Freight & Trading Weekly / Project Cargo

JUNE 2009 FREIGHT & TRADING WEEKLY

SPECIAL feature

Project Cargo

Opportunities abound despite the slowdown

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From mining and infrastructure in Africa to the 2010 Fifa World Cup closer to home, project cargo specialists are keeping afloat.

In this special feature, industry leaders share their insights.

Editor Joy Orlek Consulting Editor Alan Peat Contributors Liesl Venter Advertising Carmel Levinrad (Manager) Yolande Langenhoven Claire Storey Jodi Haigh Managing Editor David Marsh

Seafreight Page 4 Loading of 736-ton reactor all in a day’s work

Page 10 Bigger companies shun smaller projects

Roadfreight Page 6 Upbeat about future growth Page 12 Gautrain project is big business

Correspondents

Durban Terry Hutson Tel: (031) 466 1683 Cape Town Ray Smuts Tel: (021) 434 1636

Carrie Curzon

Tel: (021) 674 6935 Port Elizabeth Ed Richardson Tel: (041) 582 3750 Swaziland James Hall jhall@realnet.co.sz

Advertising

Co-ordinators Layout & design Circulation Printed by

Page 16 Mining sector under siege

Tracie Barnett, Paula Snell Dirk Voorneveld subs@nowmedia.co.za JUKA Printing (Pty) Ltd

Page 19 Specialist project division set up

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Page 14 West Africa service upgrades

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Page 25 Getting the basics right Page 26 Keeping on the ball with the World Cup Page 27 Global tie-up adds project muscle

Containers Page 13 Supply surfeit puts pressure on price

Software solutions Page 10 Accurate costing information is essential

Page 18 ‘Don’t base shipping decisions on price alone’

Supply chain Page 5 NVOCC expands portfolio Page 8 Turning attention to Angolan opportunities

Cover concept: Dirk Voorneveld

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Page 9 Worldwide project network

Page 24 Adding competitive edge

2 | JUNE 2009

Abnormal industry heading for greater professionalism Project cargoes and abnormal road transport are inherent bedfellows, with every project cargo dependent on being hauled extensive distances by road at some stage of its travels.

Ask anyone what abnormal transport is, and

By Alan Peat

B

ut what are these mammoths of the transport trade?

According to Sampie Swanepoel, MD of Transvaal Heavy Transport and abnormal load adviser to the Road Freight Association (RFA), abnormal means the load and the vehicle fall outside the legally permissible parameters of the Road Traffic Act (RTA) and regulations.

They fall under the maximum allowable under a permit which is managed and controlled through the TRH11 abnormal load guidelines,” he said.

“Load abnormality consists of length, width, height and weight and involves permits in each province, one or two self escorts, provincial escorts, Telkom, Eskom, and the like.

they are apt to conjure up something along the lines of “giant juggernauts which, accompanied by flashing blue lights and queues of cars waiting to get by, crawl along the SA roads at snail’s pace”.

“All this, and much more, is part of the day-to-day headaches and frustration that are dealt with in this industry.”

The abnormal load sector is a specialised industry, Swanepoel added.

“It is specialised in the sense that you must know what to do and what precautions and arrangements must be made for the safety of the public using the same roads on which you transport these abnormal loads to create infrastructure and economy growth.”

There’s a skills and experience shortage now in the abnormal road transport sector, according to Swanepoel.

“There are not a lot of people left in this industry that really know what it is all about,” he said. “Yes, there are a lot of cowboys – unskilled and untrained people – in this industry. But

all they are doing is causing havoc and creating problems for legal operators, as well as putting the public’s safety at risk.”

It’s not a poor man’s trade, nor is it one that promises an immediate return on investments.

The way Swanepoel sees it, the abnormal industry is one that has always had to battle to survive in the total transport industry.

“This,” he told FTW, “is because the equipment we invest in is very expensive, and usually has to obtain principal approval before we can start the manufacturing of lowbeds and the like. This can also take time.”

It’s also an industry sector that faces serious governmental restrictions on its allowable operating hours.

“The abnormal industry is not allowed to operate every working day

of the week,” said Swanepoel, “but is restricted to operating from Mondays to Fridays from sunrise to sunset. No weekends, no public holidays – and also restricted by embargoes which are prescribed by the department of transport (DoT).”

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JUNE 2009 | 3

It’s also an industry sector that faces serious governmental restrictions on its allowable operating hours.

Where is the abnormal industry heading?

It is heading towards being a more professional and specialised industry, according to Swanepoel. “It is also

going to be strictly controlled and managed by the road traffic act (RTA) and regulations - in conjunction

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with a new TRH11. And these new guidelines should see the light of day within the next few months.”

A major part of its battle for survival has been with government and provincial authorities, who, according to Swanepoel, have added tedious limitations on the operators’ business freedom.

“Due to the many restrictions,” he said, “this industry has been involved in numerous head-on collisions with the DoT and the provinces for the relaxation of specific issues such as: Weekend travel, minimising of embargo days, and optimisation of equipment to the maximum capacity.”

It has also had to prove itself willing to government to be able to look after its own affairs.

Many of the role players in the industry have been jacking up their operations to improve equipment and to clean up their act, according to Swanepoel.

“Through this,” he added, “the industry would like to show the DoT that it is willing to participate in the process to improve its internal standards - hoping that this will facilitate the negotiations around the table to relax the issues which concern us.

