Ask the expert: Sanjeev Mathur

Question: What are the benefits of offshore transshipment?

Expert: Sanjeev Mathur, General manager of Emirates Trading Agency's shipping division.

About Emirates Trading Agency (ETA)

ETA Star is a multi-dimensional and vastly diversified corporate entity headquartered in the UAE. It was established in 1973 and has currently grown to comprise more than 140 associate offices in 22 countries and employs about 73,000 people worldwide.

Among the various divisions, such as contracting and engineering, the Trading and Shipping division has special significance in terms of business volume. The Transshipment arm of ETA's shipping division handles the offshore logistics requirements of three of the largest iron ore importers in the Arabian Gulf Region, performing lighterage of Capesize vessels.

The process

Offshore transshipment essentially comprises of transferring cargo from one vessel to another in a double banking operation, done offshore. This can be done either for unloading or lightening of inbound cargo or loading or topping-off of outbound cargo. When the ocean-going vessel arrives, the transshipment vessel approaches it and moors alongside in a double banking manoeuvre.

The heavy-duty marine cranes on board the transshipper then transfers the cargo from the ocean-going vessel into the holds of the transshipment vessel at a daily rate in excess of 30,000 tonnes. When sufficient cargo has been transferred from the ocean going vessel, the ships cast off and proceed to the berths.

The transshipment vessel then carries out a self discharge of the lightened cargo by using the cranes and a material handling system comprising of hoppers, conveyors and a delivery boom, which is long enough to deliver the cargo directly into the shore receiving facility of the client, simultaneously with the shore discharging of the ocean-going vessel.

Reducing costs

Since freight plays an important role in the landed cost of dry bulk cargo, any savings in the landed cost can be done only by reducing the freight. This can only be done by increasing shipment sizes.

The daily charter hire of the ships is generally governed by various indices in which the only variation possible is because of the age of the vessels, with the newer vessels commanding a higher time charter as compared to the older ones. The freight differential is substantial when it is switched from Panamaxes to Capesize vessels. An annual freight saving of 33% can be achieved for a cargo quantity of five million tonnes transported from Brazil to the Arabian Gulf in larger vessels.

But what if the infrastructure bottleneck does not allow berthing and handling of large vessels? The only way to deal with this problem is offshore transshipment, where cargo is transported in fully laden Capesize vessels, which are then lightened offshore by using specially built transshipment vessels.

In terms of the economic crisis, the fact that not much cargo is being transported currently has caused severe pressure on the shipping industry. This pressure will definitely ease once the cargo movement gains momentum and the vessels are deployed.

Fast and efficient

The offshore transshipment facilitates the ocean-going vessels to come alongside to discharge cargo. The transshipment is done at a fairly fast daily rate in order to reduce the waiting time of the ocean-going vessels.

The freight advantage achieved by switching to higher shipment sizes and faster handling rates fully justifies the time required for offshore transshipment operation. The amount of time it takes for lighterage of the ocean-going vessels at the anchorage is more or less compensated by the amount of time gained to discharge that much less cargo at the jetty.

From ship to transship

A typical transshipper (Panamax size vessel converted - similar to the ones being used in the Arabian Gulf) would comprise four heavy duty marine cranes, material handling system, power generation system, mooring and fendering devices and electrical system.

These components need to be procured individually and transported to the shipyard where the vessel conversion takes place. Depending on the size and type of various equipments, a typical conversion should cost in the region of about US$30 million. It is important to be noted here that the cost of the vessel to be converted is additional.

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