The bottoming out of the commodity boom cycle, as China’s appetite for iron ore diminishes, has forced miners to cut back on capex investment as their share prices fall, removing a significant market for the transport/installation of bulk handling plant.

At the same time, the drop in the oil price to below US$80/ barrel from a high of over US$115/barrel in June has a two-pronged effect. First, it forces the oil majors to re-appraise their investment plans and reduce speculative drilling  or delay the development of new marginal fields and, secondly, they will put pressure on suppliers to reduce prices.

This reaction may only be short term, although the International Energy Agency considers oil prices “will continue falling into 2015”. But with the US now self-sufficient in oil and gas and OPEC’s apparent reluctance to cut output to raise prices, some observers believe it may be some time before oil prices recover to June 2014 levels.

Flattening market

In the meantime, the heavy lift shipping industry, particularly those that have invested heavily in the offshore installation market, such as Jumbo, SAL and BigRoll, will be hit by reduced demand and tighter prices.

BigRoll, for instance – a joint venture between the Spliethoff subsidiary BigLift Shipping and RollDock – initially ordered two flat top module carriers, with an option for a third subsequently exercised in June.

The first ship, BIGROLL BARENTSZ will be delivered June 2015, followed by BIGROLL BERING in January 2016 and BIGROLL BAFFIN in June 2016.

These vessels are specifically designed for the carriage of “modules”, large sub-assembly components for the offshore sector, and are being built to Swedish/Finnish Ice Class 1A. They are designed for operations in Arctic waters,  especially in Russian concession areas – the clue is in their naming. While the ships have high ballasting capabilities, they are not designed to be semi-submersible. Thus, while cheaper, they do not have the flexibility of Dockwise’s ships.

Opportunistic

“BigRoll vessels are supposed/ planned to work on large, longterm projects,” notes BigLift. But a project recently carried out by the company suggests that they would also be suited for one-off contracts.

Konecranes contracted with BigLift Shipping for the transport of five STS cranes for Indonesia’s Teluk Lamong container terminal. For this project BigLift chartered the Korean deck carrier KOREA EXPRESS and moved the cranes from Hailong in China to Surabaya in Indonesia in two voyages.

The 2012-built vessel – whose correct name is KOREX SPB NO. 1 – is slightly smaller than BigRoll’s newbuildings, which have a loa of 173m and a 43m beam, compared to 152m by 40m for Korean-owned ship. “This operation could have been undertaken by one of the BigRoll vessels [were they in operation],” BigLift admits.

“However, shipments done by KOREA EXPRESS are not of that kind [as planned for the BigRoll MC ships].”

BigRoll vessels will be separately marketed and managed by the BigRoll organisation, although it is unlikely BigLift would charter a third-party vessel if it secured a crane move contract, unless its module carriers were fully  committed. With the potential impending slowdown for marginal offshore concessions, full utilisation at profitable rates or long-term charter for these three ships could be difficult to attain, particularly with strong competition from
Dockwise and Cosco.

China’s Cosco has quietly built up a significant fleet of six large semi-submersible flat top carriers, plus a 90,000 dwt vessel currently under construction. It also has a fleet of 35 heavy lift/multipurpose (MPP) ships of around 28,000 dwt, including eight with a twinned 700t lift capacity. 

In Hailong, the KOREA EXPRESS deck was fitted with rails and winches, so that the 960t Konecranes cranes could be winched onto the flat deck over the side with the booms down. The full loading operation, including laying out the deck fittings and seafastening, was completed in two days for each crane, while discharge was completed in half that time.

The vessel arrived in Surabaya after 12 days, where the cranes were rolled back onto the quay with winches, then lifted with hydraulic jacks, enabling the bogies to be swung 90 deg to be landed in their quayside rails. 

Delicate weights

The weight of a crane does not necessarily pose the most difficult problem in transporting it, as configuration can present more of a challenge, as BigLift found when it won a contract to move two new rail-mounted jib cranes. The technical planning for shipping the cranes – each 70m high, weighing some 650t and with a footprint of 23m by 16m – was started a year in advance. Even so, two consecutive voyages were necessary.

