project cargo owners. “What you do is put something on a trailer, you drive it to a quayside, you get a big crane, you get your heavy load into a ship, it sails to wherever you want to go, or the vicinity of wherever you want to go, then you get another big crane, lift it out again, put it on the trailer, and you drive to where to want to go and offload it,” Klijn said. “This could have been avoided by just leaving it on the trailer in the first place and driving on the roads to where you want to go.”
PANDEMIC ALTERS ACCESS
During the pandemic, as border closures hampered global cargo movements and lockdowns caused supply chain chaos, inland transportation in Europe faced some unique challenges. The European Commission, under pressure from the International Road Transport Union, or IRU, tried to keep freight moving across the euro zone by offering guidance to its member states on setting up “green lanes” – border crossings located along the trans-European transport network, or TEN-T, that would limit cargo processing time to 15 minutes. Further EU measures were adopted to keep cargo moving, including a directive in January this year recognizing transport workers and seafarers as “travelers with an essential function or need.” Still, Covid tested the resolve of haulage drivers, with restrictions often creating intolerable working conditions. Some 3 percent to 4 percent of drivers left the profession during the pandemic, Klijn said. “Drivers that go to loading or unloading places traditionally get the chance to use a decent toilet or to use a canteen facility,” the ESTA director said. “The first thing the shippers did was ban drivers from entering their premises. There were even places where they were not allowed to leave their cabins
when they were unloading their trucks. This of course does not make the profession any better for people to be in.” As pandemic restrictions have eased, other challenges have begun to emerge. Changes to permitting rules for heavy transport, for example, are generating concern and frustration among European heavy haulers. In Germany, an overhaul of the so-called Vemags online system for the application and approval for largescale and heavy transport took effect in January 2021 as authorities sought to harmonize permit procedures and rates across the country’s 16 federal states. Under the new rules, international companies can only apply for a transport permit at the place at which they cross the border into Germany, while German-based firms can lodge their request from three separate locations, including their company premises. Detractors claim the new system gives German haulers an advantage over their European counterparts, and has led to delays, red tape and costs that could end up rising by up to 130 percent, ESTA said. German authorities said the changes were also needed to tackle “permit tourism” whereby companies attempt to jump the queue by lodging applications with several different authorities to see which one processes their request the fastest. “The official comment when we complained to the German authorities that this was competition fraud was ‘no, because we are going to expand the capacity at the border places so much and there will not be any time difference in the issue of the permit,’ ” said Klijn. “The opposite is the case – the permit times are going through the roof so sometimes it takes eight weeks or three months to get a permit.” The reforms have gone down badly even with German operators. “Unfortunately, the new Vemags system is not very flexible, and there are many limitations for users. We sense that the procedures are becoming increasingly difficult,” Clever said. www.breakbulk.com
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INLAND TRANSPORTATION
DRIVERS NEEDED
Another concern for specialist transport firms is driver shortages. In the UK, Covid-19 complications have been compounded by Brexit.
“It is fair to say that the UK as a whole has experienced driver shortages within the last 12 months,” Allelys’ Latham said. “Lockdown measures meant that ESTA is campaigning for improved working conditions for heavy-haul drivers. CREDIT: ALLELYS
The European Commission tried to keep heavy freight moving throughout the pandemic. CREDIT: BOLK TRANSPORT
With cargo continuing to increase in size and weight, roads have greater capacity than alternative options. CREDIT: COLLETT & SONS
Heavy Goods Vehicle driver tests were unavailable or limited, so the number of new drivers entering the job market was significantly lower than normal. The UK’s immigration rules also changed with Brexit, affecting the flexibility that European drivers had previously. “Having said that, the heavy-lift and transport sector offers drivers a unique opportunity to move specialist cargo. It is a role that continues to attract candidates, which has minimized the impact of the driver shortage.” Luring talent from a more diverse pool of workers would be one way to guarantee the sustainability of the industry and ensure heavy haulers have a well-trained workforce to call on. For ESTA, improving working conditions for drivers is crucial. The association has been campaigning to improve the scope and safety of facilities catering to long-distance heavy-haul drivers throughout the EU, a move that would help resolve longstanding recruitment problems by encouraging younger drivers and more women drivers to join the industry. The European Commission has announced plans to develop a network of Safe and Secure Truck Parking Areas, or SSTPAs, every 100 kilometers along the TEN-T. According to the IRU, the EU has a shortfall of some 100,000 truck parking spaces to meet total demand, with less than 3 percent of the region’s 300,000 existing parking spaces in certified safe and secure areas. “There is a huge deficit of safe truck parking areas throughout Europe,” Klijn said. “With abnormal transport, you do not only have to abide by the normal driving and rest time rules, but in addition to this, you also have permitting rules that only allow you to drive during certain hours or require you to stop during other certain hours, which means the need for a good stop place for abnormal transport is even higher than for a normal truck. “We are battling to make sure we get these places set up along the network.” BB Colombia-based Simon West is senior reporter for Breakbulk.
40 BREAKBULK MAGAZINE www.breakbulk.com
MARCH-APRIL 2022
THOUGHT LEADER
Tech and Talent Convergence Transforming for People Needed in Breakbulk
T
he next generation of professionals set to shape the breakbulk market is wired to embrace technology. Though fleet complexity, business fragmentation and intense competition between containers and bulk continue to influence the sector, digitalization has been a key to survival through the Covid-19 pandemic. But digitalization alone is not enough to drive its future success. That will require the successful interface of intelligently applied technology with human talent. Management teams must understand the role and potential of data integrations, data governance, cyber security, and modern solutions such as blockchain and artificial intelligence. New recruits starting their careers are techsavvy; they have grown up with the Internet. They have been digitally literate almost since kindergarten, and they are already playing an integral role in shaping company culture to harness the power of digitalization. Staff numbers in many organizations are down as a result of the “great resignation,” which has seen a rise in the number of employees quitting to seek schedule flexibility and better work-life balance. It’s a loss that is being felt especially keenly in the labor-intensive breakbulk sector, where companies offer a complete logistics solution including engineering, risk assessment and logistics planning. It is getting harder to maintain the data and insights that executives need to make informed decisions, so increasingly businesses are turning to their suppliers for the intel they need. For example, information on the status of spare parts was held by marine logistics providers responsible for picking, storing, consolidating and delivering them to vessels and offshore platforms. But now, asset owners and operators want to have that information at their fingertips, in their own systems, giving them greater control of their operations and enabling them to challenge poor supply chain performance in a bid to boost productivity and safety. We have gone from an “on demand” to a “just-in-case” scenario. Everyone wants to have control of their stock – just in case. GAC has responded to these changing demands by expanding its systems and services. We invested early in creating an accurate data
model of our business – a significant investment for an established global operator. But that data model is now paying dividends in many ways, including giving us the ability to operate as a “data transfer business” that can adapt in response to market changes, in a similar way that Uber did during the pandemic when it pivoted from taxi services to food delivery. Our data model drives profitability, flexibility and resilience – qualities prospective new recruits will be on the look-out for as we emerge from the pandemic. We have worked hard to retain our global presence and local knowledge. Being physically present ‘on the ground’ engenders trust and confidence and enables us to roll out digital services for our shipping and transportation customers efficiently and effectively. With its mature digital services and a dynamic culture enthused by new ‘big tech’ recruits, GAC is ready, willing and able to provide the information that the shipping and logistics industries need to chart their route through the challenges and opportunities to come. BB
BY MARTIN WALLGREN
Martin Wallgren is chief information officer at GAC Group.
www.breakbulk.com
BREAKBULK MAGAZINE 41
BREAKBULK GLOBAL SHIPPER NETWORK
BY SIMON WEST
SHIPPERS UNITE AT BREAKBULK EVENTS Expansion of Global Shipper Network to Include Digital Platform
A
fter nearly two years of digital interaction, this year’s Breakbulk Middle East conference in Dubai was full of buzz, as industry professionals got the chance once again to rub shoulders with colleagues, customers and competitors. Attendees totaled 3,374 for the two-day event, visitors increased 7 percent, with representatives from 2,134 companies attending the in-person gathering – a 28-percent increase over 2020. At the top end of the exhibition hall, just along from the main stage, the Breakbulk Global Shipper Network, or BGSN, lounge was a hive of activity, a go-to place for owners of industrial projects to catch up, grab a coffee and talk business. The BGSN has been an invaluable networking platform for executives operating at the top end of the project supply chain in sectors such as oil and gas, energy and renewables, mining and minerals, construction, forestry, industrial manufacturing and aerospace. Shippers worldwide come together at the three annual Breakbulk conferences in the Middle East, Europe and the Americas to meet with partners, keep on top of market trends, explore new Ben Law opportunities and source new supBreakbulk Global Shipper Network pliers. 42 BREAKBULK MAGAZINE www.breakbulk.com
Breakbulk Middle East attendees enjoyed the in-person event after a near two-year break. CREDIT: SHUTTERSTOCK/MARK CLUBB
The BGSN team, led by Ben Law, is now ready to take the network to the next level. “It is about feeling part of an exclusive club of people who all do a very similar thing,” he told Breakbulk at the BGSN lounge in Dubai. “We are looking to really grow the program.”
