Transroll Navegacao SA

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Transroll Navegacao SA is a Brazilian maritime company providing shipping and navigation services.

Transroll Navegação S/A was founded in 1975 by Shipping Executive Washington Barbeito de Vasconcellos and Richard Klien, head of the traditional trucking company, Transportes Fink S/A. The company started operations in 1979 by taking up delivery of its first vessel, the M/V Pioneiro, a small Roll-on-Roll-off ship of 5.000 metric tons, and the ship was deployed in coastal services between Brazil and Argentina. Environmental conditions in Brazil for a new shipping company to get established in the 70's and 80's was very difficult due a highly regulated market. The operation of a shipping company was subject to governmental approval and the established companies and the Conference System had a powerful lobby to prevent new entrants. However Transroll managed to expand and grow in the early 80's, establishing regular Ro-Ro services to the West Costa of South America, linking Brazil to Chile, Peru and Equador. Commercial relationship was established with the powerful Automotive Industry, as Transroll's Ro-Ro operation enable the Brazilian subsidiary of Volkswagen, General Motors and Ford to reach the target markets of Chile and Peru on regular basis. The relationship with the Auto Industry was key to Transroll's fantastic growth in the 90's. To back-up its ro-ro operations in the port of Santos, Transroll established in the early 80's an off-dock marine terminal at the Cais do Saboo, which was assigned by the local Dock Company - Codesp, as the site for ro-ro operations in the port. The terminal company was named Termares - Terminais Maritimos Especializados and it was the first terminal company controlled by a ship operator in Brazil. In 1985 Transroll achieved a major breaktrhough when signed a multi-year Contract of Transport with Fiat Automoveis to ship as much as 100,000 cars per year from Rio de Janeiro to the Italian ports of Livorno and Salerno. Authorization from Government was obtained with the engagement of the Brazil's ANFAVEA, the organization held by Brazilian Automotive Industry. The FIAT contract opened up to Transroll the possibility of participating of the very lucrative Brazil / Europe trade, firstly for transport of Ro-Ro cargoes and thereafter expanded to transportation of containers on the homebound trip. To operate its FIAT contract Transroll teamed up with Wallenius Lines of Stockholm and a joint operational company was established in Brazil named WallTrans - Wallenius Transroll do Brasil Ltda. In 1986 Walltrans was awarded by Ford Motor Company to carry out the transportation of its export program of about 3.000 trucks per year from Brazil to the United States, on exclusively basis. The participation of Transroll in the Brazil / Europe trade as a member of the prestigious Brazil-Europe-Brazil Freight Conference and the solid revenue growth achieved with the FIAT contract and the expansion to the North America trade through the WallTrans enterprise prompted Transroll to qualify for a shipbuilding program financed by Brazil's Merchant Marine Fund. In 1987 Transroll signed a shipbuilding contract with Caneco Shipyard in Rio de Janeiro to build 2 x 1,100 TEU - Ro-Ro/Lo-Lo vessels, later named Intrépido and Independente and in the end of 1989 Transroll signed an additional shipbuilding contract with Emaq Shipyard in Rio de Janeiro to build 2 x 2.200 TEU - Ro-Ro/Lo-Lo vessels, later named Belatrix and Betelgeuse. The FIAT export program to Italy suffered a sharp decline in volume after 1989. The Ford program was suspended in the same year. The Walltrans operation was terminated but Transroll was able to form a new partnership to keep its container operation in the Brazil-Europe trade, this time with Laser Lines of Sweden, which had a regular Ro-Ro / Container service between Brazil, Argentina and Scandinavian ports. The agreement with Laser Lines allowed Transroll to buy space available on Laser's vessels Rosa Blanca and Rosa Tucano to operate containers to European Continental ports, increasing the utilization of ship's space. In January 1991 the new elected Collor Administration, the first direct election since the Military Revolution of 1964, enacted the de-regulation of Brazil's Shipping Industry, terminating a long lasting Government ruling of the maritime transportation business in the country. Companies become free to establish shipping services as they deem fit and Transroll was extremely well positioned with its string of new ships coming brand new from Brazilian shipyards. Transroll's strategic position in the beginning of the 90's coupled with the stimulating new scenario brought by the perspective of economic Globalization and the Collor liberal Government, was certainly the reason where a new breakthrough was achieved by Transroll when forming a partnership with shipping giant Sea-Land Service Inc. in August 1991, to operate a