Swirebulk - A handy guide for bulk shipping

SWIRE BULK

A HANDY GUIDE FOR BULK SHIPPING POWERED BY INSIDE MARINE

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A handy guide for

SHIPPING With over 200 years of heritage and the infrastructural backing of its robust parent organisation, Swire Bulk is making waves as one of the world’s leading specialist shipping companies. Its fleet of over 150 Handysize and Supramax class vessels are equipped to trade anywhere and carry almost anything.

Amidst the ongoing disruption in the global container shipping industry, the company is welcoming a steady stream of new clients seeking innovative freight alternatives to improve their supply chain lead times. Commercial Director Rob Aarvold pulled back the curtain for Richard Hagan and revealed the behind-the-scenes action at the company.

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2022, Singapore’s Swire Bulk will celebrate the 150th anniversary of its organisational parent: The China Navigation Company. This puts the deep-sea shipping arm of the Swire Group in good company with the likes of Hamburg-Sud, which recently also celebrated the same milestone.

While Swire Bulk is a relatively young enterprise by comparison, having been established in 2012, it benefits from the rich maritime heritage and organisational excellence by which the Swire family’s companies are recognised.

Those business interests range from its ownership of more well-known brands like Cathay Pacific, Swire Properties and Swire Coca-Cola, to the less public entities 2

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such as Finlays Tea and Argent Energy.

Altogether, the group employs around 135,000 people globally.

According to Swire Bulk’s Commercial Director Rob Aarvold, whilst his firm has only recently become an independent entity, as a brand it is embedded within the John Swire & Sons business portfolio.

“There are multiple layers and legacies to the company, which deliver the depth and context of the Swire Bulk brand,” he noted.

A modern fleet for modern needs Swire Bulk, based in Singapore, is a global dry bulk shipping company specialising in the geared sector between Handymax and Supramax size vessels. It is both

a vessel owner and operator, with control of between 150 and 170 vessels at any given time, with the majority of those being within the geared sector (i.e. they have their own cranes on deck).

The fleet is extremely modern, confirmed Mr Aarvold: “We are very proud to have the most modern and fuel-efficient Handysize fleet in existence. The average age of our fleet is 4.8 years on the ships we own, while our long-term chartered fleet is slightly younger at an average of 4.3 years old.

We’ve tended to focus our core, long-term charter fleet on much more modern, large deadweight, fuel-efficient ships.”

The company’s fleet is flexible by design, which provides an opportunity to create defined trade triangulations through the carriage of niche cargo; in short, the fleet can trade anywhere and carry almost anything within robust safety limits.

“As a geared operator, we are theworkhorse of the ocean in terms of tramping,” Mr Aarvold underlined. “The reason we trade in this sector is that it’s

a lot less commoditised, and as a more fragmented market you can develop unique cargo combinations: this commercial agility and solution-based approach suits our style of doing business.

“We’re able to innovate in terms of the cargoes we carry, and we will regularly use the ships’ deck in addition to whatever is loaded inside the hold to load project cargoes.”

By loading more cargo onto the ship and optimising the space available, the commercial team can materially reduce the CO2 emissions per tonne of cargo. In a world in which emissions are now being actively measured, this approach is vitally important to continue to proactively mitigate the carbon footprint of the trading fleet.

Emissions control measures The company’s ethos is centred on the Swire family’s Latin motto, ‘Esse Quam Videri’ which translates as ‘To be, rather than to be seen to be’.

“Our ethos is about walking the walk and making sure that as a business we conduct

ourselves in a safe and professional manner at all times,” Mr Aarvold explained.

At Swire Bulk, doing the right thing in terms of reducing emissions is extremely important. One simple measure the business is taking to reduce its emissions involves active monitoring of the fuel efficiency of its fleet. After each voyage, the company produces an Emissions Voyage Completion Report which is provided to the client for mutual review.

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This four-page report displays the ship’s actual performance on her respective voyage, highlighting operational issues such as weather or port delays to allow both the client and Swire Bulk to evaluate trade-specific initiatives to improve future voyages and ensure that the fleet is deployed as efficiently as possible.

