2016 Maritime Leaders
Logistics News ME look at the performance highlights of the region’s biggest shipping firms to name its leaders of the maritime industry
For the shipping sector, business success in 2015 was dictated by M&A activity, congestion at the worlds oldest ports and the expansion of a new generation of ports.
Performance in 2016 looks set to be decided by the impact of a global economic slowdown, which is likely to bring about prolonged weakness in commodity prices over the next decade. Adding to this, a slowdown in China could also hit shipping activity, but increased demand in Iran could stabilise overall demand and performance of the industry. There is also an urgent need to retrofit port technology and ensure operations are as high-tech as possible in order to attract and retain Gen Y professionals.
Regionally, the industry has enjoyed a level of protection in double digit growth and heavy levels of investment in infrastructure. Entities such as Abu Dhabi Ports are now moving into a phase of maturation, with their 10 year anniversary of operations and continued positive performance.
Captain Mohamed Juma Al Shamisi, CEO, Abu Dhabi Ports, says: Although many analysts predict that shipping industry will remain volatile in 2016, we will continue to build on the strengths and achievements we had in previous years. The year-on-year double digit growth we achieved in all three cargo sectors and in cruise sector in recent years, on the backdrop of a slowdown in the global maritime industry, makes us confident about 2016 also. The UAEs stable economic condition encourages us to hold this positive outlook, in spite of the new challenges in the global economy.
But that doesnt mean success will be achieved complacently. He adds: We need to work on optimising our operations and providing our customers with added value offerings that will impact their businesses. We have to increase our contribution to the economic diversification and Abu Dhabi and UAE economy has proved to be a resilient economy.
Competing, both globally and regionally, Abu Dhabi Ports offers more than 100 direct connections to global ports with over 36 shipping lines calling there. Khalifa Port Container Terminal alone can offer a network to 52 international destinations via more than 20 shipping lines and can accommodate the biggest ships sailing the worlds oceans currently.
Acknowledging that business conditions in 2016 could be tough, H.E. Sheikh Ali bin Jassim Al Thani, chairperson of the board, Milaha, adds: The global economic outlook and oil prices will be the main drivers governing the shipping industry this year and the slowdown in the Chinese economy will increase the uncertainty of the global maritime shipping industry, which is currently witnessing an oversupply in bulk and container vessels.
On the other hand, the drop in oil prices has forced major players to cut capital spending in the exploration and production operations which will adversely impact the offshore supply vessel (OSV) industry. The OSV market is already under pressure as a result of an oversupply of vessels which will lead in some cases to significant rate reductions.
Al Thanis outlook may be cautious yet, protected by economics and fortunate geographical positioning, the GCCs ports and maritime operations will continue to benefit from public sector support.
At a recent conference in Abu Dhabi, H.E Dr. Abdullah bin Mohammad Belhaif Al Nuaimi, UAE Minister of Public Works and the chairperson of the Federal Authority for Land and Maritime Transport said: We promise the sector we will develop our legal and procedural system and build more marine facilities, so that our ports can be the first global destination for ships docking and for the stability of shipping companies, having the UAE flag to be among the most favorite flags in the world.
Abu Dhabi Ports
Years in operation: 10
In 2015, Abu Dhabi Ports achieved a new annual cargo-volume record, surpassing the previous record set in 2014. Khalifa Port Container Terminal handled 32% more containers and the terminal moved 1,504,293 TEUs, up from 1,137,679 TEUs in 2014.
Roll-on-roll-off (RORO) traffic increased 27% with 134,272 vehicles, up from 106,071 vehicles previous year. General and bulk cargo saw 20% surge to 15,310,847 million freight tonnes (FT) from 12,804,248 million FT in 2014.
The cruise industry witnessed 16% growth with 170,360 cruise passengers visiting the emirate in 2015, up from 146,997 cruisers previous year.
Looking ahead, Zayed Port is expanding its status as a regional hub for the cruise industry, as well as general and bulk cargo. The newly opened Abu Dhabi Cruise Terminal, and the upcoming first cruise beach stopover in the Arabian Gulf in Abu Dhabis Sir Bani Yas Island are hoped to support this surge in performance looking forward.
At Khalifa Industrial Zone (Kizad), a total of 21 Standard Musataha Agreements (SMAs) signed in 2015 with national and international investors, and three plot extension SMAs with existing investors. These projects represent over 1,384,017 million square metres of land leased in 2015.
In 2014, the record volumes represented 26% increase in container cargo, and 37% in general and bulk cargo compared with 2013.
Looking ahead to 2016, ADP has a strong positioning to respond to the demands from rising import and export activities in Abu Dhabi by enhancing the capacity of its ports, including those in the Western Region.