The cranes, built by Eurocrane at Aveiro in Portugal, were destined for the French Mediterranean port of Sète. HAPPY DRAGON was selected to undertake this transport, being equipped with two 400t cranes and one of 120t, with the notation to undertake open hatch sailing.

The project was extremely time-sensitive due to the delivery dates agreed between Eurocrane and its client. At the same time, Eurocrane preferred to ship the cranes as late as possible to allow the maximum time for completion and testing.

The cranes were fully assembled and tested in Aveiro directly on the quay assigned for the loading operation. They were then fitted with the necessary internal lashings to withstand the possible stresses of the sea voyage.

The high centre of gravity dictated a complex lifting arrangement and left no margin in terms of stability of the lift. As the centre of gravity was not in the centre of the crane, it was decided to use the 400t deck crane’s sync hoist
system as an additional safety measure.

The main purpose of this system is to counteract any deviation of the lift from the horizontal axis by remotely adjusting the length of the lifting arrangement on one side.

The height of the harbour cranes and the objective to keep the acceleration forces on them as low as possible, required that they be stowed as low in the vessel as possible. In a tandem lift operation, the harbour cranes were placed  on the tank top where steel rails had been installed to distribute the weight, and the ship sailed with the weather deck hatch covers open.

Awkward move

In another awkward move in August, HAPPY ROVER transported two Siwertell screw type continuous ship unloaders (CSUs) from Trieste in Italy to Immingham on the Humber, UK. The CSUs, each weighing 600t, are designed to discharge mainly biomass and some coal at the Immingham Renewable Fuels Terminal, to feed the Drax power station. At full capacity, the two Siwertell units will be handling 3 Mtpa.

For this project, a Happy Rtype vessel was considered most suitable, as it has sufficient capacity to lift and stow the two CSUs in one voyage, it could access the limited draught and obstructions at the berth in Trieste and is certified to sail in an open-hold configuration.

In Trieste, the fixed shore crane on the Frigomar Berth prevented a conventional lifting operation taking place over the berth’s midsection. A draught survey was conducted and it was decided that HAPPY ROVER could be berthed forward, outside of the regulardeep-water zone, but just clear of the obstruction by the shore crane on the quay. Because of the draught limitation and the subsequent low draught of the vessel, the stability for lifting was a challenge, but HAPPY ROVER was able to lift the unloaders in a tandem lift.

Low stow

Due to the high centre of gravity of the CSUs, the best place to stow them was as low as possible on the tweendecks, which can be set at different heights, yet still high enough to be able to manoeuvre the CSU’s offloading booms over the weather deck hatches, thereby making good use of the vessel’s capacity for open sailing.

Two complete hold length rail tracks were created on the tweendeck, providing enough length to stow and manoeuvre the CSU’s onboard. 

After six days of preparation while berthed in Trieste, the lifting operation could commence. The CSUs were brought alongside one by one on self-propelled, multi-wheel transporters. Their booms were slewed into lifting position, keeping just clear of the surrounding buildings, ready for the lift.

When the first unloader had been placed on the tweendeck rail track, its main drive was plugged into the ship’s grid and, in close cooperation with Cargotec’s supervising engineer, the booms were brought into position to allow the CSU to be driven forward over 30m, thereby passing the ship’s forward crane to make space for the second CSU.

Once the second CSU was manoeuvred into its stowage position, the crew attached seafastenings, including over 120 lashing wires, allowing the CSU’s vertical booms to be secured with large 19m long push-pull braces.

Finally, the 180t counterweights were taken down before the sea voyage using the additional fly jib on HAPPY ROVER, which was the only way they could be accessed. After berthing at Immingham, the loading cycle was carried out
in reverse order and the CSUs were discharged directly onto the quayside rails.

Strength in numbers

The threat of market upheaval is  causing a number of operators to rationalise, including J. Poulsen Shipping (JPS). The company operates a fleet of 10 relatively modern heavy lift ships, including four 10,000 dwt vessels fitted with  two 450t deck cranes built 2009/2010, plus a pair of slightly smaller vessels fitted with two 350t cranes.

