Page 36: of Maritime Reporter Magazine (November 2015)

MARKET UPDATE: BREAKBULK & HEAVY LIFT velopment projects. For China’s trade tomers with the most responsive service nameplate capacity. attention to detail required to safely and partners, the attempt to shore up China’s we have an AAL management of? ce in In turn, the demand for high quality, consistently shift complex cargoes from economy may trigger growth and stimu- Shanghai and a number of representative specialist breakbulk cargo and heavy lift A-to-B. late demand for their goods. However, of? ces in the main ports. solutions for the components and ma- We have also seen some operators this will have to be offset against the chinery has become increasingly critical. compromising on the cargo safety and cost increases that will result from a less Moving a 75-m long wind turbine is no cargo care standards that customers have

The Energy Sector favourable exchange rate. small feat, and requires scrupulous plan- every right to expect due to low freight

The energy sector is also a regular ning and wide-ranging expertise. That, rates. At AAL, we are proud of our repu- source of business for multipurpose car- of course, is where we come in. These tation for the highest standards of cargo

Finding New Markets riers and uncertainties in global energy transportation challenges are nothing care, because we know that investments

Finding new markets for Chinese- markets can certainly impact the demand new to AAL, and with the youngest ? eet in safety pay dividends for our custom- made goods is a priority for economic for project cargo, services; for example, of new generation and technologically ers. They understand that supply chain planners, as increasing exports would the world’s big energy groups have advanced multipurpose heavy lift ves- integrity depends upon the reliability help ease the burden of industrial over- shelved $200bn of spending on new sels we’re fully prepared for the growing of each stage for the safe and reliable capacity. The government has sought projects in recent months according to demands of the renewables sector. movement of their cargoes. In our mar- to open new trading destinations for consultants Wood Mackenzie. However ket, short-term pro? ts often result in

Chinese companies through a host of given that global businesses have a cu- long-term costs.

government-led initiatives. Africa is one mulative $4.4tn of cash on their balance

Increasing Competition

The signi? cant advantage enjoyed by of the foremost targets for China’s am- sheets, and with S&P forecasting capital

One of the biggest consequences for multipurpose operators is that we’re not bitions, as a region where exponential expenditure to rise 8% in 2015, we’re the multi-purpose sector of the slow- dependent on one sector or market, but growth is still possible, and whose eco- anticipating a sizeable uptick. down in global trade since 2009 has have the in-depth knowledge and experi- nomic outperformance during the global This is primarily due to the impres- been the increase in competition from ence to operate in a variety of specialist recession showed the enormous promise sive growth of their renewables market. the container and bulker sectors, which ? elds. This expertise and heritage has of its emerging markets. Indeed China According to the U.S. government’s En- has inevitably affected margins, as well enabled AAL to realize considerable hopes to achieve $400 billion in trade ergy Information Administration, China as the generic quality and potential growth over the past few years. Despite volumes with Africa and raise its direct invested more than $89 billion in renew- health and safety within the industry, as the downturn of the markets, we have investment in the continent to $100 bil- able energy projects in 2014 – a growth these operators do not have the specialist doubled our revenues and expanded our lion by 2020. Since the typical Chinese of 31% on the previous year. Beijing is equipment or expertise that is required to ? eet, trade routes and services to cement ? rm operating in Africa is a large state- aiming to generate 200 gigawatts (GW) transport complex cargoes.

our position as a truly global carrier. owned enterprise, they tend to have of electricity from wind and 100 GW of With regards to freight rates, in reality

There will always be some turbulence a major competitive edge: subsidized solar by 2020, as part of their drive to they are market driven and there is not a in global trade, and much like the chang- government credit, which enables them have 15% of total energy consumption lot you can do about it. It is also highly ing domestic and international demands to out-compete other bidders for Afri- from non-fossil fuels by 2020. likely that when container freight rates placed on China have required it to can procurement contracts. To achieve For AAL, as a specialist breakbulk, and demand improve, container lines adapt to a changing business environ- these ambitions will require substantial heavy lift and project cargo operator, will become much more reluctant to ment, AAL is taking this development as heavy cargo movement, and given the these are patterns that we’ve been antici- carry this complex and more time-con- an excellent opportunity to respond and expedited timelines favored by the Chi- pating for some time, and we believe that suming cargo, which could cause rates to grow. nese government, specialist knowledge renewables will constitute a substantial rise dramatically.

and expertise in implementing ef? cient part of our project cargo in the coming At AAL, we understand that there is transportation solutions. years. We continue to deliver signi? cant a certain amount of cyclicality in the

China is therefore a crucial market for movements in this sector, not just in Chi- markets and for that reason we focus on

AAL, and one from which we expect to na, but worldwide. One reason for this is what we can control: our operating costs, continue to realise signi? cant growth. that the technological expertise required driving ef? ciencies, delivering depend-

The Author

In line with these ambitions, all of our has diversi? ed, reducing wind power’s able services, and integrating our cus- liner services collect cargo from China, capital costs. This has resulted in the de- tomers’ needs with our own. For us this

Wolfgang Harms, AAL’s chief representa- and a signi? cant amount of our tramp & velopment of larger machines capable of is where the key difference lies: bulkers tive for greater China and deputy manag- projects divisions’ voyages take on cargo increased power yield – which require and container liners cannot provide the ing director.

from Chinese ports. To provide our cus- higher hubs, longer blades and greater expertise, the technical capabilities, and 36 Maritime Reporter & Engineering News • NOVEMBER 2015

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