Week #03 – 2020

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In this edition: New Year Questions with Shipping Professionals >>>

Week #03 | 16th January 2020

Dear Readers,

Bo H. DrewsenIt’s Thursday 16th January and I’m currently in Beijing for a couple of days, in between flights from Stockholm to Bangkok. Although it’s a rather long route, flying Stockholm to Bangkok via Beijing, it does allow you a stopover that can be used for business. The new rules in China are handy, allowing a 144-hour visa-free entry if you’re later heading to a third country after.

For more info on the new Chinese rules for visa-free transit, you can read here.

I am here for three days, mainly to see my in-laws coming from Shandong province, but I’ve also managed to join a local North China and Russia meeting of the CLC Projects network and visit Sinotrans Project Logistics, one of the biggest state companies involved in the global logistics procurement for many Chinese state-owned enterprises active worldwide. I first visited Beijing in 1986 and it is certainly a marvel to behold its development since then, for better or worse, of course. It’s hardly possible to flag down a taxi these days unless you’ve got the local app and you can sometimes be specifically snubbed for simply being a foreigner (laowai).

Developing Africa as well as Central & South America is high on the Chinese agenda, and with soft power spreading across the world, you have now Chinese EPC contractors who are active from Madagascar to Cuba. Whether we like it or not, they are here to stay and will continuously deliver more and more sophisticated and complicated equipment needed for the world’s developing infrastructure.

My city of residence, Stockholm, currently has a gigantic bridge section en-route from China by heavy-lift ship for the ‘Slussen’ area (see here). Also, several post-Panamax gantry cranes are on the way from China, on Chinese tonnage of course, to Stockholm/Norvik’s deep-water port. The embassies are lined up from every country in the world in Beijing and, taking a walk in San Li Tun, you do hear a lot of foreign languages in the area, not to mention in the night clubs.

I shall refrain from telling you about the Mongolian embassy, but people who’ve been around Beijing for a couple of decades should know what I mean. I also recently sustained both a sprained ankle and a sprained wrist by clumsily slipping down the stairs in a Bangkok shopping mall/ As I often say in my editorials, we never know what’s around the corner, and nowhere is this more apparent than it was for the passengers and crew of the Boeing 737 that was recently brought down over Iran. What a horrific event and a total tragedy, with simple human error apparently to blame. PCW’s thoughts and prayers go out to the victims and their families, of course.

Business-wise, this week we continue our gentle wind-up to 2020 proper with some quick interviews involving several shipping dignitaries from various corners of the world. I trust you will enjoy their thoughts and opinions and hope you might also benefit from them. Of course, we’ll be providing the usual shipping news, trade intel, video and picture of the week, as well as wise words.

Until next Thursday, I remain,

Yours sincerely,
Bo H. Drewsen


Two quick questions with

Mr Herbert Lösing

COLI Shipping – Hamburg, Germany

herbert.loesing@coli-shipping.com | www.coli-shipping.com

Hamburg,-Germany Map

How was your New Year’s celebration?

I spent my New Year’s Eve having a quiet evening in with my family.

Do you generally have a negative, moderate or positive outlook for 2020?

We expect good development this year, though the prospects are not exactly bright. However, over the decades we have learnt to live with the market and that it never stays bad forever.

The low sulphur regulation gives additional pressure to the carriers and the cargo having to pay for it. As a result, we expect that major players will become more careful and that this will influence market development. 

Still, overall, we have a moderate to positive outlook for 2020, though the political situation does not really reflect this. We expect the tensions will soon calm down and trade will begin to develop on the back of several environmental concerns and changes.

Anyway, we wish you and the other readers a happy and successful 2020!

Two quick questions with

Mr Andy Hall

Fagioli – Abu Dhabi, U.A.E.

a.hall@fagioli.com | www.fagioli.com

UAE-Abu-Dhabi Map

How was your New Year’s celebration?

I returned to the cold of the UK for the Christmas festivities to spend time with my family. It was lovely to catch up with everyone I love, and I enjoyed the realisation that, after all the hype and excitement post-election, nothing will really change in the months to come.

As for the new year, I returned to the relative warmth of an Abu Dhabi Winter to enjoy a few days in the city and see something other than the inside of an office. 

Do you generally have a negative, moderate or positive outlook for 2020?

Overall, my outlook for 2020 is moderate. There look to be several events in 2020 that could change the course of history forever, but not in the immediate term. I believe that 2020 is going to be a challenging year. In the oil & gas industry, we have been dreaming of a comeback and the thirst for investment has left a lot of companies very hungry for work, which as we know has an impact on the bottom line. I believe that Fagioli will see a very strong 2020, with the order book already looking strong for the coming year. We feel that things are starting to look up and we’re thinking more about strategy than feeling the desperation of trying to secure business.

Two quick questions with

Ms Leah Cook

US Ocean LLC – U.S.A.

leah.cook@usocean.com | http://www.usocean.com

USA Map-02

How was your New Year’s celebration?

