Heavylift / Breakbulk
It’s in the mix
Size is not always everything, as Raymond Fisch, BBC Chartering’s senior vice-president for strategic projects, told Christian Doepgen recently. Efficiency and proximity to markets are also key, amongst other things.
Analysts are predicting that the heavylift market will remain vulnerable to pressure on prices until the end of 2017, Mr Fisch. How will BBC Chartering tackle these conditions?
Our objective is primarily to ensure the best possible trading of vessels in any market. We try to deliver the best to owners and cargo customers, and through this want to create superior value.
The factors influencing tonnage procurement decisions have changed and we have adjusted and strengthened our organisation to flexibly accommodate an increasing number of vessel under various contracting modes. We now operate and manage about 170 project carriers of all sizes globally, managing a multitude of tasks with them. To remain a strongly-performing project carrier, we focus on adopting and improving three strategic resources – our network, fleet, and service delivery organisation.
You have more than ten years of experience with semi-liner services (also in the framework of alliances). What is your assessment of these activities? Have you got any new plans?
Our semi-liner network is the result of our efforts to deliver flexible transport solutions to the maritime project industry worldwide. Behind this was the idea of combining our parcelling approach with volume contracts, to establish a high frequency network of trades over time. To better promote our offering we named our semi-liner network the “apac service” – any port, any cargo.
As a platform and network our “apac service” has proven itself. Some call this an approach to a “share economy” in shipping – we don’t object! Operating a large number of multipurpose and heavylift vessels (MPP / HL) in our network ensures the best utilisation and trading of capacity in the markets. On top of this we make use of premium project opportunities to leverage capabilities that can be deployed efficiently through our service concept.
Dynamar has estimated that BBC operates the largest tonnage. What are your policies concerning capacities?
Today BBC Chartering operates and commercially manages around 170 vessels with a capacity of 2.1 million dwt. Independent research often fails to keep track of all developments and thus does not always reflect the latest operating fleet size. Currently our MPP / HL ships’ capacities range from 3,500 to 20,000 dwt. We provide lifting capacities from 120 to 900 t. The bulk of our capacity consists of compact and flexible MPP / HL vessels, with high average lifting capacities. We also cater to the larger intake segment, which runs in our “apac service” too.
In general we procure tonnage on long and short-term basis, and the set-ups more or less reflect the time-charter arbitrage risks. In the current market we’re prepared to grow our capacity volume, whilst we try to limit our commercial risk. This means no new long-term time-charter positions; an opportunistic approach to spot charters; and an increasing share of vessels taken on commercial management. We call this an overall risk-efficient and value-oriented approach to fleet procurement.
So we’re always open to new alliances and cooperation agreements with quality owners, wherever these would appear to add value. The combination of our “apac services” with “premium heavylift services” leaves space to realise efficiency gains, leveraging brought-in capabilities and our network.
Chipolbrok and Intermarine are putting new vessels on the market. What newbuildings have you, in turn, got in the pipeline?
In today’s weak markets, newbuilding activities are very modest in the MPP / HL segment. Quite a few programmes that were announced have been shelved or cancelled in the meantime. Although the market needs modern and innovative tonnage, there is hardly any economic rationale for owners to invest, due to the low rate-environment in the segment. With that comes a stressed financing sector with restrictive lending policies for the financing of new vessels, and weak scrapping activity, all of which do not help.
BBC Chartering, as a commercial partner, has nevertheless engaged in a newbuilding programme for the next generation of multipurpose and heavylift vessels. In a consortium we’ve developed a forward-thinking design of a new eco-trading 12,500 dwt vessel, which offers lifting capabilities of up to 500 t. The overall design aims to optimise cargo handling and fuel efficiency – a fact which was already impressively demonstrated by the first unit, the BBC Birte H., which was delivered in May 2015. A total of six units will be commissioned in this programme over the coming years.
One of the core aspects of HL ships is their cranes’ lifting capacities. What dimensions are easiest to market?
Cranes are amongst the most crucial components of MPP / HL vessels. Looking at newbuildings in the sector, there is a clear trend towards higher lifting capability, which is needed. We have to acknowledge that the competitive potential of older, less capable tonnage dominates in a weak market, however. Flexibility-wise we think that a vessel with a lifting capacity of 500 t is probably fit to meet 98% of the project market’s cargo requirements. But the problem is that there is a high price-tag for that flexibility. Nevertheless, as the leading vessel type in the market, we believe the 12,500 dwt vessels with 500 t lift will establish itself as the mainstream workhorse in the MPP / HL sector.
So it’s not easy to say what capacity is most marketable in this segment. As a service provider we focus on the right mix of tonnage, in order to provide efficient, flexible and high-performance services and a wide range of transport solutions for our customers. Our set-up is geared to providing transport solutions ranging from light cargo transactions to heavy, complex and high-impact supply chain projects and volume contracts.
So far you’ve established new branch offices in London and Esbjerg this year. What is your medium-term strategy for BBC’s regional presence?
Our customers value us for our proximity to the markets; that means being present where our customers require us. We can thus quickly mobilise critical resources for a successful project accomplishment.
We have always focused on establishing a presence where volumes are handled and where cargo decisions are made. Our service hub strategy supports the centralisation of coordinating functions in Houston, Leer (Germany) and Singapore, and the decentralisation of operating requirements, which are close to market activities. We thus remain flexible and can simultaneously provide continuity.
What external and internal quality standards do you measure?
Delivering quality services is one of our core values. Due to the individual nature of our services – solutions for customers in any port, for any cargo – managing HSEQ cannot be compared by looking at a few benchmark indicators without understanding the logic of the business.
Our fleet changes, the crews change, the owners change, and each transport looks at a set of unique requirements. Depending on trading, cargo and service requirements we’re looking at a multitude of influencing factors that determine overall quality. A large part of this is covered through International Safety Management (ISM) as a quality management system on board our vessels; another part through the ISO system ashore. However, having such systems may not be sufficient for customers. Upon their request we thus offer to conduct customer-specific audits, which helps to diligence our operations and assure them of our compliance as well as our preparedness to meet their standards.