Shipping Archieven

MSC buys Bolloré Africa

Posted on april 1, 2022Leave a comment

€ 5.7 billion is the MSC bid for 100% of Bolloré Africa Logistics which has now been accepted. It covers all transport and logistics activities in Africa.

The Swiss-Italian – Aponte family group got access to the data room and started audits and contractual negotiations. Employee representatives of both groups have also agreed after successful negotiations with employees. So both groups reached an agreement on the acquisition based on a net value of the minority interests of EUR 5.7 billion.

The acquisition is still subject to approval by the relevant competition authorities and the agreement of some of Bollore Africa Logistics counterparties which are expected to be finalised within 12 months.

Bollore Africa Logistics is present in 42 ports and manages 16 container terminal concessions in 8 West-African ports. The group also owns three rail concessions in Africa, namely Sitarail, Camrail and Benirail whereby landlocked countries are connceted to ocean ports.

This network will be in the hands of MSC, which will become the largest transport and logistics operator in Africa adding terminals in Togo and Ivory Coast with TIL (Terminal Investment Group.)

So far, so…….. How does this re-desings the West-African shipping, ports and logistics lanscape ? Lets analyse the West-African tango of the two largest container liner operators and add APM Terminals-Maersk to the picture. APMT has terminals in Angola, Benin, Cameroon, Congo, Ghana, Guinea, Côte’Ivoire, Liberia, Nigeria, Senegal, South Africa and Uganda. Lets add Bollore’s – read now MSC’s – 16 container terminal concessions in, among others, Ivory Coast, Ghana, Nigeria, Cameroon, Gabon, Congo, Togo and Guinea-Conakry, 7 ro-ro terminals, 2 timber terminals. With TIL MSC had already a presence in Togo and San Pedro. Maersk and MSC have share-swaps in a.o. Guinee-Conakry and Liberie-Monrovia. In several other ports they are in JVC’s with Bollore – now MSC. When adding-up, more than 60% of the West_African container handling capacity on Africa’s westcoast is in hands of only 2 operators – MSC and Maersk.

If such a move would occure in Europe or the USA we would see red-lights flashing with the EU & US antitrust authorities. Not in Africa (yet).

Already for some time we see a considerable difference in handling cost in West-Africa ports which is min/max Usd 100/320 compared to the rest of the world Usd 80/155. Offcourse labourcost in Africa is also about double – right ? Or is the other way around ? On the inland logistics side related to landlocked countries we see an import container from Tema (Ghana) to Ouagadougou (Burkina-Faso) taking abt. 13-22 days at cost of Usd 4,800.- while the same move from Newark to Chicago takes 5 days and cost Usd 654.- Export containers move slightly faster and cheaper. How will MSC develop the Railproject Abidjan – Cotonou ? Will MSC – Maersk allow competition or “adjust” their pricing policies to meet their economic objectives ?

And what will be the herritage of Vincent Bollore’s activities in West-African ports.
SPECIAL REPORT: How Vincent Bolloré won control of Ghana’s biggest port | Article | Africa Confidential (africa-confidential.com) And that is only Ghana. He already settled the Togo case for Euro 12 millions. Will MSC be able to trace all the historical hidden “arrangements” made by Bollore – if there are any.

Is it all bad news – well its news and every downside has also an upside. Lets look to the study made by the CSIS – Centre for Strategic International Studies.
190604_AfricaPorts.pdf (csis-website-prod.s3.amazonaws.com) . Can MSC – Maersk be a counterbalance against the strangling port financing, investment and construction heists ?

West-Africa remains a Political unstable region where key factors for top-decision makers are a fast payback and a good and steady return on investment. You never know which military boys band sings next and where you will end-up. Best example is the Necotrans experience in Conakry and how it ended when a new president handed-over the port concession manu-military to Bollore. The rest was for his Turkish friend Erdogan. Lets see how Special forces commander Mamady Doumbouya will react to the MSC take-over.

To be Continued…….

ARA Ports, Container Carriers & Surcharges on Multimodal Operations

Posted on mei 14, 2021Leave a comment

Again all stakeholders are pointing fingers to the splinters in the eyes of everybody else while not willing to see the beam sticking in their own eye.

And than there is COVID-19, the most convenient excuse to claim surcharges and implement excessive 10,000 Usd+ ocean freight levels. The MSC’s, CMA-CGM’s, Maersk’s, Hapag-Lloyd’s etc… now all hide their failure to anticipate on “unforeseen” events. Fortunately on top of the COVID-19 pandemic they also have the Suez incident. The consequences of all this is…. surcharges and market damaging measures.