BUILDING RELATIONSHIPS
According to Law, motives for joining the BGSN are varied. Some members just want to interact socially, others see it as a serious opportunity to do business. The network has in the past facilitated a range of activities
designed to foster professional relationships. Thomas Sender Mehl, director of global sales and operations planning and supply chain excellence at Denmark-based KK Wind Solutions, remembers a particularly entertaining session at a Breakbulk Americas event based on the concept of speed dating. “It is set up, then you have five or 10 minutes, and you shift around, talk to different companies,” Sender Mehl said. “We were three or four guys from the company, and we just met all these other people. That was really good.” MARCH-APRIL 2022
For Sender Mehl, the benefits of the program are clear. “You share knowledge, and also connections, so for example we worked with one shipping company, and the director said, ‘we have these challenges in Korea’, and I said, ‘we also have that’. Then you talk. It is super valuable for a lot of companies.” Ruediger Fromm, head of logistics for high voltage grids at Siemens Energy, and a member of the Breakbulk Middle East Advisory Board, has been networking at Breakbulk events for more than a decade, and has enjoyed plenty of confidential discussions with fellow shippers about market trends and challenges. “A very good advantage of this network is that sometimes you are entering markets where you simply do not have the experience, and then you can ask somebody else, ‘OK, so I know you had a project in Brazil’ for example, could you give me some information? What about difficulties? Or how is the market over there?’ ” Members who sign up to the network enjoy a number of benefits, including free passes to Breakbulk events, entry to the BGSN lounge at each event with complimentary breakfast, lunch and late afternoon beverages and snacks, access to private meeting rooms and a free subscription to the print version of Breakbulk magazine, published six times per year. Participating companies also get the chance to take part in panel events, webinars, education programs, seminars and Thought Leader contributions for the magazine and the fortnightly BreakbulkONE digital newsletter. BGSN member Stephen “Spo” Spoljaric, corporate manager of global logistics at engineering firm Bechtel, as well as an advisory board member for Breakbulk Americas, said his company has a long history participating in the Breakbulk conferences. “As a major shipper, we feel that there is reciprocity between us and the logistics service providers and that is the reason why we continue to get engaged,” he said. “Shipping is still very much a relationship business. Attending Breakbulk events allows for many of the parties to get to know each other, building trust
Ruediger Fromm Siemens Energy
Stephen ‘Spo’ Spoljaric Bechtel
and making new connections. Bechtel is a global company and having a footprint in logistics around the world is key to our success. This network offered by Breakbulk helps our employees and partners to offer local and regional knowledge to solve complex logistics challenges.”
DIGITAL AMBITIONS
As it stands, interaction among members is mostly limited to the three Breakbulk conferences, the world’s largest gatherings for the breakbulk and project logistics industry. However, pandemic-enforced rules that restricted opportunities to network and do business face to face have underlined the importance of having a digital presence. The BGSN management team plans to incorporate a digital platform into the network, giving members the opportunity
to maintain contact away from the conferences. “It is this idea of engagement,” Law said. “We want them to attend all three events in the year if they can, and really increase the physical engagement, but then we also want to have the platform and the opportunities digitally for them to benefit if they are not here in person, or in addition to being here in person.” According to Law, such a platform could incorporate podcasts, webinars, online Q&A sessions, social media and much more. Members of the network who spoke to Breakbulk were receptive of the idea to year-round, digital collaboration through groups or personal communication: “A digital platform would improve (the BGSN), make it a bit easier to get in touch, or to stay in touch, and exchange more information,” Fromm said. “I think it is worth trying.” Breakbulk Europe will take place this year in Rotterdam on May 17-19. Alongside the main stage, this year’s event will feature an innovation stage, complimented by an all-new Discovery Zone in Hall 1. Breakbulk Americas 2022 is returning to the George R. Brown Center in Houston, Sept. 27-29. For more information on the BGSN visit https://breakbulk.com/page/bgsn. BB
Colombia-based Simon West is senior reporter for Breakbulk.
The Global Shipper Network Lounge at Breakbulk Middle East. CREDIT: BREAKBULK
www.breakbulk.com
BREAKBULK MAGAZINE 43
PROFILE
DRILLING DOWN INTO INDUSTRY CHALLENGES Project Cost Exposure A Real Concern
Breakbulk introduces a continuing series of interviews with members of event advisory board members, starting here with two members of the Breakbulk Europe Advisory Board
A
mong the many hot topics covered at Breakbulk Middle East 2022 in Dubai, none perhaps generated quite so much debate as freight rates and capacities. As we gear up for Breakbulk Europe, May 17-19 at the Rotterdam Ahoy, the industry is itching to know if the market this year will find some semblance of stability. Carsten Wendt, head of sales, high and heavy and breakbulk at Norwaybased shipping company Wallenius Wilhelmsen, said rising rates and tight capacities are one of the biggest challenges facing the industry today. “Everyone is concerned about the projects that have been sold already, or the projects that need to move. They
are worried that the rate they have budgeted for might not be valid anymore. It is really about limiting your cost exposure,” Wendt said in an interview with Breakbulk. “Looking to the future, transport costs could really make a decision if a project will run or not run. So, it is certainly of big interest for our industry – how this will develop, and how reliable it is. Not only to have the capacity but also to know your cost framework.” Wendt, who joined Wallenius Wilhelmsen in September 2014 after a seven-year stint at Hamburg-based project cargo carrier Rickmers-Linie, recently became a member of the Breakbulk Europe Advisory Board, a team of industry experts who have been instrumental in shaping the program for this year’s conference in Rotterdam. Drawing on their decades of experience as project cargo owners, forwarders, carriers and heavy-lift professionals, board members have identified and Carsten Wendt said explored the the upheaval of the issues that matter past two years is most to breakforcing companies bulk and project to rethink how they cargo. source their products. CREDIT: WALLENIUS For Wendt, WILHELMSEN another big challenge for the industry will be adapting to climate change. “The shipping industry has a lot of work still ahead, and it cannot only be done by the carriers alone. This needs to be
44 BREAKBULK MAGAZINE www.breakbulk.com
BY SIMON WEST
a joint effort,” he said. “This will be a huge challenge. How do we go into that next stage of zero emissions? How do we transport goods in a CO2 friendly environment?” Sustainability is one issue that is changing how companies operate; the other, he said, has been Covid-19. Although too early to understand its long-term impact, the upheaval over the last two years is forcing companies to rethink how they source their products. “A lot of people realize that if you depend too much on suppliers overseas and you have disruptions, maybe a blockage of the Suez Canal, or you have issues with Long Beach vessels unable to call, or ports being closed in China, then this could disrupt production lines or construction sites and I think you will see a change here. “I think customers will try to put this on more shoulders and really spread the risk, and so cargo volumes will shift maybe then to more local production. You will also probably see an increase in storage facilities, just to have a little bit more room to breathe.” Despite these major challenges, Wendt remains passionate about his industry. Among the dozens of worldscale projects he has worked on during his 15-year career, the executive said it was “really difficult” to pinpoint a favorite. “I cannot really come up with a single project where I said, OK, this is the one which was life-changing, but I guess as a general note any project which pushed us as a company or my colleagues or myself to the limits – those are usually the exciting ones.” BB Colombia-based Simon West is senior reporter for Breakbulk. MARCH-APRIL 2022
THE VOICE OF YOUTH
T
Young People a Solution to Industry Issues
he industry needs more radical thinking to solve the myriad issues that the breakbulk and project cargo industry is facing – and engaging better with young people could be the answer. That’s the viewpoint of Christel Pullens, managing director of Sea Ranger Service, president of WISTA Netherlands and member of the Breakbulk Europe Advisory Panel. Speaking with Breakbulk, Pullens said the sector needs to recognize that young people have no boundaries. “They are not used to the ‘way we have always done it,’ so attracting them to our industry and making them actively contribute to solutions is a big opportunity,” she said. “We really have to demonstrate what we are capable of as a sector and how innovative we already are.” Through her role at Sea Ranger Service, Pullens is walking the walk with a goal to train 20,000 young people for a maritime career by 2040, alongside restoring 1 million acres of ocean biodiversity. “That’s a big challenge and every day we’re working hard to accomplish that,” Pullens said. Looking ahead, Pullens said that Europe’s Fit for 55 plan – referring to the EU’s target of reducing net greenhouse gas emissions by at least 55 percent by 2030 – is an important topic for ship owners operating in the region. This includes a “drastic” reduction in emissions from shipping, the use of alternative fuels and energy taxes. “We will be forced to focus more and more on alternative fuel as ship owners,” Pullens said. However as there will be insufficient alternative fuels to meet demand, she urged ship operators to consider alternative propulsion options as well.
