G2 Ocean sees Southeast Asia, Africa rising to project cargo prominence

G2 Ocean sees Southeast Asia, Africa rising to project cargo prominence

Bergen-headquartered G2 Ocean a major player in the open hatch and dry bulk segments believes that Southeast Asia and Africa will gain in importance for the project cargo industry. This is due to the fact that more and more production of equipment is moving from China to Southeast Asia while there is increasing investments into Africa.

Speaking to Project Cargo Journal, business development manager project cargo at G2 Ocean, Kent-Ove Jacobsen, said, “We see more and more production of equipment moving from China to Southeast Asia and increasing investments into Africa. Based on this, we believe these regions will become increasingly important for project cargo. We also foresee growing demand in South and North America, mainly due to new infrastructure investments and an accelerating focus on renewable energy,” Jacobsen said.

G2 Ocean sees Southeast Asia, Africa rising to project cargo prominence
Photo source: G2 Ocean

G2 Ocean’s project cargo activities have grown over the last few years with the strongest push coming from onshore wind projects.

“In 2020, Covid-19 affected many large capital expenditure projects resulting in delays, postponements, and cancellations. Despite this, we are also this year expecting to see continued growth in our project cargo services.”

He noted that the company expects onshore wind to continue to grow steadily in developing markets and Europe, as well as in the United States, as net expansion remains positive and older wind turbines are being replaced with newer ones.

“Offshore wind is expanding rapidly with many projects in the pipeline. As turbine and project sizes grow, we expect an increase in demand for all types of multipurpose vessels and general cargo ships,” Jacobsen said.

G2 Ocean has served the energy sector for nearly 30 years, and is currently seeing growth in nearly all its trades, be it container, multipurpose or dry bulk markets. “All the indicators are up,” stressed Jacobsen.

Congestion hurting the project cargo sector

The major challenge faced by the dry cargo sector, including project cargo, is the congestion that currently experienced in several ports around the world.

Adding to the congestion is the recent halt of all inbound and outbound container services at Ningbo-Zhoushan container port’s Meishan terminal in China. The services disruption was caused by a new case of coronavirus. Bloomberg reported that Ningbo-Zhoushan port was redirecting vessels to other terminals and adjust the working hours at other docks. The terminal has since partially resumed operation with at least five vessels departing the Meishan terminal in the past few days.

Ginkgo Arrow while discharging windmill components at Port of New Orleans. Photo: Sea O.G (Source: G2 Ocean)

“We are following this development closely, especially in China where the situation is expected to worsen due to an increase in Covid-19 cases,” noted Jacobsen. “To minimise our delay exposure and its negative impact, we are continuously monitoring port developments worldwide and working closely with industry partners to find effective solutions. We put great efforts into our vessel planning and are keeping customers regularly updated on ports and vessel schedules which could impact their cargo shipments.”

Multi-purpose vessel market upside down

The global multi-purpose vessel market has turned upside down in the past 12 months. One year ago, container carriers were competing against the multi-purpose segment for project cargo. Now, the multi-purpose sector is carrying containers to cover the demand for container transport.

A lot of containers are being carried by the multi-purpose sector due to lack of container vessel capacity, but there are also cargo volumes taken from containers and shipped as breakbulk cargo due to the lack of containers globally.

Matsu Arrow. Photo: G2 Ocean

Jacobsen further noted that an advantage of the multi-purpose vessels is their flexibility. However, responding to Project Cargo Journal, whether these vessels can be considered niche, Jacobsen noted that depending on their crane capacity, as well as their ability to handle large and complex project cargoes, these vessels can also fall within a niche segment.

There are several instances when this is the case:

  • Customer requires large crane capacity

The multi-purpose vessels that are available in the market today have cranes with capacity ranging from less than 100 metric tons to more than 1000 metric tons. In situations where the customer requires large capacity, gearless bulkers, container vessels, and other ships depending on shore-based equipment at ports for loading and discharging, are not able to compete.

  • Transport of oddly-shaped cargo

Multi-purpose vessels are also able to handle oddly-shaped cargo, such as long-length steel cargoes or large yachts. In these situations, multi-purpose vessels will also be considered a niche.

  • Enabling offshore operations

Some of the multi-purpose vessels have dynamic positioning (DP) capacity and ice class. This enables the vessels to perform offshore operations, which places them in the niche bracket.

The multipurpose vessels market, as well as the expertise needed to manage the challenges presented during project cargo shipments will be a topic of discussion Kent-Ove Jacobsen will tackle in the upcoming Project Cargo Summit, taking place on September 21-23.

G2 Ocean’s quick response kept the cargo moving in 2020

The coronavirus pandemic is still putting pressure on the market and the the companies operating within the project cargo sector. Despite this, G2 Ocean’s gross revenue rounded off at $1.11 billion in 2020.The company’s net income came in at $1.5 million according to the company’s annual report issued at the end of April this year.

Commenting on the company’s adjustment to cope with the pandemic, G2 Ocean’s managing director organisational development, Martha Roed said, “To comply with guidelines from various national authorities, most of our staff (approx. 80 per cent) have been operating from home, and many are still working remotely.”

“Although most of our employees are used to working both remotely and virtually, I have been impressed by their ability to step up and quickly adapt to the ‘new normal’. Determined to stay connected, we have been able to uphold a high level of productivity, work smoothly and efficiently together – both internally and with our customers and partners. Our global teams are fully operational and as usual, dedicated to keeping the vessels, business, and our customer’s cargo moving,” Roed said.

Author: Adnan Bajic

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