Strategic redeployment

Heavylift cargo shipping lines believe that their fortunes are a-changing. Growing demand during the second half of 2013 has continued into 2014. Joerg Roehl, the chief commercial officer of Hansa Heavy Lift, spoke to the ITJ’s editor-in-chief Christian Doepgen about the improved situation, moderate margin improvements, developments in emerging and established markets and HHL’s expansion plans.

Mr Roehl, you worked for Agility and Kuehne + Nagel for many years. When did you join Hansa Heavy Lift?

I’ve been involved with Hansa Heavy Lift from the very beginning. I was originally employed by Oaktree for Beluga in 2011, but the bankruptcy of the latter was then no longer avoidable. My primary objective was initially to lay the foundations of the new company. But for some time now I’ve been able to devote myself to the operational side of the business, which is of a global nature in our case, as you know.

 

The complaints about oversupply are not going away, not even in the heavylift cargo segment.

This has remained one of the main problems facing the industry. The niche within a niche in which we also operate – which we refer to as super-heavylift and which also covers our core activities – still represents a major market, however. Since the middle of last year we’ve even seen increasing demand, which has continued into 2014.

 

Do the market improvements also affect the rates?

There’s definitely a slight recovery. Although rates have still not returned to really healthy levels, we’re nevertheless confident. So lengthy turnaround times are now no longer an issue for our ships. And the endless influx of new capacity into the market appears to have come to an end now – at least for the time being.

 

How is your fleet currently made up?

We currently operate 22 of our own and two additional chartered ships. In terms of ship categories, we have thirteen P type and nine F type units, with each of the seven P2 ships being able to lift cargo with a total weight of 1,400 t, using two cranes. And what’s also quite important in today’s times is the fact that the fleet’s long-term future is secure and that it is also fully financed.

 

Are you planning to expand your fleet?

Following detailed discussions with our customers and thorough market research the answer is a clear yes. We’re currently planning to build six new ships, each of which will be able to lift cargo weighing 1,400–2,000 t. With such specialist builds you’re always heavily involved in the detail of the design. In the medium term, we envisage having a fleet of 30 to 35 ships.

 

But isn’t that at odds with the existing oversupply you just mentioned?

Not at all. Immediate availability is becoming increasingly important for our customers. And another reason we’re so successful at acquiring clients is the fact that we deploy our fleet on a global scale. The quicker you have a ship in place, the quicker the contract is awarded.

 

Is that why you also make use of the Northeast Passage?

Yes. We’ve sent five ships through the passage so far, saving up to 20 days compared to the Suez route. Russia is already a major market for us, as our fleet has the highest ice-class rating and can use this route from June to November, depending on the weather.

 

What’s the situation in other emerging markets? Has the momentum slowed?

We’re well able to cope with this, thanks to our flexible structure. The Chinese market is highly competitive, but strong. We cover India with our partner All Cargo, but are behind schedule there in terms of volume growth. We currently serve the exciting markets in Mexico and Chile from our office in Houston.

 

What about Brazil?

That’s where we’re experiencing strongest growth, as well as in Russia. Our new branch in São Paulo (see page 8 of the main issue of the ITJ) has been operational since February, and we will provide greater support to Latin America from there. In January we added a new office in Perth (Australia) to our network.

 

What trends can you identify in the heavylift cargo business?

Firstly, in addition to logistics, engineering is becoming increasingly important. It now accounts for a quarter of our employees – a figure that is set to increase in future. Secondly, the volume of individual modules is increasing, resulting in the need for ever-closer collaboration between carriers and clients. This has been a positive learning experience for all parties. Finally, customers are attaching more and more importance to the quality of a fleet, based on Ovid certification.

 

What do you think is the secret of Hansa Heavy Lift’s success?

I believe our competitive advantage lies in applying the key industry standards to all of our business. We call this the six-stage process. First comes the marketing and tender stage, then an order, followed by the establishment of the project team, planning and implementation, until finally the stage in which the project is completed. This also sees an internal evaluation. In practice, this is all far more challenging than it sounds.