JPS joined with German shipping company Harren & Partner (H&P) in 2000 to form CombiLift, which ordered four specialised floodable dock type ships, two of which were subsequently sold at a profit to the offshore oil industry, leaving COMBI DOCK I and COMBI DOCK III.

However, JPS and H&P have now agreed that in order to adapt  to the changing market, it is time for a new strategy. Henceforth, CombiLift will be based entirely in and operate from Bremen, where the technical/engineering of CombiLift will be joined by chartering and operations, centralising all services in one place. H&P’s logistics and engineering experts and their specialised equipment will form part of the newly composed team, enabling CombiLift to become a real one-stop shop for site-to-site transport of large and heavy components.

However, in a slightly confusing sub-plot, H&P and JPS will also jointly establish Combi Dock Chartering in Korsoer, Demark, where JPS is headquartered. This company will be the specialised set-up for chartering and operation of the  semi-submersible COMBI DOCK I and COMBI DOCK III, as well as for PATRIA and PARIDA, two existing vessels in the JPS fleet equipped with stern ramps. The commercial and operational management will still be undertaken at JPS’s head office in Korsoer, as well as branch offices in Houston and Singapore.

Bulking up

Shortly after this move, JPS announced that it has joined forces with the HBC Group, which is based in Singapore and Hamburg. This latter owner-operated group was founded 1999 and holds freight contracts for 4 to 6 Mtpa of bulk cargo and has an average of 15-20 vessels in ownership and on time-charter, as well as vessels under commercial and technical management. It has, however, no involvement in heavy lift or project cargo activities. The cooperation, JPS claims, will enable the parties to jointly execute current opportunities on a short-term basis for both market and fleet activities. On a long-term basis, they say, the agreement may lead to a full merger.

“HBC has no particular experience with project cargo”, says Jens von Husen, co-founder and managing director at HBC. “However, through numerous industry talks, it has become clear that the MPP and bulk markets are intertwined.

“Even after years of tumultuous markets, the German shipping  industry still controls the majority of MPP vessels. Furthermore, the German shipping industry is rather much a closed shop. For a Danish operator, it is therefore of fundamental importance to have a reliable, long-term partner, who is an insider of the German maritime industry. Having known the HBC founders personally for decades, this is a natural step for us.”

H&P is not involved in this venture, although it does operate bulk carriers. In May this year, H&P initiated a pool for heavy lift vessels in the form of a joint venture with BBC Chartering under the name BHS Pool WeserEms. This pool  initially consists of 15 units and will be managed by BBC Chartering and Combi Lift. 

Fuelling debate

A further challenge facing the heavy lift and project cargo shipping, along with all other operators, is the introduction of the Emission Control Areas (ECAs) next year. While Rickmers-Linie has declared its support for stricter sulphur  regulations, it expects that they will lead to an increase in the fuel costs. In the heavy lift market, where there is increasing pressure on rates, operators will not be able to absorb these increases, and they will have to be passed on to the shipper.

“While shipping is already the most environmentally friendly mode of transport, the new regulations help to further reduce the impact on the environment and our health,” says Ulrich Ulrichs, Rickmers CEO. “But low sulphur fuels are more expensive and growing demand is widely expected to further increase the costs of these fuels.”

The new regulations come into effect on 1 January 2015 in the ECAs in the US and Canada as well as the North Sea, English Channel and the Baltic Sea.

Outside the ECAs, sulphur content in marine fuels will need to be reduced from the current 3.5% to 0.5% by the year 2020.

“The new regulations will inevitably mean an increase in bunker costs. So we are in the process of implementing a Low Sulphur Fuel Surcharge for quotations valid for shipments arriving to or departing from an ECA on or after 1  January 2015.”

A fear of many of the major operators that do not maintain a liner type service, as RickmersLinie does, but operate almost in a tramp ship mode, is that less scrupulous shipowners will not adhere to the low sulphur regulations due to the lack of enforcement, particularly in Europe.

Read this item in full
This complete item is approximately 2500 words in length, and appeared in the November 2014 issue of WorldCargo News, on page 53. To access this issue download the PDF here.