CFL

These days, entrepreneur Kees Koolhof will admit that, six years ago, those in shipping circles responded with concern - or even negativity - to his plans to set up a new company to sail its own exclusively designed, Dutch-built, multi-purpose short sea vessels. Some pointed to a looming surplus of tonnage and warned that, for the aspiring newcomer, higher initial costs would be biting. Others sneered that the market would decide.

Yet five years and a long recession later, and CFL is still alive and kicking. Indeed, the the Netherlands’ newest shipping company is growing and looking solid: sales rose last year to around €35 million, CFL is making a profit, and increasing numbers of clients and investors are being attracted by the young fleet’s flexibility and reliability of supply, good fuel economy, wide range, unique configurations and low net transport costs.

Moreover, the ambitious new building programme is now in its second phase. In September this year, the first ship in a new series of multi-purpose short sea vessels was unveiled at Peters Shipyards in Kampen: the Sole 10,000. A 10,000 dwt vessel, it is expected to be even better at carving a niche in the international transportation market than the already successful nine ships of the Jumbo 6500 series.

“Our concept works,” says Kees Koolhof, at 38 the youngest independent owner in the Dutch maritime sector. “CFL originated from the idea that we should be able to move with the market’s needs, not vice versa. Therefore, we’ve gone against the prevailing current in choosing to design our own ships and build them in a Dutch shipyard, according to the specifications our clients demand. Shippers and freight carriers want short sea ships that can carry dry bulk and containers, but they also want them to be able to take project cargoes from the new energy sector – for example, a windmill in one piece, or components for a drilling platform, and preferably below deck. In addition, many such projects are initiated in areas hard to reach for deeper draft ships and where the infrastructure is inadequate. To be able to offer a solution as a company, you must have access to several types of ships suitable for various kinds of cargo, that can be adapted fast and flexibly, that are energy-efficient and sustainable, not too deep of draft and even able to sail through fields of ice. Our fleet meets all these conditions, and is also built to the most current classification requirements. When we decided to do this, it was a big gamble. But now it’s paying off.”


> CFL is Canada Feederlines

Back then, CFL was founded as Canada Feederlines. The company would focus on coastal shipping in the Great Lakes and St. Lawrence Seaway on the border between Canada and the USA. So is that still the case?
Koolhof:  “It remains an attractive niche with great future potential. But the protectionist set-up of the Canadian and American authorities means that that market is still not fully accessible to non-North American carriers. In addition, transport in the area is very cyclical. It is highly dependent on the automotive industry, and as we know, that’s doing particularly badly in the USA.

“The latest thinking goes that this trade will eventually take off. But I do want to emphasize that, from the beginning, our aim has been to deploy our ships globally, and this trend has accelerated that process at most. We have now broadened our horizons ahead of schedule and sail to destinations mainly in Africa, Eastern and Central Europe, South America, the Middle East, Scandinavia and of course also to Canada and the USA.

Our early focus on a busy freight market in a polar and environmentally sensitive area has proved an advantage, anyway. The design of our boats is in line with those factors, and therefore we are now better - and earlier  - positioned than competing companies to take advantage of recent developments in global demand. Consider the increasingly stringent requirements of port authorities throughout the world regarding the sustainability of vessels. This will only intensity over the coming years. Think too about the plans that exist in the energy sector to establish large-scale wind farms around the world, or to exploit oil sands in Alaska and in the far north of Canada. That’s a huge growth market, particularly for transportation projects that fit into operations in ecologically sensitive areas. We’ve got an excellent fleet.”

So now you've chosen to go through life as CFL.
“Right. Why should you limit your name to one area if you are already a global player? Moreover, everyone knows us in the industry as CFL.”

