European owners raise the ante

European owners raise the ante

If breakbulk shipping is in decline, the word hasn't reached Europe. Shipowners based on the continent are adding services and investing in new ships to handle cargo that doesn't move in containers.

Rickmers-Linie, the Hamburg-based operator, launched a round-the-world service in June that provides a fixed schedule with scheduled port calls every two weeks. The goal is to provide a reliable service along the lines of that offered by container carriers.

Rickmers is offering the service with nine new ships, all of which will be in service by year-end. Each of the new ships is designed with wide hatches to accommodate oversized project cargoes, and with four cranes - including two that can combine to handle a 640-ton lift.

Consultant Michael B. Berzon of Mar-Log said Rickmers' liner-style service raises the bar for breakbulk operators. "Competition will ratchet up," he said. "There is a trend to scheduled breakbulk services."

Jan B. Steffens, managing director of Rickmers, said the scheduled services will help customers plan projects. If they miss one sail-ing, they know they can catch another ship in two weeks. "It provides shippers with options that until now have not been available and will permit them to revise the way they plan their shipments," Steffens said.

The Rickmers service has been launched at a time when European owners are preparing for an expected boom in heavy-lift and project-cargo shipments as the reconstruction of Iraq gets under way. "Everybody is looking at Iraq," Berzon said.

But while they await the "Baghdad bounce," breakbulk vessels are being kept busy with the unexpected resilience of the economy in China, which remains a top destination for construction-project shipments. In August, Hamburg-based forwarder Rode & Liesenfeld completed a 15-month project to move 250,000 tons of components of a steel mill from Dortmund, Germany, to Zhangjiagang via Antwerp. And there have been even bigger projects; the IPS petrochemical project in Nanjing involved the transport of 1 million tons of components and associated cargo, including one piece that weighed 740 tons.

The revival in the heavy lift and project cargo markets follows a post-9/11 downturn that delayed several projects.

Large projects in Southeast Asia that have been frozen for two years are coming back, said Bert de Wolff, marketing manager of Jumbo Shipping, the Dutch operator. He said the Middle East has remained strong, driven by Iran and Qatar, which are pursuing large, complex developments.

The transport and heavy-lift division of Smit Internationale, the Rotterdam-based salvage and towage group, posted a profit of 8.2 million euros ($8.9 million) in the first half of 2003, compared with a $5.1 mil-lion loss a year earlier. The company cited "excellent levels of utilization" of its ships in the Europe-Asia mar-ket and "an impressive volume" of orders.

Louis Dreyfus Armateurs, the French shipping group, and Leif Hoegh, the Norwegian owner, will begin work next year on a 20-year contract with Airbus Industrie, the European aerospace company, transporting the fuselage, wings and tail of the A380, the world's biggest passenger jet. The cargo will be handled on a specially designed roll-on, roll-off vessel under construction at China's Jinling shipyard. Asecond ship is expected to be ordered in 2005 to keep pace with rising production of the A380, which is due to enter service the following year.

Most investment by European owners, however, is focused on the bread-and-butter shipments that dominate the breakbulk and project-cargo business. Rickmers is spending $270 million on its nine new 30,000-deadweight-ton ships for its round-the-world service.

Dockwise, a Rotterdam-based heavy-lift specialist, has committed to a fleet-renewal program of $50 million a year for the next 10 years. Dockwise is spending between $25 million and $30 million to expand the Blue Marlin, one of its semi-submersible heavy transport vessels, into a 78,000-deadweight-ton ship that can carry structures of up to 73,000 tons on an open deck covering 11,227 square meters (about 13,475 square yards).

Jumbo is spending about $110 million on two 11,000-deadweight-on vessels, each of which can lift 1,600 tons. Jumbo's new ships will increase the company's fleet to 13 ships when they enter service next year. "That shows our confidence in the market," de Wolff said.

Vessels also are becoming more sophisticated. The Rickmers ships have a 19.5-knot speed - fast by the standards of most breakbulk ships - and incorporate such feat-ures as adjustable tweendecks for improved capacity utilization and dehumidification equipment in holds to prevent condensation on iron, steel and paper.

Some new vessels are built to handle multiple kinds of cargo. A group of European investors led by Craig Shipping, a British marine-services group, has teamed up with China Shipbuilding Industry Corp. to build a new generation of double-hulled bulk carriers.

The Diamond 52 vessels will have four 36-ton cranes and five holds offering a maximum cargo volume of 64,000 cubic meters (2.24 million cubic feet). The ships will be able to carry bulk grain as well as traditional breakbulk commodities. Four of the vessels have been ordered, and as many as eight more may be added.

The new Rickmers liner vessels are designed to carry up to 1,888 TEUs of containers. The carrier is marketing the service not only to breakbulk customers but to container lines for the repositioning of empty containers and for transport of lower-valued freight and outsized cargoes.

Not everyone is sold on the concept of a breakbulk liner service. The new Rickmers service " is certainly not a trend," said Jumbo's de Wolff. "We think the market is best served by smaller tramp ships going to where the cargo is."