Scorpio Logistics’ OFT ‘Zeus’ gives clients the ability to save money
ABOUT SCORPIO LOGISTICS
Scorpio Logistics, part of the Monaco-based Scorpio Group,
operates specialized transshipment vessels, designs customized
logistics systems and invests in businesses and projects. Based in
Singapore, Scorpio is proximate to the emerging producers and
consumers of dry bulk commodities.
Its Offshore Floating Terminal (OFT) Zeus operates in East
Kalimantan (Indonesia), transshipping thermal coal from barges
to bulk vessels. Its capacity is fully committed under term
contracts with international commodity trading companies.
Zeus has taken the Indonesian transshipment sector to a new
level of sophistication. In addition to its fast loading rates and
other value-adding features, Zeus is the only offshore facility that
can homogeneously blend different quality cargoes, saving
Scorpio’s customers money and creating business opportunities
for them.
Scorpio Logistics’ philosophy is different to other marine
logistics operators. Rather than assuming that existing logistics
systems and methods are adequate, the company makes an
effort to understand industry trends and its customers’
businesses; and proposes systems which are well considered and
designed to maximize customer utility.
Scorpio only invests in high-quality equipment and operates
to world-class standards, including environmental practices which
exceed the requirements of its host countries.
 
OFFSHORE FLOATING TERMINAL (OFT) ‘ZEUS’
Offshore transshipment has emerged as a vital component of
the Indonesian coal logistics chain as growth in fixed port
infrastructure has been unable to keep pace with the rapid
increase in coal production. This trend will continue as many
small, often remote mines commence production and as
shippers continue to transition from geared to larger gearless
vessels.
More than ever, coal producers and traders are reliant upon
efficient logistics systems to support their profitability. The
transshipment sector has adapted to these demands, evolving
from basic floating cranes with 5,000–10,000mtpd (metric
tonnes per day) capacity to high-speed transshipment vessels
employing multiple cranes and conveyor systems and with
loading capacities of 35,000mtpd or more. However, these new generation
transshipment vessels still perform essentially the
same function as their predecessors.
Commencing operations in mid-2009, Scorpio’s Offshore
Floating Terminal, Zeus, has a fast loading rate (35,000mtpd+), but
it also features:
  Homogenous blending capability – Zeus’s two platform
cranes have a 38-metre outreach and can unload two doublebanked
barges simultaneously. Three hoppers and variable speed
conveyors allow Zeus to blend different quality coals in any ratio
requested by Scorpio’s customers. No other transshipment
operator offers this service.
  Buffer storage – Zeus has approximately 9,000 metric
tonnes of storage capacity so that customers can pre-load Zeus
before an export vessel arrives, allowing the barge to turn
around immediately. Alternatively, customers can store return
cargoes rather than taking the cargo back to the loading jetty
  Advanced environmental systems – While not
compulsory in Indonesia, nor market practice, Zeus is fitted
with world-class environmental systems including hopper
spill plates, water spray equipment, dust extractors and fully
covered conveyors. The systems minimize coal and dust
pollution, and for Scorpio’s customers, reduce cargo loss and
contamination.
  Automatic sampling equipment – Zeus is fitted with an
automatic sampling system which can collect samples
immediately before the cargo enters the export vessel (rather
than at the loading jetty), reducing scope for quality disputes.
 
SCORPIO’S VALUE PROPOSITION
Scorpio’s value-added services are evidence of its philosophy
that it must think long-term, and that the company must provide
the equipment and services that are of most value to its
customers. For example, as the only facility in Indonesia which
offers offshore homogenous blending, Zeus provides Scorpio’s
customers with the ability to save money — onshore blending is
significantly more expensive due to the need to sail barges to
the onshore terminal, unload, blend and then reload — but also
to generate margins through blending low quality coals with
high-quality coals to create a product that is consistently within
specification. Anecdotally, these margins are substantially higher
than the incremental cost of Scorpio’s blending services — Zeus
converts logistics from a cost centre to a profit centre!
Further, Scorpio believes its customers have had no quality
claims regarding cargoes blended by Zeus, and in fact, certain
East Asian buyers will now only accept cargoes blended by Zeus.
 
