Bahri eyes Europe expansion amid oil price slump, says official

The National Shipping Company of Saudi Arabia (Bahri) is looking to expand its general cargo operations in Europe as infrastructure projects in the kingdom pick up pace, said Matthew Luckhurst, liner director at Bahri General Cargo.

“We have some very interesting projects in Saudi Arabia, particularly driven around the transport sector – rail in particular, [such as] the Riyadh Metro. We also have overland rail projects, high-speed and cargo, and a lot of that technology is coming out of Europe,” Luckhurst told Argaam at an exhibition in Abu Dhabi.

Bahri, which is the exclusive oil-shipper of Saudi Aramco and the one of the world's largest operator of very large crude carriers (VLCCs), also does project cargo for oil and gas, construction, military etc. 

“That's why we started that service in Europe, to make sure we cater for those projects. Typically, we're looking at Germany, Poland, Belgium, the Netherlands, the UK, and Spain,” he added, noting that the company sees forthcoming volumes from these locations into the Middle East and the Red Sea.

The push into Europe also comes as a result of Bahri’s diversification strategy in the wake of falling oil prices and a slowdown in projects in Saudi Arabia.

“Our intention is to continue to expand our geographical scope. We won't necessarily deploy any more or any new tonnage, but we will attempt to partner up with other carriers with whom we have a good relationship,” Luckhurst said, noting that the shipping industry globally is already oversupplied with vessels.

The glut in vessels compared with the volumes that are being moved is having a detrimental impact on the freight rates, he said.

“Freight rates that are too low are unhealthy for the market. If the prices are so low, eventually somebody is going to compromise on service providing, and that doesn't help anybody.”

Under its growth plans, Bahri also plans to invest more in transport and logistics services in the kingdom, such as customs clearance and freight forwarding, he noted.

“We believe that there is big opportunity there,” Luckhurst said, noting that the market at the moment is “fairly immature [and] very fragmented.”

“As a Saudi government-owned entity we believe we can serve the kingdom in the internal logistics field,” he added.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com