How have you succeeded in keeping your head above water during the draconian shipping downturn?
“Our shareholders have faith in the long-term potential of our concept. Moreover, we have multi-year time charter contracts for five of our vessels, and we compensate for our higher initial investment costs through our streamlined organization, with its lower permanent cost patterns. That’s partly possible because the average TCE (time charter equivalent) of our chartered vessels is at a very competitive level. Compared with other companies in our segment, we are therefore less severely affected by the massive drop in demand and the collapse of freight rates. Ultimately, we’ve only needed to temporarily ground one ship.”

Are we seeing the market pick up again?
“Certainly, there are strong signs that world trade is picking up and that the demand for high-quality short sea capacity will continue to grow. We are seeing another kind of maritime transport market emerge. Clients aren’t just choosing the cheapest tonnage, but considering issues such as delivery reliability, degree of standardization and sustainability in the fleet, and the state of equipment and fuel consumption and emissions in their choice of carrier. All of this is extremely beneficial for us.

> Revolutionary workhorse

Having withstood the storms of the recent recession, the youthful CFL has astounded the shipping world with its ambitious new plans. Earlier this year, the new Jumbo 6500 (the CFL Penhar) made its debut, with the Sole 10,000 launching in September 2010 – a real first, developed by Koolhof and the technical management of CFL in close collaboration with Peters Shipyards in Kampen. The Sole 10,000 promises to be the ideal workhorse, says Kees Koolhof.

“For the design of the Sole series,” continues Koolhof in the boardroom of CFL’s Groningen headquarters, “Geert van Voorn (the CEO of Peters Shipyards) and I asked ourselves: what would our ideal ship look like, if we could throw all the restrictions overboard? So, together with our designers and the technical and marketing staff of CFL, we made a list of all the expected market developments, from the perspective of an owner, but also that of the charterers, operators and investors. We asked ourselves: what do they need, and how can we offer them the highest returns? Combined with our collected experience in the design, construction and operation of the Jumbo series, from this process a blueprint gradually emerged for a type of vessel which can safely be called revolutionary, and that has received a special classification from Lloyd's Register.”

The design of the Sole 10,000 is indeed groundbreaking. Compared to the Jumbo 6500, it’s a slightly shorter ship (114 metres as opposed to 118) and larger: the depth is 7.9 metres and the ratio between weight and resistance is so favourable that for the main engine, a capacity of 4000 kWh is sufficient. Therefore, energy efficiency is increased, and emissions are reduced. But the biggest breakthrough is the amount of space that has been achieved. By opting for a barge structure, with ballast tanks along the sides, a surprisingly large, 70.5-metres-long space is created - bigger than the holds of larger vessels of 18,000 dwt capacity and a corresponding cost. All this makes the Sole 10,000 ideal for carrying large cargo items below deck, without needing them to be dismantled, to places with such poor infrastructure that larger ships cannot dock because of depth or length restrictions. Moreover, the deck is made 15 % bigger by making the hatches wider than the hold. Combined with the fact that the Sole 10,000 is equipped with two deck cranes with a lift capacity of 80 tonnes each, and, like the Jumbo, is suitable for sailing in polar conditions, CFL is convinced that it holds a real trump card - particularly in the higher margin area of transportation of project cargoes.
 

> Classification

“Initially, the classification of this type of ship was a bit tricky. Classification experts require that a ship be composed of several compartments. But once they saw the lab tests of our design, we got their approval. A condition is that such a vessel may be built only by a specialized and technologically advanced yard, and that only a limited series will be classified. The chance that our Sole 10,000 will be copied is virtually impossible. We now have a unique ship that in terms of energy, sailing qualities and size fits into the category of 8000 tonnes, but has 2000 dwt more capacity. Compared to other players in the project cargo market, companies like Briese/BBC, Spliethoff or Clipper Shipping, we are now more than one step ahead.”

What are you most proud of?
“That CFL exists. Just think: over, the last few years, every three months we’ve added a new ship, while we’ve seen a historically unprecedented drop in revenue, yet we’ve built our organization up, literally from scratch, in just five years. Now, we’re a respected player, and more and more clients are choosing us, and I think that’s a compliment. And the best guarantee that we will continue to thrive.”