18 minute read
THOUGHT LEADER
THOUGHT LEADER
License to Lift
Rollout of Standardized Qualification has Begun
Let’s be honest. The warning signs have been obvious for a long time. Any analysis of lifting accidents involving mobile cranes clearly shows that operator error is the cause in the overwhelming majority of cases. In addition, crane manufacturers have long worried of the competency of operators to handle their increasingly sophisticated machines.
What is more, this unhappy state of affairs has become obvious on site. A senior project manager working on wind farms recently told ESTA: “We have to admit it. There are currently people operating a crane who should not be. As a client, often you do not have a clue who is sitting in the crane.”
These concerns were given added impetus by a new directive from the European Union that national rules must not be used to deny work to qualified professionals from other EU member states. The directive includes crane operators within its scope.
The problem is that, at present, each EU member state has its own rules on the competence and certification of crane operators. They range from compulsory to optional – and even to no rules at all. There is no accepted European standard.
But under the new directive, all “qualified” crane operators holding a card recognized by their national association would have to be treated equally, no matter how well, or poorly, they have been trained.
Since ESTA’s creation more than 40 years ago, we have made safety a central plank of our work. The problem of crane operator standards – and the obvious implications for safety on site – was one we simply could not ignore. So our work to create a European Crane Operators Licence, or ECOL, was born.
There were sound business reasons behind our thinking as well. The new ECOL license is not only an attempt to improve standards and safety, but will also help reduce the impact of skills shortages by making it easier for good operators to work anywhere in Europe and beyond.
Frustratingly, ECOL’s progress across Europe has been slowed by the pandemic – but it is still gathering momentum. It has achieved ISO 9001-2015 certification, and has been approved by the European Qualifications Framework. Training centers are up and running in Germany, the Netherlands and Denmark, operated by Liebherr, Mammoet and EUC Lillebælt respectively, with two more in Germany and one in Belgium in the pipeline.
Work is underway on the important process of setting up mutual recognition agreements with national authorities. Agreements have been signed with the Netherlands and British Columbia in Canada, and talks are ongoing with Denmark, Germany and Spain. These agreements mean that the different national authorities have aligned their standards with ECOL and the ECOL license and the national license will be interchangeable.
For ESTA, ECOL is a massive undertaking. But we have been greatly encouraged by the strong support we have received to date. We are certain that in the near future ECOL will become a standard and essential qualification.
Quite simply, at present far too many European crane operators do not have the necessary training, and those that do find it almost impossible to move from country to country due to differing and restrictive national regulations. This makes the case for ECOL indisputable. It will be proof that the crane operator in the cab is properly trained to do the job they have been employed for – and it will be coming soon to a site near you.
Watch this space. BB
Ton Klijn has been director of ESTA – the European Association of Abnormal Road Transport and Mobile Cranes – since 2017, and active in the heavy-lifting and transport industry since 1977. He was managing director of Dutch company Wagenborg Nedlift from 2003 to 2017, when he stepped down.
BY TON KLIJN, ESTA
The European Crane Operators Licence “is a massive undertaking,” but ESTA has been encouraged by strong support, Klijn said.
CREDIT: ESTA
PROFILE
TAKING THE PROJECT PLUNGE
Erhardt’s Project Division Focuses on Digitalization
BY FELICITY LANDON
Towards the end of last year, Spain’s Erhardt Group launched its rebranded subsidiary, Erhardt Projects, to manage complex industrial projects. Igor Muñiz, who previously led Geodis’ industrial projects operations in Europe, joined Erhardt early in 2019 as general manager of the new venture, and started pulling together his new team.
Up to the point of Covid-19 hitting, he was clearly pleased with results so far. “For us to be competitive in the Spanish market has not been easy – but we knew that. I was not expecting such rapid growth. But we are really booming with orders,” he said.
Having been in the industry since 1998, he was persuaded to join Erhardt because the focus was to be tailored solutions to customers.
“At Erhardt we have stevedoring, ship agency, freight forwarding, technology and now a project cargo division. Erhardt is a very well-known and established company from 1882 and wanted to develop the Igor Muñiz business. For me, what really Erhardt Projects persuaded me to make this move was to be able to bring value to our customers in a different way. We want to be niche, we want to be very unique with a boutique approach, and we want to be experts in transport focusing on engineering, chartering and projects,” Muñiz said.
Erhardt Projects also wants to take a very selective approach with clients, he added. “The idea is to provide competence, knowledge and expertise. No matter how difficult or complex the parameters, we want to put our niche customers in the center.”
He emphasized the need for teams like his to be flexible and to be clear about their customers’ reality. “To understand the challenges of our customers’ constraints is vital. These days many big operators are like elephants – it’s difficult for them to make decisions quickly. But in this industry, you need to be very agile, because the requirements are bigger and volatile, and you have to adapt and improve in order to reach targets.”