BY CARLY FIELDS
“The sector needs to recognize that young people have no boundaries. They are not used to the ‘way we have always done it’, so attracting them to our industry and making them actively contribute to solutions is a big opportunity.” – Christel Pullens
The ongoing impact of the pandemic is also on her mind. In her position as president of WISTA Netherlands, Pullens is supporting a study on the impact of Covid-19 on women in the maritime industry. “It looks like they’ve been affected harder than men. As WISTA, we want to really know what the effects are.” Through the study, WISTA is gathering evidence, to see what it can do to address problems and help women, if necessary. The results of the survey are expected by the end of the year. WISTA has more than 3,800 members in 54 countries, made up of women in management positions in the maritime industry. Pullen herself is motivated by challenge, something she relays in a story about a past career win. When she joined Dockwise in 2008, the company had a proven track record
in moving drilling rigs, but was keen to start up a new division for logistical management of projects. Pullen initially found it challenging to ‘sell’ the plan internally and did not have a full-time team to begin with. “But we managed after some time to really get the attention of the management and to win a small but complex project which gave us an entrance to all other kinds of logistical projects,” Pullens said. She kept a picture of that job and has been carrying it around ever since. “When something becomes really hard I think of that project and am reminded ‘hey, we persisted and we managed, so I can do that again.’ ” BB Carly Fields has reported on the shipping industry for the past 22 years, covering bunkers and broking and much in between. www.breakbulk.com
BREAKBULK MAGAZINE 45
LOGISTICS PERSPECTIVE
US Project Boom Imminent
A
fter a decades-long funding drought, U.S. federal infrastructure grant coffers are brimming with US$1.2 trillion. The Bipartisan Infrastructure Law has new and expanded grant programs coming on stream, and government credit programs are exploring ways to further assist. Still, transportation entities, including U.S. seaports, face challenges. Analysts say funding still falls short of need, but it is enough to start addressing failing and undersized U.S. infrastructure, improve supply chains, and at the same time provide opportunities for project cargo and construction materials sectors. The American Society of Civil Engineers’ 2021 Infrastructure Report Card provided a distressing but largely undisputed picture of U.S. need for better infrastructure. In the port sector, even after new federal initiatives and an estimated US$163 billion five-year capital investment program by ports and tenants, ASCE reports a funding gap of US$12 billion for waterside infrastructure. Moreover, there are unfunded projects outside port gates, with a US$32 million gap. For example, only 9 percent of intermodal-connector pavement is in good/very good condition according to ASCE. That jeopardizes port success, which is dependent on intermodal connectivity. Chris Connor, CEO of the American Association of Port Authorities, or AAPA, said: “In the last generation there has been a complete lack 46 BREAKBULK MAGAZINE www.breakbulk.com
LORI MUSSER
of investment in port infrastructure and intermodal connectivity. It has not been a priority at the federal or state level.” That myopia meant U.S. port infrastructure and intermodal Chris Connor connectivity were not “resilient AAPA enough to cope with the recent 20 percent upshot in throughput.” Many infrastructure issues are simply age-related. In a White House briefing Jan. 5, 2022, John Porcari, the Biden Administration’s Port Envoy, said some of the new infrastructure funds would upgrade infrastructure born in prior generations.
GRAVY TRAIN
Over a five-year period, the new U.S. Bipartisan Infrastructure Law provides: • US$2.25 billion for the Port Infrastructure Development Program, or PIDP, grants. • US$15.7 billion in INFRA and RAISE grants (Infrastructure for Rebuilding America, and Rebuilding American Infrastructure with Sustainability and Equity – transportation projects for all modes are eligible). • US$5 billion in Consolidated Rail Infrastructure and Safety Improvements grants, or CRISI.
• The U.S. Army Corps of Engineers will receive US$2.7 billion in new funds (dredging and maintaining federal channels). These amounts are supplemental to “normal” annual appropriations that, according to AAPA, were: • PIDP, US$230 million. • Army Corps of Engineers, US$2.48 billion. • RAISE and INFRA, US$2 billion. • CRISI, US$375 million. If Congress passes a federal budget, those “normal” appropriations should rise again. Additionally, over five years there is US$25 million available to supplement annual appropriations of US$14.8 million for America’s Marine Highways (promoting sea-freight transportation); and US$400 million for a Port Truck Idling Program. Even before the US$1.2 trillion proposal became law, it was clear certain industries would benefit. In an August 2021 Time.com analysis, the winning sectors were forecasted to include big telecom, global supply chain/e-commerce, metals and building materials, nuclear power, electric vehicles, and chemicals plants, among others. A spending uptick should boost construction aggregates, cement, metals including domestic steel and copper, heavy equipment manufacturers and green energy, to name a few. A Kiplinger.com analysis in November 2021 favored such stocks, and commented: “The Biden MARCH-APRIL 2022
administration’s preference for ‘buying American’ should give Nucor an advantage over its larger foreign competitors such as Luxembourg’s ArcelorMittal or Japan’s Nippon Steel,” and, “if you’re bullish on copper, then you’re bullish on infrastructure stocks such as Freeport-McMoRan ... Copper is a critical part of the green energy story, too.”
HIGH HOPES, BUT ALREADY OVER-SUBSCRIBED
Seaport hopes are high, anticipating US$6 billion in grant awards in 2022, mostly from PIDP and Army Corps navigation funds, but ports will also compete with other modes for another US$30 billion or so, according to Ian Gansler, AAPA government relations executive. About 10 percent to 15 percent of RAISE and INFRA funds have gone to ports over the last 10 years, Gansler said, adding, “We’d love to see this go up.” For the PIDP, he said: “It has been oversubscribed five-toone. For every dollar given, there have been US$5 in applications.”
Additional appropriations by Congress may prove especially important now that PIDP eligibility has been expanded to cover electric grid structures, which ports need desperately, and even electric infrastructure for passenger vessels, which is a departure from a historic focus on cargo. Efficient port infrastructure is integral to the U.S.’s competitive edge at a time when ships are upsizing. The grant programs largely support capacity projects. Port Tampa Bay, Florida’s busiest gateway by tonnage, was selected as an INFRA grant recipient in 2020 for a terminal expansion. Ram Kancharla, the port’s vice president of planning and development, said: “It is essential that port infrastructure keeps pace with cargo trends and growth to ensure bottlenecks are prevented.” The port has seen a 122 percent increase in steel and a 215 percent increase in general cargo this fiscal year, partly attributable to west central Florida’s tremendous population growth, which is driving new construction of all types. The record growth in breakbulk
Federal Funds Available and Awarded to Ports FY22 US$ bn 12 11 10 9 8 7 6 5 4 3 2 1 0 FY14
FY15
Marine Highway Program CRISI PIDP
DERA
FY16
FY17
FY18
FY19
INFRA/FASTLANE
RAISE/BUILD/TIGER Port Security Grant Program
FY20
FY21
FY22*
Actual Awarded to Ports Projected Port Awards: FY21-22
Corps Nav – Coastal Source: AAPA
is accelerating the timeline for investment in warehouses and other port infrastructure. Grant programs also support port sustainability. John Wolfe, CEO at The Northwest Seaport Alliance, said the new infrastructure funding “will support our programs to fix aging terminal facilities, improve our capacity and efficiency, and make our trade gateway more competitive.” Also, it will allow the port to “expedite our goals of transitioning to zero emissions by 2050 through increased access to shore power for vessels and more efficient equipment and trucks.”
TRADE GROWTH WILL CONTINUE
While the extraordinary spike in U.S. imports that wreaked havoc on the U.S. in 2020 and 2021 is slackening, trade growth is expected to continue. In a report published in December 2021, trade credit insurer Euler Hermes predicted global trade volume growth of 5.4 percent in 2022 and 4 percent in 2023, following an increase of 8.3 percent in 2021. The U.S. Department of Transportation’s Bureau of Transportation Statistics and Federal Highway Administration, using their Freight Analysis Framework, has also projected continued freight growth, with cargo on all modes reaching 25 billion tons by 2045. That translates into 69 million tons per day moving on U.S. transportation infrastructure. Connor noted: “This is the floor. If we are struggling with quality infrastructure at today’s level, and the problem is not going away, investment is required.” New U.S. infrastructure funding has layered goals – keeping up with freight growth, and staying competitive in scale, efficiency, safety, reliability, sustainability and social benefits. Port and transportation infrastructure is more than just an economic driver. Burt Moorhouse, president of Aransas Terminal Co., an emerging gateway for wind energy and offshore oil industry supply and service in Texas, said that U.S. ports are called www.breakbulk.com
BREAKBULK MAGAZINE 47
LOGISTICS PERSPECTIVE
on not only to facilitate trade, but to do so “American style,” which means adding layers of “good” things, like security, safety and environmental stewardship.
These are things U.S. citizens value. They have a cost. “As our nation attempts to recover from the Covid-19 shock, we see that our port infrastructure has very limited bandwidth for
Port Tampa Bay, Florida’s busiest gateway by tonnage, was selected as an INFRA grant recipient in 2020 for a terminal expansion. CREDIT: PORT TAMPA BAY.
