New Era for MPV Shipping

By Carly Fields

BREAKBULK EUROPE EXCLUSIVE: Excitement is building for “a new era” in shipping for AAL Shipping Managing Director Christophe Grammare.

Sticking to the status quo has been replaced by wholesale change over the past couple of years, with the sector shifting to low-sulphur fuels and ballast water management, and leading into the incoming focus on reducing carbon emissions from ships and new intelligent systems for port control.

A former engineer, Grammare believes that comparisons with the transformative shift from sail to steam hit the mark. “The industry is changing. For a sector that is rather ancient to have so many changes back-to-back really speaks to a new era for shipping coming up.”

Speaking with Breakbulk before Breakbulk Europe kicked off at the Rotterdam Ahoy Tuesday, he described the change as “a reinvention of how we do everything.” “It’s a new design and new thinking as opposed to this is how we have always done it.”

Tempering that positivity are the current market prospects, with Grammare admitting that his greatest concern is the current geopolitical trend of countries slowly shutting themselves out of global trade. He noted that China-U.S. steel volumes have been decreasing for the past five years on the back of U.S. protectionism. While change on just one trade lane is manageable, a shutdown of a number of major trades lanes would be another matter entirely. “If what we have seen with Russia shutting down from the rest of the world happened in China that would be a huge worry.”

He also expects a rebalancing of the freight market in the short term with the ‘truth’ somewhere in the middle of the long trough of the past 15 years and the current peak.


Risk Management

AAL Shipping is mitigating freight and geopolitical risk by forward booking its fleet of multipurpose carriers. While forward booking completely disappeared in the down market, shippers are now keen to commit to a high – but not peak – rate to forward fix tonnage for a long period of time.

Grammare confirmed that AAL has signed some forward contracts for its newbuildings, due to be delivered in 2025. AAL has six ships on order, which will join its near 30-strong managed fleet. Further newbuild orders are not on the immediate agenda, despite Grammare’s acknowledgement of a looming capacity crunch. “AAL is quite conservative. We run long haul on specific trades and the new ships currently on order fit that model. But we are not speculating.” AAL will, however, continue to invest in second-hand tonnage if it fits with its existing capabilities.

AAL is also putting the cash from the current rate spike to good use, paying off fleet financing debts in readiness for the next downturn. Grammare recognised that the market can still change extremely quickly, and carriers need to prepare for every eventuality. “100% closure of China would be catastrophic, for example. Also, breakbulk is in the middle of two trades: containers and bulk – we need them all to be doing well,” he said.

Meanwhile, investment is being made in exploring the latest systems and getting systems “to talk to each other”. “We want to create harmony and reduce manual impact,” he said. There is also an expansion of the AAL staff base, with Grammare predicting an increase of 10 percent to cover the increased ship capacity.

“We have been running quite lean for the last 10 years – we have had to,” he said. “Now we are focusing on the next generation, picking people out of school so that they can grow with the company.” However, he admitted that it is “tough” to find people, and once they are in, there is the additional challenge of retaining them.