COVER STORY

The 41,600 DWT-multi-purpose Pacific Java on the ERTW run

Across the harbour from the country’s busiest container terminal of Nhava Sheva, the old port of Mumbai continues to play a pivotal role in facilitating trade between India and the rest of the world. The development of other terminals on the West Coast of India has not stopped the Mumbai Port from remaining a premier dock facility, carving a unique niche for itself on the Subcontinent’s maritime canvas.

In much the same way Swire Shipping, whose vessels regularly call at the port of Mumbai, provides a vital and crucial transportation link between Indian customers and cargo interests both in the West and the East. The increasing focus on India by both the mega container carriers as well as the break-bulk heavylift specialist carriers has not deterred Swire Shipping from making a huge success of its niche, multi-purpose operations to and from India.

Steel plates being discharged at Mundra from an ERTW vessel

The company’s growing presence in India and the sizeable volumes of break-bulk and project type cargo its ships bring into the country is increasingly being perceived as a key driver to many businesses. "Swire Shipping’s Eastabout Round the World (ERTW) service is the lifeline of our textile units," states Mr Sundeep Vengurlekar, Resident Chief Executive of Grasim Industries Ltd, a Aditya Birla Group company, who is the receiver of over 50,000 tons of woodpulp every year which the Swire vessels carry from St. John in Canada to Mumbai. This softwood / hardwood dissolving pulp is a key raw material for the manufacturing of Grasim’s viscose staple fibre at their plants located at Kosamba in Gujarat and Nagda in Madhya Pradesh.

An ERTW vessel handling project cargo

From brand new cranes to second-hand machinery, from automobile presses to hi-tech transformers, from calcined petroleum coke to low ash coking coal, from heavylifts to containers, the sheer variety of the cargo mix which the ERTW service of Swire Shipping brings into India is stunningly diverse. Agrees Mr A.K. Bal, Deputy Chairman of the Mumbai Port Trust, with an emphatic, "Swire Shipping epitomises the concept of multi-purpose shipping at its very best."

The ERTW service is a liner product connecting the US Gulf, US East Coast and the Canadian East Coast with the Mediterranean, Saudi Arabia, India, South-East Asia, Papua New Guinea, the Samoas and Tahiti. At 41,600 DWT each, the 4 vessels deployed on this route are the largest multi-purpose ships ever built. They are dynamic and flexible, offering container, bulk and triple deck hold configurations and have gantry and slewing cranes designed specifically to carry a wide range of commodities. With 17 port calls in the rotation, this service operates on an average 120-130 days round voyage, which roughly equates to a monthly frequency.

A hydro reactor being loaded on the EBX service in Mumbai

So, what can the tremendous presence in India of Swire Shipping’s ERTW service be attributed to? "Brand recall" is the matter of fact response from Mr Bhavin Shah, Managing Director of Saumil Impex, one of India’s leading crane importers who then goes on to add, "For most of us buying various types of machinery and allied equipment from the United States and the Mediterranean, Swire Shipping is the first name that comes to mind when we have a shipment getting loadready." With the Indian project cargo business estimated to be worth Rs 30 trillion, or US $ 800 billion by 2013, such strong sentiment from its Indian customer base augurs well for Swire Shipping’s long term prospects in the country.

An offshoot of the Eastabout Round the World service is the Eastbound Breakbulk Xpress (EBX), which is what Swire Shipping’s ERTW product ex-Mumbai is known as. What started off as a sub branding exercise to increase the Indian market’s focus on ERTW’s break-bulk and project cargo carrying capabilities from Mumbai to destinations East of India, EBX has today become a household name amongst Indian exporters of heavy engineering equipment and steel products. "Our customers always had the potential of doing good business with Australia and countries in South-East Asia, among others, but could never really take advantage of it due to the paucity of regular and reliable conventional tonnage on this route," says Mr Subodh Redkar, Manager-Projects / Oil & Gas of the well-known international forwarding company, Kuehne + Nagel, a regular EBX supporter. The EBX service, which has proved to be a major boon for the Indian breakbulk/project cargo exporting community, routinely carries an assortment of non- containerised parcels to Singapore and Jakarta (where the ships call direct) and to ports like Sri Racha, Ho Chi Minh City, Port Klang, Laem Chabang, Melbourne, etc. (basis a transhipment over Singapore).