4 | JUNE 2009

Loading of 736-ton reactor all in a day’s work

T

he loading of a super heavyweight 736-ton reactor at the Port of Yokohama earlier this year presented its fair share of challenges for the master of the Beluga Intonation, Johan Buysse, and his crew.

At around 10 o’clock in the morning a small barge with the 35 metre-long reactor moored alongside the multipurpose heavy-lift project carrier. Because of the extreme torsion forces that affect the vessel during a lift of such dimensions, strict safety regulations had to be observed and only the team members actively involved in the operation remained on board.

Tons of ballast water kept the vessel in balance. Because of the weight of the loaded cargo, bunker was pumped as well to guarantee stability. “The most critical point during the whole process is when the cargo passes the ship’s rail. Then the centre of gravity moves from outside to inside,” Roberto Frigeni, head of Beluga transport engineering told FTW. “Due to the limited space on deck we could not take advantage of much room to swing the reactor and had to place it precisely in the designated position.” Steel mats

The Beluga Intonation … ‘The most critical point during the whole process was when the cargo passed the ship’s rail and the centre of gravity moved from outside to inside.’ were spread to reduce the enormous point load impacting on the hatchcovers of the vessel through the cargo.

Pre-planning and accuracy clearly paid off with the super heavy-lift loaded without blemish. The Beluga

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Intonation headed for Singapore, her first and only stop en route to the destination port of India.

In the port of Masan, South Korea the vessel had already loaded three plant components for the chemical

industry, a 71-metre refining column, a 58-metre recovery column and a 30metre-long saturator. All three items weighed between 229 and 350 tons.

For Beluga’s project division, it was all in a day’s work.

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Project Cargo Specialist Our services encompass the following:

Corinne French ... adding value.

UML makes its mark in project cargo market

By Joy Orlek

S

ynonymous until now with the movement of groupage cargo from the US to South Africa, United Maritime Logistics has now entered the breakbulk and project cargo arena.

And it’s a move that makes logical sense, says director Corinne French.

“We have the expertise and know-how on the US route – and provide the ideal outsourced option for project specialists for whom the route is less familiar.”

The company’s first venture into the project field followed an approach

by Micor Shipping in November last year.

With UML acting as the NVOCC for

Micor, shuttle cars and scoops for deep cast mines and a massive 849 cubic metre crane weighing 177 tons were imported from the US – and all was accomplished without a hitch, says French.

An added bonus for UML is the project expertise of holding company Direct Container Line/Vanguard Logistics which carries huge volumes of project cargo globally, with a dedicated project division based in Chicago, says French.

“By tapping into their expertise, we believe we add significant value for local customers.”

UML has been importing project cargo on a regular basis since last year and is set to develop this market in partnership with local project specialists.

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Planning of project shipments, preparation of route clearances, port facilities and site access

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Monitoring of shipments, vehicle planning to meet vessel dates and arranging suitable vehicles for transport

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Project specialist

upbeat about future growth

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By Joy Orlek

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hile 2009 signalled the start of the downward economic spiral, project work is all about long-term planning which can’t be stopped once it’s on course.

For project transport specialist PLM, which launched in March last year, business was on a roll until January, and while there’s been a definite dip since February, managing director Carl Webb is upbeat about future growth.

The company offers a diversified service, specialising in projects – a field in which Webb has notched up some 27 years of experience.

“At the moment we’re busy with a Sasol project, mostly involving abnormals and superloads which are a key area for us.

“In January this year we did four 200 ton pieces for Sasol – two generators and two turbines for its power generation programme,” Webb told FTW. There were also 60 loads of accessories, both normal and abnormal.

The planning starts months in advance, says Webb.

In this instance the cargo, which was imported from Germany, had to be moved from Richards Bay to Secunda.

‘In a recent instance, a ship awaiting export cargo had to wait a week to berth because the police escorts didn’t pitch up as arranged.’

“As with all project shipments, the route and all the structures have to be surveyed to ensure they are capable of taking the weight – and the vehicles are planned accordingly.

“We check out the site access, sorting out the sequence of arrival, monitoring the ships and making sure the vehicles are alongside to receive the cargo, and arranging the police escorts.”

Project cargo is a complex business, but in Webb’s view one of the biggest challenges is coordinating traffic officer escorts. “They’re generally

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Transport needs outsourced to a range of transport providers. unreliable and there’s limited time to travel. And while you’re trying to get the load to the site, there’s cranage waiting at a huge cost.”

In a recent instance, a ship awaiting export cargo had to wait a week to berth because the police escorts didn’t pitch up as arranged, said Webb.

“And the cost of a ship standing for

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a week is significant.”

Exports are also part of the mix, with shipments currently moving to Madagascar.

Privately owned, PLM has offices in Durban and Johannesburg.

It is non-asset based, outsourcing its transport needs to a range of reputable transport providers.

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Forwarders turn attention to Angolan opportunities Port congestion the biggest frustration

BY Liesl Venter

W

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ith the world recession having hit the mining industry, South African freight forwarders are finding project cargo business opportunities elsewhere.

According to Gary Wagner of RB Freight Management, there is huge potential in Angola where many building and road network development projects are under way.

“There is still big potential for moving project cargo into Africa, but especially Angola. There are however some challenges as on many occasions it needs to be handled on a port by port basis.”

And because there is very little, and in some cases even no specialised equipment available at regional ports to lift heavy and abnormal loads, project cargo demands exceptionally

careful planning.

“In Angola the biggest frustration is the number of wasted days due to port congestion. Projects are often held up because vessels are delayed at outer anchorage as a result of the port congestion.”