EXIM EYES DOMESTIC PROJECTS Because of the import boom, some U.S. exporters are struggling to find space and capacity to export. The U.S. Biden administration has taken notice and is seeking export infrastructure financing solutions. In December 2021, America’s export credit agency, the U.S. ExportImport Bank, reached out to ports and others to explore the idea of financing domestic projects. Beyond export credit insurance, working capital guarantees, and term financing to support international buyers purchasing U.S. products, Executive Order 14017 on America’s Supply Chains recommended that EXIM consider providing financing to establish or expand U.S. manufacturing facilities and infrastructure projects that facilitate exports. Comments on the idea and “hypothetical criteria” were collected in January 2022. “We’re currently compiling comments that we received, and we will be continuing our dialogue with stakeholders in the weeks ahead. We were heartened that more than 90 percent of respondents expressed support for
48 BREAKBULK MAGAZINE www.breakbulk.com
the program,” said an EXIM spokesperson. One criterion was outlined as: “EXIM may consider projects between 25 percent to 50 percent export nexus for support. For example, 25 percent of a project’s production (e.g. goods produced at an EXIM-supported manufacturing facility) or capacity (e.g. 25 percent of the traffic at a port) would need to be for export for the transaction to eligible. This export connection could stretch back through a supply chain and account for “indirect exports.” If a company sells 50 percent of its product to a domestic company, that in turn uses 50 percent of the supplier’s inputs for exports, this transaction would meet the 25 percent threshold. EXIM’s domestic infrastructure idea may attract a lot of interest if projects can access funds without Buy American procurement restrictions. In addition to the nation’s supply chain partners – and ultimately consumers and communities – multiple industries, especially constructionrelated sectors, all serve to benefit from sustained investment in ports.
disruption,” Moorhouse said. Federal investment will facilitate a more robust supply chain and protect U.S. competitiveness and jobs. Other federal funding programs support infrastructure. The Port Security Grant Program, for example, funds projects to help protect critical port infrastructure and supports port recovery and resiliency. The 2021 award level was US$100 million. The Transportation Infrastructure Finance and Innovation Act (TIFIA) provides long-term credit assistance for qualified projects across modes. The Railroad Rehabilitation and Improvement Financing (RRIF) program offers longterm, low-interest loans. Gansler said: “In California, the state government structured an agreement with DOT to prioritize the state’s port projects for TIFIA and RRIF loans. TIFIA isn’t always useful if projects don’t have long-term revenue.” He said it has been heartening to see the federal government going out of its way to fund port projects.
BARRIERS AND SOLUTIONS
But money appropriated isn’t necessarily easy to get. Matching a project with eligibility, competing against large well-staffed authorities, and handling administrative hurdles once awarded requires acumen and resources. Gansler said there is a need for more assistance for ports. Possible process improvements include a universal application for all port-related grants, a workaround for Buy American rules that delay projects and increase prices (perhaps redirecting funds to incentivize U.S. manufacturing of construction materials), less red tape, and the creation of statutory setasides for ports. “INFRA’s new mandate to raise the amount given to multimodal projects to 30 percent is a step in the right direction. For imports or exports, seaports can be the bottleneck,” Gansler said. “Now We Build!” – the AAPA’s latest catchphrase – reflects widespread appreciation for the level of federal commitment in the Bipartisan Infrastructure Law – more dollars for ports in this legislation than ever before. “We are grateful for these funds, but we are not content. This is not enough money to prepare ports for the cargo volumes forecasted,” Gansler said. BB Based in the U.S., Lori Musser is a veteran shipping industry writer. MARCH-APRIL 2022
THOUGHT LEADER
New World Tech Order Work Smarter to Bridge the Digital Divide
T
he fog of a Covid-19 world is slowly dissipating and a new ecosystem of innovation and transformation of logistics technology and end-to-end supply chain is emerging. Suddenly we have become acutely aware that lift-off has taken place for the fourth industrial revolution during the chaos of what is now a new world order. Approaching the 61st anniversary of President John F. Kennedy’s historic “Moon Shot” speech before a joint session of Congress that set the U.S. on a course to the moon, we are reminded by Kennedy’s words that “now it is time to take longer strides – time for a great new American enterprise.” Lessons learned from the space race, as well as recognition of the fragile nature of global logistics and supply chain operations has created the perfect storm to invest, embrace and leverage new technologies in our industry as we move towards an interconnected world of smart cities and intelligent freight networks. Supporting the race to transform logistics and supply chain operations, the Wall Street Journal shares that supply chain technology startups raised US$24.3 billion in venture funding in the first three quarters of 2021, US$15.4 billion in full year 2020, US$13.1 billion in full year 2019, US$11.2 billion in full year 2018 and US$6 billion in full year 2017 (Dec. 30, 2021). This substantive flow of capital in response to global bottlenecks witnessed over the last 24 months of the pandemic has highlighted the critical nature of optimizing the work that we do. No need to look farther than the U.S. port sector to consider how innovative technology, such as the port community system, could be implemented to optimize the efficient flow of cargo. Deployment of this technology would align with best practices adopted decades ago at European and Asian ports. Shifting to the warehouse sector, adoption of technology such as robotics and artificial intelligence in distribution centers enhances not only the flow of goods, but also contributes to a safety environment by transforming human interaction. Early adopters of this technology, such as Amazon, have established a competitive advantage by investing and deploying automation in their facilities. Pivoting over to the transportation management software sector, manufacturers,
distributors, ecommerce companies, retail businesses and logistics service providers adopt this technology for executing and optimizing physical movement of goods. Finally, in this brief review of innovative technologies, it should serve as no surprise that Texas has been the state of choice for test piloting autonomous trucking. Autonomy in the trucking sector serves to alleviate the driver shortage, enhance safety and fuel efficiency, and reduce congestion, according to the World Economic Forum. Covid-19 was a wake-up call for our once overlooked industry. If we are to increase the resiliency and competitiveness of our global logistics and supply chain operations it will require major investment and, reminiscent of Kennedy’s speech in 1961, “the decision demands a major national commitment of scientific and technical manpower.” It is time to invest for the digital future and train the workforce of the future by bridging the digital divide today. BB
BY MARGARET KIDD
Margaret Kidd is program director, supply chain & logistics technology at the University of Houston.
Venture Funding for Supply Chain Tech Startups in the Last Five Years
24.3
US$billion
15.4 13.1 11.2
6
2017
2018
2019
2020
www.breakbulk.com
2021 Q1-3
BREAKBULK MAGAZINE 49
CASE STUDY
BY THOMAS TIMLEN
NO REST FOR TURBINE MOVE Project Team Endures Port, Weather Limitations
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etty limitations, port restrictions, space-constrained villages and seasonal weather complications all challenged deugro’s move of 80,000 freight tons of cargo for a 1.76-gigawatt combined-cycle gas turbine power plant project in Indonesia. Everything about this project was big, starting with Indonesia’s commitment “to produce clean and affordable energy to support the country’s economic development,” as Nicke Widyawati, president director of PT Pertamina (Persero) power company, stated during the Jawa 1 combinedcycle power plant ground-breaking ceremony in December 2018. The combined-cycle plant is the biggest of its kind in Southeast Asia and is part of the Indonesian government’s 35 GW electrification program, producing 1.76 GW, enough to power 11 million homes throughout the country. A big plant incorporates big components. Among those needed were two 438-tonne gas turbine 9HA.02 units 50 BREAKBULK MAGAZINE www.breakbulk.com
produced at General Electric’s plant in Belfort, France, that were shipped out of Antwerp along with two 460-tonne generator stator units and 54-tonne steam turbines. In addition, 52 heat recovery steam generators with lengths of 30 meters and weights of up to 240 tonnes needed to be shipped from Haiphong, while casings were transported from Dung Quat, both Vietnamese ports.
CAPACITY CHALLENGES
Samsung C&T procured the US$900 million engineering, procurement and construction contract for the Jawa 1 plant in consortium with GE and PT Meindo Elang Indah. The power plant project has a total investment of US$1.8 billion and involves more than 20 domestic and international companies. Once the initial infrastructure phases were complete, the consortium turned to managing the transport of the oversized heavy-lift components,
with a delivery window at the remote project site that ranged from December 2019 to February 2021. The transport presented several challenges. The project site in West Cilamaya, about 80 kilometers east of Tanjung Priok and 7 kilometers inland, was not served by major roads, and the site jetty in West Cilamaya had limited capacity, only able to facilitate one barge at a time. Only the smaller components that fell within the maximum dimensions and weight as determined by preparatory surveys could be moved from Tanjung Priok to the project site by road. Although these components were smaller than those moved by barges, careful planning was still required as the winding road passed through several space-limited villages. A lack of storage availability at the Port of Tanjung Priok required that most components had to be directly discharged onto barges for the 100-nautical-mile sea voyage to the project site jetty. This direct discharge MARCH-APRIL 2022
A gas turbine traveling 7 kilometers on the purpose-built road to the construction site. CREDIT: deugro
to the barges did, however, create advantages at Tanjung Priok in the form of significant cost and time savings, as well as risk mitigation, since double-handling, storage in the port and reloading onto barges were all avoided. Once at the jetty, all oversize heavylift components then had to be moved on a 7-kilometer purpose-built road between the jetty and the construction site. The road had a ground-bearing capacity of 4.8 tonnes. Prioritizing safe operations – such as nighttime restrictions, the tide window at the jetty for roll-off from barge, road availability and site arrival planning – once safely on land a turbine that was discharged in the morning could arrive at the job site by the afternoon.
in spite of these daunting challenges, deugro and its partner companies completed the task on time. Key deugro team members explained to Breakbulk how these challenges were overcome. Daniel “There were Wolfenstetter several operadeugro tional challenges for this project, given its location with an infrastructure that was mainly not well-established,” said Daniel Wolfenstetter, customer solutions analyst, deugro Singapore, who served as business development manager for deugro Indonesia during the execution of the project. “For the discharging of the heavy cargo, such as the gas turbines from a geared heavy-lift vessel at the Port of Tanjung Priok, the only suitable option was to discharge directly from the vessel onto barges, because the port infrastructure did not allow discharging and reloading at the port. So, barges for these super-heavy operations had to be arranged well in advance to match with vessel actual time of arrival, so that direct discharging could take place upon arrival without waiting. “Furthermore, as there were several barges operating simultaneously
between Tanjung Priok and the job site’s jetty, the barge movements and jetty discharging operations had to be well planned and scheduled in order to avoid barge congestion at the jetty, while allowing cargo to be discharged in accordance with the required site delivery schedule. In line with this concept, and the jetty’s limitations, a vessel arrival schedule was developed, matching the vessel sequence and arrival dates with barge and jetty availability to ensure that a barge was always ready upon vessel arrival at Tanjung Priok. The barges were prepared with all the necessary equipment to receive the cargo, including stools, beams, steel plates for load spreading, and notch wedges. Precise planning as well as barge- and cargo-specific designs for the load spreading were required to stay within the technical capacities of the locally available barges. To distribute the loads to the strong points of the barge deck, load spreading was applied according to dteq’s calculations to meet the permissible deck load of the barge.