The 29,658-DWT Pacific Freedom deployed on the West Coast North America service

Swire Shipping’s mark on the Indian shipping scene, however, extends well beyond the versatile ERTW service. Its Westabout Round The World (WRTW) service, which connects ports in Western Europe with Tahiti, the Samoas, New Zealand, New Caledonia, Fiji, Vanuatu, Solomon Islands, Papua New Guinea, Australia, Indonesia, Singapore and Malaysia, has regularly brought in containers of nickel contents from Noumea to New Delhi and Usha Martin, the Kolkata- headquartered steel product manufacturing conglomerate has for several years been shipping out reels to Hull in the UK on this service. Though the ships operating on the WRTW service do not physically call at any Indian port, Singapore is used as the convenient transhipment hub for cargoes into and out of India. 5 multi-purpose Ro-Ro vessels, providing monthly sailings from direct loading ports are deployed on this service, 4 of which are equipped with vegetable oil tanks.

Yet another one of Swire Shipping’s services that has really stepped up its India presence, especially in the last year or so, is the company’s South-East Asia (SEA) service which connects ports in Papua New Guinea, the Solomon Islands, Vanuatu and Australia to South-East Asia and North Asia. Containers from all over India are feedered to Singapore for onward connection to various ports called by ships operating on this service and the cargo mix from India is expansive, to say the least. Boxes of salt from Kandla, sugar from Mumbai, coir products from Cochin, chemicals from Tuticorin, prawn feed from Chennai, stones from Delhi and jute goods from Kolkata loaded on SEA service are but some examples of the pan-India footprint that this service has in the country. The SEA service also brings in regular volumes of metal scrap, balsa wood, black tea and virgin alloy steel from Australia and Papua New Guinea to Chennai, Tuticorin, Mumbai and Delhi. A number of multi-purpose vessels between 20,300 and 25,000 dwt are deployed on the SEA service, all self-geared and with heavylift capabilities.

Complementing ERTW, WRTW and SEA are several other Swire Shipping services, which do not have any dotted line connection with India. The PNG service connects Australia, Papua New Guinea, Solomon Islands and Vanuatu; the Pacific Islands service connects Australia with the Central & South Pacific Islands and the Federated States of Micronesia and has now been expanded to include Guam, China and Korea and renamed the North Asia Pacific service; the Trans Tasman service, as the name suggests, connects seven Australian East Coast ports with six New Zealand ports; the West Coast North America service connects the US West Coast, the Canadian West Coast, New Zealand and the Australian East Coast and, lastly, the Europe Pacific Express service connects Northern Europe and the Mediterranean with New Caledonia, Fiji, Vanuatu, the Samoas, Tahiti, Tonga, the Federated States of Micronesia, Wallis and Futuna.

The 27 vessels that Swire Shipping operates on its various trades reflect a captivating array (see complete fleet profile below) of multi-purpose tween deckers, open hatch carriers and Ro-Ros with dynamic capabilities.

Swire Shipping is a part of the well known Swire Group whose activities encompass a varied range of commercial businesses with its interests spanning five continents. The Group’s principal areas of operation are in the Asia-Pacific region and centre on the Greater China area. The special administrative region of Hong Kong is home to the publicly quoted Swire Pacific whose core businesses are grouped under five operating divisions, viz. property, trading & industrial, aviation, beverages and marine services. John Swire & Sons, the parent company, is headquartered in London and in addition to its 33 per cent shareholding in Swire Pacific, controls a range of wholly owned businesses like cold storage, road transport, agricultural activities and liner shipping services. Swire Shipping Ltd, a wholly-owned subsidiary of the China Navigation Company Ltd (CNCo) is the liner shipping operating arm of John Swire & Sons, London and has provided niche, regional multi-purpose shipping services since 1883 when CNCo established liner services in Australasia.