RB Freight Management, which recently moved a large number of cold rooms and freezers into Angola to be used by several hotels, believes that despite the challenges, Africa is a viable option.

Says RB’S Richard Barry, “Anything one can think of is needed in Angola. It is all about finding the opportunity.”

And Wagner agrees. “While mining has been negatively affected across the world, gold is still a safe option and the gold mining industry in Africa is still on the upswing.

“Angola and many other countries are still increasing their basic infrastructure,” he says.

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Worldwide project network facilitates ‘zero-defect’ logistics “

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horough preplanning is the key to successful completion of any project,” says Quinton Germishuizen, project manager at Toll Global Forwarding based in Johannesburg.

Formerly BALtrans Clover Cargo, the company is currently involved in a variety of import and export projects, says Germishuizen.

A recent example involved the shipment of a 40 tonne dragline bucket to Brisbane in Australia, which was not without its challenges.

“But detailed preplanning paid off with all the parties involved in constant communication and working as one to meet the deadlines,” he said.

“The Toll team worked closely with the client, the transporter, rigging company, port authorities, stevedores and the vessel’s agent to move the consignment from Van Reenen Steel in Gauteng to Durban harbour.”

Arranging specialised abnormal transport for the huge shipment was part and parcel of the deal.

“We’re fully aware of the many factors that can complicate projects including abnormal loads, weight restrictions and the need for the consignments to arrive in the correct

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A 40-tonne dragline bucket recently shipped to Australia. sequence but have successfully managed a number of projects over the years.

These include the relocation of entire

factories overseas on a turnkey basis from the initial route planning and packing to final shipping and delivery.”

The company has a worldwide project network covering Asia, Europe and the USA.

10 | JUNE 2009

Road Transport to Angola and DRC Since 1993

Bigger companies shun smaller projects ‘Many complaints about the supply chain’

By Liesl Venter

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here is much opportunity to streamline the supply chain in Africa especially when it comes to smaller operations, says Paul Runge, managing director of Africa Project Access.

According to Runge there are no set systems to address the needs in Africa, with many smaller projects having very haphazard set ups. And with supply just not up to standard, many projects are happening all too erratically.

A recent trip to central Mozambique, where various hotel projects are under way, proved this once again, he said.

“I was shocked to see how a few guys with a truck or five are trying to get to everything. It is all a mad scramble to supply the demand and very rudimentary,” Runge said.

While he understands that many big companies are not interested in the smaller contracts, it does raise the question – what happens to the smaller projects? “Why must it be complete chaos? What has to happen is a proper needs analysis, which allows companies to be pro-active and address

the issues at hand. It is unnecessary for people to be waiting for stuff all the time.”

According to Runge there have been plenty of complaints about supply chain demand in various countries, proving that there is a need to address the supply chain. These complaints even came from the copper belt area where activity was huge until the economic downturn. “There were many complaints about the supply chain. It is not a well-oiled machine that runs smoothly.”

And, says Runge, while South Africans are remaining inwardly focused due to the many projects at home, neighbouring countries are picking up the slack. “There are so many special projects under way in South Africa that are big and grand that many companies are not going to go and look for projects in Africa where there is often no infrastructure.”

He said countries such as Namibia had, however, identified opportunities and were now a preferred option when moving cargo into Angola, especially the south. “It is a very viable option as a source of supply into Angola as they

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Runge said while it was understandable that some operators were hesitant to become involved in Africa’s smaller projects, there was also much opportunity. “Africa

is the only continent still showing positive growth, so it is no wonder the entire world is interested in the continent. Africa is a treasure trove of resources and commodities with much opportunity. But there is no denying the intrinsic need for a far smootherrun and operated supply chain.”

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12 | JUNE 2009

‘Railroad’

project on track

T

he Gautrain project is big business for specialist heavy lifting and transportation company Vanguard which was awarded the contract by Bombardier, a subcontractor to Bombela, to transport the carriages and locomotives over an 18-month period.

The project started at the beginning of December 2008 when the first two locomotives arrived in Durban harbour from Bombardier’s manufacturing facility in Derby, England.

They were offloaded from the ship directly onto specially designed Vanguard trailers.

The custom-built extension deck with rails was used in combination with a six axle trailer configuration and gooseneck to transport the 47 ton locomotive.

“Vanguard’s modular trailer and its flexibility, hydraulics and self-steer rear axle capabilities are key factors in the success of this project,” says James Robinson, Vanguard project engineer. “The locomotives and rail cars measure between 18 and 21 metres in length and weigh in at 46 700 kilograms each, so positioning the trailer precisely on-site is crucial.”

Once on site, the trailer was driven into the shunting yard and positioned exactly in

line with the rails. The steering of the rear axles of the trailer was separated from the front of the trailer and an operator used the self-steering capability to assist the driver in manoeuvring the trailer into place.

“Once we were in place, we placed an 18-metre ramp behind the trailer. Using the trailer’s hydraulics, the gooseneck was raised while the rear axles were simultaneously lowered. The winch was then released, allowing the train to roll onto the rails,” says Robinson.

The trip from Durban to the site in Midrand, Johannesburg took approximately three days and required police escorts. Due to height restrictions, the convoy followed alternative routes along the 800 kilometre journey.

“The project involves the collection of a total of 94 locomotives and carriages, with 13 more shipped in from overseas. The balance of the train units will be collected from South African-based, The UCW Partnership, located in Nigel, Gauteng,” he said.

The modular trailer’s self steering capability was essential in manoeuvring the load precisely onto the rails.