My New Year’s Eve was wonderful. It was filled with friends, fun and lots of delicious food! My husband and I hosted a small get-together at our house and it was nice to toast to the memories of 2019 and welcome in the new year 2020!

Do you generally have a negative, moderate or positive outlook for 2020?

The shipping markets, by and large, continue to remain dynamic and, unfortunately, very volatile. Overall though, we are optimistic about 2020, because we think that multipurpose operators and owners will have to confront supply and cost realities, which will lead to a recovery of the sector this year.

Multipurpose vessels are not just competing with other breakbulk and project cargo operators, but rather are competing with other types of vessel operators. In the project and heavy-lift sector, cargo types that have historically been carried on multipurpose vessels are, in some cases, can now potentially be carried by bulk carriers, container operators, and RO/RO vessels. Module carriers also have an impact on project cargo that was previously carried on multipurpose vessels. While there continues to be an important need and space for operators with multipurpose vessels and heavy-lift expertise, multipurpose owners and operators have been reluctant to accept the reality of the impact to supply arising from the competing sectors.

The supply reality should be reinforced by the recent transition to IMO 2020 compliant fuel. While owners and operators have been able to deal with the historical oversupply by working with banks and others to refinance assets or defer loan payments, higher fuel costs are not something that can be deferred to a later day. The sector has likewise squeezed operating costs to a level where there is not much more that can be done. The higher fuel costs, in conjunction with a realistic view about other sources of supply, should result in consolidation and contraction with the positive result of a rightsizing of the multipurpose fleet and sector. At US Ocean, we are positive about 2020 and beyond because of our service offerings.   

As a US Flag operator, we are engaged with not only in the general international market, but we also carry cargoes that are financed by the United States Government. We continue to remain focused on providing innovative and flexible transportation solutions to our commercial and government customers. In 2019, we expanded some of our service offerings and capabilities to make the transportation process more seamless for our customers. We will continue to expand upon this in 2020. We have likewise broadened our network, which ensures reliability for our customers and positions the company for the future. 

There have also been some very encouraging developments for US exports, which is an important market for us as a US-based company and a US flag operator. Paramount amongst these developments is the historic seven-year reauthorization of the Export-Import Bank of the United States. A fully functioning EXIM Bank will help to promote U.S industry and interests in the international arena. EXIM financed projects often buy large sophisticated pieces of equipment from the U.S. which are perfect for carriage on our fleet of multipurpose ships.

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Two quick questions with

Mr Benny Poon

Poon & Partners CPA – Hong Kong

benny@poonpartnerscpa.com.hk | http://www.poonpartnerscpa.com.hk/

Hong-Kong-02 Map

How was your New Year’s celebration?

It was wonderful thanks. I saw my family and good friends’ at many happy and eventful gatherings! 

Do you generally have a negative, moderate or positive outlook for 2020?

The global economy may have a bit of a down-turn and create a need to struggle around for keeping a stable business, but realistically, I don’t see anything changing that much in the new year, so that means generally stable growth in 2020.

Two quick questions with

Mr Christian Schmith

IOL Group – Indonesia

christian.schmith@iolgroup.com | https://iolgroup.com

Indonesia Map

How was your New Year’s celebration?

I had a very good New Year’s Eve thank you. I spent it as most people do, by celebrating with my family and many great old friends. 

Do you generally have a negative, moderate or positive outlook for 2020?

I am cautiously optimistic for a good business year in 2020. Hopefully soon the dust will begin to settle, and we will begin to glean a little clarity with regards to the trade war. So, as a result, I am moderately positive on the outlook for 2020. Of course, the upcoming U.S. election will grab the main headlines and attention, whether we like it or not.

Two quick questions with

Mr Danilo Sergi Alampi

Shanghai Capital Logistic Transport Co – China

danilo.sergi@capital-logistic.com.cn | www.caplog.org/

China-(Shanghai)-02 Map

How was your New Year’s celebration?

It was a very warm and lovely time. I spent New Year’s Eve with my family, playing with the kids all day long. I’m also happy to say that, for the first time in a very long time, I did not check my emails for twelve straight hours! 

Do you generally have a negative, moderate or positive outlook for 2020?

When it comes to 2020, we plan to keep on expanding our offices in Shanghai and Jiangsu. If we achieve the targets that we have in mind for 2020, it will soon be time to expand into other areas of China. I have got a moderate-positive feeling for 2020. Several customers have certainly complained about a year-end that showed signs of slowing down, but thankfully, we instead managed to keep up our sustained growth throughout the entirety of 2019. I think we could potentially achieve the same result in 2020 by focusing on the needs of our clients and employees that work with and for us respectively.

Intermodal Asia 2020
PCW-Shipping News

Port of Bilbao News

Editor’s Note:
The Port Authority of Bilbao has grown and been transferred over December in an operation valued at 13.1 million euros. Read more about it below.

The Port Authority of Bilbao has transferred this month of December, in an operation valued at 13.1 million euros, the last docks it occupied in the city of Bilbao.

