Heard in Shanghai …

Views and Comments from Conference Theatre

Breakbulk cargo owners reliant on complex supply chains do not have access to the integrated digital systems they need to ensure cargo visibility, pricing transparency and supply chain optimization, a representative from chemicals giant BASF told delegates at Breakbulk Asia.

Andrew Zhang, BASF’s regional category manager, logistics procurement Asia-Pacific, said irrespective of cargo type, the priorities for shippers were safety and security, quality of service, punctual services and transparent costs.

“For breakbulk it’s impossible for any company to do the full supply chain themselves. You need a ship, handling, to load and offload safely, sometimes in adverse weather,” he said. “You have to clear customs, pay taxes and tariffs. All of this is required.

“No one company can do all this, so this needs integration. Resources need to be integrated by digitialization and ‘informization.’

“In breakbulk at the moment all these systems are separate,” Zhang said.
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When evaluating costs from a project shipment that goes wrong, AIG Insurance China’s Robin Zhang reminded a Breakbulk Asia audience that the gravest damages may not be the most obvious.
Introducing AIG’s MLCE Loss Control Service for breakbulk, Zhang, marine loss control manager-China, said indirect costs go beyond regulatory, recovery and clean-up costs; and environmental, financial and customer impacts.

Management time, opportunity costs, impacts on productivity, loss of customers and reputation may never be recovered, he warned.

With MLCE, AIG has a team including experienced engineers that aim to protect a customer to avoid damaged, rather than mitigating loss for its insurance customers, he said.
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China’s breakbulk and project cargo outlook is bright, not least due to global movements supporting the Belt Road initiative, said Wei Zhuang, regional manager – Asia at shipping association BIMCO.

“One Belt, One Road means lots of infrastructure, equipment and project cargoes need to be shipped to all of these different locations,” he said, during the opening of Breakbulk Asia in Shanghai. “In return, China is a big consumer in terms of trade. If you look at Africa and South America, there is a lot of EPC (engineering, procurement and construction) activity and that’s generating a lot of breakbulk.”
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China’s ambitious Belt & Road Initiative, or BRI, is a win-win for participating countries, Qixing Lu, deputy director, Shanghai Free Trade Zone Business Committee, told Breakbulk Asia delegates.

“We don’t want a surplus, we want balanced trade, so if we export more, we need to import more,” he said. “We want to increase trade, using our industrial base and improved supply chains for both front haul and back haul trades,” he said.

More than 70 countries are participating in BRI, and Chinese companies plowed more than $15 billion into the initiative last year, according to Beijing’s figures.
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IMO 2020 low-sulfur rules, effective Jan. 1, 2019, present breakbulk and multipurpose shipowners with “two critical issues they must address,” BIMCO’s Wei Zhuang told Breakbulk Asia delegates.

“First, how are you going to share ships costs or pass to the cargo owner? Secondly, from an operational perspective, you need to prepare for sourcing the new fuels so operations are smooth.

“Availability is a big question mark. If you look at the big ports, there are no problems at all. But for breakbulk, where you might be calling at small ports which have never used these fuels before, that will be the challenge.”
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The shipping industry must do more to reduce greenhouse gas emissions to help avoid global economic catastrophe, said Saliya Wickramasuriya, senior advisor to the CEO, Hambantota International Port Group, Sri Lanka, at Breakbulk Asia.

Welcoming new IMO 2020 low-sulfur fuel rules, which he said would also drive investment in new liquefied natural gas capacity, he acknowledged shipping as a major emitter of greenhouse gases.

“If we were a country, shipping would be the sixth-largest emitter,” he said. “This means we have a collective responsibility to reduce it.”
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There are six imperatives for breakbulk shipping, according to a McKinsey & Co. presentation at 2019 Breakbulk Asia.

• Growth in good trade will continue, but slower.

• Specialization benefits movements of high-tech, out-of-gauge cargoes.

• Regional trades will grow much faster.

• There will be a pivot to Asia: growth and ownership.

• The need for a flexible and agile fleet.

• Digital remains critical to internal efficiency and work with customers.

Steve Saxon, partner, and Jeongmin Seong, senior fellow, presented on the McKinsey Global Institute recent report, Globalization in Transition: The Future of Trade and Value Chains.
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EPC major Fluor is expanding output at its fabrication facility at Zhuhai, on the South China Sea near Hong Kong, already one of world’s largest.

Speaking at Breakbulk Asia in Shanghai Wednesday, Miroslav Jakab, China logistics manager, said the 2 million-square-meter facility can accommodate fabrication of modules weighing more than 50,000 tonnes, and its output will increase from 200,000 to 300,000 tonnes per year.

The yard gives Fluor “direct control over the fabrication of the modules and can optimize the process in terms of safety and flexibility so we can flexibly react to changes in the project life cycle and adjust as needed,” Jakab said.

The yard, a joint venture between Fluor and Offshore Oil Engineering Co. Ltd., serves Asia-Pacific and global clients.