Multipurpose carriers active on Africa’s Eastern and Western seaboards face distinctive challenges, the former having had to adopt a wait-and-see approach relating to delayed LNG projects that will generate large-scale project work, the latter facing significant competition from the container shipping business.
Bremen Overseas Chartering and Shipping (BOCS) owns a fleet of multipurpose vessels operating on the Europe-West Africa trades. Bjoern Hollnagel, managing director, said that aside from insurance premium increases its business has not been affected directly by vessels that have decided to bypass the Red Sea area and re-route around the Cape of Good Hope. “That is mainly concerning oil from the Far East to Europe, or the other way back. We are not seeing rates moving on our trade line [because of this].”
Nevertheless, rates for its multipurpose shipping activities have come under pressure. “The rate level was going down dramatically after the high peak season and now we, in the West Africa trade, are already back at the level seen before covid, maybe a bit less even,” said Hollnagel. The burden has come in part thanks to developments in the container shipping sector.
“Cargoes that were for a short period being loaded conventional are now back in the container, and those carriers are focusing again to containerise commodities. They are also keen on taking project cargo.”
Further complicating the matter is the fact that many large container shipping groups, using the massive profits derived during pandemic, have gone on to acquire terminals and freight forwarders. HLPFI has reported extensively on the acquisition sprees embarked upon in recent years by the likes of Maersk, MSC and CMA CGM. It is fair to surmise that the control over supply chains that is being exerted by these increasingly diversified logistics entities is often to the detriment of niche operators.
The introduction of the EU ETS for shipping is another cross to bear. “Europeans are again the pioneers, having taken the first step. Maybe others will follow, but we do not know. The positive effect is that now everybody is starting to think of emissions, and how to minimise them,” said Hollnagel. BOCS is well under way in terms of identifying the means to perform as efficiently as possible, including technical modifications to vessels, and is giving greater consideration to newbuildings. Hollnagel does have some reservations about the ETS system, however. “For the European shipping community, and owners that are permanently calling at European ports, then it is an obligation and there is no escaping the rules. What I am really interested to see is how the EU will handle international carriers that come to Europe on a spot or one-off basis,” he said. “Will they actually pay? Let’s wait and see.” Like many others, he wants to see these rules implemented and enforced in a fair manner.
“The rules are there; we have to comply with them. We have done our calculations, what we need per freight ton, and we have implemented surcharges to cover them.” Still, taking the lead on emissions comes at a cost and “it is the EU people that will pay the bill”.
Netherlands-headquartered Universal Africa Lines (UAL) is restarting a service to East Africa, with direct calls from Europe and the Americas. UAL’s previous services to the region focused primarily on Mozambique. Its last vessel there was in 2020.
According to Dennis Malkoc, business development at UAL, the service had to stop due to the security situation in northern Mozambique, which brought projects in the region to a halt. The most significant development came in 2021 when TotalEnergies declared force majeure at the USD20 billion Mozambique LNG project.
Malkoc said: “Requests are slowly entering our inbox again for cargoes to the region, including re-starting the talks for the contracts we have in place.” The client is looking to restart its project in Mozambique around May 2024, and UAL expects its first sailing to be around or slightly earlier than that date. It will utilise its A-class multipurpose fleet – featuring box-shaped holds and suitable heavy lift capacity. The design of these vessels, Malkoc said, also enables reduced CO2 emissions and they are capable of handling “all shapes and sizes on this lane”.
An example of one of UAL’s emission reduction strategies is the repainting of its heavy lift vessel UAL Texas, which was drydocked last year for the application of silicon paint on the hull. This is used to reduce barnacle growth on the vessel, reducing drag and thus reducing fuel consumption and CO2 emissions.
UAL Texas was the first vessel in the fleet to receive the treatment; the second vessel will be UAL Cologne, which is heading to the EDR drydock for the treatment in Antwerp over the coming months.
As for the route, the East Africa service will go round the Cape and therefore open up opportunities to call regularly at Namibia, South Africa and Tanzania. “UAL is a liner service but with the capacity and knowledge to call all African ports en route. We will restart our monthly service which has proven to comply with market demands,” Malkoc explained.
In addition to direct calls from Europe and the Americas, the service would also cater for intra-Africa demands, moving cargoes from West Africa to East Africa and vice versa. The direct sailings, meanwhile, eliminate transhipment operations, which Malkoc said has many benefits, including shorter transit times and minimal handling of cargoes, reducing the risk of time lost and/or damage. In Mozambique, UAL will work with its agent, LBH Group, calling mainly at the terminals of its end clients.