Vanguard will transport 94 Gautrain locomotives and carriages to site over 18 months.

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‘Demand has gone for a loop’

By Alan Peat

T

he market for shipper-owned containers – still very much the ideal solution for getting project cargoes into Africa – has slumped, according to Darren Singh, operations director of container suppliers and converters, Container World.

“We wish that it was the same as this time last year,” he said, “when SA mining houses had stepped up their exploration in Africa, with new mining and drilling sites springing up all over the continent.

“With the containers usually also destined to remain permanently on site – for storage or workshop purposes, for example – shipperowned units were a most costefficient answer.”

This created a burgeoning market for the company in the supply of a wide range of containers – units that were vitally necessary for the movement of parts, equipment and materials to many of these rather remote sites.

But demand has gone for a loop, according to Singh.

“Containers are in abundant supply from various shipping lines,” he said, “but very few buyers.

“The end-user market is also not purchasing containers but leasing instead.”

And both these segments of the market are proving to be more chancy.

Said Singh: “Here again, you are exposed to risks of bad debts, as some of these companies close and go under very quickly. This is evidence that the current economic crisis is hurting our industry as well.”

The prices of containers have dropped sharply, and look likely to drop further. “That will all depend on the demand for second-hand containers,” he said.

Singh described special projects as “few and far between”, with those that are in the pipeline having been placed on hold due to funding.

“Not a pretty picture for the container industry,” he said, “as many are reducing prices to get a deal, and that is not helping the market.”

This is hurting the smaller players as well, according to Singh. “But,” he said, “it will only be a matter of time before it picks up again.”

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Seamless solutions

Accurate costing inf … along with track and trace ability

By Alan Peat

T

he movement of project cargoes is an involved and complicated task, and requires a lot of additional management and attention, according to Nachi Mendelow, marketing manager of freight system specialists, CompuClearing.

“For the shipping industry,” he told FTW, “this could refer to large shipments arriving at different ports at differing times, and then needing to be transported to multiple locations. Obviously, with such shipments, serious planning is needed.”

A first priority is to work out all the different costs that are involved in the shipment – including everything from overseas freight charges to local port

charges, from currency fluctuations to container cleaning fees.

“All these myriad charges come together as the final landed cost per shipment,” Mendelow added, “which can be further broken down into the final landed cost per unit.

“And obviously, the lower this final landed cost per unit is, the more profitable the shipment becomes, and the more chance a project has of reaching successful completion and remaining within its budget.”

Then, Mendelow added, you have to add in the complexity of different suppliers, overseas freight forwarders and shipping lines offering differing rates and routes.

“It is therefore of great importance to

West Africa service upgrades Safmarine has upgraded its SAFWAF (South Africa–West Africa) MPV service in order to better serve the local project cargo market.

Transit times have been improved and a third vessel introduced to provide flexibility, additional capacity and ports of call in the northern range ports in Nigeria, Ghana and Equatorial Guinea, says MPV national sales manager Mark Day.

The service enhancements are designed to give South African-based customers access to new markets and reduce costs should ports be congested.

“The idea is to have a flexible service that limits the number of calls a single vessel has to make to a particular port,” he said. The upgraded service started in April this year with the sailing of the Safmarine Soyo.

Sharon Daries, Safmarine’s MPV sales and customer services manager and Mark Day, MPV national sales manager for Safmarine South Africa.

A subsidiary of Mediterranean Shipping Co.

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formation is vital be able to factor in all of these different options when planning your shipment,” he said. “You need to have accurate costing information prior to the placing of the order.”

A second very important aspect of projects is the actual tracking of goods.

“It is of vital importance for you to know exactly where all your containers are and where they need to get to,” Mendelow said. “Many projects fall behind schedule due to goods not arriving by the required delivery date.

“You could, for example, have the entire construction teams sitting waiting, unable to work, due to cement not arriving.”

To overcome these problems, Mendelow told FTW, Compu-Clearing has

now introduced ‘Trade & Track’ – a new product that deals specifically with these issues.

This system is designed to help the importer and clearing and forwarding agents to get detailed costing information, freight analysis reports and pro-forma clearing and forwarding invoices – all prior to the actual placing of the order.

“It will also assist with the tracking of goods, ensuring that there is absolute visibility throughout the shipment, and that the goods arrive at the importer before the required delivery date,” said Mendelow.

“As always, it follows our basic company philosophy – that CompuClearing offers rock-solid systems for rock-solid companies.”

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16 | JUNE 2009

‘Aim for niche markets – a positive in hard times’

By Carrie Curzon

E

ven during trying economic times, some companies come to the fore, finding niche markets that still offer growing business opportunities.

One such is Robertson Freight which, in its ten years of existence, has found a lucrative niche in project cargo.

The company’s main focus in the field lies in West African regions, where it is actively involved (both on an import and export basis) with countries like Angola, Sierra Leone, Nigeria and Congo DRC. They also co-ordinate regular project cargoes from the USA Gulf regions to select markets north of Angola.

According to Neil Robertson, however, the size of these projects has drastically reduced.

“Honestly speaking, anyone who says the pace hasn’t slackened with the economic downturn should consider themselves fortunate.”

That said, he adds that even since the beginning of April there has been an upturn in export volumes: “We are confident that this trend will increase as our shippers start realising that current projects have to be continued and completed to bear the fruits of the initial investments by the major players in the oilfield and mining sectors.

“However, securing finance for these projects will not be as easy to come by as before, but we do have some dynamic clients who can diversify to weather the global economic downturn.”