Hapag-Lloyd is suspending their services between Europe, the Mediterranean and West-Africa. If you have a all-in deal with Hapag-Lloyd to deliver your containers inland they will conveniently route your container through German Seaports and add a congestion surcharge of 25 Euro / container – regardless the transportmode.

Maersk is informing their “Valued Customers” on a congestion surcharge to/from North West Continent main ports of 10,- Euro for Barge and Rail and 25, Euro for truck. It adds to their “very satisfied” 1st quarter report showing “record high levels” of EBITDA of Usd 4 Bn. Gateway EBITDA increase of 52%. And what to say of an EBITDA increase of 201% on Logistics & Services. Expectations Maersk Consolidated FYE 2021 +100%.

Will it be different with CMA-CGM and MSC when the CEO’s are now all ex Maersk executives ? What is the saying? When you host a tramp dog you als host his fleas. So its all the terminals to blame – is it ? With the Suez incident, and the diversion of ULCC’s over the Cape it was expected that ports and terminals would come under stress. From reliable sources i learn that terminals in the ARA Range are at 99% storage capacity and at a point where you can not move in any direction on the yard. So blame the Terminals. Or not ? See the explaining photo.

Just when I thought that it could not be more crazy ( Photo – Antwerp 2021-05-11 – 17:14). It shows one of the two PSA Scheldt Terminals in Antwerp with 2 small ocean container vessels alongside and out of the 14 cranes, 4 working the ocean vessel, 1 (read one) is working barges and 9 (nine) are idle. That would be O.K. if not approx. 5 to 6 barges are idle waiting for days for a slot for being handled and the general waiting / idle time for barges is 2-3 days. So what is causing congestion for inland navigation?

And do you know who pays for all these exorbitant freight levels and surcharges ? Yes, You and I when we buy pants and socks, laptops or dumb-phones. And since you and I are the “Silent Mass” it continues and nobody cares.

The port authorities say that the terminals and carriers are their customers – not the citizen-consumers. The Terminals say that the carriers and multimodal land operators are their customers – not the citizen-consumers. The carriers say that COVID-19 and Suez incident are the cause – not the citizen-consumers. The inland transport operators say that the carriers and the terminals are the cause of the inefficiency – not the citizen-consumers. And who pays the bill ? The citizen-consumer.

Nobody takes responsibility. Nobody feels accountable. And the Citizen-Consumer pays the bills. Where are these zillion consumer associations supposed to defend the interests of consumers? Where are our elected politicians supposed to defend the interests of citizens ?

ULCS’s, loosing containers and the Suez Crisis.

Posted on maart 28, 2021Leave a comment

ULCS (Ultra Large Container Ships)

Will this be the eye-opener and wake-up call to the container shipping industry? Not likely but it does allow for some reflexion over the concept of ULCS’s and 20.000 ++ TEU vessels.

Some history I can share from my experience. In 1999-2000 did we meet up with the engineers of the yard who presented us their drawings for large container vessels. The Terminal & Ports Team focussed on some key questions. What is the LOA and beam of these ships? What can be the max. draft of these ships? How many rows wide will they carry? Based on the answers we concluded that there was not one single container terminal in the world able to handle these ships. Key challenge was the combination of max. draft, LOA and beam. We realised that we only could increase the beam – not the LOA – to limit the draft increase. It was then decided to start converting the terminals by installing the right cranes able to handle these ships. Yes, this was 20 years ago but the intake of these container vessels on the drawing board was to be 10.000 TEU hence half the intake capacity of today’s ULCS’s with an intake of 21.000+ TEU

Let’s make a small inventory of today’s ULCS’s. Example. HMM Algeciras. LOA 399,90. Intake in hold 9.932 TEU (11 deep) and on deck 14.032 TEU (9 high) – (wonder how containers can fall overboard?). Beam of 61 mtr. Max draft 16,2 mtr. Not many ports and terminals can handle these ships. It requires a deep-draft access, a berth of 430 mtr and more important depending on the possible ships list cranes with an outreach between 68 and 71 mtr not to speak of lift hight between 49 and 51 mtr. US Ports in general cannot handle these ships. Asia is likewise limited in capacity for these vessels and Europe has entered into critical berth capacity modus forcing these vessels to divert to alternative ports. European ports have become a bottleneck to global trade. On top of the current insufficient berth capacity for the ULCS’, the European Container Terminals fail to process the containers efficiently. No surprise that they fail to move 4.000 to 5.000 containers in less than 48 hrs from ships stowage to the hinterland and v.v. Trucks are queuing-up at gates. Barges lay idle for one week waiting to deliver and receive containers. Stakeholders continue to fail in exchanging key-data on the containers allowing efficient planning of operations and yard management. Last but not least; all players remain in a state of denial and continue to finger point to each other. Likewise they all keep claiming the cost of inefficiency on the cargo. Congestion charges on road haulage and inland navigation, shortages of equipment boosting freight rates to 10.000 Usd / FFE are frequent. You and I will ultimately pay the bill in the shops for more expensive clothing, shoes, food, electronics etc…