Since its inception in 2012, the company has tracked every single voyage that every ship in its fleet has completed. The

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voyage data is distributed within the company every month, with a particular view to identifying inefficiencies such as extended ballast legs or fixtures with low vessel utilisation.

“Through these simple measures and positive engagement with our charterers, we have managed to consistently reduce our EEOI (Energy Efficiency Operational Indicator) rating over the last six years,” said Mr Aarvold.

Opportunity amidst the container crisis The world is experiencing a major container shipping capacity crisis. Rates are transacting at all-time highs, long delays are inevitable, and adding to the problem are issues around crew changes, quarantine periods and ongoing geopolitical trade wars.

The issue came to a very large and very public head in 2021 when the enormous Ever Given

container ship became wedged across the Suez Canal, blocking maritime traffic on both sides of her 199,629 DWT hull for almost an entire week whilst authorities worked to free the big ship.

This saga has resulted in continued supply chain issues and combined with the other logistical challenges referenced, has forced retailers around the world to urgently seek alternative shipping solutions for their products. One of those, according to Mr Aarvold, is the adoption of a decontainerisation strategy, or as a simpler description, the evaluation of loading unitised cargoes on dry bulk vessels.

“The supply chain frustration has resulted in a lot of retail companies looking for new ‘outside of the box’ freight solutions and we have seen a huge influx of enquiries for non-bulk cargoes to be shipped on conventional tonnage,” he remarked.

“Procurement departments continue to evaluate the intermodal options to transport products that would historically load into a container now moving as part cargoes on geared vessels direct to the destination port. As an example, products like coffee packed in one-ton bags, bagged cement, PET resin or even

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dry dog food, are now being shipped on handy size tonnage.”

Consequently, according to Swire Bulk, in 2021 the Handysize vessel market performed well above its deadweight with the full year Index on a par with the Panamax market.

Crew welfare and Covid Swire Bulk’s seafarers are an extremely high priority for the company, and like all of its peers, crew changes in the Covid era have become a major and ongoing challenge. Quarantine periods, border closures and even political and social unrest have conspired to create difficult problems that need to be resolved daily.

In total, 85% of Swire Bulk’s vessels are crewed through its sister company Swire Shipping Fleet Management. Together, the two firms ensure seafarers are well taken care of, aided by the group’s extensive onshore resources and commitment to maintain a positive working experience for the seafarers.

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“I’ve been impressed by how well our fleet management has handled the situation despite the huge number of challenges,” Mr Aarvold remarked. “We’ve ensured that crew are proactively vaccinated, and we have regularly chartered flights to ensure that the crew don’t overstay their contracts and can get home to see their families. It has been a huge coordinated effort that should not be underestimated.”

The company shows its appreciation to its crew every June on ‘Day of our Seafarer’, during which the company conducts lucky draws for great prizes, as well as hosting a photography competition for its crews.

Winning photographic entries are featured in the company’s calendars that are printed and issued to customers, employees, and to the ships themselves. Vessel masters are invited to host BBQs and themed parties on board.

Meanwhile, crews are invited to join a regular video hook up for global townhall events in which the company discusses its recent news, corporate updates, finan-

cial results and any other significant events within the organisation. In this way, the seafarers are able to stay in touch with the global business activities.

Navigating into the future Mr Aarvold said he was optimistic about both the industry and company’s outlook.

“In 2021 we reached a point of almost full utilisation of available tonnage in the geared sector. Global demand remains well supported and on the supply-side, the stress scenarios from Covid and congestion mean we have experienced a more balanced trading situation that has not been seen for the past ten years.

“Layered on top of this S&D environment, we anticipate incremental cargo flows from the implementation of multi-trillion dollar

worldwide infrastructure projects; the majority of which will come with a huge shipping requirement for commodities like cement and steel; commodities usually serviced by handy size ships.

“We expect that global infrastructure projects will continue to underpin the demand paradigm, whilst the current energy revolution also brings renewable cargo flows to the sector.”

He concluded: “With the current energy prices, we believe, as a business, that there is a competitive advantage for companies who operate a modern, fuel-efficient and flexible fleet and therefore, we retain a positive outlook for the Swire Bulk business over the medium term against the backdrop of a firm fragmented freight market,” he concluded. n

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