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more news at www.heavyliftpfi.com


INDUSTRYINSIGHT


remains fragile” in these countries. The possibility of a broad-based emerging-markets crisis, resulting from the rising value of foreign-currency debts alongside political instability and poor policymaking, cannot be ignored. An economic downturn in


China is another key concern; domestic credit stood at over 230 percent of GDP at the end of the third quarter of 2018, the EIU said. “If the Chinese government


was unable to prevent a disorderly downward economic spiral, this would lead to much lower global commodity prices, particularly in metals. This, in turn, would have a detrimental effect on the Latin American, Middle Eastern and Sub- Saharan African economies that had benefited from the earlier Chinese-driven boom in commodity prices. “In addition, given the


growing dependence of Western manufacturers and retailers on demand in China and other emerging markets, a disorderly slump in Chinese growth would have a severe global impact – far more than would have been the case in earlier decades.”


Constant change When asked to comment on some of the most prominent challenges in the project logistics sector, industry figures drew attention to structural changes in the market. “As the saying goes ‘the only


constant is change’, and in our industry we are evolving constantly,” said Luke Mace, senior vice president for Geodis’ Industrial Projects activity. One of the biggest changes for Geodis is the changing face of the competition. “The larger EPCs, in


particular, have been going direct to carriers for a long time now, and in some countries EPCs have logistics teams bigger than most project


forwarders. “In several markets we see


cargo owners also owning sister 32


May/June 2019 BBC Chartering is


reportedly in the process of launching a logistics services division in Southeast Asia.


logistics companies – then you are, in essence, competing against your customer themselves. What we are seeing more of though are carriers who aim at performing as a project forwarder. “However, what is most


important in my experience on any project or complex spot move is the first and last mile. “To be successful in any end-


to-end supply chain you need more than ships. Our customers want to know that we have, for example, a strong Customs brokerage capability, a QHSSE programme that can be


adapted to all environments, and an understanding of the importance of the socio- economic impact your project might have – and we need to be able to provide all of this in an easy-to-use IT system,” Mace explained. Multipurpose shipping line


BBC Chartering, for one, is reportedly in the process of launching a logistics services division in Southeast Asia. John Pittalis, AAL’s marketing


and communications manager, commented: “There are several multipurpose operators looking to establish forwarding arms as part of their operations. A move like that is understandable for a carrier with an enormous operating fleet and the negotiating power and constant shipowner pressures that lie therein. “In our view this is not


What is most important in my experience on any project or complex spot move is the first


and last mile. – Luke Mace,


Geodis Industrial Projects


healthy, considering the potential harm to relationships from conflict of interest and competing elements that such an endeavour would bring. AAL is a carrier first and foremost and has been there for our customers for 25 years – forwarders and cargo owners alike. Therefore, even with one of the sector’s largest fleets, such a move would pit us against the very same customers with whom we have built such strong ties – something that could only be counter-productive,” he added. There is also a risk when


diversifying to other business


models that could end up harming the quality of core services, added Pittalis. “We actually witnessed the reverse of this when logistics companies tried to enter the shipping space – and their lack of expertise and track record proved compelling. We plan to stick to what we do best and continue to serve the market – the whole market.” With regard to carriers


launching project freight forwarding arms, Ove Meyer, owners’ representative of Zeamarine and managing director of Zeaborne, said: “I have my doubts about whether this is the right way to go”.


Financial capacity Meyer believes that there are no carriers on the market that have the financial capacity to offer additional project freight forwarding services. The burden of acting a project owner would simply be too great. For Zeamarine, it will


organise certain additional logistics services when requested, but Meyer said: “We are not willing to set up these services as a standalone business division. We will focus on our core business – ocean freight. “I can only see a company


being able to offer both the multipurpose shipping services and forwarding activities if it is the result of a merger between a forwarder and carrier,” Meyer added.


HLPFI www.heavyliftpfi.com


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