MITIGATING WEATHER RISKS
Wolfenstetter noted that all the planning took into consideration the risk of unpredictable weather conditions, as the beginning and end of the project deliveries took place during the rainy season. “This meant that it was important to have a plan that included
DIRECT DISCHARGE
Complicating matters further, the operations faced challenges created by the continuously changing weather conditions during the rainy season. Yet,
The heavy cargo had to be discharged directly from the vessel onto barges at the port because of infrastructure limitations. CREDIT: deugro
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CASE STUDY Casings in transport from the jetty to the job site. CREDIT: deugro GROUP
contingency and allowed timely arrival while ensuring the safety of the cargo at all times.” To plan around the regularly changing weather, deugro looked to several sources, including data from the official Indonesia meteorological, climatological and geophysical agency BMKG. Prior to the commencement of the transport, all weather limitations were considered and fully incorporated into the method statement and risk assessment. The limitations posed by the elements had a significant influence on the grillage and sea-fastening design and on the complete barge shuttling concept. deugro’s scope started with receiving the cargo under-hook at Tanjung Priok, clarified Wolfenstetter. “Hence, weather planning had to be performed well in advance for barge mobilizations and actual cargo moves.” And then there was the pandemic, as Wolfenstetter noted: “The Covid-19 pandemic started shortly after the first project deliveries, which meant that continuity had to be ensured for all transports to be in line with the site, government and deugro Covid-19 rules. Due to the quick implementation of additional safety measures on all ends, transports could be continued without any delays.” Having managed the challenges 52 BREAKBULK MAGAZINE www.breakbulk.com
created by the pandemic, deugro was fortunate to avoid the unforeseen consequences created by the Ever Given blocking the Suez Canal, as the last cargo for the project under deugro’s scope was delivered by February 2021, only a month before the Suez Canal blockage in March 2021.
EARLY PREPARATIONS ESSENTIAL
The success of the project being completed on time can be attributed to many efforts made long before it got started. Niels Meldau, president of dteq, a company of the deugro group, Germany, explained: “Due to the challenging infrastructure of the West Cilamaya jetty, as well as the ground conditions on the subsequent route to the site, various analyses, studies and simulations were required to identify and prepare suitable equipment combinations to ensure smooth, safe and on-schedule operations.” “The comprehensive method Niels Meldau statements included stowage, dteq
grillage, a sea-fastening design and ballasting plan, motion analysis and mooring calculations, as well as the complete trailer set-up and configuration.” dteq created the design for the sea-fastening on the accelerations derived from the stowage-specific motion analysis. The motions for the barge transport were calculated based on the DNVGL ST-N-001 standard considering the criteria of weatherrestricted operations, whereby departure was limited to a maximum of Beaufort 5. In Meldau’s view, the biggest challenge was to adopt the technical solutions to deal with the dynamic logistics challenges to meet schedule demands without an intermediate laydown area. “Mutual understanding, open communication and solutionorientated thinking made it possible to develop safe and efficient solutions.” Go to www.youtube.com/ watch?v=5z-wkHjtX1g to view the video of this move. BB Thomas Timlen is a Singaporebased analyst, researcher, writer and spokesperson with 31 years of experience addressing the regulatory and operational issues that impact all sectors of the maritime industry. MARCH-APRIL 2022
BREAKBULK MIDDLE EAST
Rates to Remain High in 2022 Rising Demand to Put More Pressure on Capacities BY SIMON WEST
The project industry has been contending with sky-high freight rates for almost a year, with little consensus on when they will return to “normal.” Capacities meanwhile have been at a premium, with little room for maneuver. What are the prospects for change? Are there opportunities amid the high-price environment? And what are some of the strategies for navigating the situation? Those were some of the questions panelists tackled during the session: Managing Rates and Capacity: Outlook, Key Drivers and Remaining Competitive at Breakbulk Middle East 2022 in Dubai. Cyril Varghese, head of global logistics at U.S.-based construction firm Fluor, and the panel moderator, kicked off the discussion by reminding delegates that demand for capacity is on the rise, driven by rapid offshore wind development, higher commodity prices that are supporting oil and gas projects, and a new mining super cycle. “We see quite positive trends in terms of the demand for cargo going up, certainly for the next couple of years at least,” Varghese said. A global container shortage is pushing rates, with new build orders from operators unlikely to come online in 2022. And while those rates remain elevated, MPV tonnage is getting pulled into the lucrative container market. As a result, this year is likely to be another challenging one, panelists agreed. “Everybody expects a correction in the container market, and once the correction comes in, and once we see from the order book new containers coming into the market, I think less and less focus will come on the MPVs from the container operators,” said Kyriacos Panayides, CEO
AAL Shipping’s Kyriacos Panayides makes a point in a discussion with moderator Cyril Varghese of Fluor; and, left from Panayides: Amadou Diallo, DHL Global Forwarding; Kristian Lund Knudsen, Maersk; and Martin Harren, Harren & Partner, SAL Heavy Lift.
at AAL Shipping. “But at least for the short term, there will still be demand from the container operators, and we do not see this changing in the short term.” MPVs meanwhile have been hampered by a lack of shipyard capacity, not just for new builds but for repairs to an aging fleet. Martin Harren, CEO of Harren & Partners – SAL Heavy Lift, said new tonnage in the MPV market is not expected for another two years. “Every ship owner has ambitions to do new builds for very good reasons. The first of course is to replace old tonnage. We are the same, and hopefully we can get delivery in 2024,” he said. In the meantime, Harren offered advice for shippers on booking capacity, especially for projects of more than 500 tonnes. “My recommendation would be to book as early as possible. Maybe one year ahead would be sufficient I would say. Anything shorter is a risk.”
ISSUES FOR FORWARDERS?
