BY R. Bruce Striegler
Newest weekly stop in Vancouver connects to Asia
Established in 1976, the United Arab Shipping Company (UASC) is a joint venture corporation founded by six sovereign states in the Persian Gulf, namely Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Adding to its 17 existing routes, in May 2013, the company launched three Transpacific services connecting Asia with the west coast of North America. The new service provides Canadian shippers a weekly call in Vancouver. Anil Vitarana, President United Arab Agencies Inc. explains, “In its formative years, the business was primarily concerned with connecting the Middle East with Asia, the Americas and Europe,” adding that over the last ten years or so, UASC has gone beyond just serving the Middle East.
Highlighting the company’s routes, Mr. Vitarana noted the new Transpacific service, which utilizes two 4,250-TEU carriers, has calls in Vancouver, Seattle, Oakland and Los Angeles. “We’ve never had a presence on the Canadian west coast, and we are very pleased that this new service is our first through the Vancouver Gateway.” He says that the selection of Montship Inc. as the company’s agents in Canada is a fortunate choice. “They have a great management team and an excellent record of representing other carriers. We’re looking forward to partnering with them”
During his conversation with Canadian Sailings, he outlined some of UASC’s routes, saying, “Other major trade lanes are Asia to North Europe and Asia to the Mediterranean.” Adding that prior to the west coast service, UASC linked Asia to the U.S. east coast through the Panama Canal. Vitarana says that weekly volume on the new Transpacific route is running at approximately 3,000 TEUs per week, noting that the U.S. east coast volume is approximately 1,500 TEUs. UASC has more than 428,500 container units of various types and sizes, which are continually upgraded.
At the same time the company launched the new Transpacific service, it also implemented an internal re-organization designed to bring the business closer to the customer and to better understand customer needs. As well as executive management additions, structural changes included the establishment of trade management units to manage round trip trades, as well as the opening of new offices in Hamburg and Istanbul.
New big ship orders with expected delivery by 2015
A shipping industry dealing with overcapacity is watching UASC carefully. Of its current fleet of 53 vessels, nine ships, ordered in 2008, are capable of each carrying 13,500 TEUs. Mr. Vitarana says, “We expect our fleet to grow in the next few years. We’re on the verge of ordering five 18,400-TEU ships and a further six 14,000-TEU ships, with delivery expected in 2015-16.” He adds that the new ships will be some of the most technologically advanced ever built, as high fuel prices have driven demand for better fuel efficiency on the big new carriers. Bunker fuel prices have risen 16 per cent a year on average over the past decade. Reports from analysts suggest that UASC has managed to reduce operating costs of its fleet by about $200 million after decommissioning a number of smaller vessels since 2008.
Mr. Vitarana continued, “Rate stability has been a problem, not only for us, but for the business as a whole. We’re hoping that with more partnerships and the consolidation we’re seeing within the industry, we’ll begin to return to a period of rate stability,” adding that fuel costs are now the single biggest cost factor for carriers. Mr. Vitarana explains that although UASC offers refrigerated service, it has been a minor part of the business mix, a situation which may be changing. The company has recently created a specialized reefer desk at its Dubai headquarters and plans on expanding its refrigerated services, principally in South America and through European trades into the Middle East.
Explaining the role of United Arab Agencies Inc., Mr. Vitarana says, “The agency represents UASC throughout the United States. We have about 150 employees and offices in Cranford, NJ, Baltimore, Norfolk, Savannah, Atlanta and Cincinnati. We’ve had an uninterrupted presence in the U.S. for the past 35 years.” In addition to its liner services, United Arab Shipping Company provides cargo and port coverage services, freight forwarding, land transportation, sea/air cargo, petrochemical transport, chartering, container and ship repairs, as well as cargo services. Headquartered in Kuwait, UASC has more than 2,000 employees and 70 offices in more than 20 countries. Alphaliner’s Top 100 list for August shows UASC listed in the 19th position with a total capacity of 286,458 TEUs. APM-Maersk occupies the top position with a TEU capacity of 2,622,314.