All these challenges are not new. A study I delivered in 2014 to the ARA Range port authorities and the Terminal Operators proved with facts and figures that the foundation of these problems where surfacing and unless urgently addressed would only aggravate in the near future. Today is that near future and it has aggravated to unacceptable levels. And it will not be resolved any time soon.

And all this under normal circumstances without a Suez crisis. Ship’s queuing-up in Suez is not the most challenging issue. In the hope that the Ever Given is cleared this Sunday 28/03 and the hundreds of container ships start moving east and west, the real challenge will show starting mid-April and continue to impact logistics till at least end June 2021 – at the very best. Meantime factories will halt due to lack of parts, product deliveries will have lay times exceeding weeks etc…

Loosing Containers

MSC Zoe on the Dutch coast – 200 containers. Maersk Eindhoven – 280 containers. One Apus 1.800 containers. APL England – 40 containers. Surprised when stacking 9 high on deck? Surprised when analysing the lashing systems on these ULCS’? Is it a matter of “Pride goes before the fall” as another way to describe arrogance? Or did cost savings when building these ships play a major factor? An urgent review of the lashing systems on these ships will be needed. Until than they should limit the deckstacks to max. 5 or 6 high. Can Nautical Authorities in the ports take initiatives and be responsible? Should they in view of these recent incidents consider ULCS with 9 high stowed deckcontainers as unsafe from a nautical viewpoint and prevent them from sailing? Or will the commercial pressure for ports encourage further denial of the issue and risk? Realising that most of the IMDG classified containers are deckstowed one can consider extended disaster scenario’s not being a question of “if” but “when”.

SUEZ Crisis

The crisis will not show in Suez. The impact will show in Asia and Europe where ports are today already challenged to serve all container vessels – not to speak of the 20.000 TEU ships.

Today and under normal circumstances and without a Suez crisis ships are queuing-up to enter ports and find a berth. No issue for the carriers – just bill the cargo with a congestion surcharge. It is becoming a habit and the miracle stick the carriers use is VATOS (Valid At Time Of Shipment). Carriers recovering the extra cost caused by their lack of competence to deliver efficient and effective shipping services is smartly handled through VATOS. So don’t worry, you and I will pay the end bill. Will carriers have the balls to apply a “Suez Event Surcharge” under VATOS?

In the hope that the Ever Given is cleared this Sunday 28/03 and the hundreds of container ships start moving east and west, the real challenge will show starting mid-April and continue to impact logistics till at least end June 2021 – at the very best. Meantime factories will halt due to lack of parts, product deliveries will have lay times exceeding weeks etc…

Wrap-up

Where is the feel of responsibility of the carriers? Have freight rates dropped and did shippers benefit from the economy of scale with the use of bigger ships – ULCS? No – on the contrary Asia/Europe went up to 10.000 Usd/FFE. Have shippers been kept clear from the effects of fuel price movements? No – VATOS Bunker Surcharge. Do carriers indemnify the cargo for the congestion they cause by wrongly anticipating on the impact of their ULCS on Ports and Terminals? No – VATOS Congestion Surcharge. Did the COVID-19 pandemic impact the results of the carriers negatively? No – on to the contrary they make profits never seen before (Maersk Q3 2020 EBITDA +39% compared to Q3 2019, CMA-CGM +68%, ONE +78% etc… and for MSC we don’t know as they keep the results secretly hidden). Did the schedule reliability improve? No – on the contrary it dropped to an all-time low with no compensation for the cargo.

When will the carriers be hold accountable for this state of affairs in shipping and global logistics and be presented with the bill for the situation they created? When will all stakeholders be gathering on one table and find solutions with focus on burden sharing and allocating the cost on the right shelf? Who will take such initiative? Could it be the Top 5 industry leaders – Maersk, MSC, CMA-CGM, COSCO, Hapa Lloyd ++ ? A deep clean-up is a must.