Kristian Lund Knudsen, global head of special cargo solutions at A.P. Moller – Maersk, dismissed fears that amid the high-price environment, carriers in the future could cut out forwarders and deal directly with shippers. Some see the shift from manual to digital, accelerated by the pandemic, creating an environment
in which shippers bypass forwarders and go directly to carriers. “This is a narrative that has been very popular in the media. It creates a lot of attention and a lot of heat and I think quite frankly it has been blown out of proportion,” he said. “We are not moving towards a world where we do not want to deal with freight forwarders, or where there will be no room for freight forwarders, because I believe there is a very important space for freight forwarders and there is a very important role that they play in the market.” Amadou Diallo, head of DHL Global Forwarding Middle East & Africa, said the cash flow situation for freight forwarders has been very challenging. “We have all tried to find inventive ways of being able to manage our supply invoices and manage the fluctuations we have seen in the market,” such as hedging as a tactic to managing the situation. So how can the industry manage high rates? For Varghese, it is a question of supply chain relationships. “The relationships between stakeholders is not a one-way street. I cannot expect to treat the shipping lines like slaves when the rates are down and when the choices are plenty. It is a relationship that is built over multiple years,” the Fluor executive said. BB www.breakbulk.com
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Saudi Arabia: A Land of Opportunity Diversification Sees Big Investment in Non-oil Sectors BY SIMON WEST
Saudi Arabia’s Vision 2030, unveiled by Crown Prince Mohammed bin Salman in 2016, is a sweeping nationwide project to diversify the economy away from oil towards more sustainable, private sector-driven industries. The strategy is luring investors and providing breakbulk and project cargo with a slew of exciting new opportunities, speakers said during the Spotlight: Saudi Arabia panel event on the first day of Breakbulk Middle East 2022 in Dubai. “We can see in the last five years how much has changed in the country,” said Rafael Vicens, head of global projects and industry solutions for Middle East and Africa at DB Schenker, and session moderator. The panel pointed to several sectors that are likely to see massive development in the coming years as the kingdom opens its crude-dependent economy. Billions of dollars have been earmarked for projects in 54 BREAKBULK MAGAZINE www.breakbulk.com
renewable energy, construction, port infrastructure, tourism and entertainment. Sue Donoghue, CEO Arab Cluster at DHL Global Forwarding, pointed to mega-projects such as NEOM, a US$500 billion “smart city” on the Red Sea coast that will house port facilities, sports stadiums, green fuel plants and a high-tech 170-kilometer metro line dubbed The Line. In renewables, Saudi Arabia is targeting 60 gigawatts of installed capacity by 2030, with PV solar plants accounting for two-thirds of planned projects. Big investment is also slated in wind energy – onshore and offshore – and other renewable sources. “The market is growing, it is the land of opportunity, there is so much construction, there is so much investment – and it is fast-tracked,” Donoghue said. “The opportunity for the breakbulk industry is incredible.” Panelists agreed that the success of Vision 2030 depends on the
kingdom’s ability to lure foreign investment and know-how to expand the private sector into an engine for growth. Ibrahim Behairy, managing director at diesel engine manufacturer Win GD Middle East & Africa, said Saudi Arabia’s vast territory and its rich natural resource base would appeal to investors. “The changes that Saudi Arabia has gone through recently has made the country completely different. Saudi Arabia used to be known to all of us as an oil-dependent country. That is not the case anymore.” Meanwhile, speaker Onur Yigiter, CEO of AMSteel, a Saudi-owned firm focused on port and steel services at King Abdullah Port on the Red Sea Coast, pointed to the kingdom’s political stability and strong central bank as other reasons that foreign firms would be tempted to invest. “It is a fantastic time for Saudi Arabia investment. I believe more and more opportunities will come for investors.” BB MARCH-APRIL 2022
Pandemic Catalyzes Shift to Digital Projects Like Maqta Gateway Transform Industry BY SIMON WEST
The breakbulk and project cargo industry has not always been the quickest to embrace the shift from manual to digital processes. The productivity gains are clear, with the last two pandemic years clearly demonstrating the value of more automated and digital processes. During Breakbulk Middle East 2022’s Digital Transformation session, a panel of expert speakers discussed key developments in digitalization, regional success stories and why push back and hesitation in the industry persist. Khalid Al Shehhi, manager of marine projects at Abu Dhabi National Oil Co., or ADNOC, explained to delegates how the pandemic had crystalized the importance of digitalization. The executive pointed to ADNOC’s remote monitoring and control system for
vessels, which has improved work procedures and strengthened data integration. “As an operator and ship owner, we always try to improve our efficiency and reduce our operating costs. Covid-19 showed us all this in one year,” he said. Morten Berg Thomsen, head of special cargo solutions for West and Central Asia at Maersk, one of the largest shipping companies in the world, agreed that Covid-19 has fast-tracked the shift to digital. “The pandemic has not changed the world. It has only accelerated trends we saw before.” Mohamed Al Agha, director of smart solutions at Maqta Gateway, the digital arm of Abu Dhabi Ports Group, outlined the benefits of the UAE’s first digitalized port community system. “Maqta connects all the key players in the trade industry, whether it is
the carriers, the freight forwarders or the actual end customers and manufacturers – everybody in this chain is connected through this platform,” Agha said. “What we have created is a wealth of data that is used to serve the community in a better way. And that translates into value-added services that can always be added to what we already have.” Despite the advances, session moderator Mohammed Jaber, COO at DSV Abu Dhabi and MD for Air and Sea, asked why the shift to digital in the breakbulk industry has only come in “baby steps” compared with other industry verticals. Al Shehhi believed the key was communication: “We would like more collaboration with companies, with the inventors, the makers of solutions. We are open to dialogue. We are open to conversation to develop systems together.” BB
Mohammed Jaber, (left), DSV, moderates the digitalization panel with, from left, Khalid Al Shehhi, ADNOC Logistics & Services; Mohamad Al Agha, AD Ports Group; and Morten Berg Thomsen, Maersk.
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West Africa Calling
Potential is Huge, But Challenges Remain BY SIMON WEST
With a wealth of untapped natural resources and rapid population growth, West Africa’s project potential is huge, with a slew of energy and infrastructure projects whetting the appetite of investors and industry professionals. The Breakbulk Middle East 2022 session: Spotlight: West Africa, took a deep dive into the region’s project landscape, and some of the requirements for market entry. According to session moderator Lars Greiner, associate partner for Middle East and Africa at Hamburg Port Consulting, Africa’s development over the last 20 years has been “remarkable.” According to the consultant, a key sector for projects in the coming years will be mining. “If you look at West Africa there is a ridge of mines and mining concessions that runs along the whole coast from Morocco ... through all the countries from Cameroon down as far as Namibia,” he said. 56 BREAKBULK MAGAZINE www.breakbulk.com
“We have only really seen the start of going for that. There are a lot of gold mines; the iron ore mines have had a quiet period of late. They are starting to develop now with new mining concessions.” A big boost for regional maritime logistics was MSC’s recently announced bid to acquire Bolloré Africa Logistics for US$5.7 billion. The deal constitutes a “major change” for Africa, said panel speaker Hans-Ole Madsen, senior vice president at International Container Terminal Services Inc. “It is new people coming to Africa, new people with an interest to invest and bringing new technology. All in all, it is a positive for the region,” Madsen said. Challenges in West Africa remain, with Greiner pointing to the lack of deepwater ports and no large-scale hub terminal. Countries in the region though are starting to respond by approaching terminal operators to invest in much-needed infrastructure. Dubai-based DP World, for
Hans-Ole Madsen, International Container Terminal Services Inc, (middle), makes a point during the West Africa discussion with Lars Greiner, Hamburg Port Consulting, left; and Ronni Nielsen, OBT Shipping, right.
example, recently announced it had broken ground on a new US$1.1 billion deep-water port at Ndayane in Senegal, a project that constitutes the biggest single private investment in the nation’s history. A next stage of regional development would have to focus on land infrastructure, Madsen said. “The biggest challenge is not the ports themselves but the infrastructure behind it. It is the railway lines, sometimes thousands of kilometers long, which have to be built, sometimes through areas with disputes over who owns the land,” he said. “I think railways are extremely important for Africa.” Meanwhile Ronni Nielsen, group chief commercial officer at OBT Shipping, pointed to the massive opportunities in the region amid rapid population growth. “There is reason to believe a lot of production will be moved to West Africa. I think it is time to look into West Africa and ask what needs to be done, what can be done.” BB MARCH-APRIL 2022
CASE STUDY
SQUEEZING OUT THE AIR
Tweaks to Reduce Weight Give Greater Flexibility BY MALCOLM RAMSAY
D
elivering breakbulk cargo by air is invariably a complex challenge, but one that is normally less visible to the public than ground transport. The relative lack of road closures and out-of-town location of airports mean that the efforts of many airfreight projects go unobserved. With an ambition to address this, airfreight specialist Volga-Dnepr Airlines and logistics group Fracht FWO recently collaborated on a forwarding project and shared behind-the scenes footage of the process, raising awareness of daily all-cargo operations. “The AN-124-100 fleet often generates a lot of interest wherever they go, and we recognize the achievement that customers and viewers feel in seeing such a unique aircraft,” Ekaterina Andreeva, commercial director at Volga-Dnepr Airlines, told Breakbulk. “To date, this has been our longest livestream, and was perhaps
refreshing for reviewers to see how the aircraft is loaded from start to finish. It provided a greater understanding of the length of time needed to load heavy/oversized items due to the Ekaterina necessary preciAndreeva sion.” The cargo Volga-Dnepr Airlines moved for this project was an outsized boiler, weighing 83 tonnes, which Fracht was contracted to move from Milan to Iowa. Chris Schumacher, vice president of airfreight at Fracht, explained: “One of our VIP U.S.-based customers asked us for pricing to deliver a single boiler from the manufacturer in Italy to a jobsite in Iowa.” Building on a long history of cooperation
with Volga-Dnepr, the firm then approached the airline to discuss charter services, scheduled services, and logistics services too. Headquartered in Basel, Switzerland, Fracht provides a range of breakbulk logistics services, with a history of project forwarding stretching back more than 50 years. “Fracht USA/Italy approached Volga-Dnepr on a charter requirement for a heavy and oversized boiler from Milan to Nebraska. Due to Volga-Dnepr’s extensive fleet, including AN-124-100s, IL-76TD-90VD, B747Fs, B777F and B737Fs, we have a strong partnership with the global Fracht team, who we have collaborated with on several projects,” Andreeva said. Aware of the risks of disruption in global supply chains and the need for detailed pre-planning, the two partners began preparation two months ahead of delivery. For Volga-Dnepr, the first step in this process was to brief their dedicated load planning
TOP: The livestream allowed for greater understanding of the length of time needed to load heavy/oversized items. CREDIT: VOLGA-DNEPR AIRLINES www.breakbulk.com
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CASE STUDY
A specialist cradle was designed by Volga-Dnepr. CREDIT: VOLGA-DNEPR AIRLINES
and design team and begin narrowing the choices for optimal cargo transportation. This included not only safety compliance of cargo, but also modeling solutions to optimize lead times for the customer and reduce costs. “In this case, the Volga-Dnepr load planning team used our own dedicated software CargoPlan to accurately review the load plan itself, which includes 3D modeling for evaluation,” Andreeva said. Headquartered in Moscow and also with its own office in Ulyanovsk in the Central European part of Russia, Volga-Dnepr Airlines specializes in air charter services via a fleet of An-124-100/150 and IL-76TD-90VD (Stage IV) cargo aircraft.
