SAL Heavy Lift witnessed a tough 2015 and foresees a challenging 2016
Hamburg, 17 December 2015 – The running year turned out as a tough year in shipping. Despite a raft of technical projects for the company, the stinging tale of the low oil price created a steep downturn in the global offshore industry as well as leaving many projects deferred or cancelled. As a result SAL concludes 2015 with significant project references, but also with the marks of the general challenges in the shipping industry. SAL foresees a continued challenged mar-ket in 2016 and predicts project carriers will have to toughen up to be capable of withstanding the fights that will inevitably come.
COO of SAL, Toshi Yamazaki, gives his view on 2015 and the outlooks for the industry in the year to come.
2015 turned out to be a tough year for many ship owners and companies involved in the shipping industry. Despite a short upside in the beginning of 2015 the shipping market plummeted over the course of the summer and autumn. This has not only been within heavy lift/break bulk, but across a wide range of industries including container and bulk. Where the short upside at the beginning of the year pointed to a better utilization factors of MPV/Project carrier fleets, the sector instead witnessed the stinging tail of a low oil price, the tremendous downturn in the global offshore sector, project deferments and layoffs by the thousands.
The low oil price is however not the only catalyser for the decline faced in the MPV/Project carrier segment. Geo-political unrest and stagnating global growth are macroeconomic fac-tors with great influence as well. But the most deteriorating factor is likely the oversupply of vessels which causes an “evil spiral” on the freight rates. As Toshi Yamazaki states: “With the steady supply of new built vessels we have seen, it is my opinion that many has been built without thoughtful consideration. This I see as a main cause to the troubled conditions.” Many owners now feel the heat of squeezed margins despite the short welcomed upswing the lower bunker prices brought along. These lower operational costs were however a short lived gain, quickly upheld by the fact that the supply of vessels significantly exceeds the volume of cargo offered in the market. This situation paired with deferred projects especially within the former so lucrative offshore sector, has caused troubled times for several MPV/Project carriers.
Change is the norm – challenges remain.
On the macro-economic level, ship owners have no influence, so the challenge is to adapt the business to the market conditions given. Mr Yamazaki states: “We continue to see that the expectations of our clients are high and that the demand to scope of service rise, despite the more fierce competition in general. Some may feel that they have to shave their offering in order to maintain a competitive edge, others maintain or set to develop even higher standards and seek out the businesses where the service scope matters as much as price. SAL belongs to the latter pool”.
The markets are under constant change – as an effect of the decline in one business area, fleets seek over in other segments trying to find a foothold where revenues can still be earned. The offshore sector for instance sees a float of vessels originally destined for oil & gas, now seeking into wind and renewables. The MPV/Project carrier segment has seen a similar trend by the entrance of bulk and other vessel types. When price and position are key attributes for working in spot markets, those with smaller fleets become more exposed.
Identify your niche.
SAL knows that understanding the complexity in every step and deliver-ing suitable solutions to receive the trust of the clients will pay off at the end. „We see the strength in the expertise of our people and in the significant difference they bring when they are in unity. That is the way to outperform the market.” Concentrating on and improving its core competences will strengthen SAL’s position, even despite the general overcapacity of vessels. “With the challenged times in shipping, it is necessary to identify niches a shipping company successfully can operate in”, predicts Toshi Yamazaki. And he continues: “I think that the fleets that remain focused to their core business and competences, and which man-age their costs well, will be able to navigate through 2016, what in my view will be a time of troubled waters.”
2015 brought along some magnificent projects for SAL Heavy Lift which showed that technical projects still require pure heavy lift vessels and its abilities to utilize capacity, capability and specialized technique to overcome challenges.
The most remarkable project was the challenging offshore project of the gas platform instal-lation in the Kitchen Lights Unit over the course of the summer. SAL managed several chal-lenges within that project. It for instance designed and installed a mooring system for the installation vessel within the strong tidal current onsite, prepared temporary living quarters for 60 people onboard and managed the lifting and installation of the three main parts of the construction. All tasks were mastered to the complete satisfaction of the customer.
Amongst other projects to be mentioned was the transport and partly installation of two Ardelt Tukan 3000 slewing cranes with its flagship, the MV Lone. After shipping the cranes from Bremen, Germany, to Corpus Christi, Texas, USA, one of the biggest challenges was the tandem lift installation of the machinery houses due to the hoisting height. The MV Lone was the first vessel to call the new built jetty where the SAL crew assisted in installing the cranes directly onto the dock.
Since 35 years SAL provides customized semi-liner project service between Europe and Far East, transporting a wide range of cargos such as port facilities, refinery equipment or floating cargo. SAL managed the loading of several CCB cranes in Northern Europe and the transport to South East Asia. The biggest challenge was the huge volume of the cranes as well as the tight positioning next to the vessels cranes. These and other challenges were mastered by SAL thanks to professional preparation, excellent performance of the crew and successful cooperation with the client.
In 2015 SAL’s type 183, type 176 and type 161 vessels were also involved in a series of shipments of 270, 000 freight tons of heavy cargo in total for a refinery and petrochemical complex project in Vietnam, including units weighing up to 1100 tons each. One piece of the heavy cargo was a propane-propylene splitter. Due to its length of 95 metres, it had to be discharged on the starboard side of the vessel which required a 180 degrees turnaround of the whole ship during the discharging operation. By using MV Lone’s DP 2 system, the turna-round could be completed without any tug assistance.
Floating Cargo has in 2015 also accounted for a great deal of the daily business. All SAL Heavy Lift vessels are equipped with special lifting gear that permits safe, efficient loading and unloading of boats, yachts and other sensitive cargo. Two examples of floating cargo shippings of the company in 2015 were the transportation of ten yachts, including one 56 metres yacht from Genoa, Italy, to Hong Kong and the shipment of eight large tugboats on board MV Svenja from South Africa up to North Europe, first crossing the Atlantic to Brazil with a massive E-house on board as well.
SAL’s separate offshore installation unit, SAL Offshore was also involved in the pile testing campaign for the Wikinger Wind Farm in the Baltic Sea at beginning 2015. Thanks to the fast vessel MV Lone with 20 knots the crew was able to carry out all extensive tests by using even the shortest weather windows during wintertime. The results were used to optimize the pile design for the foundation of the windfarm.
About SAL Heavy Lift
SAL Heavy Lift, a member of the “K” Line Group, is one of the world’s leading carriers specializing in sea transport of heavy lift and project cargo. The company was founded in 1980 as “Schiffahrtskontor Altes Land GmbH & Co. KG” and has been part of the “K” Line Group since 2007. The modern fleet of 16 heavy lift vessels offers highly flexible options to customers. The vessels of SAL Heavy Lift boast an impressive travel speed of 20 knots, up to 3500 square metres of unobstructed main deck space and combined crane capacities up to 2000 tons: among the world’s highest lifting capacity in the heavy lift sector. As a leading global company in the heavy lift and project cargo segment, the company meets the highest standards with regard to quality, technical innovation and health, safety and the environment.