Breakbulk Magazine Issue 5/2019

The Publication for the Industrial Project Supply Chain Industry

Issue 5 / 2019

FAIR WAGE FOCUS

Celebrating 30 Years of Breakbulk Special BONUS Publication

Striking Gender Pay Parity Balance

TENDERING WITH A TWIST

PERIOD OF MPV STABILITY?

US WIND CARGO GUSTS

MONTHLY SERVICE TO MACKAY

Catering for cargo up to 6.5 metres high, 12 metres wide and 375 tonnes

Direct connection to North Queensland, Australia for breakbulk commodities Calling Mackay from Europe and USA once a month

www.hoeghautoliners.com

The Great Lakes St. Lawrence Seaway System

We can handle it...

Let your cargo flow on our 3,700km marine highway straight into the industrial heartland of North America.

Strategically located, Highway H2O provides shippers with easy access to a more direct route that delivers cargo nearer to its final destination.

Make your over-dimensional worries a thing of the past.

Our System provides a safe and reliable transit for your heavy-lift and project-specific cargo. Highway H2O provides the dependability you need to keep your products moving and your clients happy. A fresh clean approach to your transportation needs.

For more information, please visit www.hwyh2o.com Water way to go! www.hwyH2O.com

GO

IN THIS ISSUE

14

34

Cover Story

48

14 FAIR WAGE FOCU$ Striking Gender Pay Parity Balance

26 LOGISTICS PERSPECTIVE

48 ENERGY UPDATE

Quality Extremes in Electronic Auctions, Tendering

Sunset Shouldn’t Dim Wind Cargo Outlook

TENDERING WITH A TWIST

34 EXECUTIVE SUMMARY

54 LOGISTICS PERSPECTIVE

Underlying Strength but Disruptors Still Wild Card

Ex-Im Bank Logjam Begins to Clear, for Now

PERIOD OF STABILITY?

BACK IN BUSINESS

42 LOGISTICS PERSPECTIVE

60 RULES & REGS

Sector Must Fight for Next Gen Interest

Market Certainty from Refreshed North American Treaty

TALENT CONTEST

112

SUSTAINED WINDS

SOLID, STABLE TRADE

08 EDITORIAL 10 CONVERSATION 112 PHOTO CONTEST 114 BACK PAGE

4 BREAKBULK MAGAZINE www.breakbulk.com

BONUS PUBLICATION

BREAKBULK AMERICAS 2019 ANNIVERSARY GUIDE ISSUE 5 / 2019

High performance service We are operating the world’s only high performance inducement service for any port and any cargo. Benefit from our flexibility, worldwide coverage, performance, and reliability. Experience an unparalleled global service with the world’s most trusted project, heavy lift, breakbulk and general cargo carrier. www.bbc-chartering.com

IN THIS ISSUE

68

74

82

90

68 REGIONAL REVIEW

80 EQUIPMENT

90 CASE STUDY

‘Dead Cow’ Could Kick-start Economy

Mammoet’s Marriage of Great Convenience

An Abnormal Load for an Ambitious Plan

74 EQUIPMENT

82 NORTH AMERICA PORTS SPECIAL

96 REGIONAL REVIEW

Super-Heavy-Lift World Poised for Takeoff

US Ports Build Capacity for Future Growth

Minerals Reach Turning Point as Renewables Fly

RIDING ARGENTINA’S REVIVAL

SMALL BUT MIGHTY

TWO BECOME ONE

BEYOND TARIFF TOLL

MAGNETIC ATTRACTION

THE WAITING GAME

104 REGIONAL REVIEW

WEST AFRICA’S LABYRINTH Local Agents Key to Navigating Nigerian Maze 6 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

EDITORIAL

WAITING ON SUNSHINE As this issue advanced towards the press, days and weeks here in the southeastern U.S. we’re also filled with the inexorable approach and passage of Hurricane Dorian, a Category 5 storm that wreaked devastation upon Grand Bahama and Abaco islands, as well as strafing North Carolina’s outer banks.

As the historic storm neared, and its possible route and intensification was remeasured and reforecast every few hours, it reminded me of a quote from Irish poet and Gary Burrows playwright Oscar Wilde: “The basis of optimism is sheer terror.” In the direst of times, we strike bargains with optimism, that, hopefully events will bend to our will. The problem though, is that curve merely places malady in someone else’s lap.

Ironically, the Wilde quote comes from, The Picture of Dorian Gray.

On the other hand, the historic industry downturn of the past several years has been a comparatively equal-opportunity disaster – everyone has shared the pain.

The depths of optimism and wishful thinking about silver linings has made “cautious optimism” a punchline for shippers and carriers, intermediaries and vendors, who toil on as best as they can, inwardly willing this financial storm to curve away.

In the pages of this issue, though, are some rays of light poking through, reports and forecasts that point to signs of recovery, despite continued impacts of trade disputes and protectionism.

In a story on the super-heavy-lift sector (“Small But Mighty,” page 74), it’s noted that in DNV GL’s 2019 oil and gas industry outlook, confidence has more than doubled over the last two years, with two-thirds of senior oil and gas professionals believing more large, capital-intensive oil and gas projects will 8 BREAKBULK MAGAZINE www.breakbulk.com

be approved this year and seven out of 10 expecting to increase or maintain capex this year.

“We are seeing more oil and gas coming onstream and that’s helping demand in the super-lift category,” said Paul van Gelder, CEO of Mammoet. Investment is coming from upstream oil and gas to LNG, projects, petrochemicals and refineries.

Wood Mackenzie thinks 2019 will be the best since 2013, with project sanctions potentially hitting US$80 billion in capital expenditure, up from US$20 billion. Years of forced cost-cutting and design optimization has driven down the breakeven price to US$50 per barrel of oil, and it appears to finally be paying off.

In the U.S., the Export-Import Bank’s return to viability (“Back in Business,” page 54) the credit agency has begun working on what new Ex-Im Bank President and CEO Kimberly A. Reed estimates to be a nearly US$40 billion backlog in project approvals.

George Abreu, senior vice president for oil and gas at GEODIS, said the Americas are “absolutely booming.” He also listed Thailand, Malaysia, Indonesia, Singapore and Korea as having “real strong potential, as well as Mozambique and prospects for stabilization in oilbased South American countries (“Talent Contest,” page 42).

In his biennial report on the multipurpose vessel industry, Dynamar’s Dirk Visser proclaims that the overcapacity issue impacting breakbulk carriers since 2009 “has finally gone (“Period of Stability?”, page 34).” He expects “a period of stability in the number of breakbulk operators, rather than ongoing insolvencies or mergers.” Further, he predicted that the International Maritime Organization’s 2020 fuel sulfur regulation will likely push about 2,500 ships built before 2000 to be scrapped sooner.

Of course, there are areas where optimism can’t easily mask a more endemic problem. In our cover story (“Fair Wage Focus,” page 14), we look at the industry’s gender pay gap, and find that despite efforts by companies and governments, the problem won’t simply blow away.

EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gary.burrows@breakbulk.com NEWS EDITOR Carly Fields carly.fields@breakbulk.com DESIGNER Mark Clubb REPORTERS Paul Scott Abbott Helen Campbell Dale Crisp Amy McLellan Lori Musser Malcolm Ramsey Simon West David Whitehouse

BREAKBULK EDITORIAL BOARD John Amos Amos Logistics

Ed Bastian

BBC Chartering

Murray Cooper

LV Shipping Group of Cos.

Dennis Devlin Geodis

John Hark

Bertling Project Logistics

Dennis Mottola Consultant

William Moyersoen

ArcelorMittal Antwerp Logistics

Albert Pegg

Atlas Breakbulk Alliance

Dirk Visser

Dynamar D.V.

Grant Wattman

Agility Project Logistics

PORTFOLIO DIRECTOR Nick Davison Nick.Davison@ite-exhibitions.com ACCOUNT MANAGER Robert Janusauskas / +66 62 804 6746 robert.janusauskas@breakbulk.com SUBSCRIPTIONS To subscribe, email gary.burrows@breakbulk.com, or call from inside the U.S. +1 904 535 5460 between 8:00 am and 5:00 pm EST. You can also subscribe at www.breakbulk.com/subscribe.

A publication of ITE JV Ltd. The Studios, 2 Kingdom Street Paddington, London W2 6JG, UK

ISSUE 5 / 2019

SEE YOU AT OUR BOOTH #I-6 AT BREAKBULK AMERICAS

CREATING VALUE AT EVERY POINT OF TRANSFER

When a long, tall or heavy product is delivered by Wallenius Wilhelmsen Ocean, it’s not just another handover. It’s the last in a series of tailor-made solutions designed to perfection. It’s about providing the right vessels and specially designed equipment to enable smooth transitions between land and ocean.

And it’s about combining decades’ worth of handling expertise with a truly global network. Whether you need reliable shipping from A to B or door-todoor solutions, we work with you to create value at every handover.

Through this approach we help our customers reduce transport risks and increase delivery precision.

Find out more about how we can create value together at bit.ly/WWOceanBreakbulk

CONVERSATION Conversation is a forum of thought leaders, commentaries, letters, editors’ notes and note-worthy social media from Breakbulk’s audience and staff. Join in the conversation – submit your views to gary.burrows@breakbulk.com, or through Breakbulk’s social media channels on LinkedIn, Facebook or Twitter.

NEW YORK SIGNS RECORD OFFSHORE DEAL New York Gov. Andrew M. Cuomo has executed the largest offshore wind agreement in the U.S. as part of a Climate Leadership and Community Protection Act, or CLCPA, which is expected to spur widespread breakbulk opportunities.

The agreement will usher in almost 1.7 gigawatts of new offshore wind power projects and is expected to generate US$3.2 billion in economic activity.

“Climate change is an undeniable scientific fact. But cries for a new green movement are hollow political rhetoric if not combined with aggressive goals and a realistic plan on how to achieve them.

With this agreement, New York will lead the way in developing the largest source of offshore wind power in the nation,” Cuomo said.

As part of the agreement, Cuomo announced the winners of New York’s first comprehensive offshore wind solicitation, approving plans for the 816-megawatt Empire Wind and 880-megawatt Sunrise Wind projects.

The larger of these is to be built by Danish developer Ørsted, with construction scheduled to begin in 2022 and commercial operation set to start in 2024.

July 18, 2019 - New York Governor Andrew M. Cuomo, joined by former Vice President Al Gore, executes the nation’s largest offshore wind agreement and the single largest renewable energy procurement by any state in U.S. history.

CREDIT: POLARIS/NEWSCOM

The new projects bring the total capacity of large-scale renewable energy projects awarded by New York state to about 4.7 gigawatts.

The new CLCPA regulation has been hailed as “the most ambitious

and comprehensive climate and clean energy legislation” in the country, and in is predicted to mandate as much as 9 gigawatts of new renewable capacity in New York state by 2035.

DSV COMPLETES PANALPINA TAKEOVER Danish logistics specialist DSV has completed its acquisition of rival Panalpina Welttransport via an all share voluntary public transaction, valued at US$4.6 billion.

The agreement will see two of Switzerland’s largest breakbulk handling companies merge, with Kurt Kokhauge Larsen becoming chairman, and Jens Bjørn Andersen, Jens H. Lund and Thomas Stig Plenborg becoming members of the Panalpina board. The companies have begun an integration process which is expected to take two to 10 BREAKBULK MAGAZINE www.breakbulk.com

three years, with the combined firm to operate as DSV Panalpina A/S. The combined entity will be one of

$

TRANSACTION VALUE

US$4.6 billion EMPLOYEES

60,000

employees in 90 countries

the world’s largest transport and logistics companies with a pro forma revenue of about DKK 118 billion and a workforce of 60,000 employees in 90 countries.

“We are very excited to welcome Panalpina’s customers, employees and shareholders to DSV. Our two companies will achieve more together, creating even more value for all our stakeholders.

The settlement of the deal marks the beginning of the integration process, during which we will strive to provide the high level of service our customers know and rely on,” Andersen said.

ISSUE 5 / 2019

US LNG EXPORTS HIT NEW PEAK Exports of liquefied natural gas from the U.S. have hit a new peak of 4.7 billion cubic feet per day, according to data published by the U.S. Department of Energy’s Office of Fossil Energy.

The record volume was recorded in May, and cements the country’s position as the world’s third-largest LNG exporter, as rapid construction of export facilities in recent years has spurred breakbulk activity predominantly in the Gulf Coast states.

“The U.S. is expected to remain the third-largest LNG exporter in the world, behind Australia and Qatar, in 2019–20,” said Victoria Zaretskaya, principal contributor at the Energy Information Administration, or EIA. She noted that “U.S. LNG exports have increased as four new liquefaction units (trains) with a combined capacity of 2.4 billion cubic feet per day … came online since November 2018.”

With the addition of new export facilities at Sabine Pass Train 5, Corpus Christi Trains 1 and 2, and Cameron Train 1 in the last nine months, the U.S.

4.7 billion cubic feet per day – record U.S. exports of LNG

40% – Europe’s share of U.S. LNG exports

U.S. is world’s third-largest LNG exporter

4.7

3rd

has seen exports boom, with European growth leading as shipments to the continent have tripled over the last year.

“Although Asian countries have continued to account for a large share of U.S. LNG exports, shipments to Europe have increased significantly since October 2018 and accounted for almost 40 percent of U.S. LNG exports in the first five months of 2019. LNG exports to Europe surpassed exports to

40%

Asia for the first time in January 2019,” Zaretskaya said.

Europe’s total LNG imports last winter were 60 percent higher than for the previous two winters, averaging 10.2 billion cubic feet per day.

The EIA predicts that a total of six U.S. liquefaction projects are expected to be fully operational by 2021with a further two projects expected to come online by 2025.

BILL WOULD REAUTHORIZE FAST ACT The U.S. Senate has introduced legislation funding of US$287 billion to improve the country’s road and bridge infrastructure.

The five-year reauthorization of the Fixing America’s Surface Transportation Act, or FAST, includes a proposed 27 percent increase in federal-aid highway programs.

The new legislation would boost freight transport and breakbulk activity in the country and includes an increase in funding to US$5.5. billion for the Infrastructure for Rebuilding America, or INFRA, grant program for freight projects.

“The [EPW proposal] is the most substantial highway infrastructure bill in history. The bill cuts Washington red tape,

so road construction can get done faster, better, cheaper and smarter. It will help create jobs and support our strong, growing and healthy economy. Infrastructure is critical to our country and we should responsibly pay for this legislation,” said Sen. John Barrasso, R-WY, chairman of the Senate Environment and Public Works Committee.