fortnightly container service to the East Coast North America. At that time, Sea-Land was the world largest shipping operator and the only with a truly global reach. At the same time in 1991, the German shipping group of Hamburg-Sud acquired the control of Laser Lines and the Transroll's operation in Laser Lines' vessels were suddenly terminated. Transroll started its own service, deploying its two brand new ro-ro containerships of 1,200 TEU, Intrépido and Independente, which were just delivered by the Caneco Shipyard. Transroll's independent service to Europe was enlarged in 1992 with the addition of the twins Belatrix (May, 1992) and Betelgeuse (September, 1992), ro-ro containerships of 2,200 TEU, establishing a fortnightly service and enlarging its presence and customer base in the market tremendously. In January, 1993 Transroll was admitted to the premier Joint Container Service - JCS, a five day service between Brazil, Argentina and Continental Europe and Scandinavia. The JCS members included Hamburg Sud, Aliança, CGM, NedLloyd among others. The 2 larger ships Belatrix and Betelgeuse were deployed in the main JCS string and the two smaller ships, Intrépido and Independente were deployed in the Consortium's back-up service named Joint Break-Bulk Service - JOBBS . During 1993/94 Transroll experienced a period of stability and profitability. The Ro-Ro capability of Transroll's newbuildings permitted Transroll to profit from the lucrative transportation of project cargoes, which volume was booming in the Europe-Brazil trade. Transroll quickly took the position of the lead ro-ro carrier, grabbing major market share of project cargo shipments. The Joint Venture with Sea-Land in the American market was a success and elected by customers' pools as the most reliable in the marketplace. By the end of 1994, Transroll had grabbed a 12% market share in the Europe trade and 8% market share in the Americas trade. By mid 1994 the JCS members decided to replace Transroll's Intrepido and Independente in the JOBBS service by cheaper break-bulk vessels. Transroll managed to shift the two ships to the Transroll / Sea-Land service and the Joint Venture Service was up-graded to weekly frequency. The year of 1995 was of great changes and instability in the South America shipping market. New carriers announced new regular services in the marketplace. The Joint Container Service decided to terminate its operations and the various carriers started to negotiate new alliances in order to keep the required weekly frequency. Transroll decided to expand its partnership with Sea-Land and a new Europe weekly service was launched in May 1995. Maersk Lines was invited to participate in the two trades, and the Transroll / Sea-Land / Maersk weekly service was established to both Europe and North America. In the wave of changes in its deep-sea services, Transroll decided to invest in a new business which was perceived as with a great potential and launched in August 1995 a new regular, by weekly service in the Brazilian Cabotage, with the deployment of the two owned vessels, Intrépido and Independente, just released from the North America trade. Transroll once again pioneered in the Brazilian shipping scenario with the introduction of its new Cabotage service, which was latter followed by regular services introduced by Global (1996), Docenave (1999) and Aliança (1999). With this new investment, Transroll engaged firmly in achieving the necessary legal framework to rule Cabotage services in Brazil. In January 8, 1997, President Fernando Henrique Cardoso enacted the Law 9.432, granted the operation of Cabotage services exclusively to Brazilian shipping companies. The service with Sea-Land and Maersk was very successful in 1996, a year which Transroll yield its best result ever. Company's turn-over topped USD 200 million with the transportation of 150,000 teus and 25,000 ro-ro vehicles in its three services to Europe, North America and Cabotage. Termares had grown to a very efficient and busy container terminal in Santos, handling all container traffic of Transroll, Sea-Land and Maersk Lines at Santos' right bank. A rail connection between Termares and the Ciaga terminal located in the richest hinterland region of Campinas in São Paulo state was established through a new company, Ferromar. Brazil's container volumes were booming and throughput at the port of Santos was growing at double-digit rates. Port privatization was being designed in Government offices in Brasilia and Transroll's shareholders were extremely focused in increasing participation in terminal operations. In February, 1996 they acquired participation in the Nobara Engenharia S/A, a company which held a large landfill in Santos with a project to established a state-of-the-art container terminal in its ocean borne property. In February 1997 Termares obtained authorization to operate as a bonded terminal and changed its business focus to the more profitable storage services. Traditional container