PROJECT CANADA
CASE STUDY
2 PROJECT CANADA - CASE STUDY
Introduction
Early September 2015 XYZ Inc. (Company name has been changed for privacy)
invited 4 or 5 project forwarders to participate in a Tender for the delivery of the
project cargo items, from terminal Shanghai China to delivered quayside Port
Belledune QC Canada. The marshalling yard located there was to receive the
dismantled components and to reassemble them with other components shipped
and delivered separately.
Once assembled the consignee was responsible for arranging the delivery of the
complete built up unit to Port Cartier project site. The delivery was to be done using
a barge contracted separately from the ocean part charter handled by Icecorp.
XYZ Inc advised all Bidders that the final award would be based on the price of the
part charter proposed and transit time/routing due to time constraints involved for
final assembly and door project site delivery. A specific discharge date to Port
Belledune was requested as being NO LATER than November 12, 2015 or a closer
date. The original Packing List
for the cargo items was not
fully finalized as the fabricators
in China were still producing
the finished articles and final
weights and dimensions were
not fully determined at the time
of tender submission.
Overview
CARGO DETAILS:
1. 1 unit gantry 103,103 18.00 x 12.00 x 4.01 866.16
2. 1 unit slew bed 68,970 13.40 x 9.80 x 4.90 643.47
3. 1 unit C Frame 76,448 15.50 x 7.79 x9.55 1,153.12
4. 1 unit 24 wheel beam 33,300 13.22 x1.70 x 2.50 56.19
5. 1 unit 10 wheel beam 10,500 8.36 x2.09 x 2.35 12.80*
6. 1 unit 10 wheel beam 10,500 8.36 x2.09 x 2.35 12.80
3 PROJECT CANADA - CASE STUDY
* #5 is optional, may or may not be shipped as break-bulk cargo with remaining 5x
pieces. This was only 10.50 MTs and 12.80 cbm did not affect the part charter option
rates wise whether included or excluded
TOTAL 6x PIECES WEIGHT 302,821 kg/ 2,744.54 Cubic meters and subject to
change
TENDER INFORMATION:
The Tender issued to all bidders required:
•
Coordination with two fabricators near Shanghai to arrange for the cargo to
be delivered alongside vessel under hook Shanghai port (unnamed terminal).
*All charges prepaid
•
Receive the cargo from barge, loaded to the nominated charter vessel, fully
positioned on deck, blocked and braced.
•
Delivery by part charter to ocean terminal Port of Belledune before
November 12 2015.
•
Arrange unloading from vessel discharged to road trailers positioned
alongside the vessel for the Canadian fabricator to take possession and
arrange delivery to their nominated marshalling area nearby.
HOW THE BID WAS WON:
ICECORP was aware that to win the bid it was necessary to source numerous ocean
carrier options with vessels small enough to ensure reasonable pricing but with
sufficient on board ship’s gear to handle the heavy lift cargo items involved.
•
Source vessel owners who had other cargo commitments to ensure a
reasonable part charter pricing was achieved for this cargo (an element of
luck and timing plays a large part in this regard).
•
Select a vessel who had experience in discharging this type of cargo in
Canadian ports in the region and would be able to price accordingly
•
Select a vessel with reasonably fast transit times so the delivery deadline can
be met
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To ensure a big selection of ocean carriers were approached for pricing and offer,
ICECORP decided to work closely with their agency PPG office overseas as
ICECORP is the solely appointed PPG Member for Canada.
ICECORP found two suitable options but the price differential was quite high
between the two. In the end the carrier nominated was Thorco Shipping, with
offices in Singapore and Houston TX and the final rate was negotiated.
Tentative rates were agreed and conditions of Bill of Lading discussed, subject to
changes being agreed should ICECORP win the Tender and firm booking was to be
considered. The rates received from six charter operators ranged from US$ 850,000
to US$ 1,300,000 for the cargo in question and the Tender was submitted on time.
Towards mid/late September 2015, ICECORP was advised that our Bid was
successful and XYZ Inc had awarded them the business. Once confirmed in writing
ICECORP proceeded to make firmer arrangements with all parties involved to
confirm loading date of the cargo in Shanghai port.
Wording of the Part Charter agreement and initial Booking Note was carefully
constructed and prepared by ICECORP ensured all legal Issues were covered and
clearly defined. At this stage the final cargo piece count, weight and dimensions
were still under review, waiting to be loaded on the barge.