In particular, he is driving forward with a digitalization strategy, confident that Erhardt Projects can differentiate itself due to its established technology and technical expertise. Putting in place a digital front-end provides customers with a convenient one-stop shop experience and improves internal operational visibility, he said.
“Our group has been focused on technology for 30 years,” he explained. “We have created a platform for Erhardt Projects in which we are sharing all of our projects digitally with suppliers and customers and we are seeking digital solutions in an open, innovative way.”
FOUR-PRONG DIGITAL PLAN
Muñiz is reluctant, of course, to give too much away. But he explained that Erhardt Projects is working on four digital approaches: procurement, operations, engineering and chartering.
It is working on a digital supply chain in parallel with its traditional, physical supply chain. He envisages a digital supply chain where all those involved – suppliers, stevedores, haulers, ports, customs and so on – understand each other and work together.
“Even though we are witnessing a huge transformation of the sector, with the logical uncertainties that anything new involves, it is no less certain that we are seeing huge opportunities and we are therefore decisively and eagerly pressing to opt to be one of the trusted partners that the new Industry 4.0 concept demands,” Muñiz told a Spanish business publication recently.
“Moving special loads requires a high level of specialization, transparency and greater protection of the transported goods. Erhardt Projects is therefore being integrated in the value chains of customers and suppliers by offering a service encompassing engineering, technology, process and regulatory consultancy, assurance and, of course, transport.”
Erhardt Projects has also set up its own engineering department, which designs and develops equipment specifically to transport oversize and overweight loads.
Overall, said Muñiz, the target is to be a global player. Based in Bilbao, Erhardt has its own offices in China, Portugal and France. “However, Erhardt Projects mainly works through business partners and a global network of agents. Each project is different – it requires different experts and partners.”
Having a global network of in-house teams can be an advantage, but can also be a disadvantage, he pointed out. “You can’t possibly have experts on every type of project in every place. And if you have a permanent team of 10 people working on a specific project, what do you do when that project finishes? Therefore, we work with partners which have the equipment we need and that talk our language.
“Often customers say to us that they want to collaborate with a particular partner – they do know the market and they do have their preferences, and we respect that. I firmly believe that having local agents, business partners and a range of expertise is the right way to make things work.”
Within 10 months of starting work at Erhardt, Muñiz’s new operation had 14 technical and operations staff on the team. “These days, we are in the top four in the Spanish market. We are active in North Africa, France, the Middle East and the U.S. We have strong partners we are doing business with and I am really excited.”
KEEPING PACE WITH CHANGE
Even before Covid-19, it was clear that the industry was changing very fast, with key global players withdrawing or contracting, underlining the importance of adaptation. Those that do not adjust through digitalization and innovation will disappear, Muñiz said. “Customers want you to adapt to their needs.” Because of its smaller size, Erhardt prides itself on its focus, niche approach and ability to make fast decisions.
Erhardt believes that providers should design offerings that can be tailored to customers’ needs. Building long-term relationships and becoming leaders in innovation are essential for maintaining a competitive advantage, Muñiz said.
“And big companies want plans A, B and C. You have to have a contingency plan and you have to know how to mitigate and manage risk. There can be too many layers in decision-making – it needs to be simple. A contract with 43 different deviations of what might happen is extremely difficult to sign and manage. But the project industry is changing extremely fast – not just in the past three to four years but in the past year and last months. This is a new era that we have to go into.”
Companies are also demanding more engineering and more services across chartering and the legal aspects, he said. Standards are higher and time to market is critical.
With project cargo getting larger and more complicated by the day, engineering knowhow is paramount, Muñiz said. Those that are not able to provide that are “automatically out,” he said.
“You need to be best in class for everything, A to Z.” BB
Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors.
Erhardt believes that providers should design offerings that can be tailored to customers’ needs. CREDIT: ERHARDT
MARKET SPOTLIGHT
CHANGE IN CHINA Competitive Advantage No Longer a Given
BY THOMAS TIMLEN
While multinational corporations have been adding manufacturing capacity in China for more than 40 years, more rigorous project planning will be required to fully capture China’s competitive advantage moving forward. This is a key conclusion drawn by Christos Lampris, Independent Project Analysis, or IPA, Asia Pacific research lead, in a report published in June.
Even before additional Covid-related uncertainties arose in 2020, China’s cost competitiveness gap with the West was narrowing, making investments in manufacturing there less attractive while China’s regulatory environment became increasingly unpredictable, complicating existing and planned projects in the region.
Speaking to Breakbulk, Lampris said that at the time that report was being written, existing construction projects were resuming work and there was an increase in infrastructure expenditure by the Chinese government in an attempt to rejuvenate the economy.