With this sale, the docks of Zorroza – which began their commercial activity in 1928 (their fifth and last phase in 1932) – will remove from public port domain just over 100,000 square metres, in addition to the dock itself with of 823 metres of berthing line.

Top Freight Forwarder Joins Arctic Pledge

Editor’s Note:
The Arctic Searoute travels through some of the most pristine waters in the world. Although we know that the former Soviet Union dumped huge amounts of waste around the islands up there, there is no reason for the rest of the world to repeat their mistakes and increase the risk of running aground or causing pollution. So PCW fully supports this initiative by forwarders and shipowners pledging not to use that route. In the end though, money and not the environment will likely make the decisions for Russia.

Eight more companies have agreed not to ship goods through the Arctic Ocean by signing the Arctic Corporate Shipping Pledge, the environmental NGO Ocean Conservancy announced Tuesday. The new signatories include Ralph Lauren, top freight forwarder Kuehne + Nagel, PUMA, International Direct Packaging, Allbirds, Aritzia, Hudson Shipping Lines and Bureo.

Wind Cargo Boosts Freight Tons at Port of Duluth-Superior

Editor’s Note:
As mentioned before in PCW, the MPP and heavy-lift shipowners would really be in dire straits if it wasnt for the environmentalist wave encircling the world, with renewable project cargo being shipped left right and center. Here some news from Duluth located along the St Lawrence Seaway.

The Port of Duluth-Superior sees growth opportunities in wind, breakbulk, and project cargo, and is investing heavily in Clure Terminal.


Gebr. Pfeiffer Wins Order for Grinding Up to 370t/h of Mixed Cement in India

Ultratech Cement Ltd., the sixth largest cement manufacturer in the world and also India’s largest cement manufacturer, has opted for the latest MVR mill technology from Gebr. Pfeiffer. Hence 17 MVR mills of the type MVR 6000 C-6 will soon be producing in India alone.

This order is the first ever direct deal between Ultratech and Gebr. Pfeiffer, although Pfeiffer vertical roller mills do form part of the standard equipment of this Indian cement manufacturer.

New Turkish Electric Car Project Investment Seen at $3.7bn

Turkey’s new domestic electric car project will have a fixed investment of 22 billion lira ($3.7 billion) over a period of 13 years, with an annual production capacity of 175,000 vehicles, the Official Gazette said on Friday.

The project, launched on Oct. 30, will receive state support, including tax breaks, and establish a production facility in the northwestern province of Bursa, according to a presidential decision published by the gazette.

Al Amoudi to Build Mega Oil Processing in Ethiopia

Sheikh Mohammed Hussein Ali Al-Amoudi, Chairman and Owner of the leading Ethiopian investment group, Midroc Ethiopia, is set to invest 4 billion birr (around $126.2 million) in mega edible oil processing factory in Addis Ababa, Ethiopia.

A corner stone for the modern edible oil factory was laid today in Addis Ababa, around Summit area adjacent to Pepsi Cola factory.

Lenzing Joint Venture to Build Dissolving Pulp Plant in Brazil

The Lenzing Group, world market leader for wood-based cellulosic fibers, and Duratex, the largest producer of industrialized wood panels in the southern hemisphere, announce that they will build a 500,000 t dissolving wood pulp plant in the State of Minas Gerais, near Sao Paulo (Brazil). The start-up is planned for the first half of 2022.

In the joint venture, Lenzing holds a 51 percent, Duratex a 49 percent stake. The expected industrial CAPEX will be approx. USD 1.3 bn (based on current exchange rates and customary tax refunds). The project is financed through long-term debt. The corresponding financing contracts are expected to be concluded at the end of the first quarter of 2020.

Global Logistics Show 2020
Featured Project Shipment

Editor’s Note:
Project cargo being loaded in California to McMurdo Station Antarctica. This was all organised by US Ocean.

Project cargo being loaded in California to McMurdo Station Antarctica.

US Ocean’s M/V Ocean Giant loading in Port Hueneme, CA. The vessel carries out the annual re-supply for the National Science Foundation-managed U.S. Antarctic Program, providing the majority of supplies needed to operate Antarctica’s McMurdo and Amundsen-Scott South Pole stations for a year. The M/V Ocean Giant is operated by Military Sealift Command as part of Operation Deep Freeze, the U.S. military’s support to the Antarctic Program.


PCW-Featured Video

China’s Investment in Hambantota Port Faces Several Challenges

Editor’s Note:
Chinese investments always come with strings attached. However, tell me if investments from France, the US or India don’t. Anyway the main thing is that something should be done in countries where infrastructure is lacking, and the time between discussion and action is often lengthy, at least in the West. This is not so in the East, for better or worse. Here’s a short video of the port of Hambantota, Sri Lanka.

Port in a Storm
PCW-Featured Photo

Editor’s Note:
A raw (non-photoshopped) photo of the BB terminal at Kota Kinabalu, East Malaysia, complete with a beautiful sunset over Gaya Island.

Gaya Island