UpCargo seeks top ranking for central American freight industry


16


Panama and its canal sit literally astride the world’s shipping lanes, so it is no surprise to learn that it is developing into a major hub for project as well as other types of freight. Local agent UpCargo Logistics, for example has been handling shipments of windfarm spares for Danish manufacturer Vestas throughout the Central America and Caribbean region, explains


president Rolando Alvarez. UpCargo has been working


hard to build up a network of agents in the central American and Caribbean region but it can be difficult to find good ones, he says. Alvarez, who sits on the board


of the Panamanian Association of Freight Forwarders as well as on the FIATA global forwarders’ federation, is working hard to


AAL upgrades


heavyliſt liner route to Mideast and Asia


AAL Shipping will deploy six 30,000+ tonne heavy liſt multipurpose vessels on its Europe–Middle East/India – Asia monthly liner route, launched a year ago. The line will operate its A-Class


fleet on the service, which offer 3,000sq m of clear weather deck space, adjustable tweendecks and significant under-deck volume. As well as project heavy liſt, general cargo, steel and bulk commodities the vessels can also carry containers of up to 53ſt and their cranes can liſt up to 700 tonnes. AAL sees growing demand


for the route among shippers, amplified by the reliability of the scheduled monthly frequency for forward planning - despite its launch coinciding with one of the most challenging periods for shipping. The liner services operated


by AAL Shipping are effectively part of its customers’ supply chains, explains general manager, Felix Schoeller. Typical users include steel traders who use the regular sailings to manage their operations efficiently and keep stocks to a minimum. There are also logistics companies whose customers might include machinery makers, construction firms


and bus and truck


manufacturers. “In general, it’s companies that source finished or semi-finished goods from another country or, usually, another continent,” he says. The advantage of the frequent


liner services is that if a shipment misses one sailing, there will be another in a month’s time. AAL is also active in the charter market, with clients taking full


ships to service the needs of a particular project. But the liner services also fulfil a need for these customers too, for example by taking smaller lots of cargo before or aſter the main chartered ship(s). “The liner service can be much more competitive than chartering a ship and only half filling it,” Schoeller explains, adding: “A lot of our clients really like this model, and we would certainly consider extending it.” As well as the regular liner


services, AAL also offers semi- liner services such as that between Asia and the US Gulf which sails every 4-6 weeks. As well


as large indivisible


cargoes, AAL also carries bulk cargoes. The liner and semi-liner


services can deviate from their regular ports, to some extent, though this must not inconvenience regular customers. Semi-liner services do serve UK and Irish ports as do the chartered tramp ships; AAL has carried the new rubber-tyred container gantries for ports in the UK and Ireland recently, including the shipment of four RTGs from China to Felixstowe on a single sailing aboard the 31,000dwt AAL Kobe. “We do see opportunities


such as windfarms and other infrastructure projects in the UK,” Schoeller adds. UK customers wishing to use


the regular liner services to or from Antwerp can of course use road, barge or coaster connections. Similar arrangements also apply in the Baltic. The past year has been an


interesting one, from a market point of view. Overall demand


held steady, but there were dips in April and October at the outset of the Covid lockdowns, followed by recovery. Operationally, it has been very


difficult. Ports in China became very congested, there were severe shortages of shoreside labour and, the most challenging aspect, heavy disruption to ship crew changes, which led to some seamen spending 12-14 months continuously aboard vessels. However, morale throughout


the company is good and everyone has risen to the challenges, says Schoeller. Looking ahead, the market for


heavyliſt and breakbulk shipping looks quite buoyant over the next 12 months, he says. Indications from other sectors of shipping such as containers and bulk all point to strong demand this year – provided, of course, that nothing


unforeseen happens. “There’s still strong demand like construction,


from sectors


renewables and oil and gas, where contracts are usually signed far in advance, and bulk flows from north America


and Australia


continue as usual,” he points out. AAL will continue to expand its


fleet as and when opportunities arise, although Schoeller notes that there aren’t many vessels available in the time-charter market now. But with an average ship age of only 8-9 years, there is no urgency for AAL Shipping to obtain new tonnage. With 23 permanent ships (of which 16 are owned) and another five on short term charter, it is already the second biggest operator in its segment of the market, namely the


larger multipurpose, long


haul vessels of up to 33,000 deadweight tonnes.