TOEPFER TRANSPORT MULTIPURPOSE SHIPPING TIME CHARTER INDEX

RATE PER DAY

The index is based on a 12,500-deadweight-ton MPP/HL “F-Type” vessel for a six-to 12-month time charter, and represents the monthly assessment from operators, owners and brokers. $7,247

$6,956

$7,325

$7,185

Mar 2018

Apr

May

Jun

$7,499

$7,294

Jul

Aug

Sep

$7,593

$7,508

$7,385

$7,216

Oct

$7,518

Nov

Dec

$7,440 $7,457

Jan 2019

Feb

Mar

$7,524 $7,610

Apr

$7,476 $7,547

$7,529

May

Jun

Jul

Aug

Source: Toepfer Transport, www.toepfer-transport.com

www.breakbulk.com BREAKBULK MAGAZINE 11

CONVERSATION

Leading from the Front

Good Managers Bring the Team with Them

W

BY MARGARET VAUGHAN

atching the current 2020 presidential election campaigns in the U.S. gives us an opportunity to evaluate those persons who think they are the right individual to lead this country.

It is to be hoped that a true leader will eventually emerge from the pack, but right now their bellowing, chest-pounding, fingerpointing and ephemeral policies make them seem more like carnival barkers on the Coney Island Midway than serious contenders for the highest office of the U.S. Their objective is, of course, to get you to their booth where you are assured of easy winnings. That isn’t leadership.

It’s simply political pandering.

One of the reasons that Napoléon Bonaparte was so successful in his military career was that he was in the front line of his soldiers. He led from the front, not from the rear or at a safe distance. Leadership is about putting yourself in front; having a vision and making that vision a reality. It’s about putting the needs of those you lead ahead of yourself.

It’s about making your people the best that they can be and training them to take over your job. It’s about serving them and not the other way around. And it’s about making hard choices and living with the results of those choices. It’s not about taking credit for other people’s work or throwing them under the bus if your directives go sour. It’s about having integrity; about being true to your word; about firmly adhering to a moral code. It’s about being the person your dog thinks you are (my dog thinks I’m great, by the way).

I was fortunate to work for a man named Bill Kiely Sr. who was the finest business leader I have known. Kiely cared deeply for his employees and spent time with each of us individually at least once a month to inquire about our personal and professional lives.

When the company fell on tenuous times, he and the other owners paid the employees out of their own pockets. And when the company was sold, Kiely negotiated a sweetheart deal for the employees ensuring our continued tenure, future financial security, and yearly bonuses.

Kiely understood that in business it’s the people who are important and not the product. He knew that our success made the company’s success possible.

Today, too many managers seem to want the kudos but not the cudgels. They want to reap the rewards, but not accept culpability for failure. Harry Truman famously said: “The buck stops here.”

A good manager gives their people the tools, empowers them to make decisions, is available to assist where necessary, and stands firmly behind them when needed. A good manager is one whose people feel valued and appreciated and want to work for them. A good manager serves. BB Margaret J. Vaughan has more than 30 years’ experience in all facets of supply chain management, serving most recently as logistics manager for Wood PLC where she worked for 12 years.

Top: Napoléon Bonaparte celebrated successes because he led from the front. Leadership is about putting yourself in front and putting the needs of those you lead ahead of yourself. / CREDIT: SHUTTERSTOCK 12 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

A PORT AS BIG AS TEXAS They say everything’s bigger in Texas - and that’s no bull.

Port Houston is a big part of the largest breakbulk and steel port complexes in North America. Located in the center of the U.S. Gulf Coast, we are at the intersection of the Trans-Pacific, Inter-Americas and Trans-Atlantic trade lanes. With 52 highly-efficient general cargo and heavylift docks, an extensive rail and highway network; and a skilled and reliable workforce, we are ready to accommodate your over-dimensional cargoes. Call or visit us online to learn more about Port Houston, The International Port of Texas.

PortHouston.com • 713-670-2400

COVER STORY

FAIR WAGE FOCU$ Striking Gender Pay Parity Balance

W I do think the gender pay gap reporting mechanism is clumsy and a blunt instrument, but you need a blunt instrument to highlight the problem and then see what you do with it.“ –G raham Wood, NYK Group Europe

14 BREAKBULK MAGAZINE www.breakbulk.com

hatever the industry, reputation is everything.

Companies across all sectors are increasingly coming under pressure, and now frequently obligation, to report on a very specific aspect of their “activities:” gender pay imbalances.

It’s a thorny issue, and project cargo companies in a sector long dominated by male employees are facing tough cultural and structural challenges as they strive to narrow the gap.

A whole range of issues connected to sustainability, the environment and diversity have become steadily more important to shareholders and partners, current and prospective employees, customers and to the general public. Companies reporting on these issues – some legislatively and some voluntarily – in publications such as sustainability or annual reports or in submissions to authorities are already responding to demands for increased transparency. In doing so, they potentially expose themselves to reputational repercussions if their statistics don’t “make the grade.”

One of the newest areas on which companies are increasingly required to report is their gender pay gap. Not to be confused with pay equality, which looks at whether men and women are remunerated equally for doing the same job, the gender pay gap is the difference between the average hourly earnings of men and women working across a company.

DIFFERENT STAGES

The requirement to report corporate gender pay and any gap is not universal and, within Europe, countries are at different stages of legislative development and companies are therefore

BY HELEN CAMPBELL

subject to differing reporting requirements. In the UK, the obligation on companies with 250-plus employees to report their gender pay gap began in April 2018. Companies report to the Government Equalities Office, or GEO, and some 9,000 companies and public bodies now report the difference in both mean and median hourly earnings and bonus payments.

Somewhat ironically, the figures are expressed as a proportion of men’s earnings. Companies also publish details of the proportion of men and women in the company who receive bonuses and the breakdown of men and women in different pay quartiles. The mean and median figures tell different stories; the former is calculated by adding up the wages of all employees and dividing the figure by the number of employees, while the median is the difference between the wage of the employee in the middle of the range of male wages and the employee in the middle of the range of female wages. Part-time workers are included in gender pay gap reporting.

The breakbulk and project cargo transportation business, in common with other traditionally male-dominated sectors such as shipping and the maritime sector generally, is not an obvious candidate to be a shining beacon when it comes to the subject of a gender pay gap.

There are myriad reasons why a gender pay gap exists, and persists, in any sector, and an industry that is traditionally dominated by male employees is not in an easy position when it comes to tackling it.

In 2017, NYK Group Europe’s mean gender pay gap was 39.5 percent and the median 39.9 percent, with the gender gap for bonuses ISSUE 5 / 2019

percent of those on the lowest paid bracket are women. Mean bonuses paid to women are 17 percent higher than those paid to men; however, only 16.8 percent of women received bonus pay, compared with 27.8 percent of men.

For Hellmann Worldwide Logistics, the mean gap is 14.2 percent and the median just 2.6 percent; while a significant difference between a company’s mean and median figures can indicate pay inequality at either end, the company said that these figures, being better than the industry average, are indicative of the larger proportion of men at the lower end of the pay scale.

LOOKING BEYOND STATISTICS

Questioning the usefulness of the raw statistics in the gender pay gap reporting mechanism, NYK’s Wood points to the broader issues of equality and diversity that lie hidden behind the statistics.

“I do think one of the shortfalls of the gender pay gap [reporting] is that it just looks at the overall gap, and not necessarily at any of the issues within that,” Wood said. “One of the things we did a few years before this was introduce job grading, to try and deal, as best we can, with the equal pay issue. That means looking at job types so that people with equivalent roles are being paid an equivalent salary.

“The introduction of job gradings has helped us address that issue on pay and benefits and enables us to identify any anomalies in that, whether it be salaries or benefits. I think we have introduced a fair degree of flexible working practices, people working from home, adjusting hours and things like that,” he said.

Some employers are introducing diversity and inclusion strategies and are reviewing their policies generally to ensure they support diversity in their workforce.”

–S arah Hutley, Spinnaker Global CREDIT: SHUTTERSTOCK

close to 50 percent in both mean and median cases.

“When the gender pay gap [reporting requirement] came in, what it highlighted is the fundamental structural problem that exists in many companies,” said Graham Wood, the company’s human resources director. “When you look at jobs here, in fundamental terms of management versus non-management grades, 80 percent of females working here are in the non-management grades and only 20 percent in the management grades. For male employees, it is 60 percent versus 40 percent.

“That structural issue is a big problem,” he continued. “In a corporate head office, there is probably a relatively good spread and it’s easier to find higher numbers of women, working in roles in human resources and accounts and so on. The fundamental issue for a company like this one would be the frontline, and the transfer of people from offshore to come onshore to do those senior jobs.

Getting females to go offshore and so on is challenging, but seniority in onshore roles requires that sort of offshore experience.” NYK operates multipurpose vessels and project cargo ships under its NYK Bulk & Projects Carriers Ltd. brand.

The 2018 gender pay report from project cargo specialist CEVA Logistics shows that women earn 92 pence for every GBP£1 that men earn when comparing median hourly wages, giving women a median hourly wage 8.2 percent lower than men’s. In mean hourly wage terms, women in the organization earn 5 percent less than men. The company’s report also shows that 16 percent of the employees in the top quartile (the highest paid) are women, while almost 30

www.breakbulk.com BREAKBULK MAGAZINE 15

CREDIT: SHUTTERSTOCK

REGULATIONS NOT A PANACEA

As a male-dominated industry, the project cargo and breakbulk sector faces challenges in its ability to better balance gender pay, and reporting imbalances can only be seen as a baby step on the path to gender pay parity.

Taylor Wessing’s Roxane Davey explained to Breakbulk that the statistics, especially the UK ones, do not really explain much, as they do not represent an equal pay audit. “Just being required by law to report your corporate gender pay gap is not going to magically transform things. Changing the culture is a long-term thing, and it needs to be industry-wide, not just in individual companies.”

Some companies, she said, are drilling down and looking at specific job roles and at whether men are earning more than women, or the other way round, and that really is the only way to tell if there is an issue there.

“Companies that are worried about what it will show might not do it, but those that are comfortable are doing it and they can use it to show that, for example, all people doing the same role are being paid the same, but that they have a lot of women in junior roles, and this is very useful in a recruitment drive, to demonstrate that

there is not a pay equality issue.”

A common complaint about the gender pay gap reporting requirement in the European Union is that there is no real ramification for a company that misses the deadline, or doesn’t file.

The UK’s Equality and Human Rights Commission, or EHRC, is responsible for ensuring employers publish their gender pay gap. It said it will approach employers informally at first if they have not published by the deadline each April, but businesses could ultimately face “unlimited fines and convictions.” However, in practice, this doesn’t happen.

“That was one of the key criticisms with these regulations,” Davey said.

“There is no enforcement mechanism or sanction if companies don’t comply with the obligation to report. On the UK government website, it only says ‘not yet reported’ and there is no stronger sanction.”

Although whispered talk of a gender pay “tax” has been heard, there are no plans, in the UK at least, to punish companies that have a wide gender pay gap. However, the government reportedly plans to publish sectorspecific league tables, highlighting any companies failing to address pay differences between men and women.

16 BREAKBULK MAGAZINE www.breakbulk.com

Although a restructuring that reduced employee numbers in the UK means NYK is now out of scope for gender pay reporting obligations, the company is continuing its internal analysis and efforts towards a better gender balance. Not only has the obligation to collate the numbers and undertake the analysis revealed some invaluable insights for the company itself, it may also prove useful to keep doing so. While the UK obligates only companies with 250-plus employees to report their gender pay gap, other countries in Europe are steadily lowering the threshold and there is talk of the UK following suit.

For example, on March 1, 2019, France introduced legislation requiring all companies with more than 1,000 to report their gender pay gap. From Sep. 1, 2019, this was due to change to companies with with 251 to 1,000 employees. On March 1, 2020, the requirement to report gender pay gap will extend to all companies with more than 50 employees.

FRENCH TAKE ON REPORTING

In addition to these lower thresholds, France does certain other things slightly differently, said Roxane Davey, senior associate at law firm Taylor Wessing.

“They look at the wage gap, they look at the percentage of men and women who receive a wage increase, at the percentage of men and women who get a promotion, at the number of women who will get a salary increase when Roxane Davey they come back Taylor Wessing after maternity leave, and at numbers of women in the top 10 earners in the company,” Davey said.

“French companies then use the statistics to score themselves out of 100.”

The issues that French companies examine as part of their gender pay gap reporting provide very useful insights, and are seen by many ISSUE 5 / 2019

CLOSER FASTER SMARTER BETTER ON THE COLUMBIA RIVER IN WASHINGTON STATE

DIRECT CONNECTIONS TO MAINLINE RAIL & INTERSTATE HIGHWAYS

STORAGE OPTIONS & FOREIGN TRADE ZONE SPACE

ON-DOCK RAIL & DUAL-SERVED BY BNSF & UP

CONTACT US AT SALES@PORTOFLONGVIEW.COM | PORTOFLONGVIEW.COM

to be a much more valuable and effective way of tackling the whole broader issue of gender balance than the raw salary numbers alone. Turning things around is a long-term task, though.

“I do think the gender pay gap reporting mechanism is clumsy and a blunt instrument, but you need a blunt instrument to highlight the problem and then see what you do with it,” NYK’s Wood said. “It does enable us to raise and look at the issues beyond that, and the underlying structural issues of how we get more females coming up into the more senior levels.

One way of doing that is we are in the process of doing some succession planning, and coming out of that will look to make some recommendations of how we can accelerate the process and maybe some female leadership development programs. It’s not possible to just create positions just like that.”

Succession planning is one of the trickiest areas in the whole subject of gender pay. Long service means higher pay, but long service means providing a flexible, welcoming diverse working environment that employees, of any 18 BREAKBULK MAGAZINE www.breakbulk.com

gender, want to work in and remain in.

Ironically, that then creates an instant headache for anyone charged with trying to narrow a company’s gender pay gap – if no one leaves, no vacancies are created and opportunities for employees to climb the ladder are limited. This affects any employee but is a particular reality in the context of balancing gender pay.

FILLING SENIOR ROLES

UK port operator Associated British Ports is another company that has put in place a number of initiatives that it hopes will help it close its gender pay gap. In particular, these include a drive to recruit women to senior positions within the company.

“ABP is committed to reducing its gender pay gap, which has a mean average of 5 percent, as of April 2018,” a spokesperson said. “We have put in place a number of initiatives such as promoting work-life balance, implementing flexible working options and integrating women into all areas of the company. As evidence of this, in the last year, we have recruited three women into our executive team, into

The 2018 gender pay report from project cargo specialist CEVA Logistics shows that women earn 92 pence for every GBP£1 that men earn when comparing median hourly wages, giving women a median hourly wage 8.2 percent lower than men’s.

CREDIT: CEVA LOGISTICS

the roles of chief financial officer, chief human resources officer, and general counsel, and company secretary.”