Additionally, the rapid growth of trans-shipment at Khalifa Port is set to continue in 2016 as there is huge demand for strategic exports from the region, such as aluminium and polymers. At Khalifa Port, more factories are in the pipeline, which will augment business activities.
Years in operation: 38
Holding the distinguished position of first national carrier in the region, Bahri has become one of the biggest shipping conglomerates in the world and occupies a dominant position among its industry peers.
The company commenced operations initially for transporting general cargo and containers. However, during the course of its diversification, the companys services have been expanded to include transportation of general cargo, crude oil, chemical, liquefied petroleum gas (LPG) and dry bulk.
Bahris current fleet strength of 74 vessels includes oil tankers (VLCCs), chemical tankers, Aframax, general cargo vessels, dry bulkers and additional 10 VLCCs on order which will join the fleet during 2017/2018. The company has also diversified into ship management, freight forwarding, management of its container service yard, gas and offshore maritime services.
Years in operation: Since 1972
DP World has an impressive, growing portfolio of more than 65 marine terminals across six continents, including new developments underway in India, Africa, Europe and the Middle East.
Container handling is the companys core business and generates more than three quarters of its revenue. In 2014, DP World handled 60 million TEUs. Around the world DP World handles around 180 container ships and 150,000 TEUs daily.
DP Worlds current workforce tops 36,000 employees globally comprising over 90 nationalities and the company constantly invests in terminal infrastructure and facilities. Its flagship Jebel Ali Port in Dubai, the largest in the region, has been consistently voted Best Seaport in the Middle East for 20
Most recently DP World signed a deal at Davos with Russian Direct Investment Fund for a JV to develop ports, transportation and logistics infrastructure in Russia.
Last year a similar deal was signed with the Senegalese government in the capital Dakar to build and develop a logistics free zone in the vicinity of the new Blaise Diagne International Airport, close to the 600,000 TEU-capacity DP World Dakar Terminal, the largest and most modern facility in West Africa, located on the outskirts of Dakar.
With its committed pipeline of developments and expansions, capacity is expected to rise to more than 100 million TEUs by 2020, consistent with market demand. DP World, along with a number of partners, has also announced plans to invest $1.9 billion in China port terminals
Years in operation: 40
Last year, Gulftainer won the Port Operator Award, sponsored by Fichte & Co., at the Lloyds List Middle East and Indian Subcontinent Awards 2015 and last month Gulftainer USA, the extension of the UAE-based firm, announced a weekly cargo service between North America, Central America and Europe.
The Blue Stream Service will be mainly carrying perishable goods between regions, and will travel from Florida to French West Indies in three days with a transit time to Europe of 11 days.
The company last year signed a landmark, long-term 35-year concession with the Canaveral Port Authority in central Florida marking Gulftainers first venture in the United States of America. The Canaveral Cargo Terminal, which began operations with a TEU cargo capacity of 200,000 TEUs, has ambitious plans to more than triple its peak capacity to 750,000 TEUs.
Gulftainer has been assessing several potential new ventures in line with the companys commercial strategy and growth, driving its vision of becoming one of the worlds top six container terminal operators within the next 10 years. In 2008, it launched Momentum Logistics its fully integrated logistics provider (3PL), and is currently ranked a Superbrand in its industry.
Years in operation: 88
Despite being one of the worlds largest container shipping companies, with 374 offices in 116 countries including several in the Middle East, Maersk Line reported less than satisfactory Q4 results in 2015 at 61.4% lower than Q3, 2014.
Revenue for Q3 totalled $6.018m, which is 14.9% lower than Q3 2014. Volumes were 1.1% higher to 2,427,000 FFE and ROIC was 5.2%, down from 13.5% in Q3 2014. The result is below our ROIC target of 8.5-12%.
Throughout 2015, the average freight rate has declined due to weak demand, over-capacity and intense price competition. Maersk Lines average rate decreased by 19.2% compared to Q3 2014 and 4.3% compared to the last quarter (Q2). In the Asia Europe trade, rates reached an all-time low and the trade has contracted with 6.5% year-to-date.
However, the company fared well in Q2/2015 with revenues of $6.263 billion and reported profit of $507 million. During this period it moved 2.484 million containers compared to 2.396 million containers for the corresponding Q2/2014 period.
As part of the ambitious target to reduce 60% in per container C02 emissions by 2020 over the 2007 base line, Maersk confirmed a partnership with Borouge in January 2016 to reduce Borouges CO2 emissions from its ocean transportation with Maersk Line by 15% from 2016 to 2020.
In addition, Maersk Line is adding 30,000 new containers in its reefer fleet to add to its fruit export operations.
Years in operation: 59
In the nine months ending September 30, 2015, Milaha delivered a net profit of QAR959 million, a 17% increase compared to the same period in 2014.