“However, there was uncertainty about how our predominantly multinational clients from the extractive and processing industries would react to the Covid-19 landscape, especially when it comes to planned capital investments in China,” he said. This was not only because of the direct effects of the pandemic, such as supply chain disruptions, but also because of a reduction in spending due to the overall economic outlook, exposure to low oil prices for some firms and the trade war between the U.S. and China.
Top: Some China joint venture projects are continuing, including construction of the Amur Gas Chemical Complex, an integrated polyethylene and polypropylene production facility being jointly developed by Sinopec and Russian petrochemical company Sibur. CREDIT: GAZPROM
“There were cases where companies were deterred from proceeding with plans due to the above, the most recent being Saudi Aramco’s suspension of a planned US$10 billion facility in northeastern China,” Lampris said. “Chinese companies have also been affected and some have deferred projects or cut expenditures.”
In August, Aramco suspended its involvement in the refining and petrochemicals complex in China as part of spending cuts made to cope with low oil prices and the uncertain market outlook. Prior to the Aramco move it was reported that projects relating to the establishment of five LNG regasification terminals in China, as well as two terminal expansion projects slated to be operational in 2020, had been delayed to 2021 as a result of the impact of Covid-19 combined with financial strains faced by some private companies involved.
While there have been some setbacks within China, the country has pursued opportunities beyond its borders. Aside from the Belt and Road Initiative, there are others such as a recent project in Russia. China Petroleum and Chemical Corp (Sinopec), the largest refiner in Asia, began construction of the Amur Gas Chemical Complex, an integrated polyethylene and polypropylene production facility on Aug. 27. The complex is being jointly developed by Sinopec and Russian petrochemical company Sibur, and will be the largest chemical cooperation project between China and Russia. Operations are expected to commence in 2025, with the majority of its products destined for the Chinese market.
NOT A ‘SHOWSTOPPER’
In August IPA was asked by western multinationals to conduct risk evaluations and cost and schedule benchmarking for several prospective large chemical investments, some of which are megaprojects.
“These investments are based on expected high demand for certain petrochemicals and specialty chemicals. One client, in particular, noted that they see some remaining risk due to Covid, but they do not consider it a potential showstopper. Capital projects take years to start production, and these sectors have determined that the long-term demand forecast postCovid-19 supports expansion.”
Lampris expects to see large projects in the short term which will require transport services provided by large vessels and equipment. “However,” he cautioned, “the future is more uncertain and will depend on the sector, as well as how quickly consumer sentiment and spending will improve.” He added that the notion of reducing reliance on China is not new. Indeed, it was considered when China started becoming more expensive. The pandemic has reinforced the idea through the concept of global manufacturing resilience.
IPA has also looked at the practices, risks and performance of projects undertaken by Chinese companies, specifically in relation to chemical refining and processing plants, and the perception held by Western owner companies and manufacturers that Chinese companies can build such facilities much faster and at a fraction of the cost. Seeking to benefit from these advantages, some Western companies have partnered with Chinese firms to tap into perceived benefits of their supply chain.
“However,” Lampris said, “the question on everyone’s mind is what is the quality delivered? Will the facility run as expected and how long can we run it before we’ll need to shut it down for maintenance? Undoubtedly construction quality has improved over the past decade, and Chinese contractors can mobilize resources to execute projects fast. However, according to project management theory, it is very difficult to have it all; a facility that is cheap, fast, works as expected and that was built without injuring anyone in the process.”
FEET IN TWO CAMPS
Not long ago, talk of Asian Tigers and Dragons was common as Chinese companies shifted some manufacturing to neighboring countries with relatively lower labor and overhead costs. This applied more to consumer goods than to industrial products; however, that has changed. Lampris noted that some Chinese companies are moving abroad while retaining their plants in China as part of a global expansion plan.
“Prior to the pandemic, a trend among large global projects was the use of modularization using Chinese fabrication yards,” Lampris said. “Chinese fabrication yards also market themselves as being able to support large global projects. Projects would consider a modular construction approach, instead of stick-build, with large process and pipe rack modules being fabricated in China. This approach requires detailed logistics planning including marine transport and heavy-lift service providers. Covid19 caused a significant disruption to capital projects procuring modules from China and elsewhere.” IPA’s monthly client survey of the impacts of Covid-19 revealed significant delays from China in the March-to-May timeframe, although those delays seem to have now eased.
While the rise of Chinese manufacturers could be seen as a source of pressure for multinational corporations, included in this group are joint venture partners. Well-established joint ventures such as the COOEC-Fluor Heavy Industries Co. Ltd. (COOECFluor) partnership, which established a major fabrication yard in Zhuhai, China, now serves both domestic and
non-Chinese markets. The COOECFluor Zhuhai yard produced the entire module program for the Kuwait Integrated Petroleum Industries Co. Al-Zour project in late-2019. This involved the delivery of 88 modules in 20 separate shipments with a combined weight of 65,000 tonnes. Closer to home, earlier in 2019 the same yard produced the wellhead platforms for the Dongfang Gas Fields Development Project in Zhuhai, part of a new offshore oil and gas production platform in the western South China Sea, 132 kilometers west of Dongfang City.