There is no suggestion these women were recruited into their positions purely or partly because of their gender, but the issue of positive discrimination is one that is frequently raised as a concern that needs careful handling. Many of those talking to Breakbulk about gender pay gap reporting acknowledged that promoting females into senior and more highly paid positions can noticeably narrow any gender pay gap; while that may look good on paper, it doesn’t change the situation across the broader ranks. Females lower down a company’s hierarchy may be spending longer in their roles than men in the ISSUE 5 / 2019

| FMT | FALLine | Fednav Direct |

C E LE BRAT ING 75 SU CCE SSF UL YEARS

THANKS TO YOU!

Come visit us at booth #G20

ABP has introduced initiatives to integrate women into all areas of the company.

CREDIT: ABP

same roles, and waiting for promotion for longer than men. In addition, other areas such as bias in appraisals and the consequential bonuses awarded also need to be taken into consideration.

ABP operates a network of 21 ports around the UK, handling all types of cargoes, including breakbulk and project cargo.

Taylor Wessing’s Davey said this all goes beyond pure gender-related issues: companies need to ensure there are no barriers to anyone within a company, whether related to background, gender, 20 BREAKBULK MAGAZINE www.breakbulk.com

disability, sexuality or any other characteristic.

“We see other reporting mechanisms being mooted, for example, for ethnicity and other areas of diversity.”

Davey said. “It’s interesting to see how gender pay might be the start and we could see more reporting requirements in relation to different types of characteristics.”

JUST A STARTING POINT

Gender pay balance and gender pay gaps have undoubtedly become

a hot topic for companies and particularly recruiters and human resources managers.

“We’ve made a great start here in the UK – but just calculating the gap isn’t enough,” said Sarah Hutley Sarah Hutley, Spinnaker Global HR consultant at sector-specific recruitment consultant Spinnaker Global. “Employers now need to focus their efforts on reducing it in order for it to produce real results. To do this, they need to understand what the true issues are.

Of course maritime is global too; even those affected by the legislation tend to report just their UK position, whereas it’s a much wider, global problem.

“Some employers are introducing diversity and inclusion strategies and are reviewing their policies generally to ensure they support diversity in their workforce through, for example, maternity, paternity and flexible contracts. Recruitment methods are evolving too, with blind CVs, female representation on selection panels, and de-gendered wording in advertisements. Maritime UK’s Women in Maritime charter is getting employers engaged and involved in the subject. A general increase in the presence of HR professionals in the industry is a welcome and positive sign.”

Maybe the ultimate aim should not necessarily be to close the gender pay gap, but to simply provide full transparency and an honest picture of what working at a particular company would be like, whether anyone could fit in there, and whether they would find themselves with the same opportunities as anyone else. That way, a woman gets to choose how far up a ladder she wants to climb, sure in mind that she isn’t simply fulfilling a quota or a line in a reporting statistic.

Helen Campbell is a freelance journalist based in London who has specialized in energy, environment, sustainability and technology for over 20 years.

ISSUE 5 / 2019

MORE BREAK-BULK CAPACITY. MORE BREAK-BULK EXPERIENCE.

Florida’s largest port means capacity. Florida’s largest & fastest growing region means proximity to market and significant savings in trucking costs. And award winning experience speaks for itself. That’s why shippers, freight forwarders, 3PL’s and manufacturers alike are looking for new, more efficient supply chain alternatives in Florida - and they’re finding it with Port Tampa Bay. Serving the 10th largest economy in the U.S. (Tampa/Orlando 1-4 Corridor) and beyond, Port Tampa Bay handles a variety of break-bulk cargoes including steel, forest products, bagged cement and fertilizers, not to mention its expanding container, RoRo, and bulk business.

Our capacity includes more than 6,000 linear feet of dock and over 700,000 sq ft of on-dock warehouse space and laydown area.

Make the better break-bulk call - contact us today and put us to work for you.

1101 CHA N N E L S I DE DRI VE , T A M P A , F L O RI DA 3 3 6 0 2 W W W . P O RT T B . CO M | 800- 741 -2 2 9 7

COVER STORY

Waging Battle

BY PAUL SCOTT ABBOTT

Women are reaching earnings goals behind the big rig wheel faster than on the soccer pitch – while male counterparts continue to typically make more money than females in transportation and logistics sectors beyond trucking.

At a time when the World Cup-winning U.S. women’s national soccer team is grabbing headlines with shouts of “equal pay” in efforts to bridge the gender compensation gap, trade groups are seeking earnings parity in the supply chain. However, meaningful progress remains elusive.

Indeed, in the U.S, where a president demeaningly rates women on a 1-to-10 scale, significant advancement of female workers on the pay scale may be quite challenging to Ellen Voie attain.

Women in Trucking Ellen Voie, Association president and CEO of the Wisconsin-based Women In Trucking

Association, proudly pointed to the earnings success of highly productive female truck drivers, but she said she does not expect advancement anytime soon of formal measures such as the UK’s pay gap reporting mandate – at least not under the Trump administration.

“I don’t see the United States adopting a formal pay gap reporting requirement under this administration,” Voie told Breakbulk. “Many of the offices that were in place in the Obama years are gone, such as the initiatives to explore issues regarding women’s rights and violence concerns.”

Maggie Walsh, who chairs the board of directors of WTS International, founded in 1977 as the Women’s Transportation Seminar, also questioned whether such reporting requirements might be implemented in the U.S., saying instead that WTS remains focused on education and professional development programs for its 8,000 members in 60 chapters throughout North America.

Equipped to handle our customers’ needs Horizon Terminals is an International Marine Terminal, Processor and Logistics Operator. We provide tailor made solutions to the equipment and project cargo industry.

Our solutions build on first class technology and long expertise within terminal and logistics management.

www.horizonterminals.com

22 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

“The gender pay gap is an ongoing and important conversation throughout the entire transportation industry,” Walsh said.

Walsh cited numerous mentoring and leadership programs, roundtables, a virtual career fair, online recruitment resources and the annual WTS International conference among her group’s endeavors. But those are centered more on “young, mid-career and executive-level women and men in the transportation industry,” as defined

by Walsh, as opposed to rank-and-file female workers.

Arguably, having more women in the higher positions may help toward achieving gender pay equality across the board, but it is hard to find statistical backing for that theory.

MALES DOMINATE

A July 2019 report from leading U.S. industrial staffing firm EmployBridge, billed as encompassing the largest-ever survey of the U.S. hourly workforce, with more than 18,500 manufacturing

SKIDDING

RIGGING

Jennifer Woznick of CRST Specialized Transportation shows women are flexing their muscles as drivers of trucks, earning more than male counterparts. / CREDIT: WOMEN IN TRUCKING ASSOCIATION

and logistics workers surveyed, does not home in on the gender pay gap. However, it does indicate male domination and suggests it be combated through recruitment of more females.

HYDRAULICS

Men hold three-quarters of the 13 million U.S. jobs requiring only a high school diploma and paying at least US$35,000 a year, according to the EmployBridge report, which notes the

HEAVY LOAD MOVING EQUIPMENT SOLUTIONS. UNEXPECTED SERVICE.

hydra-slide.com

(519) 900-1450

www.breakbulk.com BREAKBULK MAGAZINE 23

jobless rate for women with just a high school education is 4.7 percent, more than the 3.5 percent for such men.

“Some of the problem can be attributed to the supply chain and logistics workforce itself, which has been historically male dominated, with women making up only 37 percent of its labor pool,” according to the EmployBridge report.

To create a more inclusive workforce, the report recommends flexible work schedules, personal time off to accommodate juggling of parental and professional responsibilities, creation of a line of female uniforms and careerpathing across all workforce segments.

For the women who do work in the supply chain, pay continues to lag behind that of male counterparts.

According to a March 2019 report from Glassdoor Economic Research, an arm of job and recruiting website operator Glassdoor, men in transportation and logistics jobs on average earn (or at least get paychecks for) 5.5 percent more than women in similar positions.

Across all industry sectors for the 20162018 study period, the Glassdoor report showed a comparatively smaller U.S. average adjusted gender pay gap, with men being paid 4.9 percent more than women.

The same Glassdoor report noted the pay gap in transportation and logistics improving marginally over the past decade or so, as the 5.5 percent figure for 2016-2018 is down from 6.7 percent for the 2006-2015 period looked at in Glassdoor’s preceding study.

Backing the assertion of Women In Trucking’s Voie, the latest Glassdoor report showed women in driver occupations earning 11.7 percent more than men during the 2016-2018 study period. In fact, driving is the only logistics-specific job group with females making more than 10 percent above males.

Why women tend to earn more behind the wheel than men comes down to their ability to outperform male drivers.

“For drivers,” Voie said, “there is no

gender pay gap, as carriers pay by the mile, load or hour regardless of the age, race or gender of the driver. However, women actually earn more than their male counterparts because they outperform them. Omnitracs found that women run more miles than men, so they essentially are earning more.”

Voie said driver retention analytics firm Stay Metrics has found female drivers are more satisfied in their careers, are less likely to think about leaving the business, tend to stay with a carrier longer, have likely driven for fewer carriers and have a turnover rate of 12.13 percent compared with 17.24 percent for men. Those findings could point to a future preference for female truckers at a time of severe driver shortages, as, according to the American Trucking Associations, the industry has a current shortfall of 60,000 drivers, with the number growing as more retire.

Currently, according to the Women In Trucking Association Index, women make up 7.89 percent of the commercial

AT VISIT US

ULK B K A E R B S 2019 A C I R E AM

Please join MAFI Transport Systeme GmbH at Eastern Lift Truck Co. in Booth

24 BREAKBULK MAGAZINE www.breakbulk.com

O25 ISSUE 5 / 2019

driver workforce, an overall labor contingent pulling down a mean annual wage of US$45,570, based upon latest U.S. Bureau of Labor Statistics numbers.

At the same time, Voie said, women constitute only 23.75 percent of trucking company management and only 75 percent of motor carriers have women on their board.

WOMEN VALUED

“Progress in regard to advancing women in transportation is due to our efforts to introduce more women to these careers, but it is also due to the industry realizing the value women bring to their bottom line,” Voie said.

“The more diverse the leadership team, the higher the profits.

“Women lead differently and are more collaborative, which increases employee engagement and retention,” Voie continued. “Women also are more risk-averse and are less likely to jump into an unexplored area without doing additional research.”

The benefits of a diversified supply chain workforce have become an increasingly popular topic for industry events, one example being the Retail Industry Leaders Association’s LINK 2019 conference held Reflecting the role of women behind the wheel of big rigs is a driver last February in for Big Freight Systems. / CREDIT: WOMEN IN TRUCKING ASSOCIATION Orlando.

The RILA supply chain event agenda overflowed with messages of diversity “We’ve got to get back to making peoand inclusion, including a luncheon ple more important than numbers,” presentation from now-retired socWambach said. “Focus on people and cer star Abby Wambach, whose U.S. the numbers will come.” BB teams captured Olympic gold in 2008 and 2012.

Wambach urged a human A professional journalist for nearly 50 approach to the workforce, looking at years, U.S.-based Paul Scott Abbott has individuals to a greater extent than focused on transportation topics since the statistics to achieve a greater goal. late 1980s.

STAND #J32 Visit us at the

MRO - Continuous Flow - Forwarding - Project Logistics

www.breakbulk.com BREAKBULK MAGAZINE 25

LOGISTICS PERSPECTIVE

BY CARLY FIELDS

TENDERING WITH A TWIST

Quality Extremes in Electronic Auctions, Tendering

L

ove them or loathe them, online bidding platforms are so entrenched in modern-day shopping habits that the verb “eBay” has an entry in the Oxford English Dictionary.

The runaway success of that virtual shopping site spawned a mass of copycat e-tailers and, over the years, continued use has allowed buyers and sellers to become comfortably familiar with the e-auction format for trading goods and, more recently, services.

26 BREAKBULK MAGAZINE www.breakbulk.com

Personal has translated into professional and now the project cargo and breakbulk world is seeing a proliferation of e-auctions sites and platforms, aimed at simplifying and improving transparency for project bidding. But is it effective?

Ove Meyer, managing partner of Zeaborn Holding, pulled no punches when he lamented the lack of proper risk assessments on e-auction sites when he spoke at Breakbulk Europe earlier this year. If set up the right way, he said, e-auctions are a posi-

tive development, but not when any company can bid, regardless of their asset base or appreciation of the market.

On the one hand e-auctions allow for more digital analysis in costing, standardization of prices and rates, and improved tracking and tracing – using technology and analytics – all of which should allow forwarders and suppliers to price more accurately. But on the other hand, there is not always a standard for vetting who’s bidding on the other side. If ISSUE 5 / 2019

Star Lygra discharging windmill components in Chile. G2 Ocean transports this type of cargo from China, South Korea and Vietnam to various destinations./ CREDIT: G2 OCEAN.

an algorithm says “here’s your winner” there’s no way of knowing if it’s a one-man-band operating from the back of a shoe store, with no owned fleet and a nonchalant approach to safety.

CREDIT: SHUTTERSTOCK.

COUNTING ON EXPERIENCE

Siemens has been using its proprietary e-auction platform for a decade and has learned much about the process in that time. And while the shipper has been approached to include its tenders on third-party e-auction sites, it remains reluctant to risk sharing confidential information with outside vendors.

Ruediger Fromm, senior director and head of global project logistics at Siemens Gas and Power, recalls that there was pushback against the use of e-auctions from the project cargo team at the start: “There were big discussions around whether you could do project logistics by e-auctions – it took us a while to get onboard.”

Ruediger Fromm Siemens

Emre Eldener KITA Logistics

Now, though, the team has fully embraced their use and, from a shipper’s perspective, see limited downsides to running e-auctions.

“We see it as simply a different way of awarding tenders,” Fromm said.

“The biggest positive argument is that this is the most compliant way of awarding tenders. There is full transparency for all stakeholders, and there is less of the human factor in the awarding process. From

our point of view, it is the fairest approach to competing in the market.” He estimates that 20 percent to 25 percent of Siemens project cargo awards go through e-auction today.

Istanbul, Turkey-based KITA Logistics comes at e-tendering from the other side of the table. As an air, sea and road logistics provider, KITA Logistics has more than 20 years of experience in largescale logistics projects. Managing Director Emre Eldener estimates that about 10 percent to 15 percent of all KITA Logistics’ tenders are now done electronically, and he anticipates that percentage will rise, although this trend is not necessarily viewed as a positive.

“Transport or any type of logistics service should be based on trust, and we consider that the parties must meet face-to-face and understand each other’s needs. Ultimately, it is the people who do the business,” he said. “Most of the services are tailormade in logistics and e-tenders structurally cannot see www.breakbulk.com BREAKBULK MAGAZINE 27

and evaluate the outcome in the best way possible.”

Beyond trust issues, Eldener criticizes e-tenders for creating fiercest competition on price, and only price. “This is the negative side of it,” he said. Eldener relays an e-auction incident where the time was extended by an additional three minutes every time someone reduced the price. “It went on forever,” he said. “There was no deadline for bidding, and it was an absolute negative experience. We lost that one, but I do not think the winner was happy either.”