Project business in China is currently quiet, says managing director of Shanghai-based Global Star Logistics, Leo Ge, but there are hopes that things will pick up soon as the country recovers from the effects of the Covid crisis. Factory relocations and various infrastructure projects including clean energy schemes, rail lines and others are however keeping the market ticking over for GSL, a partner in the Project Cargo network. “There is major competition


for the big projects,” he explains, “but a little less for the smaller ones,” he says. Many of the construction


schemes are in inland parts of the country, as China shifts its economic centre of gravity away from the east coast region, but the latter remains very important, of course. Getting large pieces of cargo


moved by road into China has become more difficult over the past couple of years, Ge continues. Road authorities


have become strict about permits and the rules differ from region to region. The regulators have become increasingly concerned about safety and this has led them to tighten up. At the same time, the Covid


lockdown has meant that health certificates are required for drivers too and this has made it hard to guarantee when deliveries can be made, says Ge. The River Yangtze can be


a good alternative to road for parts of the country, he adds, provided the cargo is big enough to justify chartering a barge and if suitable cranes can be obtained to lift it off at the end of the trip. Finding space on ships


in and out of Chinese ports has also become very tough, particularly containers, which has led GSL to turn more to ro ro options for its smaller projects. The cost of container transport has also gone up tremendously in the last few months.


Covid turns project world upside-down Several projects have been


postponed during the past year as manufacturers have been forced to close their factories during Covid lockdowns, says Davies Turner Rotherham branch manager, Andrew Ford. Once reopened they have lost


staff due to Covid self-isolation, while importers have delayed project delivery dates due to the same issues. Ford adds: “We have also noticed there has


been an extended turnaround time for projects due to the need for social distancing in the workplace and constant sanitation.” However, within the next


12 months or so all delayed projects should be completed, except perhaps in those cases where the supplier or importer has gone into liquidation due to the Pandemic. Ford says: “We saw this on a


small scale in a construction project in Azerbijan where several


suppliers had sent


goods in April/May2020. These were stuck on trailers and in containers at customs depots and ports for over six months while the project was eventually taken over by another contractor. However as detention charges had been incurred, the new contractor pushed for the suppliers to


accept a part of the cost.” Some schemes could also be


affected by Brexit as they are no longer cost effective due to higher duties. Ford sees construction


projects as possibly the main driver of the market as governments try to rekindle economies. Green energy may also come under this umbrella, but oil and gas projects will be more affected by fuel prices.


raise the standard of logistics education logistics


by developing diploma a for Latin


America. Already available in Panama, Chile and Mexico, the aim is to roll it out to other countries in the region and so boost standards and understanding of the industry. It will be taught in Spanish – the predominant language of most countries in the region – but


students will learn key English terms as part of their training. English is in fact widely spoken and understood in Panama itself – the US maintained a presence in the Canal Zone until 1999 – but less predominant in the other countries. Panama’s logistics industry is


also well developed and it is in fact the predominant hub for all of central America. The Canal is


Issue 2 2021 - Freight Business Journal


///HEAVY LIFT


a major revenue generator for the government and there are five major ports on the Atlantic and Pacific coasts which are important maritime hubs for other countries, able to handle the largest main line break bulk vessels with transhipment to smaller ships able to penetrate the smaller ports in central America and on the Caribbean islands. “We can receive cargo here in


Panama and transload it onto other vessels, taking our own cranes to the destination port if necessary,” Alvarez explains. Panama’s own ports have cranes


capable of handling up to 100 tonnes whereas in the outlying ports the maximum is usually nearer 40t or so. Panama


also generates a


certain amount of project cargo itself. As well as the Canal – the subject of a major widening and lock-building programme a few years ago – this year will see the start of construction of a third metro line for Panama City, with Hitachi rolling stock being shipped from Japan and infrastructure material from Korea, with construction expected to last over the next four years.


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