The increase in project and infrastructure activity in Qatar positively impacted its maritime and logistics and trading units while robust charter rates for product tankers and gas carriers led to an increase in the profit of the gas and petrochem unit. Furthermore, the net profit of Milaha Offshore grew by 120%, driven largely by the strong performance in its diving services business.
Milaha has undertaken a sizable investment programme over recent years, which will come to fruition over 2016 and 2017. Development of new warehousing facilities in Qatar, as well as deliveries of new vessels, will add to the groups offerings. However, challenging market conditions mean Milaha will be prudent and selective in accelerating its growth strategy.
Years in operation: 16
SOHAR Port and Freezone, managed by Sohar Industrial Port Company (SIPC), is a 50:50 joint venture between the Government of Oman and the Port of Rotterdam. The port and freezone, now fully operational with modern sophisticated facilities and terminals, has current investments exceeding $14billion effectively making it one of the largest port development projects.
With the relocation of all commercial traffic from Muscat to SOHAR in 2014, and the newly expanded Terminal C now fully operational, SOHAR is now equipped to manage 1.5 million TEUs per year. Ultimately, our goal is to secure that all imports and exports from and for Oman go through Omani ports, and adding these new direct services is another important step on that journey.
Andre Toet, CEO, SOHAR Port, says: We are a young Port and are building world-class infrastructure as we develop. Thanks to 400 years operational experience of the Port of Rotterdam, we know what to expect as things scale-up and its a big advantage to have that kind of heritage and working knowledge inside our company.
Omans Vision 2020 programme aims to diversify Omans economy beyond the oil industry. The development of SOHAR is a good example of how the nation is strengthening its manufacturing capabilities, and slowly shifting away from being a country that only exports hydrocarbons.
Despite currently low global oil prices, the development of industry in Oman will continue regardless, because the cost of energy resources within the country will always be relatively low, irrespective of global market prices. SOHAR is a critical link in Omans commercial logistics industry and is committed to building a sustainable logistical hub that will help Oman to achieve its Vision 2020 objective of globalising the economy.
Port of Salalah
Years in operation: 18
In Oman, the Port of Salalah is among the top publicly-traded companies, as well as the largest private sector employer in the Sultanates southern Governorate of Dhofar. In 2014, the Port of Salalah handled in excess of 3 million TEUs and 3,000 vessel calls bound for 52 destinations.
With future growth pegged to its prime location on the approach to the Gulf, Salalahs 20 year master plan runs to 2030 and envisions the establishment of the Salalah Hub that includes a railway connection and distribution centre, food reserve and processing centres among warehousing and other logistics facilities, dedicated terminals for cruise tourism and liquid storage along with dedicated facilities that can boost SME entrepreneurship for the community.
It is expected to become a greater hub for regional logistics, especially with the GCC rail in the pipeline. This would position Salalah to become the entry-point for the region, saving time, money and in some cases, CO2 emissions.
Years in operation: 18
Tristar is a fully integrated Liquid Logistics Solutions provider to the petroleum and chemical industries in the Middle East and globally. Its core expertise lies in handling hydrocarbons, lubricants, chemicals and liquid gases.
The company owns and operates a wide network of dedicated facilities to manage road transport, warehousing, fuel farms, turnkey fuel supply operations, into plane aviation fuel services, and ship owning and chartering.
In 2004, Tristar Energy was set up to enable the company to engage in the ship owning and chartering business and in 2007, Tristar entered Africa to manage one of the largest turnkey fuel supply contracts awarded to any company in the continent by an international non-governmental organisation.
Tristar today counts a host of national and international oil companies and NGOs as its customers. The company is in more than 15 countries in the Middle East, Africa, Asia, the Pacific and Central America.
In 2016, Tristar will start taking delivery of the six new MR Product Tankers that were ordered from Korea. The vessels will be fuel efficient and eco-friendly.
Tristar will commission its custom-built multi-logistics platform and chemical warehouse which will contain the first silo and bagging facility of its kind inside the Jebel Ali Free Zone.
The company also plans to double its fleet in the next three to five years and expand its presence in Saudi Arabia. Tristar will also look into positioning itself as the leading road fleet operator in the kingdom by playing a key role in promoting road safety.
Years in operation: 40
The company has grown to become one of the largest container shipping lines in the Middle East region and in the adjacent markets, covering over 240 ports and destinations worldwide. UASC services include containerised cargo transportation, temperature controlled (reefer) and out of gauge cargo amongst other value added services to a diverse global client-base.
UASC is currently implementing one of the industrys largest and most technologically advanced new building schemes, with seventeen new vessels on order; six 18,800 TEU and eleven 15,000 TEU containerships. These vessels will be the first ultra large containerships in the industry to be delivered LNG ready, to enable dual fuel usage that is expected to significantly reduce environmental impact and reduce fuel costs