LEARNING FROM PAST MISTAKES

FINDING ARTIFICIAL APPLICATIONS Artificial Intelligence, or AI, has great potential to drive the development of future digital marketplaces. Certainly when it comes to chartering, machines can rapidly sift through real-time supply/ demand data and apply it to historical data to create greater value and reduced logistics and supply chain cost for all.

Application for AI in the project cargo business could be for pricing the carriage of more “standardized” cargoes such as transformers, generators, turbines, and wind turbine blades. G2 Ocean’s Leif Arne Strømmen anticipates that automatic creation of stowage plans and automatic pricing of these cargoes may well be possible in the future through integration of AI. However, when it comes to requests for qualification and bidding of larger complex engineering, procurement and construction projects – often into remote geographical areas – AI and digital marketplaces will have a limited direct impact.

“AI will come whether we like it or not, so everyone needs to prepare and adapt to the technological development in order to stay relevant in the future,” Strømmen said.

“However, new technology, such as AI needs to add value for the involved business partners, and the same goes

28 BREAKBULK MAGAZINE www.breakbulk.com

for pricing/digital marketplaces in the breakbulk and project cargo space.”

Siemens’ Ruediger Fromm explained that AI works when there is a large amount of data available; however because each project is different, the EPC business lacks those big data lakes. “It will take a longer time for our business to be able to use AI,” he said. “Human intuition is still needed in the calculation of a project.”

KITA Logistics’ Emre Eldener sees long-term potential: within the next 10 to 15 years he believes that it will be possible for the tendering party and the participants to all run on AI in the project cargo industry. “There would be no human involved in any party.”

G2 Ocean has been mapping new upcoming digital marketplaces for breakbulk and dry bulk, and based on those studies, Strømmen is “convinced” that these will change the way we work for projects in the long run. “There are, however, very good reasons to be critical to all development around AI and ask critical questions around ownership of data, intellectual property and control the parameters and data used in a future digital AI environment.

“Old fashion human common sense in a future AI-driven business environment will be more important than ever.”

Perhaps the sector can blame the past for any current reticence towards or criticism of e-auction sites and e-tendering. Big Oil got in on the e-auction party towards the end of the 1990s, and the experience was far from positive. Bidders very often went far below their own breakeven limits, and customers ending up with poor solutions which in fact created a higher logistics cost. This led to a decline in the use of these sites and left a bitter taste.

“Our experience at that time was that it was a pure ‘bazaar,’ with the only focus on reducing unit prices per ton/cubic meters as low as possible, not focusing on lead time, performance, quality, Leif Arne safety, security, Strømmen compliance, G2 Ocean etc.,” said Leif Arne Strømmen, vice president innovation at G2 Ocean. “It was a race to the bottom, and many providers went far below their actual cost or buying rates during these sessions. Many customers also had very negative experience with this approach, since they ended up with vendors not performing, and the overall logistics cost went up.”

While the online tendering and project e-bidding offerings available today are more varied and less constrictive, only a few of G2 Ocean’s existing customers use typical e-auction ISSUE 5 / 2019

HEAVY

WEIGHT

CHAMPIONS

No congestion. Greater options. Ready to grow.

Port Canaveral has the strength you need to handle your cargo.

Our new Liebherr LHM 600 mobile harbor crane – the largest in the U.S. – can handle all types of cargo with the heaviest lift capability in all of Florida at 154 tons plus an outreach of 18-containers across. With this kind of cargo handling versatility, Port Canaveral can help your business profits reach new heights. For more information, visit portcanaveral.com.

SEE US AT BREAKBULK AMERICAS, BOOTH #O26

Star Livorno shipping yachts from Port Everglades to the West Coast of North America. / CREDIT: G2 OCEAN.

We strongly believe that oversize logistics is not a commodity and price cannot be the only driver.”

– Adolph Colaco, e2log

platforms for pricing today. Within the company’s project business, only one customer uses an e-auction platform on a regular basis. G2 Ocean does count several customers using digital tender platforms for handling the overall tendering process, sharing request for qualification documents, and uploading/submitting full tender responses. However, these are not used for the purpose of pure e-auctioning.

That said, Strømmen does expect that digital development will open doors to new tools and digital marketplaces that will influence the project cargo sector in the future.

He counts close to 10 different digital marketplaces under development for bulk, dry bulk and breakbulk, a development he believes will change the way chartering and fixing of breakbulk cargo will be done in the future, “not next year, but for sure over the next 10 years.” These tools include automatic matching of cargo and ships, and automatic pricing based on cargo details, laycan, lead time, carbon footprint, vessel performance and demand/supply, as well as other live and historical data 30 BREAKBULK MAGAZINE www.breakbulk.com

such as fuel and weather data.

While the need for manual assessment for loading, sea-fastening, stowage, weight distribution and so on will remain, Strømmen believes the process of chartering vessels will change, and that will have a knock-on effect on commercial models between project owners, engineering, procurement and construction companies, freight forwarders and carriers. “You will have much more transparency for all parties when it comes to availability of vessels at all times and the same will apply to other means of transport,” he said.

ONE-STOP-SHOP

Virtual portal e2log prides itself on its offering of a number of online services for the door-to-door shipping of oversized cargoes, which include e-auction functionality.

Founder and CEO Adolph Colaco described the product as “a digital ecosystem” that connects shippers with due diligence-approved logistics providers. It’s underpinned by a procurement engine, bid evaluation tools, a transparent logistics

provider selection processes, cargo tracking and event management capabilities, cloud-based document repository, communication boards and smart Adolph Colaco phone-enabled functionalities. e2log “We strongly believe that oversize logistics is not a commodity and price cannot be the only driver,” Colaco said. e2log favors the reverse auction method and requires logistics providers to bid on cost and transit time. “The shipment is ultimately awarded to the logistics provider of the shipper’s choice, after the shipper has evaluated and compared all technical, commercial and risks associated with each bid – and not just to the lowest bidder.”

Colaco is a supporter of online auction platforms, but only if they are fit for purpose. “Stand-alone ISSUE 5 / 2019

Star Lindesnes at port in Altamira with windmill towers on board.

CREDIT: G2 OCEAN.

e-auction platforms which are primarily price focused are not well suited for oversize logistics. Risk assessment can be effectively done only when bidder’s competencies, expertise and performance track records can be mapped to the needs of the shipment.”

E-auctions need to look at the entire chain, from requests for qualification creation to delivery of cargo at destination. “This allows the collection of data and measurement of performance each step of the way, which provides critical data points for risk assessment and decision making,” Colaco said. Platforms like Expedia and Booking.com have successfully implemented similar models, and the oversize/project cargo industry could learn much from that, he added.

However, every auction model is not suited for every product, service or transaction type. The auction 32 BREAKBULK MAGAZINE www.breakbulk.com

model used is ultimately chosen by the party which controls the transaction, so that it delivers the desired outcome … for them.

When the seller controls the transaction, the auction model chosen typically drives the price up; when the buyer controls the transaction, the auction model chosen typically drives the price down.

Colaco gives the examples of an auction of artwork versus an auction for oversize cargo. At the artwork sale, the seller controls the transaction and looks to drive the price up and sells to the highest bidder. Whereas in the case of oversize cargo, the owner of the cargo is the buyer of the service and controls the transaction.

Hence, they look to drive the price down through an auction.

E-auctions are most effective when the owner of the cargo does not unilaterally set the base price, but allows the logistics providers to first

submit their prices which then triggers a reverse auction. “This ensures that the logistics providers have built profit margins into their bids and ultimately gain from the transaction,” Colaco said.

INCREASED FUTURE DEMAND

Fromm noted criticisms of e-auctions generally come from the supplier side. “They push the button too early and have to live with their actions.” But given that increased use of e-auctions in the oversize/project cargo community in the future is “inevitable,” according to Colaco, suppliers will need to get onboard and find a way to work with, rather than against, these e-tendering tools.

“I think it will become more and more the normal way for awarding contracts,” Fromm said. “We are facing an increasing requirement to tender on e-auctions.”

ISSUE 5 / 2019

Eldener added that the sector needs to accept the fact that e-auctions are a part of logistics pricing and awarding of services today and that training needs to reflect that.

“We all need to educate some of our staff to be familiar with all types of e-auctioning, thus making the company prepared for the future,” he said.

Returning to Meyer’s opening complaint of inadequate risk assessments, project cargo movers need to have confidence that vetting is robust on their platform of choice. Siemens takes care to check suppliers in advance and evaluate and analyze risk in any project tender through its platform. Fromm stressed that while the shipper is interested in the lowest rate possible, it is not looking for the cheapest.

“We are looking for the best,” he said. “So we do make a high effort in our awarding process to find the supplier with the lowest risk.”

Fromm conceded that not every

Windmill tower being loaded in China. / CREDIT: G2 OCEAN.

shipper puts such a high focus on risk assessments, and that some are only interested in securing transportation from A to B at the cheapest possible cost through an e-auction. It is here where problems arise in e-tendering and where Meyer’s criticism can be correctly directed. Shippers, forwarders and suppliers need to compare apples

with apples when it comes to online auctions and tendering platforms, else risk being caught out in a race to the bottom on price. BB Carly Fields has reported on the shipping industry for the past 19 years, covering bunkers and broking and much in between.

Some Shippers Just Can’t Contain Themselves Specialty cargo isn’t one size fits all, and neither is the Port of San Diego.

OPEN SPACE FLEXIBILITY EXPERTISE Find out what our special advantage can do for you. portofsandiego.org/cargo

www.breakbulk.com BREAKBULK MAGAZINE 33

EXECUTIVE SUMMARY

PERIOD OF STABILITY? Underlying Strength but Disruptors Still Wild Card

Dynamar B.V.’s biennial study on the breakbulk industry is an in-depth analysis of breakbulk, heavy-lift and project vessel operators and services. In conversation with Carly Fields, Dirk Visser, author and managing editor for Dynamar, reveals exclusive content from its 2019 edition of the report, Breakbulk V – Operators, Fleets, Markets.

Q:

What were you particularly surprised by in this edition of your report?

A:

Companies come and go, get bigger or shrink, but of definite amazement is the fast emergence and growth of Zeaborn. Dynamar’s previous breakbulk report from mid-2016 noted that the company had ordered 12 multipurpose/project/heavy-lift ships – which were subsequently rejected – but that it was not yet actively operating.

Nowadays, it incorporates the major brands of Rickmers Line with its semi-liner services, Zeamarine with its tramp services, the commercial management of part of the Carisbrooke

(UK) fleet and the chartering activities of the HC Group, MCC Marine and NPC Projects, among others. In addition, the company is active in ship management and ship owning. And it’s not finished yet. Zeamarine had stated a goal of operating some 100 multipurpose ships by early 2019, although as we leave the third quarter that goal has not yet been achieved.

Q:

I note that you comment in the report on the rising star of vehicle carriers and that they are making their presence increasingly felt in the breakbulk sector. How do you see this trend developing over the coming years?

A:

In the report, we refer to the operators of vehicle carriers, container ships, reefer vessels and dry bulk carriers as ‘disruptors’ as, apart from their core business, they also carry breakbulk – the bread and butter of traditional breakbulk operators. Of those four disruptors, vehicle carrier operators have developed into formidable breakbulk operators.

For most vehicle carrier operators, non-carloads account for up to 30 percent of total liftings and in some isolated cases as much as 40 percent to 50 percent of their total liftings. On the delivery of the first in a series of six 8,500 car-equivalentunit, post-Panamax car carriers

Composition of the Multipurpose Fleet, Early 2019

Segment

# ships

Operated fleet Total dwt Avg dwt Avg Age

# ships

Order book Total dwt Avg dwt Share

Breakbulk

4,221

56,547,700

13,400

17

179

2,386,100

13,300

4.2%

General Cargo Ships

3,888

42,018,600

10,800

17

166

1,593,100

9,600

3.8%

Multipurpose Container

16

390,500

24,400

11

Open Hatch Cargo Ship

317

14,138,600

44,600

12

13

793,000

61,000

5.6%

Ro-ro

483

6,419,300

13,300

17

42

711,400

16,900

11.1%

Ro-ro Cargo Ship

351

3,812,900

10,900

17

41

700,900

17,100

18.4%

Ro-ro Container Ship

5

278,400

55,700

3

General Cargo with Ramp

Total

127

2,328,000

18,300

16

1

10,500

10,500

0.5%

4,704

62,967,000

13,400

17

221

3,097,500

14,000

4.9%

Source: Breakbulk V Operators, Fleets, Markets, July 2019, Dynamar B.V., www.dynamar.com

34 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

d ou Pr LN GP M r be em e nc Si 11 20

Visit us at Breakbulk Americas in Houston, TX, USA October 8-10, 2019 Booth No M15

2 t.

Es 4

00

Membership Available in Selective Markets!

Application: info@gpln.net / www.gpln.net

Not really. After all, car carriers are primarily built to carry cars which, under normal circumstances, is big business. However, we see the conventional ro-ro ship ultimately being replaced by a car carrier-like vessel.

For example: Wallenius Wilhelmsen Ocean has earmarked eight of its ships as ro-ros rather than a car carriers.

The difference? A missing side ramp, a heavier quarter ramp and strengthened and higher project holds, with some able to sustain loads of up to 10 tons per square meter. Some of these ships can also take cargo on deck.

The number of conventional deepsea ro-ro operators has come down substantially. There is now Grimaldi, WWO, NYK Bulk and Project Carriers, Messina Line and Bahri; that’s about it.

Q:

With that in mind, are you concerned about the proportionately larger orderbook for roll-on, roll-off ships?

CREDIT: ARC, PORT OF SOUTHAMPTON

A:

– which are still the world’s largest – Höegh Autoliners said: “With these ships we target the breakbulk market.”

Typical cargoes moving by car carriers include boats and yachts, high-and-heavy, machinery and tools, mining equipment, power generation plant, railway coaches and locomotives. There are also pallets and big bags, all mobilized on cassettes, MAFIs, chassis and other rolling equipment. It is now a fact: the vehicle carrier is a formidable breakbulk vessel.