“Never say No”, could be the Robertson Freight motto.

Having recently quoted a local company to ship antennae and communication equipment to East Africa, their outlook remains nothing but positive.

Other recent projects include: ● The handling of the charter of a multipurpose vessel to ship a dismantled brickmaking plant from Cape Town to Luanda, and ● Assisting in the charter of another multi-purpose vessel to accommodate a load of dismantled diamond mining equipment.

Not easy of course. The former involved shipping huge cement silos, tons of drying racks, conveyors and kiln equipment, flat-racks and several 20’and 40’ GP containers.

The latter eventually involved roadhauling from Gauteng to Richards Bay

and shipping to Sierra Leone.

Despite all these day-to-day challenges, according to Robertson the biggest problem facing the company is getting payment secured prior to shipment, and the release of the necessary documents.

“In most instances we have been fortunate to have been involved with reputable shippers who have proper guarantees set in place.

“Co-ordinating transport of these project cargoes poses a problem, but it can be avoided by using the service of reputable transporters.

“They may cost more, but it ensures deadlines are met.

“Otherwise delays can mean the loss of thousands of dollars a day in charter costs, which may not have been budgeted by the shippers.”

The dismantled brick-making plant that Robertson freight sent to Luanda recently.

Arnold Garber

Executive Chairman Compu-Clearing Outsourcing

Sheldon Vorster

Product manager operational systems

Moshe Zulberg

Marketing representative

Emille Kamffer

Assistant warehousing solutions manager

Tel: 011 882 7300 www.compu-clearing.co.za FTW4389

JUNE 2009 | 17

‘Mining sector under siege’

By Liesl Venter

A

s the effects of the economic downturn continue to impact industries across the world, South African transporters are also feeling the pinch – especially when it comes to project cargo.

The mining sector in particular has come under siege with projects either shelved or cancelled resulting in a dramatic downturn in cargo compared to last year.

According to Herbert Muller, general manager of a hartrodt South Africa, project cargo has not come to a complete standstill but no growth is expected in this sector of the business in coming months.

“It is not all bad – although we have already seen a dramatic downturn in volumes. It could without a doubt be much better.”

Muller said last year the company moved approximately 2000 tons of project cargo, but

was expecting a decrease this year.

“We have some small projects that we are still working on – some printing presses for Caxton and the CTP group that are on order now, as well as some mining equipment that has still to be moved, but otherwise it is quiet.”

He said mines, often in big demand for project cargo, were in current economic times downscaling operations drastically. “We are seeing less refurbishment and very little investing taking place at present whereas last year we were very involved in moving machines for the refurbishment of several mines.”

Muller said infrastructure upgrades in South Africa had also not really resulted in an increase in business, but it had not caused too much concern for the company.

“We continue to keep abreast of our clients’ requirements and needs, ensuring that cargo is transported safely and timeously from one destination to the next.”

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18 | JUNE 2009

‘Don’t base shipping decisions on price alone’

T

he West African project cargo market remains buoyant thanks to continued investment in large infrastructure-related projects.

“While the global financial crisis has had some impact on the West African breakbulk market, it has not been as severe as initially feared,” says Mark Day, MPV national sales manager for Safmarine South Africa.

“A number of large infrastructural and oil and gas projects continue to come on stream throughout the region and this bodes well for the project cargo industry. In fact, volumes for the first quarter of 2009 were slightly up on 2008 figures, which is an encouraging trend.”

Day says breakbulk shipping volumes dipped in certain sectors as a result of letters of credit not being awarded, but there are encouraging signs that business is picking up.

Which is one reason why several new, often speculative players, have entered the market.

“Typically these tend to be ‘spot’ carriers who are often only in the trade for short term gain – their aim is to make a quick buck by reducing rates in order to fill available space on

voyages by-passing South Africa.”

While the low rates are attractive to cargo owners and shippers – especially in the current tough economic climate – Day cautions against basing shipping decisions on price alone.

“Anyone serious about succeeding in the African project market needs to take a long-term view when it comes to cost and space allocations. Spot carriers may offer cheap rates but they often do not have adequate knowledge of the market or local ports and this lack of experience can be very costly, particularly when vessels are delayed and deadlines missed.

“Furthermore, when capacity is tight, established operators – who are in the trade for the long haul – will give priority to loyal customers.”

Safmarine, which has been involved in the South Africa–West Africa breakbulk market for more than 15 years, says it will not participate in a rate war.

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JUNE 2009 | 19

TCS sets up specialist project division

By Alan Peat

A

developing skill in handling project cargoes has encouraged TCS Freight to start promoting this sort of cargo movement as a new discipline in the company, according to MD Rogan Brent.

‘TCS was responsible for moving all the construction machinery for the Lusaka to Choma road in Zambia – a project consignment including more than 60 tippers and road rollers.’

This focus on project cargo is now helping to occupy the transport and logistics division’s fleet of specialised project cargo trailers, he told FTW. “We now have 17 lowbed stepdeck loaders,” he added, “ranging from 30 to 47-tonne load capacity.

“We also have other well-deck loaders, ranging from 55-75-t.”

These haul cargoes on the Durban-Johannesburg route – and to anywhere in the sub-Saharan area, according to Brent.

The company has developed a specialised sector working on project cargoes, and the experience to date has been highly satisfactory, he added.

This has included the Sakonia project for a mine in the Copper Belt; and sections and structures for a bridge on the Ndola to Sakania road in Zambia.