CUSTOM CRADLE MANUFACTURED
Having modeled the boiler in detail, the teams then faced an additional challenge as it was calculated that the unit would need additional support during the flight. “The cradle was needed to hold the boiler in place, while it withstood the ‘G’ forces associated with air travel. With the load being at the max weight of what the Antonov could transport, even the slightest shift of the cargo could have caused 58 BREAKBULK MAGAZINE www.breakbulk.com
major issues. Volga-Dnepr created the design of the cradle and the fabricator of the boiler sourced and built the cradle from scratch,” Schumacher said. Full technical drawings and specifications of the boiler were the starting point for this design process, with Volga-Dnepr’s design team using SolidWorks and AutoCad, together with Ansys, to perform a stress analysis to check for tolerances inside the aircraft cabin. This allowed the team to check correct weight distribution and for engineers to carry out strength analyses based on cargo floor structure. “Although safety is our primary purpose for cradle designs, we also look at what materials can be widely sourced by our customers for time management and cost benefits,” Andreeva said. While customers may design cradles themselves, the Volga-Dnepr team’s experience and knowledge of loading parameters for the various aircraft in its fleet is advantageous, she added. “Once we present out initial design, we then work in collaboration with all concerned parties (often engineers from both charterer/manufacturer’s sides) to ensure everything matches with their requirements, before in turn creating the final
customized cradle design for production,” Andreeva added. With the calculations completed, the partners agreed on a route that would take the valuable cargo from Milan in the north of Italy to Lincoln, Nebraska, with tech stops planned for Liege, Keflavik, Gander and Bangor.
PAYLOAD LIMITATIONS PROMPT RETHINK
For this project, one of the biggest challenges for the flight was the maximum payload limitations en route, which in this case was 113 tons. “At first, in consideration of the cargo piece itself, plus the weight of the cradle and our standard aircraft loading equipment, the total weight was 112.5 tons for loading, which can be risky should there be any unplanned weight deviations,” Andreeva said. Opting to avoid the use of one of the airlines Volga-Dnepr AN-124-150 aircraft – which is often limited in availability and could result in higher costs due to global positioning – the team opted instead to optimize the weight of the cargo and turned to Fracht to reconfirm the weight using a lift at the shipper’s premises to avoid any surprises. Having accurately re-weighed the cargo, Volga-Dnepr chose to reduce MARCH-APRIL 2022
CASE STUDY
the payload by using its own proprietary rampextension equipment plus a special spreading beam that was flown in from Ulyanovsk, Russia. This adjustment to the project move allowed the partners to reduce the overall payload by 8 tons, allowing for greater scheduling flexibility with the AN-124-100 aircraft – and also reducing costs for the customer. As well as loading considerations, the weight of the payload also affected the route planning for the project as extra fueling was required to ensure safe transit. “We were max weight of the Antonov, so we needed to make an extra fuel stop in Bangor,” Schumacher noted. The customer’s final destination requirements for delivery to Nebraska also placed further restrictions on the route, as there was a limited selection of airports with the infrastructure necessary to accommodate an aircraft with such a heavy payload. Lincoln Airport was chosen as the destination airport due to its capacity to handle the freight, but as it had no international customs facility it was necessary to arrange for clearance at another U.S airport. As a result, the planned tech stop in Bangor allowed Fracht to process U.S. customs clearance upon arrival.
GLOBAL STREAMING SUCCESS
With the route finalized the partners began final preparations to begin loading in Milan as well as coordinating with a film crew and IT teams to capture the operations for the live stream. “We partnered with Jerry Dyer at Big Jet TV – who does this regularly – to capture this one live and hope to partner with him again for future shipments,” Schumacher said. On the morning of the move itself, cameras were in position early, the loading procedure in Milan went ahead using ramp-extension equipment for loading through the aircraft
Jerry Dyer at Big Jet TV created the five-hour livestream of the load.
nose cargo door. This process required cargo pieces to be lifted on to it using mobile cranes. “For this flight two cranes were used to ensure flat alignment against the slope of our ramp-extension equipment. This method is often used in the case of long/heavy pieces to ensure precision control,” Andreeva explained. Some additional measures were also required to compensate for the tight space onboard the aircraft, with Schumacher noting that “the position of the bolts on the boiler and cradle made in difficult to loosen/ tighten them. We had to use special wrenches to be able to fit in a tight space, in order to secure the boiler to the cradle.” With Big Jet TV recording for more than five hours, the resulting livestream was viewed by more than 2,000 people worldwide, providing an unprecedented insight into the challenges and processes required to load such a large and heavy cargo. Calling the project, a “live Mega Load operation,” Dyer of Big Jet TV complemented the teams: “With the expected challenges, the boiler was loaded flawlessly by Volga-Dnepr’s own ‘traveling’ team of loadmasters.” “Live streaming on future projects depends on the customer and the airport of course. It is also a feature that we will look at when international industry events return again,” said Charlotte Willoughby, business development manager
at Volga-Dnepr. “We have also similarly welcomed Sam Chui (who has his own aviation Youtube channel) on board, with the video grossing 3.3 million views to date, showing just how much excitement there is around the AN-124100. Prior to the pandemic we would also offer local logistics communities in-person tours of the aircraft for better understanding of its capabilities and hope we will be able to resume doing so soon.” With the cargo safely stowed, the aircraft then made its way to Lincoln, Nebraska, where unloading took place ahead of onward road transport to the final destination, a plant in Sioux City, Iowa. There was one further challenge to overcome at this stage: here, Fracht encountered a lack of police escort availability. Schumacher explained that the police were short staffed due to the pandemic and that there was a back log of oversized truck loads moving across Nebraska. But close coordination with them allowed the team to find a suitable time to travel and keep the project moving. The livestream of this move can be viewed here: https://www.youtube. com/watch?v=388jgStcNEk. 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
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Breakbulk Events & Media’s biweekly BreakbulkONE newsletter keeps the industry connected between issues of Breakbulk. Here’s a selection of subscriber favorites from the past few months.
ANTONOV’S AN-225 DESTROYED DURING FIREFIGHT
‘Mriya Will Definitely Be Reborn,” Owner Vows BY SIMON WEST
Antonov Airlines’ AN-225 “Mriya,” the world’s largest cargo aircraft, was destroyed during Russia’s assault on Ukraine’s Gostomel Airport. The project cargo specialist’s parent company, Ukrainian state weapons manufacturer Ukroboronprom, said the plane, the only one of its kind ever built, had been undergoing repair and routine maintenance at the time of the Russian attack. As part of the work, one of the AN-225’s six engines had been dismantled, preventing flying crews from making an emergency departure as Russian forces advanced. Fighting for control of the strategically located airport, a base for Antonov’s operations located close 60 BREAKBULK MAGAZINE www.breakbulk.com
to capital city Kyiv, has been ongoing since Russia launched its invasion of Ukraine on 24 February. Russian forces were in control at press time, according to local reports. “Russian occupiers destroyed the flagship of Ukrainian aviation – the legendary AN-225 Mriya,” Ukroboronprom said in a statement. “The occupiers destroyed the airplane, but they will not be able to destroy our common dream. Mriya will definitely be reborn.” To rebuild the AN-225 would cost “more than US$3 billion,” Ukroboronprom added, although in a later statement the weapons maker said it was “impossible” while the airport remained in Russian hands to gauge the condition of the aircraft or the likelihood of it being restored.
The AN-225 was built 40 years ago for the Soviet space shuttle program, making its first flight in December 1988. Commercial operations began in 2001. The mammoth jet could carry up to 250 tonnes of cargo in one delivery, and was used to transport heavy project cargo such as transformers, turbines, satellites, oil and gas components, industrial machinery, aircraft parts, helicopters, trains and yachts. A recent overhaul had aimed to keep the aircraft flying until at least 2033, with further upgrades in the pipeline. It was unclear if any damage had been inflicted on other aircraft in Antonov’s fleet, including the company’s seven AN-124s. BBONE MARCH-APRIL 2022
EXPEDITORS RESTORING SYSTEMS AFTER CYBERATTACK Cyber Perils Leading Cause of Concern For Business BY SIMON WEST
Expeditors scrambled to get its operations back up and running after a cyberattack that struck the global logistics specialist on Feb. 20 shut down most of its online network. In a latest update, the U.S.-based company said it was making progress in returning to normal operations, with cybersecurity teams “working around the clock” to put in place immediate and longer-term solutions to restore its systems. “We are now handling shipments and providing services across most products and expanding recovery across our locations. We recognize the challenges this incident has created within supply chains,” Expeditors said in a filing on Feb. 28.
The cyberattack two weeks ago forced the company to close down a chunk of its global operating systems, temporarily limiting its ability to conduct forwarding activities or offer clients customs and distribution services. A thorough investigation was being carried out to determine what happened, it said. Expeditors is not the only logistics company to have recently suffered cyberattacks. In December, Germany’s Hellman Worldwide Logistics said an attack had forced it to temporarily disconnect all connections to its central data center, while Australian forwarder Toll Group suffered two major ransomware attacks in 2020 that disabled its IT systems.
