Tuesday, January 19, 2010

Shipping Downturn Affects Every Aspect Of The Freight Industry

Harbour Crane Sales Down as Ships Propulsion Maker Moves East
Shipping News Feature

WORLD WIDE – The crisis which has blighted the worlds freight transport groups over the past months has inevitably had a knock on effect across all the supporting industry sectors. We have seen some, like shipping container maker Singamas Container Holdings Ltd., diversify to add value to their standard product lines as we have reported previously however what can one do when your goods are shipping essentials which find themselves in a much more competitive market?

Two leading companies in these fields have made statements this week showing how it is essential to economise in order to survive the financial restraints now in place. In October we reported how Liebherr, the handling machinery manufacturer, had centralised their UK operations in Sunderland by bringing different divisions onto the same site. Today they have released the figures from their mobile harbour crane (MHC) division announcing they have managed to place 74 of the units with customers, 27% down on the previous year, but ahead of competitors who they claim have seen sales reduce by around 40%. The company observes that, whilst traditional European markets are down, they have managed to capture new customers in developing areas such as Africa and India.

The company has made technical developments to their MHC’s and produced rail mounted portal cranes capable of simply plugging in to a ports own electrical supply to enable the unit to run. The report comes from the group’s Austrian maritime production site which coordinates further production in Sunderland and Rostock in Germany.

Meanwhile the company who supply over one third of ships engines throughout the world today have announced it will quit Europe as a manufacturing base and reopen in China. Wärtsilä, the Finnish motor manufacturer will shut its local and Dutch based production lines with the consequent loss of 1400 jobs. Manufacture of propellers and components will move to China to ensure the company retains its strong position in its chosen industry sector.

Europe, once the stronghold of vessel manufacture, has seen the Asian share of the market rise steadily to its current level of over 50% of all new builds. Wärtsilä feel that it can no longer remain remote from its sole market whilst engine technology in the region continues to improve. Order levels for the company have slumped to $3.6 billion for the next 9 months, down almost 50% and its shares rose around 16% at the news of the move. Estimated savings for the group are €90 million annually and the move is scheduled to cost circa €140 million.

“China has become a strong maritime centre and its growth will continue. By developing our manufacturing footprint and our businesses for the future key markets, Wärtsilä will further improve its competitiveness” said CEO Ole Johansson in a statement.

pic: Liebherr Cranes at work in Kumport, Turkey (Courtesy of Liebherr).