Steady as she goes (high & heavy cargo carriers weather the economic storm)
Source: The Journal of Commerce Breakbulk Magazine, May 2009 – Excerpt: “…For his part, Luc Van Heygen, Managing Director for the Americas and Europe at BDP Project Logistics, said his clients and prospects, manufacturers and shippers of heavy-lift cargoes, have full order books through the middle of next year and some orders into 2011. Cargo is moving, he said, although new orders and inquiries have slowed and some mega-projects, such as the petrochemical complexes in the Middle East, have been put on hold or delayed.”
“A big part of the world just cannot afford to cancel some of these projects,” Luc Van Heygen said. “Some are critical to local infrastructure needs or are strategic. They might be postponed for six to eight months — but no real cancellations.” During the Asian economic crisis of the 1990s, he said, projects were canceled left and right. That does not appear to be happening now.
…However, Van Heygen said, some companies are postponing projects to renegotiate prices, not just for freight rates but also for other elements, such as materials. “Raw materials prices have dropped worldwide. Part of the delay or slowdown in new projects is just that,” he said. “They want to squeeze the lemon a little bit harder, because they know the opportunity is there.”
In another sign of a slower market, carriers are working more with logistics providers, Van Heygen said. When volumes are high, asset-owning companies tend to work directly with manufacturers. Before, “when we were trying to find any space, none was available. Now, for some carriers, there is more dialogue. I hope that the carriers at this time in their life cycle get a little bit smarter and continue this dialogue when times get better,” Van Heygen said. “That would really be a nice change in our industry.”
Activity is picking up in some less traditional markets, he said. For example, BDP is handling one project, a cement plant, from China to Ethiopia and another project from China to Libya, less traditional regions that might not have gotten much attention during busier times.
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