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 A shipment being unloaded from a Kanoo-represented vessel

A shipment being unloaded from a Kanoo-represented vessel



Kanoo Shipping says new trends signal optimism

May - June 2001

Bahrain-based Kanoo Shipping Agencies, which has the distinction of being the largest Arab-owned shipping agency in the Middle East, says recent exporting trends in the region augur well for the shipping trade. The Gulf countries, pursuing an economic diversification policy to reduce reliance on oil income, have made big strides in industrialisation and this is being reflected in the shipping trade, as carriers that once left virtually empty after unloading their diverse cargo are now returning with consignments destined for foreign ports, Kanoo officials say.

"Saudi Arabia, particularly, is industrialising at a hectic pace; there is a rising population of young Saudis and they are increasingly well-educated, entering service and business. Domestic industrial production has expanded to meet local requirements and exports are rising," comments Nicholas J Lane, executive general manager of Yusuf Bin Ahmed Kanoo's shipping agencies division.

Lane says the largest contributor to Kanoo's shipping agencies business was Saudi Arabia, followed by the UAE, which, like the Kingdom, has seen remarkable development over the past few years. "We've secured a greater market share in the UAE than we had previously. Our market share in Saudi Arabia is also growing," adds Lane.

Kanoo owns 19 offices in the Gulf and Red Sea and has a network of subagents through which it is able to provide representation across the region from Egypt to India. The company covers all aspects of the shipping business and is a leader in the liner trade with a strong presence in the tanker market where it represents such operators as Exxon Mobil, Vela, Indemitsu, Nippon Global, BP and Maersk. It has also been active in the non-liner trader, both general and bulk cargo, and has been representing major heavy-lift carriers engaged in project work such as infrastructure buildings and major plants and refineries. A feature of the Kanoo business is its representation of major car carriers including WWL, Mitsui and Hual.

Kanoo handles over 2 million tonnes of dry cargo per year. The company moves more than 40,000teu and issues 75,000 bills of lading and 54,000 delivery orders annually. Vehicle and Ro/Ro operators it represents bring in more than 50,000 vehicles.

The company has been involved in developing the Gulf's offshore oil fields from the very beginning and has developed unmatched expertise in expediting documentation and fulfilling government requirements for clearances and permits. Kanoo has developed its own launch services that are available in Fujairah, Ras Al Khaimah, Dubai, Bahrain and Ras Tanura. Some 2,000 crew and 100,000 tonnes of stores are transferred annually to and from these ships. Four Kanoo-owned ships are deployed for this run. Kanoo also has a role in the cruise business in the region, working closely with Kanoo Travel Agencies, which is the largest travel agency in the Gulf. The company represents a number of cruise companies for agency services and has developed specific new cruise destinations in Iran and Oman. Shipping lines, observing a shift in fortunes, are uniting to further their interests. "After many years of continuously declining rates and very low profitability for the lines in the region, there is a move to try to increase the rates, which will sustain the level of service demanded by the trade. In the past year, there has already been a rate restoration or adjustment," observes Lane.

"The Gulf has always witnessed artificially low export rates because there was a surplus of empty boxes. That's changing. Now, some 50 per cent of the boxes leaving the Eastern seaboard of Saudi Arabia are laden, for example."

Commenting on the Bahrain business, Kanoo shipping manager Yusuf Abdulla Al Rayes says business is picking up.

"The year 2000 was satisfactory, 2001 will be more productive. There's commercial optimism which wasn't there a few years ago," he says, commenting that political issues had been resolved and Bahrain was effectively being promoted as a business, banking and tourism centre.

"We at Kanoo Shipping have 35 per cent of the market share of cargo coming in and moving out of Bahrain," says Al Rayes. As well as representing the top shipping lines, Kanoo is the agent for a number of feeder operators.

Al Rayes says the shipping trade along with other businesses were relieved when low oil prices of the earlier part of 2000 gave way to record-level prices in the latter part. Al Rayes observes that the development of the new port of Hidd would make it possible to handle vessels more efficiently. A free zone at the port, if it materialises, would encounter stiff competition from similar zones in the region including ones at Jebel Ali, Sohar, Salalah and Dammam.

An important aspect of the shipping trade in Bahrain is the handling of raw materials for the aluminium industry and the finished product. Each Kanoo vessel on an average discharges 30,000 tonnes of alumina plus 15 to 20,000 tonnes of associated material and there are two vessels visiting every month. The company handles 40 per cent of aluminium exports through different liners.

Shipping agencies is one of several businesses in the Yusuf bin Ahmed Kanoo group including travel, merchant trading, property, machinery sales, oilfield supplies and services, chemicals and insurance.

The origins of the family business go back to the close of the 19th century when Haji Yusuf founded Yusuf bin Ahmed Kanoo as a mainly shipping enterprise.

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