Filling the gap in the dry bulk maritime supply chain
The perfect supply chain: use the largest ship (promptly available
when required) that can be accommodated at both the loading
and discharging ports, with suitable shore facilities to allow
fastest possible turnaround.
The freight component of the total delivered cost is
significant for commodities such as coal and iron ore, especially
where they need to be transported over long distances from the
producer to the consumer.
The practice of using larger vessels is due to the fact that
larger sizes allow lower transportation costs on a per-tonne
basis. The economical equation looks fairly simple — the bigger
the cargo size, the lower the per-unit transport cost.
This is the case of the iron ore supply to China. The Chinese
appetite for iron ore has prompted commodity suppliers to seek
improvements in the commodity supply chain.
Australian suppliers rely upon a freight advantage due to their
geographical proximity to China, making the landed cost of their
iron ore in China and other Asia destinations significantly
cheaper than the Brazilian (and Indian, if you discount quality/Fe
contests) commodity.
The merit of VALE iron ore, the FOB (free on board) cost
and quality is hampered by the freight cost.
In order to reduce its freight disadvantage, Vale is building
400,000+dwt ore carriers (the world’s largest ore carriers) to
transport the iron ore in much larger parcels than the
conventional Capesize (180,000dwt).
The so called ‘Valemax’ will be employed on dedicated routes
such as Brazil–Oman (captive receiving port under construction
at Sohar) and Brazil–China and back.
Effective logistics costs give suppliers and industry a
competitive edge and enable countries to benefit from trade
growth, since any savings that can be made on freight costs
reflect on the competitiveness of the supplier and consequently
the final product price.
Logmarin Advisors adopted this philosophy which later
turned out to be the most outstanding ability of the company,
working with its clients to improve the dry bulk commodity
supply chain to industry.
 
MEGA-SHIPS REQUIRE MEGA-PORTS
Many ports are making attempts to improve their existing
approach channels and berthing facilities sufficiently to enable
them to handle larger vessels. However, the cost of ports
adapting to suit the increasing dimensions of the vessels is not
always economically justifiable.
One major implication for ports of increasing vessel size is
the amount of dredging that must take place. Moreover, open
land next to deep water is not easily available and dredging
(both initial and periodical maintenance) is an environmentally
sensitive issue that often causes concerns within the local
community.
As a result of the above, raw material producers and endusers
are penalized compared with competitors which can rely
on the necessary infrastructure to accommodate larger vessels.
 
THE CHALLENGE AND THE SOLUTIONS
The increasing difference in port size between supplier and enduser
destination require new efforts to exploit alternative
‘logistics’ solutions to reduce the delivery cost per tonne of the
raw material.
Despite the global economic downturn, major iron ore and
coal players (China, Brazil, Australian, India) are on the hunt for
strategic mining investment opportunities.
A significant factor in logistic costs for most of the projects
at implementation stage (mines and coal-fired power stations) is
the raw material CIF (cost, insurance, freight) price, mainly
limited by accessibility of larger bulk carriers to both suppliers
(Indonesia, Mozambique, Australia, etc) and end-users (India,
Indonesia, Vietnam, Philippines, etc.). In fact, a number of the
new greenfield projects are affected by shallow water draught,
thus preventing end-users from benefiting from the utilization of
the larger size of modern vessels.
When the trade volume is not large enough, and/or
environmental restrictions are hard to crack to justify the
investment in a shore-based facility, offshore transshipment can
provide a commercially viable alternative or may supplement the
existing port facilities.
Some solutions are standard like floating cranes, some have
buffer storage on board, while others don’t. As each project has
its own unique requirement most of the transshipment solutions
are customized to suit the specific end-user’s requirements and
logistical bottlenecks.
Herein below are illustrated some solutions devised to
overcome some inadequacies.
 
THE PRINCESSE ABBY’ K.I.S.S. PRINCIPLE: KEEP IT SIMPLE AND SAFE
The floating crane Princesse Abby, owned and operated by PT
Mitra Swire CTM, (Indonesian JV between PT Mitra MBSS and
SwireCTM BL) has been designed by Logmarin to find a balance
between operational requirements and costs, thereby giving the
best value for money.
Since commissioning (November 2008) Princesse Abby has
achieved results, in its coal transshipment performance (on
behalf of PT Berau Coal) steadily in excess of its guaranteed
contractual loading rate.
A monthly average of over 300,000 tonnes of coal have been
loaded so far at a daily average rate exceeding 23,000 tonnes,
with the best daily average loading rate of 27,600 tonnes. There
are very few single floating cranes around that can boast a
similar daily rate while operating in open sea conditions.
To maximize the floating crane availability, bilge keels and
structural anti-rolling fins, have been incorporated in the design
so that the Princesse Abby is less sensitive to adverse weather
conditions as compared with standard floating cranes.
Princesse Rachel, a younger sister with royal pedigree has
commenced her coal transshipment operation in August last at
Adang Bay (East Kalimantan), on behalf of PT Kideco.
Two other sister units are at different construction stages.
 
