High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
The world’s largest ore carrier, Vale Brasil, was loaded for the first time Tuesday at Pier I at Ponta da Madeira Port Terminal (TPPM) in Brazil. The vessel was loaded with 391,000 tons of iron ore destined for Asia.
Vale Brasil was ordered by the a Brazilian mining company, Vale, from Daewoo Shipbuilding & Marine Engineering Co in South Korea. The Vale Brasil is the biggest ore carrier in the world, with a 400,000-ton capacity, 362-meter length and 65-meter width. Vale Brasil is the first of seven ore carriers ordered by Vale from the South Korean shipyard, totaling an investment of US$748 million.
Vale has also ordered 12 ships each with a capacity of 400,000 tons from the Rongsheng Shipbuilding and Heavy Industries shipyard in China. These vessels, being built at the Chinese shipyard, involve a total investment of US$1.6 billion.
A highly efficient logistics infrastructure is a key element for competitiveness in the iron ore market. In order to maximize the efficiency of its operations and meet growing global demand, Vale is developing various initiatives to obtain economies of scale. The ordered vessels will be part of the logistical solution between the company’s maritime terminals in Brazil and Asian customers. The ore carriers have a high standard of safety and will contribute to reducing the cost of long haul maritime transportation of iron ore to steelmakers.
Vale’s logistics innovate and raise competitiveness further
Besides owning 19 400,000-ton ships, Vale will have an additional 16 ships with the same dimensions, which will operate exclusively for the company under long-term contracts signed with ship owner partners. These 35 ships are due to be delivered between 2011 and 2013.
“With our fleet of our own and chartered ships, we will be able to reduce volatility in the freight market. Volatility does not only affect the freight cost, but also the price of ore itself. As the new ships come into operation, the freight and ore costs will become more stable, benefiting Vale and its steelmaking customers,” said Marketing, Sales and Strategy executive director, JosÃ© Carlos Martins.
Developing the design represented an enormous technological challenge and involved considerable innovation, and the desired results were achieved. Vale Brasil enables faster loading and unloading, is suitable for the most modern ports in the world, and produces 35% less carbon emissions per ton of ore transported.
Vale’s orders heat up Brazilian shipbuilding industry
Over the last two years, Vale has ordered the construction of 51 vessels, including tug boats, barge trains and catamarans, from domestic shipyards, helping to develop the Brazilian shipbuilding industry, generating 2,465 direct and indirect jobs, and involving investment of R$403.9 million.
In all, 15 tugboats have been ordered in Brazil – 11 built at the Detroit shipyard in ItajaÃ (Santa Catarina) and four at the Santa Cruz shipyard in Aracaju (Sergipe). Of this total, 13 vessels have already been delivered to Vale. The tugboats will be allocated to operations at TubarÃ£o Complex (EspÃrito Santo), Ponta da Madeira Maritime Terminal (MaranhÃ£o), Ilha GuaÃba Terminal (Rio de Janeiro), Vila do Conde Port and Trombetas Port (ParÃ¡). With the new fleet, Vale will now operate a total of 29 tugboats.
The new tugboats are powerful and have a good maneuvering capacity, and this will contribute to enhancing the productivity of ports, as well as improving safety for docking and undocking maneuvers for the largest ore carriers that currently operate in the world. By building these ships, 1,530 new direct and indirect jobs will be generated.
Besides the tugboats, two barge trains are being built at the Rio-Maguari shipyard in ParÃ¡, composed of two push boats and 32 barges, and two catamarans at the Arpoador shipyard in Angra dos Reis, to transport employees from Ilha GuaÃba Terminal, totaling 51 vessels. The orders will be delivered before the end of this year. Building the barges and catamarans will generate 695 direct jobs and another 140 indirect jobs.
Join the 67,392 members that receive our newsletter.
Have a news tip? Let us know.