Dubai-based Simatech Shipping, operator of the Gulf’s biggest feeder fleet, is to acquire up to four vessels later this year to reduce its reliance on the charter market.
“During 2016 we added two ships of 2,500 teu capacity to our fleet,” managing director C F George told Fairplay. “They are deployed in the India coastal service. There are plans to buy a few more this year. This is to replace some of our chartered-in vessels and reduce our reliance on the charter market.”
Simatech currently has a fleet of 55 vessels, 16 of which are owned and 39 chartered-in or deployed by partners. It handles around 10% of the movements through the Gulf’s biggest transhipment port, Jebel Ali, which saw throughput of 15.6 million teu in 2015. “Although 2016 turned out to be slower than 2015, when Simatech handled over 1.6 million teu at Jebel Ali, I expect 2017 to be a better year than last year,” George said. “The trend for [first quarter 2017] is better. It’s encouraging.”
Mergers and alliances had brought a noticeable reduction in the customers Simatech was able to deal with. “It depends on how you look at it,” George said. “The cargo volume remains the same.”
He said that Saudi Arabia’s Dammam Port was going well. “Both players [the Hutchison Ports Holdings and PSA International affiliates] are very aggressive in getting new business. Saudi Arabian volumes are also increasing. When direct services call at Dammam, our volumes decrease.”
While Simatech has been studying opportunities in the Red Sea, it believes that because most of the major lines make direct calls at ports like Jeddah Islamic Port, King Abdullah Port, Port Sudan and others, opportunity for feeders are limited. “We have not progressed much in the Red Sea, where feeder volumes are not big. Most of the alliances have direct calls,” he said.
He said Yemen continued to be interesting, but had yet to become a permanent fixture. “We did a few one-off voyages for some customers there, but we do not have a regular service.” But he added that there is still no sign of improvement in Kuwait.
In Somalia, Simatech has a feeder service to Mogadishu and Berbera, where DP World is developing the port. “We hope this will increase volumes to Berbera since [it] has the scope to support neighbouring land-locked country Ethiopia,” George said.
“We are the first to start a container service to Somalia after about 20-odd years of isolation of that country from international trade. Currently there are three major players: Simatech, CMA-CGM, and MSC. Mogadishu port is now run by a Turkish company, Albayrak Group. The port continues to suffer due to a shortage of equipment and systems. Berthing delays and low productivity affect turnaround of vessels very badly.”
He said Berbera’s throughput was foodstuffs, cars, electronic goods, and household items. “Berbera has no raw materials for processing. [In Somaliland], it’s a consumer economy.”
Mumbai-based Sima Marine is a Simatech group company. It runs an Indian coastal service within the framework of the domestic cabotage law, with two Indian-flagged vessels of 2,500 teu each, operating on the Indian west coast.
“Colombo is one of our biggest hubs. We have six calls every week connecting the Gulf, southeast Asia, China, and Korea. Our CCG service connects both the east coast and the west coast of India.”
Port operator Adani Ports and Special Economic Zone is developing a transhipment project at Vizhinjam, close to India’s southern tip. “This is a new port in India owned by Adani. They will switch on next year. It has an 18 m natural draft. This port can be a game-changer in the region.”
George is mindful of the benefits an Indian transhipment hub might bring, but acknowledges the difficulties that have been faced by DP World’s Cochin facility. “The original idea was to compete with Colombo as a transhipment port for India from India’s west coast. The idea was to bring the cargo now being shipped over Colombo to Cochin. The draft at Cochin is 12 m [and constant dredging is required]. Big main line ships are not able to come there.”