Heavylift / Breakbulk
Sailing for new horizons
When the Austral Asia Line started regular services between Asia and Oceania in 1995 its main trade also provided it with its name. 20 years later AAL, which specialises in transporting breakbulk, project cargo and heavy loads, is celebrating its 20th anniversary, and simultaneously pursuing a new strategy. Managing director Kyriacos Panayides explained its repositioning to Antje Hanna Veregge.
Mr Panayides, you changed your brand name from Austral Asia Line to AAL in March this year. What is behind the move?
The logic of the rebranding is our desire to mirror our global coverage. We started out as a regional carrier serving the Asia–Oceania trade. Whilst we will naturally continue to maintain our Austral–Asian trade, over the last years we have grown and now call at every continent. Our name was simply no longer representative of our global presence, which includes the Americas, Europe and other parts of the world.
Why did you decide to extend your network?
We took a decision to broaden our market presence in 2008. Our business model had been very successful so far and it was time to increase our footprint into other regions. So we ordered our second generation of ships at that time. These newbuildings were delivered between 2011 and 2014. During this time we also started to expand into new areas and markets.
It must have been a challenging time to venture into new fields in those years.
Yes, it was – and still is – quite a challenge. We are happy that we have been supported strongly by our established customer base, that has provided the stability and foundation to expand into new markets, enhance our services and infrastructure and build our customer base even further.
Where exactly do you see AAL’s niche?
We operate in a specialised industry. Our niche basically consists of delivering efficient and safe breakbulk, heavylift and project ocean transport solutions with the commensurate know-how and expertise, both from the technical as well as the commercial point of view. We aim to build long-term partnerships with our customers and associates, relationships built on trust, and approach each new market opportunity with an entrepreneurial spirit. This ambition has driven us to new heights, both in terms of our business development and the quality of the pioneering solutions we create and execute for our customers.
Our strategy is based on two core pillars. These are our liner services division activities, which focuses on the areas in which we have sustainable freight support that can justify regular services and a fixed scheduled presence. The second pillar, our tramp and projects division, offers our customers solutions in other regions, with the tramp segment offering great flexibility that is additionally tailored to individual needs.
Which of these two divisions accounts for the larger share of your business?
In terms of the fleet as well as its utilisation rate, business is pretty much divided equally between the two. But in terms of expanding our fleet our investments are directed at the tramp sector. This is the one with the most potential nowadays.
How do you tap into this potential?
We want to add further regions in which we offer tramp services. Our medium-term strategy is to include new routes by initially offering our tramp options there. This is how we enter a new market. When we have established the infrastructure that is required and have ascertained sustained demand, then we offer regular liner sailings – if the trade justifies it. Before we reach this stage we will already have gathered a great deal of knowledge and information, however.
Some players bank more on specialisation rather than on a general approach. Why has AAL consciously decided against that?
The beauty of our business is that we deal with diversified markets. We provide multipurpose ocean transport services and have more than 20 years’ of experience in delivering such solutions to the world’s most demanding industries. We have the finest engineers, support networks and hardware that enable us to tailor our solutions to fit the individual demands of each customer and their sector – irrespective of whether their cargo consists of mining components, wind energy blades, giant construction machinery or even bulk cargo such as pulp.
How exactly do you go about this?
We carefully control the growth and development of our fleet, so that we deploy the tonnage needed to satisfy our customer projects and trades and, at the same time, ensure that vessels in our fleet run at optimum efficiency and capacity. For some time now our focus has been on North America and Europe, with growing demand for capacities there. This is why we are set to enlarge our fleet to well over 500,000 dwt in the course of this year.
By adding own tonnage?
Our fleet expansion plans are driven by customer demand and strategic expansion plans – and are always built on sustainability. We do not wish to expand the global multipurpose fleet, which is already threatened by oversupply, so will seek quality tonnage from the long-term charter market.
AAL has managed to double its revenues in the past two years. Where have you established the biggest promise for the further expansion of your business activities in the coming years?
This year we are experiencing a large degree of uncertainty in the oil and gas industry, on account of the dramatic decline of the oil price. However, existing projects are nonetheless being carried out, and mostly without delays. We remain cautiously optimistic, especially concerning the infrastructure and construction industry. We assume that this segment will be able to compensate for a slowdown in the oil and gas industry.
Which world regions do you believe currently hold the greatest potential?
Infrastructure development is still high on the agenda of many important industrialised regions such as China and Southeast Asia, as well as emerging markets in the Middle East and Africa. Added to this there is widespread global demand for greener and more sustainable energy solutions, which are themselves becoming bigger and more complex in terms of their logistics demands.
Speculation over consolidation in the shipping industry continues unabated. What is AAL’s stance on the subject?
Consolidation would not be a driver for us in pursuing potential cooperation with other operators. We would only consider such ventures if they enhanced our service, expanded our reach and offered both sides significant long-term and sustainable growth potential.