These are exciting times for Swire Shipping. The company’s performance this year is expected to be unparalleled even by its own high standards and China Navigation’s recent decision to order six 40,000 DWT multi-purpose vessels with an option for up to six more ships is seen as both an endorsement of CNCo’s commitment to MPP shipping as well as an acknowledgement of its subsidiary Swire Shipping’s potential for growth. The agreement for the newbuilds with Nantong Mingde Heavy Industries was signed by CNCo in Shanghai on 19th June 2008 and the ships ordered represent an investment of approximately $ 360 million. The ship design comprises of five hold, nine hatch configurations with a centreline bulkhead and flush-sided box holds with no under-runs. These 40,000 dwt ships will each have four cranes with a maximum lift capacity of 250 tonnes at 11 metres from ship’s side when twinned. The holds will have specially strengthened tank tops for the loading of two tiers of heavy steel coils whilst the hatch covers will be flush for the carriage of long pieces of project cargo such as wind turbine blades, boilers, etc. and will be strengthened for heavy project cargo. Most holds will be fitted with pontoon tween decks, each capable of supporting moderately heavy break-bulk cargo or two tiers of containers.

Swire Shipping is not a Western Pacific and Australasia centric organisation anymore. While consolidating its hold over these traditional core trading areas, Swire Shipping has expanded to the four corners of the world and today calls at around 130 ports in Asia, Pacific Islands, Australia, New Zealand, North America, Europe, the Middle East and the Indian Subcontinent. With regional representative offices in Sydney, Singapore, Mumbai, Hong Kong, London, Oakland and New York, which is supported by a strong agency network, Swire Shipping continues to grow from strength to strength. The fact that this now truly global shipping company goes about doing so quietly without much fanfare has perhaps something to do with its corporate motto ‘Esse quam videri’ meaning ‘to be, rather than seem to be’. 

"We have developed ambitious growth plans for the next 5 years and beyond"

Mr Ulrich Stelling, Chief Executive - Swire Shipping

After dispensing with service names like Indotrans and Bank Line last year, how has the new unified Swire Shipping brand progressed in terms of market identification and positioning?

The main rationale for the consolidation of previously fragmented entities like Indotrans, Bank Line, Crocodile Line, etc. under one brand was to give our customers greater clarity on the breadth and diversity of Swire Shipping’s global services on one hand and to simplify the way our customers do business with us on the other, for example, standardisation of documentation and schedule information, visibility on a common website and a more consistent approach to client responsiveness. I am happy to say that we have received extremely positive feedback to date from our customers and suppliers on the unified ‘Swire Shipping’ brand.

We have seen some recent press reports about the launch of a Swire Shipping service between mainland China and Australia. Can you walk us through this new product for the benefit of our readers?

With pleasure. We have had ambitions to expand our existing and well established direct shipping links between South-East Asia and Australia into North Asia for some time. We decided that the most efficient way for such expansion is to build on our existing liner network infrastructure in the region. As a consequence, we will, this month, be launching the new connection by extending our established Australia-South Pacific Islands operation to Guam and then on to Shanghai and Busan. The sailing frequency will be improved from 35 days to monthly, on a rotation of Melbourne,
Prony Bay (New Caledonia), Lautoka, Suva, Port Vila, Tarawa, Majuro, Guam, Shanghai, Busan, Brisbane, Newcastle, Melbourne. Complementing our established South-East Asia–PNG–Australia service, this new direct link is consistent with our goal to offer a broader range of shipping connections to our customers and expanding our presence in the North Asia region.

Are there any more services that Swire Shipping plans to introduce in the short-medium term?

Absolutely. We have developed ambitious growth plans for the next 5 years and beyond. Our growth agenda is based first and foremost on expansion and improvement of our existing service products and secondly on extending our service offerings into complementary niche markets. We aim to achieve this through organic growth, alliances and cooperations and will also look at acquisitions when opportunities present themselves. Our parent company, China Navigation, is very supportive of these plans as evidenced by the recently announced significant large multi-purpose newbuilding order.

Do you see India continuing to play an important role in Swire Shipping’s growth story and why?