Since 2017, the world’s four largest shipping companies – APMMaersk, MSC, COSCO and CMA CGM – have all suffered cyberattacks. In its 2022 risk barometer, Germany-based insurer Allianz said cyber perils have outranked Covid19 and broken supply chains as the world’s No. 1 business risk. Allianz’s barometer is based on insight from more than 2,650 risk management experts from 89 countries. “The threat of ransomware attacks, data breaches or major IT outages worries companies even more than business and supply chain disruption, natural disasters or the Covid-19 pandemic, all of which have heavily affected firms in the past year,” Allianz said. BBONE
WILHELMSEN EYES MIDDLE EAST PROJECT REVIVAL
Diversification Towards Sustainability Driving Cargo-Carrying Opportunities BY SIMON WEST
The energy-driven economies of the Middle East, hit hard by the twin shocks of Covid-19 and record-low oil prices, are now well on the road to recovery, with major industrial projects being revived, a Dubai-based executive for Wilhelmsen Group told Breakbulk. “We are starting to see the end of the tunnel,” said Frederic Fontarosa, the breakbulk shipping line’s vice president for the Middle East, Africa and Indian subcontinent. “Things that I heard that were in the plan pre-Covid, that were stopped during Covid, or they were not the focus at that time of making sure the economy survived, are now coming back.” Fontarosa pointed to new cargo-carrying opportunities amid a region-wide economic strategy to diversify away from crude oil to more
sustainable, private-sector industries. In addition to a focus on renewable energy, mega-projects such as Saudi Arabia’s NEOM, a US$500 billion “smart city” on the Red Sea coast that will house port facilities, sports stadiums, green fuel plants and a hitech 170-kilometer metro line dubbed The Line, will require significant project support in the coming years. The first phase of NEOM is slated for completion in 2025. “Will they be able to sustain the timeline? I am not sure. Will we be involved? Yes, we will participate – it is a question of how good we are in delivering the service to our customers,” Fontarosa said. “The whole area feels very dynamic but it has not really unfolded because for the last year and a half there was Covid, and there was a lot of delay. We will see what is going to
happen over the next few weeks. But I am very optimistic.” In addition to project revival, Fontarosa, who began with Wilhelmsen in 1994, is bullish on this year’s hot topic – rates and capacities. As demand for capacity grows amid rapid wind energy development, a resurgence in oil and gas projects and a new mining super cycle, pressure on already exorbitant rates is unlikely to slow any time soon. As supply chain woes continue, industry players are keen to know when the market will find some semblance of stability. “It is quite a versatile industry, and people move quite quickly in shipping,” Fontarosa said. “I think towards the end of this year, beginning of next year, the supply chain bottleneck will have dramatically diminished.” BBONE www.breakbulk.com
BREAKBULK MAGAZINE 61
BACK PAGE CORRUPTION PERCEPTIONS INDEX 2018-2021
Transparency International’s index, which ranks 181 countries and territories by their perceived levels of public sector corruption, according to experts and business people, uses a scale of 0 to 100, where 0 is highly corrupt and 100 is very clean. Nearly 70 percent of countries score below 50. #
COUNTRY
1
Denmark New Zealand Finland Singapore Sweden Norway Switzerland Netherlands Luxembourg Germany United Kingdom Hong Kong Canada Austria Estonia Iceland Ireland Australia Belgium Japan Uruguay France Seychelles UAE Bhutan Taiwan Chile USA Barbados Bahamas Qatar Korea, South Portugal Spain Lithuania Israel St Vincent & Grenadines Latvia Cabo Verde Costa Rica Slovenia Poland Saint Lucia Italy Fiji Botswana Georgia Dominica Czechia Malta Mauritius Cyprus Rwanda Grenada Saudi Arabia Oman Slovakia Namibia Greece Armenia
4
7 8 9 10 11 12 13
18
22 23 24 25 27 29 30 31 32 34 36
39 41 42
45
49
52
56 58
2021
CPI SCORES 2020 2019 2018
88 88 87 88 88 87 88 85 86 85 85 85 85 85 85 85 84 84 84 85 85 82 82 82 81 80 80 80 80 80 78 77 77 76 77 76 74 77 77 74 76 77 74 75 74 74 75 78 74 72 74 73 77 77 73 76 75 73 74 73 73 71 71 71 69 69 70 66 66 69 71 71 68 68 68 68 65 65 67 67 67 67 67 69 65 64 62 64 63 64 63 63 62 62 61 59 62 61 62 61 62 62 61 60 60 59 60 60 59 59 59 59 57 56 58 58 58 58 57 56 57 60 60 56 56 58 56 56 55 56 53 53 55 55 60 61 55 56 56 55 55 55 54 54 56 54 53 54 54 53 52 53 57 58 53 54 53 53 53 53 53 53 53 52 54 52 52 49 50 49 51 52 49 50 48 49 49 42
88 87 85 85 85 84 85 82 81 80 80 76 81 76 73 76 73 77 75 73 70 72 66 70 68 63 67 71 68 65 62 57 64 58 59 61 58 58 57 56 60 60 55 52 61 58 57 59 54 51 59 56 52 49 52 50 53 45 35
# 62 63 64 66
70
73
78
82
85 87
96
102
105
110
115 117
COUNTRY
2021
Jordan Malaysia Croatia Cuba Montenegro Sao Tome and Principe Romania Vanuatu China Jamaica South Africa Tunisia Senegal Hungary Ghana Kuwait Solomon Islands Bulgaria Bahrain Benin Burkina Faso Belarus Timor-Leste Trinidad and Tobago Maldives India Guyana Morocco Colombia Ethiopia Suriname Tanzania Kosovo Vietnam North Macedonia Argentina Lesotho Turkey Brazil Serbia Indonesia Kazakhstan Sri Lanka Gambia Ecuador Peru Cote d’Ivoire Panama Moldova Albania Thailand Bosnia & Herzegovina Mongolia Malawi El Salvador Sierra Leone Algeria Philippines Egypt Nepal
49 48 47 46 46 45 45 45 45 44 44 44 43 43 43 43 43 42 42 42 42 41 41 41 40 40 39 39 39 39 39 39 39 39 39 38 38 38 38 38 38 37 37 37 36 36 36 36 36 35 35 35 35 35 34 34 33 33 33 33
CPI SCORES 2020 2019 2018 49 51 47 47 45 47 44 43 42 44 44 44 45 44 43 42 42 44 42 41 40 47 40 40 43 40 41 40 39 38 38 38 36 36 35 42 41 40 38 38 37 38 38 37 39 38 36 35 34 36 36 35 35 30 36 33 36 34 33 33
48 53 47 48 45 46 44 46 41 43 44 43 45 44 41 40 42 43 42 41 40 45 38 40 29 41 40 41 37 37 44 37 36 37 35 45 40 39 35 39 40 34 38 37 38 36 35 36 32 35 36 36 35 31 34 33 35 34 35 34
49 47 48 47 45 46 47 46 39 44 43 43 45 46 41 41 44 42 36 40 41 44 35 41 31 41 37 43 36 34 43 36 37 33 37 40 41 41 35 39 38 31 38 37 34 35 35 37 33 36 36 38 37 32 35 30 35 36 35 31
#
COUNTRY
2021
Zambia 33 122 Eswatini 32 Ukraine 32 124 Niger 31 Mexico 31 Gabon 31 Papua New Guinea 31 128 Bolivia 30 Kenya 30 Azerbaijan 30 Laos 30 Togo 30 Dominican Republic 30 Paraguay 30 Djibouti 30 136 Mali 29 Russia 29 Liberia 29 Angola 29 140 Pakistan 28 Mauritania 28 Myanmar 28 Uzbekistan 28 144 Kyrgyzstan 27 Uganda 27 Cameroon 27 147 Bangladesh 26 Madagascar 26 Mozambique 26 150 Guinea 25 Guatemala 25 Iran 25 Tajikistan 25 154 Central African Rep. 24 Lebanon 24 Nigeria 24 157 Honduras 23 Zimbabwe 23 Cambodia 23 Iraq 23 161 Eritrea 22 162 Congo 21 Guinea Bissau 21 164 Nicaragua 20 Chad 20 Comoros 20 Haiti 20 Sudan 20 169 Burundi 19 Turkmenistan 19 DR. of the Congo 19 172 Libya 17 Equatorial Guinea 17 174 Afghanistan 16 Korea, North 16 Yemen 16 178 Venezuela 14 179 Syria 13 Somalia 13 180 South Sudan 11 Brunei Darussalam
CPI SCORES 2020 2019 2018 33 33 33 32 31 30 27 31 31 30 29 29 28 28 27 30 30 28 27 31 29 28 26 31 27 25 26 25 25 28 25 25 25 26 25 25 24 24 21 21 21 19 19 22 21 21 18 16 19 19 18 17 16 19 18 15 15 14 12 12 60
34 34 30 32 29 31 28 31 28 30 29 29 28 28 30 29 28 28 26 32 28 29 25 30 28 25 26 24 26 29 26 26 25 25 28 26 26 24 20 20 23 19 18 22 20 25 18 16 19 19 18 18 16 16 17 15 16 13 9 12 60
35 38 32 34 28 31 28 29 27 25 29 30 30 29 31 32 28 32 19 33 27 29 23 29 26 25 26 25 23 28 27 28 25 26 28 27 29 22 20 18 24 19 16 25 19 27 20 16 17 20 20 17 16 16 14 14 18 13 10 13 63
Source: Transparency International, 2021 Corruption Perception Index, www.transparency.org/cpi. 62 BREAKBULK MAGAZINE www.breakbulk.com
MARCH-APRIL 2022
Join the world for new project cargo business 17 - 19 MAY 2022 | ROTTERDAM AHOY, NETHERLANDS
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