Top 25 Multipurpose Operators’ Fleet By Deadweight, Early 2019

Rank Carrier

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

G2 Ocean Saga Welco BBC Chartering CSSCC Grimaldi Zeamarine Spliethoff AAL Shipping Chipolbrok NYK BPC Swire Shipping Wagenborg Thorco MACS WWO Pacific Carriers PIL Messina Line Ethiopian Shipping Eastern Car Liner GMB Maritime Chun An Westwood Bahri Toko Kaiun

Total Top-25

Other carriers Total

Share Top-25

Operated fleet Total dwt Avg dwt Avg Age

# ships 89 52 145 64 34 69 57 24 20 30 21 30 27 11 8 12 12 7 9 16 4 19 4 6 6

4,813,200 2,613,700 1,869,200 1,776,100 1,063,200 937,100 927,600 707,300 622,700 546,100 491,900 466,600 425,900 355,700 330,200 326,700 313,300 284,400 251,200 212,200 212,000 196,400 183,900 155,600 143,800

776

20,226,200

4,709

63,017,000

3,933

16%

42,790,800

54,100 50,300 12,900 27,800 31,300 13,600 16,300 29,500 31,100 18,200 23,400 15,600 15,800 32,300 41,300 27,200 26,100 40,600 27,900 13,300 53,000 10,300 46,000 25,900 24,000 26,100

10,900

13,400

# ships

Order book Total dwt Avg dwt Share

13 16 1 55,700 55,700 9 6 82,600 13,800 10 7 434,000 62,000 10 11 171,400 15,600 10 2 26,500 13,300 13 8 9 12 14 9 8 11 13 13 6 10 8 8 10 14 16 6 7 11

18 17

32%

27

770,200

28,500

221 3,097,500

14,000

194 2,327,300

12%

12,000

2% 4% 24% 16% 3%

4%

5%

5%

25%

Source: Breakbulk V Operators, Fleets, Markets, July 2019, Dynamar B.V., www.dynamar.com

36 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

Q:

CREDIT: PORT OF LONGBEACH

What changes of note have there been in the Top 25 fleet ranking for this edition?

A:

Staying with the Top 25 combined breakbulk/roll-on, roll-off carriers – the multipurpose operators – there have been quite a number of changes, in part reflecting the consolidation taking place in the industry.

Examples are the two major forest product carriers with their mighty open-hatch cargo ships: G2 Ocean – the October 2017-formed joint venture between Gearbulk and Grieg Star – and Saga-Welco – formed in 2014, and ultimately owned by NYK and Westfal-Larsen.

In May 2018, Intermarine of the

Fleet Development Breakbulk Fleet Year/Period

Deliveries # ships

Total dwt

1980-1984

987

12,051,600

1985-2989

511

7,175,400

Demolitions Avg dwt

#ships

Total dwt

Avg dwt

Avg age

12,200

1,892

19,420,800

10,300

24

14,000

1,386

15,231,100

11,000

22

1990-1994

381

4,165,900

10,900

704

7,922,300

11,300

26

1995-1999

602

8,365,400

13,900

1,035

12,945,600

12,500

26

1980-1999

2,481

31,758,300

12,800

5,017

55,519,700

11,100

24

126

1,528,800

12,100

208

2,696,000

13,000

25

2000 2001

76

914,500

12,000

232

3,465,600

14,900

25

2002

79

1,156,400

14,600

162

2,330,600

14,400

26

2003

69

1,126,200

16,300

155

2,134,600

13,800

27

2004

115

1,465,500

12,700

79

878,200

11,100

29

2005

166

1,588,000

9,600

37

407,200

11,000

29

2006

184

2,021,100

11,000

63

826,600

13,100

32

2007

215

2,323,400

10,800

52

548,500

10,500

29

2008

258

2,815,700

10,900

70

868,400

12,400

33

2009

264

3,366,200

12,800

267

4,176,900

15,600

31

2010

268

4,182,700

15,600

198

2,382,100

12,000

32

2011

279

3,935,800

14,100

294

4,122,100

14,000

32

2012

243

3,941,100

16,200

278

4,415,900

15,900

30

2013

161

3,363,500

20,900

236

2,953,900

12,500

30

2014

92

2,185,400

23,800

182

2,215,300

12,200

30

2015

83

2,034,600

24,500

111

1,771,500

16,000

28

2016

64

1,353,500

21,100

119

2,050,300

17,200

29

2017

69

1,505,800

21,800

104

1,308,600

12,600

29

2018

54

1,069,900

19,800

42

483,400

11,500

29

2000-2018

2,865

41,878,100

14,600

2,889

40,036,000

13,900

29

Total

5,346

73,636,500

13,800

7,906

95,555,700

12,100

26

Source: Breakbulk V Operators, Fleets, Markets, July 2019, Dynamar B.V., www.dynamar.com

38 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

stevedoring & warehousing rotterdam

Lifting your cargoes faster

PROJECT CARGO & BREAKBULK HEAVY LIFT STORAGE AREA HEAVY LIFT UP TO 1800 TONS ASSISTING OFFSHORE VESSELS 730 METRES QUAY LENGTH

CHECK OUT OUR

ISPS CERTIFIED AEO-F CERTIFIED

TELEPHONE

+31 (0)10 429 94 33 FA X

+31 (0)10 429 02 61 E-MAIL

office@rhb.nl www.rhb.nl

WEBSITE

www.rhb.nl

Waalhaven n.z. 4 3087 BL Rotterdam P.O. Box 55092 3008 EB Rotterdam Portnumber 2157

WEB

➔NEW

shorecranes up to 208 tons

Breakbulk Fleet Distribution By Deadweight Class, Early 2019

Deadweight class 5,000-7,499 7,500-9,999

Operated fleet Total dwt Avg dwt Avg Age

# ships 1,620

9,696,100

6,000

22

# ships

Order book Total dwt Avg dwt Share

78

476,500

6,100

5%

873

7,395,700

8,500

16

39

324,500

8,300

4%

10,000-19,999

1,002

13,459,900

13,400

13

43

567,500

13,200

4%

20,000-29,999

265

6,699,300

25,300

14

0

0

0

0%

>=30,000

461

19,323,800

41,900

11

19

1,017,600

53,600

5%

4,221

56,574,800

13,400

17

179

2,386,100

13,300

4%

Total

CREDIT: G2 OCEAN

Source: Breakbulk V Operators, Fleets, Markets, July 2019, Dynamar B.V., www.dynamar.com

U.S. and Zeaborn from Germany formed the joint 25:75 venture Zeamarine. Barely a year later, Zeamarine became a fully owned subsidiary of Zeaborn, which also owns February 2017-acquired Rickmers Line.

Also in 2017 but toward the end of year, Hamburg-based multipurpose liner operator MACS, serving Southern Africa, acquired Hugo Stinnes, operating between North Europe, Mexico and the U.S. Gulf.

Finally, some operators called it a day. Hansa Heavy Lift, the successor to bankrupted Beluga Shipping, was the most prominent one. Hong Union Shipping of Shanghai just disappeared.

Q:

Do you expect there to be a period of stability in the number of MPV operators, or are you 40 BREAKBULK MAGAZINE www.breakbulk.com

expecting more insolvencies or mergers before the end of 2019?

A:

The current multipurpose orderbook, including openhatch ships but excluding ro-ro, amounts to just 4.2 percent of the existing fleet. From 2009 to 2018, 1,577 vessels were built and 1,831 were scrapped, a clear sign of a shrinking fleet. Additionally, the 2020 IMO fuel sulfur regulation will no doubt induce additional scrapping. We anticipate that as a result of this regulation the about 2,500 elderly ships built before 2000 will be scrapped more quickly.

Hence, the overcapacity that has long plagued breakbulk carriers since the end of the 2005-2008 heydays has finally gone.

Instead of building ships, nowadays capacity requirement is increasingly sought in the pooling of

ships and in incidental cooperation in the form of temporary joint services and the like.

Hence, we expect a period of stability in the number of breakbulk operators, rather than ongoing insolvencies or mergers.

However, what breakbulk operators cannot control is the activity of the disruptors, those being car carriers, container liners, reefer vessels and dry bulk carriers. The level of their competition depends on the demand for their core cargoes. When down, the interest in filling their ships with breakbulk cargoes amplifies, and vice versa. BB Dynamar’s report provides an overview of important breakbulk and project shipping markets, sorted by major cargo segment, complemented by the main trade areas (destinations), with notes on developments, expectations, facts, findings, options and trends relevant to each cargo segment.

The full publication, Breakbulk V (2019) – Operators, Fleets, Markets, is available from Dynamar at www. dynamar.com/publications/216.

Dirk Visser, senior shipping consultant and managing editor of Dynamar BV – Shipping Information and Consultancy, is a 30-year veteran of the liner shipping and forwarding industry in the Netherlands. Since 1999 he has been responsible for the publications and consultancy sections of Dynamar, including the DynaLiners portfolio of news and commentary, and Dynamar’s biennial flagship breakbulk publication.

ISSUE 5 / 2019

LOGISTICS PERSPECTIVE

BY CARLY FIELDS

TALENT CONTEST Sector Must Fight for Next Gen Interest

T

hose looking for a career with glitz need not apply: the project cargo industry is not a “glamor industry, no matter how much we think we are.”

That’s George Abreu’s no-nonsense take on the employment attributes of the sector.

As GEODIS’s senior vice president for oil and gas, Abreu has first-hand experience of what the industry has to offer and why it faces a dearth of talent in the future. Speaking to Breakbulk, he explained the changing job requirements of the next generation: where once overseas assignments were a great lure, today’s

new recruits put less weight on travel and more on flexible working and greater independence in their working life.

There are now so many other draws on young people when they are considering a career, he said. “The Amazons and the like have a more exciting product perception, so we are definitely competing against others for that talent base.” Consequently, attracting new talent today is not, Abreu said, “the simplest task.”

But while it might not be the simplest task, it’s not an impossible one. Abreu believes that the project cargo forwarding industry’s focus on

sophisticated solutions can still excite people and draw next-generational groups, including Millennials, into the business and into GEODIS. There is, he said, a bright future, despite the challenges, as long as the sector is prepared to position itself and fight for talent.

Discussing service provision and the ever-increasing demands placed on logistics providers in the breakbulk industry, Abreu commented on the detrimental impact of companies straying from their strengths to meet intensified pressures from shippers.

This is particularly true when it comes to geographical spread.

Top: Two 85-ton decomposers are moved from Italy to a work site in Messaieed, Qatar. / CREDIT: GEODIS

42 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

OUT OF THE BOX SOLUTIONS

When bulk cargo comes into port, you need versatile and reliable equipment to move loads fast. HysterÂŽ Big Trucks feature innovative solutions to help your operation keep moving.

BREAKBULK 2019

Visit us in Booth F41 at Breakbulk 2019 to learn how your operation can benefit from the latest solutions Hyster has to offer.

Houston, TX

HYSTER: TOUGH AND RESOURCEFUL

October 8-10, 2019 George R. Brown Convention Center

www.hyster.com

CREDIT: SHUTTERSTOCK

TAKE NO CHANCES Risks in the industry are growing, of that there is little doubt. Therefore, project cargo forwarders need to be that much more astute when evaluating where the buck stops when assessing new contracts.

GEODIS’s George Abreu explained that clients are putting more risks than ever on the forwarder’s side of the table. “You want the benefit? You take the risk,” they say.

“So, you have to understand what risk is acceptable to you, which risk isn’t and then, which risks you can mitigate,” he said. Critical to getting this right is having a competent legal team that has industry knowledge to draw on.

Contract management, added Peter Anetsberger, GEODIS director industrial projects Germany, is really important.

“Nowadays, EPCs try to put risk on the shoulders of freight forwarders, and, Peter very often, a lot Anetsberger of these risks GEODIS cannot be

44 BREAKBULK MAGAZINE www.breakbulk.com

insured.” It’s also important to review risks per country. In places like Dubai, for example, risks can be easier to calculate, but in countries like Russia or Bolivia, this risk calculation is more difficult to accurately assess.

A major headache in today’s tempestuous risk waters is one of liquidated damages. “Mitigating liquidated damages is one of the things that we talk about most in contract discussions,” Abreu said.

He makes particular reference to the spate of failures of ship operators over the past couple of years and troubles with subcontractors.

GEODIS’s compliance program employs a methodology for vetting its vendors, which it has upgraded in light of increased subcontractor risks. “The vetting process is very important because if you choose the wrong partner, you can be 100 percent responsible for that,” Anetsberger said.

“The vetting process is much more aggressive right now than it has been in the past because of financials, but also because these projects are going to places that are very difficult,” Abreu added. “So, you’d better have a very good vetting process.”

“It’s a very big world out there and there’s a lot of work going on in a lot of locations. It’s so tempting to stretch out to places where you may not have the necessary boots on the ground, George Abreu structure or longevity,” he GEODIS said. “You have to be very, very careful to commit to things in locations and in areas where you may not have as much experience as somebody else.”

Abreu believes the key to success in logistics is to stay where you’re good, where you have assets and where you have a structure.

“If you don’t do that, you risk failing, and that’s what everybody wants to avoid because the stakes are too high – projects are too big.”

Where previously forwarders might have taken risks because projects were “below the radar,” today’s projects are more often than not large and highly visible. “So you’d better be good at it because your reputation is just as good as your last project,” he said.

OUT OF THE LOW

Looking at the project pipeline, Abreu sees reason to be positive as industrial segments start to come alive again and upstream oil and gas surges. “We’ve come out of the low,” he sanguinely notes.

For GEODIS, the Americas are “absolutely booming,” he said. “The U.S. is chugging away at a very strong GDP and Mexico has come back strong again.” And while there are certainly geopolitical complications to consider in the oil-based economies in South America, there has been promising stabilization.

Abreu also listed Thailand, Malaysia, Indonesia, Singapore and Korea as having “real strong potential where things are fabricated.”

And then there are the hot spots in Africa. “Africa is one of those continents where the headlines always pop up. Mozambique, of course, is the ‘mega-headline’ because of all of the money being poured in there for gas drilling.”

ISSUE 5 / 2019

WE DELIVER SMALL TO LARGE-SCALE INDUSTRIAL PROJECT LOGISTICS. From heavy transportation to heavy-lifting, project management to warehouse and materials management, we offer an integrated range of logistics solutions in more than 20 worldwide locations. What makes Ă„rk Global different from others is our individual commitment and our passion that inspire the ideal and the most pragmatic solutions.

It’s a very big world out there and there’s a lot of work going on in a lot of locations. It’s so tempting to stretch out to places where you may not have the necessary boots on the ground, structure or longevity.”

–G eorge Abreu, GEODIS

Mexico’s President Andres Manuel Lopez Obrador at a ‘unity’ rally in Tijuana, Mexico. Mexico’s Senate backed the ratification of the USMCA deal by a vote of 114 in favor to 4 against. / CREDIT: JORGE DUENES/REUTERS/NEWSCOM.

Top: The Talara Refinery Project involved the delivery of 20 shipments – almost 60,000 freight tonnes – of heavy-lift items from 15 European suppliers to the Talara Refinery in Piura, Peru.

Right: Handling cargo of 30 meters in length, 13 meters high, with a maximum weight of 400 tonnes in Batam, Indonesia.

CREDIT: GEODIS

Here Abreu refers to the two planned liquefied natural gas, or LNG, plants that will be built in Mozambique. The two LNG projects,

by Anadarko and ExxonMobil, in its northern province will extract, liquefy and ship gas, found in abundant quantities offshore Mozambique.

The recoverable gas recorded amounts to a decade’s worth of European consumption.

“That is definitely an area where a lot of people are going to be ready to try to support business,” Abreu said. Egypt is also noted for its planned upstream and downstream projects. Nigeria and Tanzania are other hotspots.