Swire Shipping has been participating in the substantial growth of India’s trade with the countries we operate services to, however, this was earlier facilitated mostly on a transhipment basis. The acquisition of Indotrans (now Eastabout RTW service) a few years ago has given us the opportunity to provide direct connections to our Indian customers for break-bulk and container cargoes to and from Asia-Pacific, the US, Europe and the Middle East. The outstanding support we have received from importers and exporters, combined with the continuing strong economic growth of this country, has encouraged us to look at expanding our services to and from India in the not too distant future. We have an excellent team here, led by Nithin Menon, and we hope that the plans we are currently developing will result in some positive news before the end of the year.

What is your vision for Swire Shipping?

We are a multi-solution shipping service provider that is focused on delivering excellent service to our customers and acceptable returns to our shareholders. By ‘multi-solution’ we mean creating customised shipping service products tailored to our customers’ needs, rather than a ‘one-size-fits-all’ commodity. Depending on our customers’ requirements, we offer liner shipping services for break-bulk, bulk and project cargoes of all sizes and dimensions as well as containerised cargoes. Personalised customer service and an intimate understanding of our customers’ markets and products is a prerequisite to delivering on such customer-oriented aspirations. 

"We seek to be a company that is perceived by the Indian trade as large enough to be reliable but small enough to be dedicated and personalised"

Mr Nithin Menon, Head - South Asia & Middle East, Swire Shipping

Apart from Swire Shipping, are there any other China Navigation businesses active in India?

Yes, Tasman Orient Lines (TOL), which is jointly owned by CNCo and Germany’s Ahrenkeil Group, is very active in India offering containers and break-bulk services to destinations in New Zealand, New Caledonia and Fiji. Then there is New Guinea Pacific Line-JSP which is majority owned by CNCo and accepts boxes from India to Apia, Pago Pago, Papeete, Port Vila, Santo, Nukualofa and Tarawa. An exciting project that is currently ‘work in progress’ is Swire CTM Bulk Logistics, a joint venture between CNCo and Drylog’s C Transport Maritime which aims to provide customised and cost-effective seaborne supply chain services to Indian companies importing and exporting dry bulk products.

While Swire Shipping is well established in India, could you expand on its presence in the rest of South Asia and the Middle East ?

The ERTW service has an active presence in Saudi Arabia where we discharge large volumes of rice in jumbo bags, vehicles, project cargo and containers at the ports of Jeddah and Gizan. Out of the United Arab Emirates, our SEA service carries oilfield equipment in containers into Papua New Guinea and from the Subcontinent, Bangladesh and Sri Lanka both chip in with bookings, again on the SEA service.

….and are there any plans of escalating Swire Shipping’s activities in the region?

The Indian economy is going to continue growing at over 10 per cent per annum and the Middle East will see an unprecedented boom in the next decade and beyond, thanks to the petro dollars flowing in. Without getting into specifics, all I can say at this point is that Swire Shipping will continuously seek avenues to participate in the exponential trade growth of both these regions.

What is the secret of the very strong cargo flows being witnessed on Swire Shipping’s ERTW vessels calling India?

In any market, a carrier can adopt a ‘pull’ or a ‘push’ strategy. Lines adopting a ‘pull’ strategy develop a reputation for offering low rates and poor service levels to draw the market towards themselves. A ‘push’ strategy on the other hand concentrates on sales efforts and customer satisfaction to promote the Line’s service and capabilities first and thereafter the price. It is my belief that Swire Shipping’s successful ‘push’ strategy both in India and in ERTW’s North American loading areas has created a strong and content customer base which is a major contributor to our performance.

What does the EBX sub brand owe its success to?

EBX combines ERTW’s capabilities ex Mumbai with the efficiencies that our office in Singapore provide by way of transhipment connections to destinations in South-East Asia and Australia. With EBX, we created an opportunity for the Indian break-bulk exporting community to trade with several areas in the East and this opportunity seems to have now given rise to continuous and consistent demand.

What is the fundamental philosophy you have adopted in making Swire Shipping such a strong brand in India?

We focus on our strengths, develop a close rapport with our clients and get to understand them and their needs better. We seek to be a company that is perceived by the Indian trade as large enough to be reliable but small enough to be dedicated and personalised. 

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Near GPO, Opp. Citi Finance, Fort, Mumbai - 400 001.
Ph: 022-2261 3873/2267 9798/2263 2612/13 Fax: 91-022-22679795
Internet: http://www.eximin.net