There has also been the movement of four Terex 240 excavators, each in 38 loads, from Durban to the Fungurume mine in Tenke in the Democratic Republic of Congo (DRC).

“These,” said Brent, “were intended for the excavation of this principal mine in the region.”

TCS was also responsible for moving all the construction machinery for the Lusaka to Choma road in Zambia – a project consignment including more than 60 tippers and road rollers.

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20 | JUNE 2009

From Celine Dion to Mighty Men – Silic has it taped

By Alan Peat

T

o be a success in project freight you have to get the planning right, according to Warren Sievwright, operations director of Silic Logistics.

“It is one of those areas of the industry that takes an immense amount of planning,” he told FTW. “For example, many man-hours go into breaking down the packing list; creating trailer-sized parcels; doing route inspections; and scheduling departures and arrivals according to the construction plans.”

It is apparent that – with Silic Logistics being the preferred logistics contractor on major live event tours such as World Summit; Celine Dion; 46664; and Mighty Men – the company has the implicit knowledge required to handle some of the strictest budgets and schedules possible, Siewright added.

“It all comes down to commongoal focus, transparent planning, and continual communication,” he said.

“For such events we handle the entire logistics programme – organising up to 100 movements of staging, lighting, sound and audio-visual equipment to the

respective venue in time for the event. It is a matter of hours-and-minutes.”

And, with such a time-sensitive product, the logistics company has to get the information early, according to Silic marketing director, Angus Dustan.

“This has to be long before the vessel or plane arrives,” he said, “often consulting the principals on their planning so that our side runs as smoothly as possible.”

Silic’s location on Maydon Wharf at Durban harbour also plays an important role.

“We are ideally placed for handling seafreight projects arriving or departing from SA,” Dustan said. “It means we have hands-on management as soon the cargo arrives – and the ability to have men immediately on the ground to ensure safe and effective handling makes all the difference.”

Financial director Nick Fountain stressed that, through hard work on the event side, it was inevitable that Silic's reputation would grow in the project freight industry – with word now filtering through to the industry in China, Southern and Central Africa.

“For example,” said Fountain, “we have just quoted on the handling of

Celine Dion ... Silic was the preffered logistics contractor for her SA tour. seven vessels arriving intermittently over this year with cargo to be delivered in parts from China to Maydon Wharf, and finally destined for a power plant in Africa.

“We have already done all the route

surveys and scheduled the trucks – and that for a project that only looks set to begin around August.”

This project function is part of Silic’s four operational divisions – domestic and cross-border transport; warehousing; international freight; and live-event and project logistics.

“Our service commitment to our clients is based directly on their requirements,” Dustan said, “where we like to think outside the box.

“By assessing their current systems, we aim to provide them with cost-effective and hands-free solutions, allowing the respective company to continue the business of doing business.”

The company is also busy developing its other logistics services, and acquiring extensive premises in and around Durban.

“We now have warehousing and container-handling capabilities in the busiest break-bulk metropolis in Africa,” Dustan added. “Which – together with what we call a ‘virtual fleet’ of over 800 vehicles all over sub-Saharan Africa – allows us the flexibility our clients require, and to operate on short-notice at competitive prices.”

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JUNE 2009 | 21

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Restricted hours for project loads remains a contentious issue

By Liesl Venter

T

raffic authorities agree that road and rail networks continue to be the backbone of the South African economy, and therefore it remains imperative that they are protected and preserved.

Which makes stringent laws around the transportation of abnormal loads and heavy project cargo necessary.

According to the Department of Transport the damage to roads caused by heavy-vehicle overloading runs into hundreds of millions of rand while safety of all road users must be guaranteed at all times.

Gavin Kelly, technical and operations manager of the Road Freight Association, says legislation around the allowed travel time of especially large abnormal loads remains contentious.

“The amount of work that is to be done and the amount of time open to operators to move goods from manufacturers and the ports to customers remains an issue.”

Many of these vehicles are only allowed to travel in daylight and not in peak traffic time.

Edna Mamonyane of the Johannesburg Metro Police says this is mainly because it is safer to travel in the day, while it also allows for well-rested drivers.

“Drivers must rest to be able to function at their optimum level. They are responsible for heavy vehicles with valued cargo on board and already they cannot react quickly just due to the size of the vehicle. How much more of a danger if you have a tired person operating these vehicles?”

Her advice to operators is not to take chances – either with their drivers or with the loads.

“Overloading remains a problem for traffic officials and we are very strict in policing it. It is dangerous should the driver of the truck lose control, but also causes much damage to the infrastructure.”

Kelly maintains that very few incidents occur where road users are unhappy with heavy load operators or even large project cargo.

“Obviously one could not move this during peak hour traffic, but we are moving these large loads with the least amount of negative effect on standard traffic flows.”

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From Caterpillars

Graders and front end loaders had to be used to pull the trucks out of potholes which become craters in rainy weather.

to the Confederations Cup

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DV’s projects department clearly thrives on challenge – and the movement of Caterpillar equipment from Durban to the DCP mine in Kolwezi, DRC recently was evidence of this.

The 3 500 km journey included narrow and unsteady bridges when available, and barge crossing when not.

Added to the mix were gigantic muddy potholes where trucks would have sunk without graders and backhoe loaders.

“And if the poor infrastructure was not enough, the size of some of the equipment presented its own challenges,” Jacques Baudelot, SDV commercial manager, told FTW. “The largest piece could not be

moved as a single load and had to be dismantled and distributed among several loads.

“The four RH340 excavators (540 tons) were transported as 17 loads while the 230 ton bulldozer was moved in eight,” he said.