But for all its potential, Africa is a tough nut to crack. “Africa is a 46 BREAKBULK MAGAZINE www.breakbulk.com

unique continent. Every continent will say this, but Africa really has a unique DNA. How you do business there, how you position yourselves, how you structure your ownership structure with partners – all of those things play into what you want to be in Africa,” Abreu said.

“The rewards are great, but you’ve got to go in contractually

sound, structurally sound and you’d better have people that have been around the block a couple of times,” he said. BB Carly Fields has reported on the shipping industry for the past 19 years, covering bunkers and broking and much in between.

ISSUE 5 / 2019

ENERGY UPDATE

SUSTAINED WINDS

Sunset Shouldn’t Dim Wind Cargo Outlook

BY PAUL SCOTT ABBOTT

A

s expiration of tax credits looms, the rush to move U.S. wind energy project cargoes into place is testing logistical capabilities and, while perhaps somewhat diminished, post-sunset demand is expected to be sustained.

Trucking, rail and port logistics providers – as well as a prominent energy intelligence consultant – tell Breakbulk they expect the supply chain to stay plenty busy meeting the challenges of moving these oversized units, even as U.S. production tax credits go away.

Many anticipate the biggest push in the final month of 2019, just before scheduled expiration of the production tax credit, known as PTC for short, for projects for which construction has not yet begun. But 2020 might be even busier.

Industry efforts to renew the PTC are likely to fall short under an administration bent on attacking renewable energy production with sometimes erroneous rhetoric.

DEMAND INTENSIFIES

“As developers push to have projects operational within the current window, the demand for support for these projects is outstripping the availability of equipment and manpower,” said Mike Meyer, principal of Colorado-based TLG Transport, which focuses on moving wind components and other specialized cargoes.

“Wind energy will continue to develop within the U.S. after the 48 BREAKBULK MAGAZINE www.breakbulk.com

2020 expiration of the current PTC due to the development of new and more efficient turbine designs, but implementation will not be as robust without a renewal of the PTC,” said Mike Meyer Meyer, who has been in the speTLG Transport cialized trucking business for more than 40 years.

“What 2021 and forward will look like for wind transportation logistics is largely unknown, but we remain optimistic.”

Meyer said many transport companies have been hesitant to invest US$750,000 or more in a specialized truck-and-trailer combination in fear of a precipitous post-sunset drop-off in demand – a fear Meyer sees as unfounded.

“As the grid further develops, and efficient methods are created to store this energy, the potential for generation and utilization of clean energy will grow exponentially,” Meyer said. “My hope would be that, with the development of more efficient turbines, the grid to move this power to where it is needed, the ability to store power, as well as a well-thought-out and pragmatic national policy, we can levelize implementation and move away from the boom-and-bust cycle we have experienced, driving confidence ISSUE 5 / 2019

A truck with an extra-length trailer carries a wind energy blade from the Port of Brownsville en route to a Texas wind farm.

CREDIT: PORT OF BROWNSVILLE.

www.breakbulk.com BREAKBULK MAGAZINE 49

and thus further investment in the industry and those services that support it.”

HISTORY TO REPEAT?

Federal figures support Meyer’s boom-and-bust assessment, with the U.S. Energy Information Adminis-

tration, or EIA, making a mid-2019 projection that U.S. wind capacity additions in 2019 will total 12.7 gigawatts, surpassing annual capacity additions for each of the preceding six years, but falling shy of the record 13.3 gigawatts of capacity added in 2012 – just prior to initial PTC

OFFSHORE WIND OFFERS ABUNDANT OPPORTUNITY While landside wind energy installations are booming in Texas and beyond, offshore opportunities abound, in particular off the U.S. East Coast.

Aaron Barr, principal consultant for wind power and renewables at Wood Mackenzie, said he believes offshore wind farms will represent an increasingly large share of U.S. projects – and bring new challenges.

“The growing U.S. offshore market will require an entirely different logistics supply chain, focused on port management and scheduling of installation vessels and crew transfer vessels,” Barr said.

Among those looking to benefit is the Port of New York and New Jersey.

“We have been having dozens and dozens of meetings, briefings and tours with developers, component manufacturers, assembly companies and supply chain partners to discuss the Port of New York and New Jersey’s role in offshore wind development and how the port authority’s facilities could be used to support the development,” said Bethann Rooney, the port’s deputy director.

Discussions have included examining how existing facilities could support early stages of development with the import of component parts and raw materials, Rooney said. “In later

50 BREAKBULK MAGAZINE www.breakbulk.com

stages, we remain optimistic that one or more of our undeveloped parcels in Staten Island [New York] or Elizabeth [New Jersey] could be developed as a component manufacturing and subassembly site.”

Rooney said leaders of the bistate port have been actively collaborating for more than 18 months with New York and New Jersey economic development and utilities agencies developing offshore wind master plans, port infrastructure assessments, supply chain analyses and workforce initiatives in support of respective state goals.

“With offshore wind farms being developed from Maine to Virginia,” Rooney said, “the Port of New York and New Jersey is centrally located to not only play a critical role in supporting the development of our coasts but could support development along the entire North Atlantic Coast and could potentially back-feed future development in Europe.”

According to the American Wind Energy Association, which supports federal legislation to extend tax credit benefits for offshore projects, there is “a huge opportunity for U.S. supply chain businesses, including those with experience in offshore oil and gas, to construct and service offshore wind farms.”

expiration. Activity picked up again following retroactive renewal of PTC in 2013, under the Obama administration.

According to the EIA report, December is expected to see completion of 44.7 percent of all U.S. wind capacity coming online in 2019 – precipitating a demand crunch similar to the one experienced as 2012 drew to a close.

This time, however, the postsunset decline is not seen as so precipitous as that experienced from 2012 to 2013, when U.S. wind capacity additions plummeted from the stillrecord 13.3 gigawatts in 2012 to fewer than a single gigawatt in 2013.

Aaron Barr, principal consultant for wind power and renewables with the natural resources research firm of Wood Mackenzie, said he expects the extra-high level of activity to continue through 2020, as companies hurry to get their operations underway.

U.S. wind project developers who want to receive full value of the PTC must begin operation by the end of 2020, according to the EIA. “The phaseout of the PTC has created a rush to complete projects by the end of 2020, in order to qualify for the full value of the PTC,” Barr said. “Wood Mackenzie expects 2020 to be a record year for the U.S. wind market, and the ultimate volume of realized projects will be defined by supply chain and logistics constraints, rather than the volume of good wind project developments.”

Barr said he anticipates long-term U.S. demand for wind energy after PTC expiration to stabilize at between 4 gigawatts and 7 gigawatts a year.

“Corporate offtake agreements, state-level renewable energy goals, utility-owned wind projects and the ever-decreasing cost of wind power are significant drivers of this demand after federal subsidies are phased out,” Barr said.

LOGISTICS REMAIN CONSTRAINED

The latest generation of turbines uses blades that are longer than 180 feet, Barr said, and the supply of purpose-built trailers to carry them is limited, as is the contingent of specially trained drivers to guide such units. Also, the longer blades present permitting and escort requirement hurdles.

ISSUE 5 / 2019

DUAL LINE TRAILER THP/DC TAILORED TO MEET AMERICAN REQUIREMENTS THE VEHICLE AT A GLANCE Reduced transport time widening under load while rolling Safety first and foremost operation (widening, levelling, steering) via wireless remote control Low maintenance and long service life new ideas combined with proven ball bearing race ring technology

WWW.GOLDHOFER.COM

The entire industry will need to work together and utilize all available transport modes to meet a very ambitious build plan.”

–A aron Barr, Wood Mackenzie

Wind energy blade units are carried by train to one of a host of wind farms under development in Texas and beyond. / CREDIT: BNSF RAILWAY.

Segmentation of super-big wind energy components such as blades and towers, while deployed on a limited basis for more than a decade, may only provide a partial solution, according to Barr.

“The challenge with segmented blades and towers are the added weight, cost, reliability risk and field assembly that are imposed by a joint,” Barr said. “The logistics industry has continually pushed the threshold for transportable components, but practical limits are being reached. Wood Mackenzie anticipates that segmented components will be offered as options for next-generation wind turbines that are being installed in logisticsconstrained sites, such as ridgelines, populated areas and regions with poor logistics infrastructure.”

Barr said transportation and logistics planning will become imperative to completing wind projects in time to qualify for the PTC, commenting, “The entire industry will need to work together and utilize all available transport modes to meet a very ambitious build plan. Innovative approaches to logistics will be required, including forward staging of turbine components, maximizing utilization of rail infrastructure and looking to barges to transport equipment to the interior of the country.

52 BREAKBULK MAGAZINE www.breakbulk.com

“Business opportunities are significant in wind logistics for the next two years, including significant opportunities for qualified drivers, as the industry is currently facing a significant driver shortage,” Barr said.

COLLABORATION IS KEY

Greg McComas, BNSF Railway’s manager of dimensional clearance customer support, who chairs the clearance committee of the Railway Industrial Clearance Association, echoed the call for a cooperative approach across modes.

“The collaboration of other modes of transportation working toward a multimodal solution is paramount to growing the accessibility of wind energy equipment,” McComas said.

Greg McComas

Steve Tyndal

BNSF Railway

Port of Brownsville

“We believe this collaboration can lead to more opportunities.

“We’ve seen exponential growth of wind energy project scope with our customers,” McComas said.

“This dynamic encompasses heavier, longer and wider equipment. These modifications to wind energy equipment create unique challenges for rail transportation providers. We work with our customers to evaluate how we can move the equipment safely and efficiently through our network. Oftentimes these unique challenges lead to longer evaluation periods to find a transportation solution.”

Whereas precise solutions are typically proprietary, McComas said rail approaches often are centered upon use of 89-foot-long flatcars.

Seaports also have geared up to handle a burgeoning flow of wind energy components, and a leader in imports and exports is the Port of Brownsville, just across the U.S. border from Mexico.

Steve Tyndal, the Port of Brownsville’s senior director of marketing and business development, said the South Texas port not only is positioned as a gateway to installations in Texas – which has far more generating capacity than any other U.S. state – but also safely and efficiently serves Mexico, where both Germany-based Nordex ISSUE 5 / 2019

and Arizona-headquartered TPI Composites are developing wind blade factories within 20 miles of Brownsville.

Within one two-week period this summer alone, the Port of Brownsville landed four wind energy component projects anticipated to combine for moves through the port of about 200 completed units, according to Tyndal. The port last year brought online 20 additional acres for fortified outdoor storage of wind components, and is adding more such acreage this year.

Asked if he believes PTC expiration will stem the flow of wind units, Tyndal responded: “The demand is not going to go away. Because of the affordable land and demand in the region, I don’t really see activity slowing down anytime soon.”

U.S. Department of Energy figures show Texas having

PUERTO DE

more than 20 gigawatts of wind capacity already installed, with that number projected to nearly double by 2030.

As technologies for storage of wind-generated power continue to evolve and corporate power purchase agreements enhance viability of smaller projects, some see demand being further propelled.

TLG Transport’s Meyer said: “If a viable means to store the energy generated by wind turbines is developed, the power generated can be utilized in a far more economical manner, driving the cost downward, which will result in more demand for turbines – and the logistics that will follow.” BB A professional journalist for nearly 50 years, U.S.-based Paul Scott Abbott has focused on transportation topics since the late 1980s.

PORT OF

BILBAO

Above: The outlook remains bright for U.S. wind energy installations and related logistics, as federal production tax credits near sunset. / CREDIT: TLG TRANSPORT.

PORT OF

WORLDWIDE HEAVYLIFT & PROJECT CARGO LOGISTICS VIA

Cluster for the competitiveness improvement and promotion of the PORT OF BILBAO and its companies

.

BILBAO

Uniport Bilbao Port Community

Alda. de Urquijo, 9 1º dcha.

48008 Bilbao - SPAIN T +34 94 423 6782 info@uniportbilbao.es www.uniportbilbao.eus

www.breakbulk.com BREAKBULK MAGAZINE 53

LOGISTICS PERSPECTIVE

BACK IN BUSINESS

BY LORI MUSSER

Ex-Im Bank Logjam Begins to Clear, for Now

B

ig projects are back on the table for U.S. businesses. U.S. companies that haven’t been able to provide national-level export credit agency financing to secure overseas projects since 2015 are back in the game.

Without a quorum, the ExportImport Bank of the United States, or Ex-Im Bank, wasn’t able to make deals above US$10 million. Unable to approve these larger transactions, the bank also couldn’t authorize any new long-term financing. It was unable to operate at full capacity, shutting U.S. businesses out of the competition for global projects, and ultimately sending U.S. jobs to other countries with better access to financing.

Those companies with a significant overseas presence, including the largest engineering, procurement and construction companies, had a workaround. They simply shifted their bids to their base of business in other countries. If they won the contract, they had to use the supply chains – including manufactured content – of the other country/countries. The many small and medium-sized U.S. businesses that typically provide components for big international projects were out of luck. For more than three years.

54 BREAKBULK MAGAZINE www.breakbulk.com

Today, the Ex-Im Bank is able to perform all its duties. There may be a small hiccup this fall as reauthorization is due, but there is also reason for optimism.

A FAR BETTER PLACE

“We are in a much different place than we were a year ago in the capital projects industry,” said Capt. William G. Schubert, former administrator, U.S. Maritime Administration, and current president of International Trade & Transportation, a Houston-based export credit agency finance Capt. William G. and maritime Schubert transportation consultancy. “There are enough Ex-Im Bank board members to start to clear the backlog of transactions.

We have a quorum now and the new members are all exceptionally qualified.” He suggested the Ex-Im Bank in place today may be even stronger than in 2015.

At its July 31 meeting, the new board’s light agenda addressed, among other items, two global infrastructure division files requiring preliminary approvals, one for civil engineering equipment being purchased by the Special Council Fund for Mutual Assistance in Cameroon, and the other for gas processing equipment being purchased by Iraq’s Ministry of Oil. At its next meeting the board is expected to begin tackling what has become, according to newly appointed President and Chairman Kimberly A. Reed, a backlog of nearly US$40 billion in transactions that would support more than a quarter-million jobs.

In her speech at the TXF Global Conference in Berlin on June 12, Reed said: “We also expect an influx of applications, now that the board is back. The plan is to work through the applications at a thoughtful and reasonable pace. We expect the board will vote on some of them before the end of the summer.”

Reed did not say the files would be processed in a hurry. She cautioned that “protecting the interests of U.S. taxpayers is still paramount to us. The fact that the bank has a default rate of 0.5 percent shows the prudence of ExIm’s staff.”

ISSUE 5 / 2019

Schubert added: “It is anticipated that the board will begin moving on to some of the larger transactions in August.” He noted that transactions above US$100 million get referred for oversight and a 30-day comment period.