5 PROJECT CANADA - CASE STUDY
CRITICAL SUCCESS FACTORS:
Key elements and communications required for set up of firm booking and loading
included:
•
Final cargo piece count, weights and dimensions and compiling a final
Packing List for vessel owner to determine vessel load plan and lashings on
board
•
Establishing barge size and dimensions, what protection existed on the barge
port and starboard sides whilst unloading occurred alongside the charter
vessel to avoid damages/claims etc.
•
If the barge is self-propelled or being towed by a tug (it was self-propelled)
•
Identifying loading plan/cargo pattern on board the barge.
The fabricators provided ICECORP with a barge loan plan for charter vessel to
review for their loading to vessel purposes and approved the positioning of each
cargo item on the barge itself. Two cranes operating in tandem together were
required and turning circle once placed on board had to be calculated to allow for
cranes to operate unhindered. And to place specific cargo pieces in preselected
places on charter vessel deck.
•
To meet our delivery deadline date it was negotiated with the shipping line to
have this project cargo loaded in Shanghai last and to be discharged in Port
Belledune first. Where the cargo was placed on deck during the loading
proceed was extremely important to ensure quick access for offloading at
destination.
•
Until Thorco Shipping was able to arrange loading of the steel in Japan and
confirm anticipated date of arrival in Shanghai port we had to ensure daily
communications existed with both fabricators. This was done to determine
the last date of loading the cargo to their nominated barge, thus allowing two
days transit time for arrival Shanghai terminal and ensure that the barge
arrived at loading terminal around the same day that the vessel was available
to receive the cargo.
A delay in loading of the vessel incurs vessel demurrage charges in excess of US$
15,000 per day or pro rata.
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CONCLUSION:
Final vessel name was determined as being the Thorco Empire and technical details
of this vessel were conveyed to ICECORP/XYZ Inc. XYZ Inc provided ICECORP with
confidential CAD Drawings of the relevant cargo items which the charter vessel
owner used to determine best lifting and positioning methods ex barge onto their
vessel. The C Frame was able to be loaded upside down provided none of the frame
lugs were touching the vessel deck, thus providing the vessel operators more space
to work with on deck.
Third Party Liability Insurance for charter vessel coverage was provided by The
Japan P&L (Protection & Liability) Club, in case the barge/stevedores damaged the
vessel during the barge offloading process. XYZ Inc Canada requested permission for
a Marine Surveyor appointed by them to board the vessel and inspect both the cargo
as offloaded from the barge, their on deck positioning and final blocking and bracing
done for the vessel voyage. XYZ Inc paid for the Surveyor and detailed
report/photos were compiled for XYZ. It was extremely important that the Marine
Surveyor did not delay or disrupt the loading process and cargo positioning on deck.
(No delays were experience)
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The vessel from barge loading date was agreed as being October 3 or 4, 2015
allowing the Thorco Empire 1.5 day’s transit from loading the steel in Nagoya Japan,
departing Nagoya 1st October and to arrival Shanghai port. ICECORP organized all
the export documentation and authorities with the Port of Shanghai/China Customs
before the loaded vessel was authorized to commence export sailing to destination.
Loading of this project cargo was anticipated to take one day allowing for minor
delays, weather etc.
Departure date from Shanghai was set to be October 4, 2015. Based on a vessel
calculated speed of 13.5 knots and allowing for a 5% loss of timing, bad weather and
storms en route the transit time to Belledune was calculated as being 36 to 37 days
without any guarantee implied or given. Thus arrival at Belledune was estimated to
be November 9 or 10, 2015 within the time frame requested by XYZ Inc (12
November.) Two days transit through the Panama Canal was added to allow for
heavy vessel activity, bad weather.
Regular daily vessel monitoring and tracking by GPS Satellite was maintained and
position status updated for XYZ Inc, as they were nervous about the final arrival
date to Belledune. Updated position maps were emailed to XYZ Inc as and when
received/updated. Vessel anticipated arrival date at Belledune was 14 -15 November
2015 weather/circumstances permitting. Before the actual voyage commencement,
advance vessel and cargo reporting had to be made to the Canadian Authorities via
the vessel owner's Canadian representative based in Montreal, Quebec.
The MV Thorco Empire arrived at Port Belledune on November 24, 2015 around
20.00 hours and the discharge time frame was expected to be between 13 and 16
hours. The XYZ Inc cargo was the first to be discharged. Arcelor Mittal's regular
Canadian customs broker ensured the cargo was fully customs cleared and most
importantly the cargo itself was customs released before the vessel was in Port
Belledune and made ready for discharge. XYZ Inc requested permission for their
Canadian appointed Marine Surveyor to board the vessel in Belledune prior to
delashing and offloading of the cargo to ensure everything was found to be in good
condition and order.
One Source. One Solution