Despite the challenges, the equipment reached its destination in pristine condition.

FTW1418SD

Closer to home the company has been involved in several Fifa-related events.

For the Confederations Cup SDV is moving 150 containers of marquees, tents, toilets and stadium equipment.

“It’s a real challenge,” says Baudelot, but moving the equipment from Europe and China to designated sites at very short notice is part and parcel of what SDV's project department is all about.

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JUNE 2009 | 23

Cargo keeps moving despite slowdown

I

t could take three to four years to get back to ‘Go’, according to Dave Johnson, managing director of Edgin Logistic Solutions.

Which is not to say he is that pessimistic about the current state of economic affairs. In fact far from it.

“From our perspective the outlook is very good,” he says. “We have managed to streamline our operations so that even if there was no improvement in the economy we would still show some small growth year on year.

“Considering that there are already signs of commodities bouncing back, it’s clear that an upward curve is beginning.”

However, he adds a word of caution. “Having said that, we are of the opinion that it will be at least three to four years before we are handling the volumes we did before the worldwide slowdown in trade.”

From its warehouse in the Cape Town foreshore, Edgin receives and packs project cargoes that can involve either specialised packaging and

crating, or the expert securing of large items on flatracks.

The company then ensures safe transportation of the cargo to the port and on board the vessel.

For imports the reverse applies, as for example the large consignments currently being handled for the Greenpoint Stadium.

Dealing with project cargo is a fast-growing part of Edgin’s business, particularly with the addition of Rob Brown to their staff early this year.

A doyen in the projects industry, he brought many of his clients dealing with specialised cargoes with him.

At Edgin some slacking off in the work-load is expected over the next 18 months, because most of the large projects are planned two to three years in advance.

“There are now fewer enquiries, but workwise not much has changed,” explains Johnson.

“We face three challenges now and each of those is ‘to remain positive’.

“It was after all negative perceptions of the world’s credit worthiness that created this mess in the first place.”

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24 | JUNE 2009

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‘Software system features add competitive edge’

W

hen it comes to project cargo, co-ordination is key.

Which is why it’s crucial that any software system helps the operator to manage the status of each file involved in the project, says Sydney Ramoorthy of Core Freight Systems.

“CoreFreight has advanced file tracking functionality which maintains a record of each key process step as it occurs,” says Ramoorthy. “This provides a log of the user who has taken the action along with a date and time stamp on the activity.

“In addition an audit trail of when the electronic files have been passed from one user to another provides management with the ability to identify bottlenecks and circumvent these as required.”

Comprehensive reporting is available both online and as excel output, he added.

“This is used for both internal monitoring of transaction process flow and to report service level performance to clients as required.

“Escalation of events that have not met predefined time periods is also available.”

There are three levels of escalation that can

be set up within CoreFreight.

“First is to the responsible user himself, then perhaps to a supervisor and after that to a manager. Issues are only escalated when they exceed the period allowed for resolution at the previous level.”

The intention behind the application is to proactively identify potential problems and provide the opportunity for each responsible individual to mange them accordingly, he said.

Ramoorthy believes the “Personal Task Manager” used by each operator on CoreFreight is another pertinent feature of the application. “This functionality groups files logically according to where they are in the transaction process, allowing the individual to view the status of his workload at a glance and drill down to specific files for action as required.

“With a little imagination it becomes obvious that the benefits of the system that will accrue in the project environment are equally relevant to the general operation of an agent’s business – and we believe it’s what helps to provide competitive edge,” he said.

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JUNE 2009 | 25

Getting the basics right

By Alan Peat

T

here are certain basics that any player must bring to the project cargo party, according to Alfred Thamm, projects manager of the Super Group’s forwarding arm, Micor.

“Any proficient project forwarder must be able to undertake route surveys, perform heavy lift studies, undertake port and shipping studies, find and maintain relationships with the best industry sub-suppliers for transport and rigging services and advise on revenue service and insurance procedures both locally and elsewhere.”

The company believes it has special expertise in the markets of Africa, China and the CIS – the last being predominantly Russia in Micor activities, but also including the former Soviet states of Belarus, Ukraine, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan, Uzbekistan, and Georgia.

“Locally, we have niche experience in the shipment of project cargoes, particularly turnkey projects and crossborder movements,” said Thamm.

“As a result of our flexible and efficient cargo delivery capabilities, we are becoming increasingly involved in handling global projects. Our global

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The driving force behind the company’s projects focus, according to Thamm, is simple.

“Price, industry knowledge, reliability, comprehensive service, one-stop-shop solutions and market knowledge are definitely the important factors,” he said.

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26 | JUNE 2009

World Cup

keeps Geodis on the ball

By Alan Peat

T

he 2010 World Cup soccer tournament – a major highlight of SA’s next sporting year, and the first time the cup has been held on the continent of Africa – has been helping to keep the projects cargo division of forwarding operation, Geodis Wilson, extra busy in recent months.

With more or less a year to go to the kick-off, according to MD Jan Ludolph, this global project specialist has had further successes to report since completing the logistics for the Moses Mhabida World Cup soccer stadium in Durban.

This project was a first consignment consisting of the 14 000 freight tonnes of steel that made up the roof arch, and a second shipment of all the fibreglass roofing material – occupying about twenty 40-foot (12-metre) open-top containers.

The third seafreight movement was the extremely unusual shipment of the cable car that will be attached to the roof arch – and is expected to be a major tourist attraction in Durban.