handling was to be developed by the new Nobara enterprise. Pressed by the lauching of various new services of global operators seeking to participate in the growing North/South trades, market conditions in deep sea trades experimented acute deterioration from the beginning of 1997, due to substantial over-capacity introduced by the newcomers. Vessel's utilization decreased to marginal levels and losses were posted by virtually all players. Pressed by poor results and the Global Alliance between Sea-Land and Maersk, the Transroll / Sea-Land / Maersk cooperation was terminated by end of 1997. The Globalization was playing in the North/South trades its tough rules. Business success was dependent upon the company's ability to forge alliances and no operator was able to fully control its future as a stand-alone entity. Transroll was forced to re-align its operation in its two deep-sea trades in a very unstable market environment where several merges, taking-over and even bankruptcies were at play. In the Europe front Transroll started a new service with CGM - Compagnie Generally Maritime of France, with a 10 day frequency. In the North America trade Transroll established a joint company with NPR- Navieras Inc., of New Jersey to run a weekly service in association with Brazil's Libra Group. Market conditions continued bad in 1998 and freight deterioration was unstoppable. The Transroll/Navieras venture was terminated in August 1998 and, consequently, Transroll withdraw from the North America trade. The Europe service was also a concern to most of operators. In November, 1998 Brazilian biggest container Line and most traditional Europe-Brazil operator, Aliança sold 100% of its control to Hamburg-Sud of Germany. In December 1998, all Europe carriers to South America decided to streamline operations in an effort to cut losses. A new Joint Container Service was established by the amalgamation of Hamburg-Sud / Aliança and Transroll / CGM services. A separate string was established by the amalgamation of the services of Maersk Line, Sea-Land, P&O, CSAV and Contship. Transroll obtained a share of 9% of the total trade rights. Although Transroll's cabotage service was a market success, with growing volumes and geographic expansion, it had still not reached a profit by the end of 1998. In 1999 the powerful Brazilian company Docenave announced plans to launch a dedicated Cabotage Service. Transroll rapidly approach Docenave in order to avoid duplication of services in the Cabotage front and in April 30, 1999 Transroll and Docenave launched together a combined Cabotage service, with improved frequency and geographic scope. The new configuration of the Europe service was not enough to stabilize rates and cut losses. In April, 1999 Sea-Land decided to withdraw from the Europe trade. Transroll was pressed by its investments in the Cabotage Service, Nobara Terminal and Termares and had to take immediate steps to cut the losses faced in the Europe Service. In June, 28, 1999 Transroll agreed to sell its trade rights in the Europe Service to Aliança, a subsidiary of German's Hamburg-Sud and not to operate services to Europe until June, 2002. The agreement with Aliança also included the long term charter of Transroll's vessel Betelgeuse which was deployed in Alianças'Brazil - U.S. Gulf service, as well as a cooperation in the Cabotage Service. Transroll had to deploy an additional vessels, Belatrix, released from the Europe service and Aliança had plans to deploy two additional vessels. The Transroll / Aliança cooperation in the Cabotage service triggered the termination of Transroll's agreement with Docenave. Transroll and Aliança launched two separate string of by weekly services as of August, 1999, the first string between Buenos Aires and Salvador, and the second string between Rio Grande and Manaus. Docenave become the competitor with two equivalent strings of services of its own. The fierce competition in the Cabotage trade after 1999 prevented operators to achieve necessary level of profitability. Transroll's shareholders were extremely focused in their port/container terminal and willing to reduce the risk as a ship operator as much as possible. Aliança was extremely committed wit the Cabotage service, as a bridge to built reliable feeder connection and a strong intermodal operation in Brazil to serve deep-sea and Cabotage customers, none of these objectives being pursued by Transroll. In May 2001, Aliança offered to charter Transroll's Intrepido and Independente for a period of two years. Transroll decided to accept Alianças' offer and withdraw from ship operations altogether. In the next two years Transroll will be dedicated to the management of its 4 ships in charter to Aliança and to keep following market conditions and business opportunities for the years to come. A new Government will be in place in the beginning of 2003 and a new perspective may open up to the Brazilian Maritime Industry.

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