FLOATING TERMINAL CONCEPT – TO PROVIDE ADDITIONAL
SERVICES, BUFFER STORAGE, BLENDING, SAMPLING, WEIGHING
While the value of the buffer storage as an effective device to
minimize vessel loading time (resulting in lower sea freight costs)
and to boost barging/feeder efficiency (lower domestic
transportation costs) is clear, the size and design depends on a
number of factors such as daily and annually required
throughput, distance from the barge/feeder loading/unloading
facility deep water transshipment site, daily feeding capability
to/from the transshipment site, river/port congestions, tide, size
of the vessel to be loaded etc.
This concept offers almost the same advantages as a shore
base facility but a lower cost and negligible environmental
impact.
The availability of floating storage can also be used as
feedstock for blending coals in order to meet buyer’s quality
requirements, mechanical sampling, blending and weighing of the
coal, can also be provided.
The cargo handling facility consists of a combination of
grabs, cranes, hoppers, conveyor belts and shiploader(s). Faster
loading/unloading rate and greater throughput are achieved,
thanks to the shorter grab cycle to reach the hopper(s) as
compared with the standard floating crane cycle. An
automatic sampler can be arranged to provide samples for
buyer and seller’s representatives in accordance with ISO and BS
standards. On-line weighing and metal detector can also be
incorporated.
To mention some examples, Zeus owned and operated by
Scorpio Logistics is a self propelled floating terminal (see
picture) capable to transship coal from barges at an average daily
rate of about 40,000 tonnes. Zeus’s cranes have a 38-metre outreach,
hence are capable of unloading two side-by-side barges
simultaneously.
In order to gather the coal from small mines scattered on the
east coast of Kalimantan and to ship the desired quality of coal, a
larger floating terminal (hub) designed by Logmarin/Interprogetti on behalf of
Scorpio Logistics, is at conversion stage under Rina Class surveillance and will
start to operate next December.
The availability of over 60,000 tonnes of floating storage at the transshipment
site will provide a buffer capacity that allows for an uninterrupted and smooth
coal loading operation.
This concept is recommended in the case of greater coal production coming
from different sources with longer barging distance and/or blending
requirements.
The efficiency of this coal handling facility (daily loading rate of about 50,000
tonnes, blending, large buffer storage) will enable the coal trader to reduce the cost
per tonne exported significantly, compared to earlier cost by using floating
crane and blending carried out ashore.
The floating terminal Princesse Chloe is under construction at Keppel Subic
Shipyard, on behalf of PT Mitra SwireCTM. Thanks to the Liebherr
cranes, Peiner Smag grabs and Bedeschi conveyor system hoppers and shiploader,
Princesse Chloe is capable of loading over 800,000 tonnes of coal monthly. The
environmentally friendly coal transfer operation on behalf of PT Berau coal, will
be carried out starting from December next, at a daily average rate exceeding
40,000 tonnes.
In addition to having good equipment, it is also important for any successful
operation to have experienced operators and maintenance personnel for, without
both, the project objectives will not be attainable. It is therefore essential for end-users
to selectexperienced and reliable service providers. The old expression
‘you get what you pay for’ does indeed apply to offshore transshipment facilities!
As demonstrated by the above operations, both PT Mitra
SwireCTM and Scorpio Logistics provide, creative and efficient
solutions which are tailor-made and designed to fit the clients’
needs specifically and, last but not least equally rely on Logmarin
Advisors support towards achieving their goals.
 
A SUITABLE TOOL TO EMPOWER CLIENT DECISION
Having made a name for itself in the floating terminal market
niche and thanks to its versatility in waterborne logistics,
Logmarin provides comprehensive consultancy services in the
field of shore port facilities and coastal engineering as well.
Mara: at conversion stage in China.
Hence, solutions for logistics supply chain are almost infinite.
A solid knowledge of the markets, of the materials, technical
and operative know-how are necessary to produce a solution
which delivers value to the client.
Logmarin has been deeply involved in supporting activities for
both the logistics chain ends (suppliers and industry). Anglo,
ArcelorMittal, ENEL, Marubeni, Japan Power, Kepco, Sandwell,
Sogreah and Vale, among others avail themselves of the support
of Logmarin Advisors for their sea borne logistics projects and
to oversee project implementation.
Creativity and reliable technology are necessary just as much
as experience to ensure sound results suiting each specific enduser
situation. Present logistics challenges at design stage include
grains export from Azov sea (very shallow water, food stuff and
icing in winter time), iron ore export/import by means of large
ore carriers, coal supply to green field power stations.
Rather than deploying new technology, the emphasis is placed
on a combination of the most experimented technologies in a
way to make them reliable, flexible and as efficient as possible to
satisfy end-users’ needs. This is the secret of Logmarin’s success.
 
CREATING VALUE SERVICES THROUGH ACCUMULATED
KNOWLEDGE
To better serve its customers a larger variety of products and
services, Bedeschi Liebherr and Logmarin have formed a new
strategic business alliance, launched under the name of
BulkLogisticLandmark.
While continuing to do what each partners does, more
efficiently, the pooling of skills, individual strengths and expertise
of the three partners provides progressive advice (software) and
products (hardware) both on shore and off-shore.