The success of the Durban project

FTW0972SD

encouraged Geodis Wilson in Cape Town to offer logistics solutions to interested parties for the Greenpoint Stadium in the Mother City.

Again, the stadium roof has been the major cargo movement. This was shipments of compression, horizontal and vertical beams, all the glass required for the roof, fabric for the membrane, and a lot of accessories – this latter described by Ludolph as “the nuts and bolts of the project”.

This cargo for Greenpoint Stadium – officially due to open in December – was brought in both by sea and air from all over the world.

Said Ludolph: “Geodis Wilson colleagues both locally and internationally deserve recognition for being awarded the transport of the roof structures for the two stadia, as well as showing how successfully, and with what vigour, we are making things happen.”

The complete Greenpoint stadium … cargo was brought in both by sea and air from all over the world.

JUNE 2009 | 27

Global tie-up adds project muscle

By Alan Peat

A

global partnership tie-up has allowed GAC Laser International Logistics to play a more significant role in SA’s project cargo industry, according to Durban-based regional managing executive, Carol Holland.

“GAC owns 50% of Laser International Logistics in SA,” she told FTW. “As a result, we have secured additional project shipments. This due to their many years’ experience and specialisation in project management worldwide.”

The group has a widespread area of focus for its project cargo division, operating in such industry sectors as oil and gas, mining, engineering, procurement and construction, pulp and paper, plant and factory relocation, and military and aid cargo.

And a look at its recent orderbook for project shipments shows an equally wide selection of product types that the company has moved.

The export of two umbilical reelers in a 40-foot (12-metre) flat

rack from Cape Town to Scotland was one such project. This out-ofgauge consignment measured 3.75 m long, 2.8 m wide and 3.66 m high, weighing in at 19-metric tonnes and occupying a volume of 76.086-cubic metres.

“We have also recently handled a number of abnormal shipments for a platinum smelter expansion project,” said Holland. “One of these was a shipment from Hamburg to Durban – with a final destination in Rustenburg – consisting of two star coolers.”

Another export move was the road transport of two Mafi tractors to Lobito in Angola.

Destined for the SAB Miller brewery at Rosslyn were five fermentation tanks – each measuring 21.859-m long, 5.675-m in diameter, scaling in at a weight of 25-tonnes a tank, and giving a total project weight of 125-t.

These GAC Laser International Logistics freighted directly from the manufacturing works in Germany and delivered to the SAB site in June to August last year.

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28 | JUNE 2009

Risk management a crucial element for project cargoes

By Alan Peat

T

he high value and often complex nature of project cargoes vastly increases the need for risk management, according to Dave Oram, a partner along with father Syd Oram in survey and claims investigation specialists, DS Oram & Associates.

And a full-scale examination of the cargoes as they land in SA is a vital part of this risk management procedure, he told FTW. “We currently undertake survey and claims investigation for several of the

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large local marine underwriters, and risk management/project cargo discharge supervision for several of the large clearing and forwarding agents who specialise in projects in the Southern African region. In some instances, clients require continuity of survey and consequently request that we travel to the load ports in Europe/Far East to undertake the loading surveys of items ultimately destined for Southern Africa” The father and son combination brought over 50 years of combined experience in the marine survey and insurance industries into play at DS Oram & Assocs.

In the early years of his career from 1998 Chalba Freight Chavda Freight Clover Cargo Compu-Clearing Conop Freight Container World Core Freight DS Oram & Associates Edgin Logistic Solutions Expolanka Freight Falcongate Logistics First Class Logistics Forward Air & Sea Frits Kroon Transport GAC Laser Geodis Wilson Global Inspections South Africa

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with D S Oliver & Company, Dave was involved with surveys of projects involving the handling of abnormal/heavy-lift cargo – like the Mozambique Aluminium Smelter (Mozal) Phase 1 in Maputo and the Phase 1 extension; the expansions of breweries in Johannesburg and Durban for SA Breweries (SAB); the export of 98-tonne heat exchangers to the Middle East for DB Thermal; and the Hillside Aluminium Smelter expansion in Richards Bay. Syd, meantime, has had over 40 years experience in the marine insurance industry during his time with the Grindrod Group where he was a director of Unicorn Lines, HB Services 20 Hoëgh Autoliners 13 Interlogix 2 Land & Sea Shipping 22 Leo Shipping Services 24 Logan Freight Services 13 Lombard Insurance Group OBC Lovemore Bros 23 M&B Transport 15 Macro 2000 4 MACS Maritime Carrier Shipping 26 Manica Group Namibia 1 Micor 6 MSC Logistics 14 MSC Shipping 10 NGL Logistics 20 Nomad Freight 28

&

Johannesburg: Durban:

Tel: +27 11 3020000 Fax: +27 11 3020092 Email: metcon@mur.co.za Tel: +27 31 2776530 Fax: +27 31 2776531 www.metconsouthafrica.com

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and responsible for the portfolio of risk and legal services – and is now an integral part of the company’s claims handling team.

In the months since its inception, DS Oram & Associates has already undertaken specialised survey work for Siemens and Eskom through local C&F agents, and involving the handling of transformers up to 215-t.

It offers a full spectrum of marine survey services, including marine and goods-intransit claim investigations; loading and discharge supervision surveys; cargo tally services; and cargo securing/loading for shipment and road transit.

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JHB: +27 (0) 11 461 1300 DBN: +27 (0) 31 301 0392 Maputo: +25 82 131 0561

E-mail: rord@nomadsa.co.za www.nomadsa.co.za FTW3751

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