Among the often-unsung benefits of the bank are the follow-on benefits.

Schubert said: “It is not just selling a billion-dollar project; it is the supplies, spare parts, the operations and maintenance, and all the other sales.

If you win the initial project, you also have ability to win 10 to 20 years of additional business.”

DAMAGE DONE

During the years the Ex-Im Bank operated without teeth, tangible and intangible damage was bound to accumulate.

Ex-Im Bank’s 2018 Competitiveness Report, released in June 2019, concluded that the export credit agencies of nations around the globe didn’t sit still while the U.S. Ex-Im Bank was stymied. They moved ahead, picking up ground that the U.S. may not get back.

The U.S. Ex-Im Bank reported on fundamental changes in officially supported export finance over the last decade. “During this time frame, export-led growth has become a key priority of many governments. Export credits agencies, or ECAs, are being viewed by governments as tools to achieve national strategic goals and to close the financing gap between the creditworthiness of an export-finance transaction and the commercial bankability. Today, there are 112 ECAs worldwide, up from 95 in 2017.”

In the report, Chairman Reed is quoted: “[It] illustrates the breadth and depth of the involvement of governments, especially China, in promoting and financing the exports from their countries. The performance of China’s export credit system has triggered the governments of other countries to respond defensively by changing their policies and programs or risk their exporters losing access to large swaths of global markets.”

Key findings of the report include: • Governments today are not only supporting their exports through ECAs, but are increasingly focused on expanding future exports through a whole-of-government approach that involves other types of support.

• Other nations are doing more to support their exports, with more providers, more recipients of official support, more aggressive terms, more types of financing products and programs, and more proactive strategies.

• China’s trade support has trended upward for 10 years, reaching roughly US$39 billion in 2018.

The next-highest levels were recorded

by Italy (US$12.4 billion), Germany (US$12 billion), and Korea (US$10.6 billion). U.S. support was US$300 million.

John Schuster, founder and president of JLS Capital Strategies LLC, and former vice president and head of the structured finance division of U.S. Ex-Im Bank, spoke to Todd Alexander of Norton Rose Fulbright on project finance. He described the damage done by the prolonged inaction of the

Ex-Im Bank. In addition to the loss of profit, which would have accrued to the American people, there was tangible job loss as U.S. manufacturers and others were cut out of supply chains.

Less tangible damage revolves around Ex-Im Bank’s ability to pick up the pieces after losing key personnel and market trust. “The bank does not have the personnel it used to, so expertise will be stretched,” Schuster said.

And then, of course, the risk of future mischief persists.

SEPTEMBER REAUTHORIZATION

Ex-Im Bank is reauthorized every four years, and it is set to expire Sept.

30, 2019. This time around, “there is no question about the rechartering passing,” Schubert said.

Addressing the issue at June’s TXF Global Conference, Reed said: “I look forward to engaging with both the House and Senate on reauthorizing the bank – and in making the bank even better by implementing positive reforms that increase transparency and effectiveness.”

U.S. Ex-Im Bank President and Chairman Kimberly A. Reed.

CREDIT: MISTRULLI/FOTOGRAMMA/ROPI/ ZUMA PRESS/NEWSCOM

www.breakbulk.com BREAKBULK MAGAZINE 55

“We know how important it is for this next reauthorization to provide private industry certainty in the marketplace – and the timeline needed for planning the allocation of capital,” Reed said.

Bipartisan support for a reauthorization bill and an upbeat and positive new Ex-Im leadership will secure the reauthorization, Schubert said, but it may not happen before the end of September.

If Congress does not reauthorize the bank by then, Ex-Im Bank will service its existing obligations, but will, temporarily, be unable to approve new loans, guarantees or insurance commitments.

When authorization lapsed in the latter half of 2015, reauthorization was added to the Fixing America’s Surface Transportation Act. There have been major changes in global ECA finance since the last lapse of Ex-Im Bank’s authorization, and while U.S. ability to win business overseas is vital, the new game changer is that national security is being bundled into export credit. A U.S. presence in strategic places is important, and Ex-Im finances a part of that presence, just as the ECAs of other countries do.

At Ex-Im Bank’s 2019 annual conference in March, National Economic Council Director Larry Kudlow said that Ex-Im is needed in the current trade environment, particularly with respect to China, in order for the U.S. to compete and succeed internationally.

“Ex-Im Bank can be working with us and helping American interests around the world because the geopolitics have gotten much tougher, and the competition has gotten much tougher. And, yes, a lot of this, too, revolves around China,” Kudlow said.

“This is an export credit lending matter that we believe will be very helpful in the new tougher global competition. You are a financial tool and a national security weapon.”

If only for that reason, it is unlikely that Congress will dawdle too long on reauthorization.

Based in the U.S., Lori Musser is a veteran shipping industry writer.

56 BREAKBULK MAGAZINE www.breakbulk.com

MAKING A CASE FOR EX-IM BANK Railserve Inc. is an Atlanta-based business that sought out U.S. ExportImport Bank financing back in 2013 to begin exporting locomotives to a railway operator in Gabon.

The bank guaranteed a US$10million loan to facilitate the export.

With Ex-Im Bank financing in hand, Railserve was able to outbid its Chinese competition and exports began. This mitigated the potential risks associated with selling to foreign buyers and ensured the U.S. business got paid. It also created jobs at Railserve’s manufacturing facility in Texas. Ex-Im supported US$38.2 million of Railserve’s exports from 2014 to 2018.

TJ Mahoney, Railserve’s LEAF program manager, told Ex-Im Bank: “It was very important that we had the support of Ex-Im, because that was a critical element in the buyer’s selection of Railserve … and we think it’s going to open doors for us across Africa, where there’s a lot of rail development underway.”

Breakbulk caught up with Mahoney in Africa, where he was seeking out future contracts. “We

hope to win more business in Africa by leveraging Ex-Im Bank’s MoU with TDB,” he said, referring to the Trade Development Bank’s September 2016 memorandum of understanding with Ex-Im. The MoU aims to increase trade between the U.S. and subSaharan Africa.

Heavy Equipment Resources Inc., or HERO, of Jacksonville, Florida, specializes in the export of components, spare parts and heavy machinery to mining and earthmoving industries. They turned to the U.S. Ex-Im Bank for a small business insurance policy for Africa. Between 2010 and 2018 they received several million dollars of support.

“Nobody is going to trust anybody to send anything to Africa and wonder when they’re going to get paid,” said Leslie Smith, HERO’s president and founder. “I was concerned about the risks of doing business in some parts of Africa … We began to use the bank’s export credit insurance to provide competitive terms to buyers and sales increased.” BB

ISSUE 5 / 2019

VISIT BOOTH D15 AT BREAKBULK AMERICAS TO HEAR ABOUT OUR NEW LIEBHERR 550 CRANE!

BIGGER, STRONGER & BETTER CONNECTED. See why we’re built for breakbulk.

The Port of Corpus Christi provides more advantages for the movement of heavy lift cargo, including dockside rail loading and truck transfer, a 47’-deep channel, three Class 1 rail carriers, best-in-class equipment and a skilled labor force.

connect with us: portofcc.com

ONE ENDLESS PO Container, RORO, Breakbulk Cargo

420 Ton Quarter Ramp

Enables Simultaneous Loading & Discharge of Oversized Cargo

28,900 m2 of RORO Space

For a FREE ACL G4 POSTER, em

SHIP. OSSIBILITIES. • To/From North America & Europe

1,300 Vehicles

mail us at G4@ACL cargo.com

3,807 TEUs Container Capacity

Specially designed cell guide system safeguarding containers and reefers on and below deck.

RULES & REGS

SOLID, STABLE TRADE

BY LORI MUSSER

Market Certainty from Refreshed North American Treaty

W

hile supporting free and open trade is a mainstay for global supply chains, forwarders and engineering, procurement and construction companies asked to outline the pros and cons of the United States-Mexico-Canada agreement, or USMCA, for breakbulk and project cargo movements were unusually coy.

The USMCA was signed by the U.S., Mexico and Canada on Nov. 30, 2018. Mexico was the first to ratify, on June 19. U.S. and Canadian ratifications will take a little longer.

The new agreement is already a hot topic in the container industry, but in the breakbulk and project sector, little has been said.

Olga M. Pina, partner with the Florida-based law firm of Shutts & Bowen, said to Breakbulk that the “quiet” may be because the lion’s share of the USMCA remains consistent with the North American Free Trade Agreement, or NAFTA; the main improvements relate to modernization to protect trade elements that were in their infancy 25 years ago – for example, technology and data flows across borders and intellectual property rights.

60 BREAKBULK MAGAZINE www.breakbulk.com

CONFIDENCE FOR PROJECTS

There is support for the USMCA from companies across many industry sectors. The supporters’ one common denominator appears to be a quest for market certainty. Simply

USMCA

having a workable free trade agreement in place is the end goal for many.

American Petroleum Institute President and CEO Mike Sommers

said to Breakbulk: “Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”

U.S., Canada and Mexico markets are highly integrated and interdependent. The energy market (which supports millions of jobs, energy security, and reliable/affordable energy), depends on the unfettered flow of energy products across North America, according to Kyle Isakower, vice president of regulatory and economic policy for the American Petroleum Institute, or API. An API spokesperson noted that the oil and gas sector finds value in provisions such as continued zero tariffs on its products, and investment protections to which all countries commit and the eligibility for investor-state dispute settlement for U.S. companies investing in Mexico.

Much to the relief of the energy industry and the project sector, on May 20, U.S. steel and aluminum tariffs on Canada imposed roughly a year earlier were officially lifted. Such quotas and tariffs created uncertainty for U.S. energy projects and potentially threatened U.S. jobs, as well as America’s energy leadership, ISSUE 5 / 2019

www.elme.com

John (Johan) Ericsson, Swedish-American Engineer and Inventor. Born in 1803 in Värmland, Sweden.

From the country of John Ericsson who gave you the USS Monitor.

Now we’re peacefully back with worldleading spreaders.

ELME Spreader. Born in Småland, Sweden.

Visit us at Booth C35 October 8-10, 2019

according to API in a comment submitted to the U.S. International Trade Commission at the end of 2018.

U.S. oil and gas industries rely on steel products for virtually every aspect of their infrastructure, including pipelines, well casing, terminals, petrochemical plants, and refineries.

DISJOINTED GOVERNMENT PROCUREMENT

Top Five Reasons for the US to Support the USMCA 12 Million U.S. Jobs

The agreement allows the U.S. to trade roughly US$1.4 trillion annually, which supports more than 12 million jobs.

Essential to U.S. Producers

Between manufactured goods and agricultural products, U.S. exporters nearsell much of their production within the North American bloc. More than 2 million jobs at more than 43,000 manufacturing firms across the U.S. are supported by exports to Canada and Mexico. Of the 42 U.S. manufacturing sectors, 38 count Canada or Mexico among their top two foreign buyers. And about one-third of U.S. agricultural exports go to Mexico and Canada.

Brings Trade into the 21st Century

The digital trade chapter in the USMCA is “the best ever negotiated, by any country.”

The USMCA includes some innovative rules and protects e-commerce and certain classes of intellectual property.

Boosts U.S. Small Businesses

For U.S. small and medium-sized businesses (more than 120,000 of them), the top two export destinations are Canada and Mexico.

New businesses cut their foreign-trade teeth on Canada and Mexico.

Powers the Service Economy

U.S. services exports to Canada and Mexico are highly competitive and tripled from US$27 billion in 1993 to US$96 billion in 2018. Those business services sectors, with high export growth, include engineering and project management, as well as insurance, banking and many more.

Source: Derived from U.S. Chamber of Commerce Above the Fold, Feb. 26, 2019

62 BREAKBULK MAGAZINE www.breakbulk.com

Chapter 13 of the USMCA, which deals with government procurement, may prove to be a weak spot – it only covers procurement between the U.S. and Mexico. Procurement between the U.S. and Canada will be governed by the World Trade Organization’s Government Procurement Agreement, and Canada-Mexico deals are covered by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or TPP. Chapter 13 only looks at government procurement bilaterally,” Shutts & Bowen’s Pina noted. “Leaving Canada out defeats the purpose of a tri-party agreement. It creOlga M. Pina ates a disjointed situation.” That Shutts & Bowen situation could impact a great deal of business including large infrastructure projects.

Mexican contractors may end up with better access than U.S. contractors to Canadian procurement through TPP, because it likely will allow greater competition in purchasing. U.S. contracts may have decreased competition because Canada isn’t bidding. Ultimately, the system is less efficient.

Pina said, technically, the USMCA achieves what it should, but that there are parts that may deter trade, and others that won’t have much of an impact at all. “I’m not sure the rules of origin have been greatly simplified, and there is a need to look at remaining barriers to trade,” she said.

Also, concerns are arising related to Chapter 34’s review and termination processes, which may allow, under certain circumstances, annual reviews. Pina said: “Infrastructure development is long term. If rules ISSUE 5 / 2019

If You Think There Is No Way, We Will Find One. At deugro, we have a lot of passion for difficult and challenging projects, and we always find a way to make it work!

Our highly motivated and very experienced workforce always works towards the same goal: your success.

deugro.com

were changed in the midst of a contract it could be very disruptive for major infrastructure projects.”

DELAYS IN RATIFICATION

The trade agreement ratification process was never expected to be speedy.

While Mexican ratification depended on a relatively simple U.S. Senate vote, Canadian ratification involves tabling the agreement and an explanatory memorandum in the House of Commons, followed by debate and governor in council order, which allows the minister of foreign affairs to ratify. The Canadian government may not be in a hurry to ratify an agreement that will take some time to wend its way through the U.S. political process.

That said, in Canada there is widespread support for the trade agreement. In a May 29 letter to Canadian Prime Minister Justin Trudeau, the Canadian Chamber of Commerce, along with Canadian Manufacturers and Exporters, the Business Council of Canada, the Canadian Federation of Independent Business and the Cana-

dian Agri-Food Trade Alliance, offered their full support for Canadian ratification.

With a membership responsible for the vast majority of Canada’s exports to, and commercial ties with, the U.S. and Mexico, the group of organizations noted that the Canada-United StatesMexico Agreement, or CUSMA as it is called in Canada, would “lift the cloud of uncertainty that has hung over the North American trade and investment relationship since 2017,” spur new investments and create jobs.

Congratulating the government for maintaining Canada’s preferential access to the U.S. and Mexico (Canada’s largest and third-largest trading partners respectively), while modernizing NAFTA’s outdated terms, the group noted that there is no need to wait for ratification – the opportunities start now for a more productive and mutually beneficial trilateral relationship. “For example, we would encourage all three governments to work together to enhance North American competitiveness and good regulatory practices as outlined in the agreement by establishing commit-

tees in each area to promote economic growth and strengthen regulatory cooperation,” the letter stated.