TURBINE HOPES
As spending cuts employed by some refining and petrochemical companies have slowed related developments in China and elsewhere, there are few signs of similar restraint in the renewables sector. For the Simec Atlantis tidal turbine project, the company’s Director of External Affairs Sean Parsons explained the significance of completing the works despite the challenges posed by the pandemic.
Simec Atlantis Energy, through its partnership with ITPEnergised, worked with China Shipbuilding Industry Corp., or CSIC, and China Three Gorges, or CTG, to develop CTG’s first SG500-kilowatt tidal stream turbine. The mammoth structure, with a rotor diameter of 18 meters, was installed between the islands of Putuoshan and Huludao in the Zhoushan archipelago in China mid-April. This achievement has helped to open China’s 8.2-gigawatt tidal stream renewable power potential.
Parsons said that CSIC’s facilities in Wuhan had to deal with being at the center of the outbreak of Covid-19 and managed the logistical challenges that this presented with extreme professionalism. While following all government advice concerning social distancing as well as the regulations concerning manufacturing facilities, CSIC triumphed and the turbine is now installed.
Government policy is a significant driver for renewables. China is working to cut its coal consumption, which is a huge challenge as fossil fuel accounts for about 60 percent of the
Joint ventures such as the COOEC-Fluor Zhuhai fabrication yard serve domestic and nonChinese markets. Shown here, the central platform for CNOOC’s Dongfang 13-2 Gas Fields Development Project is loaded onto a barge at the COOEC-Fluor fabrication yard, destined for the western South China Sea. CREDIT: FLUOR, BUSINESS WIRE
Simec Atlantis overcame the pandemic to complete the manufacture of its mammoth tidal stream turbine at facilities in Wuhan, the epicenter of Covid-19. CREDIT: SIMEC ATLANTIS
country’s overall energy consumption. Its strict 2015 Paris climate change commitments have been met, reflecting domestic political desire to respond to environmental concerns and address urban pollution. As such, the country is actively seeking out renewable investment opportunities, with studies estimating that tidal stream energy in China could supply more than 8.2 gigawatts to the country’s grid.
Parsons said that the natural resource and commercial opportunity China represents for the tidal stream power industry cannot be overstated, and that this opening up of a vast international market will have profound implications for supply chain and cost reduction developments, which will be felt across the entire renewables and wider energy sector.
China still holds potential for continued joint venture works, leaning on the expertise of foreign multinational countries. No doubt, as Lampris explained, challenges remain, which can vary significantly between sectors. However, there are promising examples showing that with careful planning and coordination, these challenges can be overcome. BB
Thomas Timlen is a Singapore-based analyst, researcher, writer and spokesperson with 30 years of experience addressing the regulatory and operational issues that impact all sectors of the maritime industry.
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AMERICAS ECONOMIC ACTIVITY 2018-2021
GDP FORECAST
Economists forecast a significant decrease in GDP across the Americas in 2020, while anticipating a strong turnaround in GDP growth in 2021.
% 12 9 6 3 0
2019 2020* 2021*
-3 -6 -9
-12 ARGENTINA BOLIVIA CANADABRAZIL CHILECOLOMBIACOSTA RICA HONDURASDOMINICAN REP.ECUADOREL SALVADORGUATEMALA MEXICONICARAGUAPANAMAPARAGUAY
INFLATION FORECAST
-27.8 -26.8 -2.6
PERU UNITED STATESURUGUAYVENEZUELA
Inflation rates throughout the Americas remain relatively under control, with the extreme exceptions of Argentina and Venezuela.
% 8 9 53.8 39.8 44.9 7 6 5 4 3 2 1 0
-1 ARGENTINA BOLIVIA CANADABRAZIL CHILECOLOMBIACOSTA RICA HONDURASDOMINICAN REP.ECUADOREL SALVADORGUATEMALA MEXICONICARAGUAPANAMAPARAGUAY
10093 4556 1818
PERU UNITED STATESURUGUAYVENEZUELA
CURRENT ACCOUNT FORECAST
Current account balances are the difference between a given nation’s imported and exported goods, services and transfers and are an indicator of foreign trade trends. In US$bn.
10 0
-10
-20
-30
-40
-50
-60 *Forecast ARGENTINA BOLIVIA CANADABRAZIL CHILECOLOMBIACOSTA RICA HONDURASDOMINICAN REP.ECUADOREL SALVADORGUATEMALA MEXICONICARAGUAPANAMAPARAGUAY Source: Consensus Economics, www.consensuseconomics.com
-480.2 -460.7 -535.5
PERU UNITED STATESURUGUAYVENEZUELA