SEAPORTS KEPT BUSY

U.S seaports are also onboard. On March 26, the American Association of Port Authorities, or AAPA, testified before the U.S. House of Representatives Ways and Means Subcommittee on Trade, urging congressional approval of USMCA. Susan Monteverde, AAPA vice president of government relations, told the committee: “AAPA is concerned, however, that potential trade sanctions imposed on Canada, Mexico or other trading partners like China, and reciprocal actions, could result in significant losses of good-paying U.S. Susan trade-related jobs, Monteverde including those AAPA

Mexico’s President Andres Manuel Lopez Obrador at a “unity” rally in Tijuana, Mexico. Mexico’s Senate backed the ratification of the USMCA deal by a vote of 114 to 4. / CREDIT: JORGE DUENES/REUTERS/NEWSCOM.

64 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

Young.

Experienced.

Independent.

Young Fleet | We operate a modern eet of MPP vessels which have recently been complemented by eco-friendly ships.

Experienced Teams | From start to ďŹ nish, our experts ensure your cargo is treated with the highest degree of safety and professionalism.

Independent Spirit | Our creative and even unconventional way of thinking achieves the best customized solutions for your project requirements.

dship-carriers.com

in the seaport industry. You can help by approving the USMCA and encouraging the president to speed up negotiations with China.”

Monteverde added to Breakbulk: “The 31 million jobs supported by cargo of all types moving through U.S. deep-draft ports benefit from increased trade, both imports and exports.”

She said that North American seaports handle about 2 billion tonnes of cargo per year and that the economic value that U.S. coastal ports provided in terms of revenue to businesses, personal income and economic output by exporters and importers accounted for nearly 26 percent of the nation’s US$20.5 trillion economy in 2018.

between the United States, Mexico and Canada as essential to maintain American economic strength, and to support a more competitive North American economy as a whole.”

While no agreement is perfect, Huneke said: “USMCA makes a number of important improvements over NAFTA, and it provides a firm foundation for growth in cross-border commerce.”

Across sectors, the case for an updated North American trade agreement is strong. It is about preserving and strengthening trade ties between long-time allies who oper-

ate some of the globe’s busiest trade lanes.

The breakbulk and project cargo sectors traditionally support the benefits of free and open trade. A solid, stable, certain trade environment that extends well into the future underpins trade in more goods and services within the North American bloc. It buoys North American trade in a wildly competitive world economy.

Based in the U.S., Lori Musser is a veteran shipping industry writer.

MANUFACTURERS SIGN UP

Not surprisingly, given the broad base of its membership, the National Association of Manufacturers, or NAM, was among the first, last November, to release a statement encouraging U.S. ratification. CEO Jay Timmons said: “Manufacturers called for a trilateral agreement, and this moves us one step closer to restoring certainty to the North American market, the biggest market for U.S. exports in the world.”

Like other friends of the USMCA, NAM was careful to articulate its support in a broader, global context: “By securing the relationship with our North American allies, we are also better positioned to demonstrate a strong and united front against China’s unfair trade practices and end the harm they inflict on manufacturers in America.”

Canada and Mexico purchase one-fifth of the total value of U.S. manufacturing output – more than the next 11 countries combined, according to NAM. “The USMCA is about restoring certainty, improving the rule of law and expanding our partnerships with our most significant trade partners,” said Linda Dempsey, NAM vice president of international economic affairs.

Jonathon Huneke is spokesperson for the U.S. Council for International Business, an advocacy group that represents many of America’s largest global companies. He said to Breakbulk, “Our members are strongly in favor of the USMCA. We view more open trade and investment 66 BREAKBULK MAGAZINE www.breakbulk.com

21ST CENTURY UPDATES Like many transportation and logistics regulations and mandates, treaties are rarely written with breakbulk or project trade in mind, and the United States-Mexico-Canada agreement is no exception, making it hard to get a good read on the implications of the new agreement.

Many breakbulk cargo shippers, engineering, procurement and construction companies, and project forwarders are still uncertain of the ramifications, but, the much-lauded modernization elements may prove helpful.

EPCs with licensed technology may benefit from the new protection of intellectual property elements, which secure stronger protections for patents, copyrights, and related rights, trademarks, designs and trade secrets. There are also strong enforcement tools against counterfeiting and piracy.

Shippers and forwarders may be treated to new customs efficiencies,

especially related to risk management, but also to advanced rulings, simplified entry, single window, e-signatures and self-certification of origin.

The project sector may appreciate the assurance of fair competition.

The agreement establishes rules to ensure that central government state-owned enterprises do not distort competition in the marketplace by guaranteeing regulatory impartiality; their decisions must be commercially motivated. Also, antitrust investigations must be based on sound economic analysis. They must be fair and transparent.

There are also specific rules to remove regulatory and technical barriers, to level the field for financial services trade, and to simply maintain market access.

The agri-food sector faces updated agricultural trade standards, said to be the strongest ever achieved in a trade agreement. BB

ISSUE 5 / 2019

REGIONAL REVIEW

RIDING ARGENTINA’S REVIVAL ‘Dead Cow’ Could Kick-start Economy

An aerial view of a shale oil drilling rig SAI-310, known as Vaca Muerta (Dead Cow) shale resource, in the Patagonian province of Neuquen.

CREDIT: ENRIQUE MARCARIAN/REUTERS/NEWSCOM

68 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

BY SIMON WEST

Argentina’s President Mauricio Macri has been instrumental in attracting investors to the country’s oil and gas sector.

T

hey say a wise man turns chance into good fortune.

Many Argentinians would balk at describing their under-fire president in such glowing terms, but Mauricio Macri deserves at least some credit for the explosive growth at Vaca Muerta, a 30,000 square-kilometer rock formation in northern Patagonia that holds one of the world’s largest reserves of unconventional oil and gas.

Since taking office in 2015, Macri has sanctioned a series of industryfriendly legislative changes in a bid to lure investors back to the country’s upstream sector and overturn a costly energy deficit, which last year totaled US$2.3 billion.

Strict currency controls, price caps and heavy-handed regulation have been swapped for stable tax regimes, subsidies and sensible labor agreements.

Vaca Muerta, or “Dead Cow,” located in the prolific Neuquen Basin, is leading the revival in upstream development, accounting for about 23 percent of the country’s total natural gas production and 16 percent of total crude output.

The formation is often compared with the giant Eagle Ford shale play in southern Texas. According to the U.S. Energy Information Administration, or EIA, just 4 percent of Vaca Muerta’s acreage has entered full development.

MAJOR PLAYERS

State-controlled energy producer YPF is the main player in the region, backed by more than 30 national and international operators. Investments over the next five years in Argentinian unconventional resources are expected to reach US$21.8 billion, with much of that heading for Vaca Muerta, according to energy consultancy Wood Mackenzie.

U.S.-based ExxonMobil is one of the latest firms to ramp up activity in the region, announcing in June plans to spud 90 wells at its 99,000acre Bajo del Choique-La Invernada block. The project, which will include a central production facility and export

CREDIT: JORGE ADORNO/ REUTERS/NEWSCOM

infrastructure connected to pipelines and refineries, could produce up to 55,000 barrels of oil equivalent per day, or boepd, within five years.

Other heavyweights to recently commit resources to the formation include Shell, ConocoPhillips, Wintershall and Mexico-based operator Vista Oil & Gas. Authorities in Neuquen province, where most of Vaca Muerta is located, have so far granted 36 unconventional oil and gas concessions, with another four likely to be signed off by the end of the year.

The government expects Vaca Muerta to drive Argentina’s total oil production to 1 million barrels per day, or bpd, by 2023, and boost natural gas output to 260 million cubic meters per day, or cmd, converting the country into a world energy power.

“When we started this process in 2015 we had 500 wells in Vaca Muerta.

By the end of the year we will have 1,500 in development,” Neuquen Gov. Omar Gutierrez told journalists in July, shortly after awarding local firm Tecpetrol two concessions to drill the Los Toldos I Norte and Los Toldos II Este blocks.

LOGISTICAL CHALLENGES REMAIN

Rapid development, however, has flagged logistical issues that the government will have to address if Vaca Muerta is to reach its full potential and match the success of the shale revolution in the U.S. For starters, a shortage of pipelines and processing plants has thwarted efforts to export liquefied natural gas, or LNG, during Argentina’s summer months from October to April, when output exceeds domestic demand.

Conversely, during the winter months, when domestic demand soars, existing midstream capacity is unable to shift adequate gas supplies to processing plants, forcing the government to hike up LNG imports.

The three existing pipelines that ship gas out of the Neuquen Basin – Neuba I, Neuba II and Centro Oeste – are operating at full capacity, according to the energy ministry.

Argentina’s lack of large-scale natural gas storage facilities means some producers, including YPF, are focusing on shale and tight oil to sustain output growth. www.breakbulk.com BREAKBULK MAGAZINE 69

Argentina Gross Natural Gas Production (2009-2019) billion cubic feet per day 6 5 4 3 from shale formations

2

from tight formations

1

other

0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Source: U.S. Energy Information Administration

Argentina Natural Gas Trade (1997-2019) billion cubic feet per day 1.5

Exports by pipeline to Chile by pipeline to Brazil by pipeline to Uruguay as LNG

1.0 0.5 0.0

Imports as LNG by pipeline from Chile by pipeline from Bolivia

-0.5 -1.0

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

Source: U.S. Energy Information Administration

“Vaca Muerta players are ready to increase speed, but Argentina still needs to make improvements to accommodate that pace,” said Fernanda Pedo, upstream research analyst for Latin America at Wood Mackenzie.

The rise in production has triggered a restart of gas shipments to neighboring countries such as Brazil and Chile – supplies to the latter were suspended in 2007 amid a decline in production – while YPF announced in June it was readying its first-ever export of some 25,000 cubic meters of LNG, equivalent to 1,000 truckloads.

OPPORTUNITIES FOR INVESTORS

Longer-term solutions to bump up export capabilities are also taking shape.

The government opened bidding in late July for the construction of a new 1,040-kilometer natural gas pipeline from Vaca Muerta to capital city Buenos Aires. Neuba III, slated to come online 70 BREAKBULK MAGAZINE www.breakbulk.com

in 2021, will boost gas transport capacity by 15 million cmd, and save some US$240 million in LNG imports, the energy ministry said.

The capacity of Neuba III, Argentina’s first new pipeline construction project since 1988, could be increased incrementally to 40 million cmd, depending on future demand, the ministry added.

YPF, meanwhile, is mulling the construction of a new US$5 billion LNG terminal, either at the Bahia Blanca industrial complex in Buenos Aires province, or along Chile’s Pacific Coast. The state-run giant is looking for partners to help develop the project.

According to Wood Mackenzie, a new infrastructure drive would support exports to bigger markets such as Asia.

Argentinian facilities would enjoy lower shipping costs compared with their U.S. Gulf counterparts, whose ships have to navigate the Panama Canal.

“We see a great opportunity (for

Argentina) in the Asian market,” Pedo said. “Those (LNG export) plans could be ready in five to six years.”

Argentina’s road and rail networks, meanwhile, also require heavy investment.

Large sections between the southern port of Bahia Blanca – the main entry point for cargoes to and from Vaca Muerta – and oil and gas installations in the Neuquen Basin are linked by poorly maintained roads that cut through arid Patagonian desert.

The lack of trucks adds to the strain, while for movers of breakbulk, high demand from Argentina’s burgeoning renewable energy industry is creating a shortage of special transport equipment, according to Sergio Vanina, regional manager at ALE Heavylift.

“This demand (for renewables) means that there is practically no oversized transport equipment available in the market. In addition, rates have gone up significantly,” Vanina said.

Authorities are mulling a US$570 million overhaul of the 700-kilometer Norpatagonico freight railroad linking Vaca Muerta to Bahia Blanca, a project that would reduce logistics costs by up to 50 percent, according to the transport ministry.

The overhaul, which would be funded under a public-private partnership, or PPP model, would boost shipment capacity of cargoes such as sand, methanol, piping and building materials from 700,000 tonnes to 4.1 million tonnes per year by 2030.

The high cost of financing the project, however, may deter potential investors.

“I think it is a very good idea, but they need private investments, and I don’t know where that is going to come from,” said Muriel Maurizzio, a broker for Buenos Aires-based shipping agency Oceanway.

CAPTURING BREAKBULK POTENTIAL

Still, the exponential growth at Vaca Muerta and the gradual upgrade of supporting infrastructure is providing plenty of opportunities for breakbulk and project cargo.

The demand for new rigs, piping and other heavy-lift equipment has driven expansion projects throughout the country’s southern regions, including ports such as Bahia Blanca.

“These were ports that were mainly used for grains and some spot project cargoes, but really not that much,” Maurizzio said. “Between Vaca Muerta and the wind projects we have in the ISSUE 5 / 2019

ALWAYSRELIABLE DEPARTSWEEKLY SMOOTHSERVICE

EXPRESS SERVICE FOR OVERSIZE CARGO American Independent Line offers the most professional and comprehensive service available for the ocean and inland transportation of oversize and project cargo.

Our service: predictable, expedient and competitive.

Our people: knowledgeable, attentive and responsive.

Shippers and forwarders entrust American Independent Line to move the capital goods that move the world.

New York | 516.829.0647 | east@aishipping.com Chicago | 630.848.0004 | midwest@aishipping.com San Francisco | 415.461.9714 | west@aishipping.com

Asia

|

Australia

|

Europe

|

Mediterranean

|

Middle East

|

South America

www.aishipping.com

Above: “No to G20 and IMF,” is written on the poster of a demonstrator during a protest march against the G20 summit and Argentina’s IMF bailout. / CREDIT: NICOLAS VILLALOBOS/DPA/PICTURE-ALLIANCE/NEWSCOM

south, the port (at Bahia Blanca) has had a huge increase and a lot of investments.”

Bahia Blanca’s public berth is the main dropping point for big bags of sand and ceramic proppants used for

hydraulic fracturing, or fracking, the controversial technique that employs a high-pressure mix of water, sand and chemicals to unlock unconventional oil and gas.

However, importing fracking sands, either by breakbulk or container, can be costly, so producers have started looking closer to home to secure their supplies.

Earlier this year, Tecpetrol struck a deal with the local unit of Belgium dredger Jan de Nul to buy some 70,000 tonnes of sand scooped up from Argentina’s Parana River. YPF, meanwhile, has built a fracking sands plant in southern Chubut province that has significantly reduced its exploration costs.

Potential opportunities for breakbulk are also surfacing further downstream.

Natural gas from Vaca Muerta is creating fresh supplies of ethane, propane and other natural gas liquid feedstocks that would support proposed expansion projects at Bahia Blanca’s petrochemical plants.

ECONOMIC WOES CANNOT BE IGNORED

Argentina’s fragile economy, which shrunk by 5.8 percent in the first quarter, has so far failed to dent investor appetite in Vaca Muerta. Even so, with inflation hovering around 60 percent, and the peso losing value, the government has been increasing interest rates to more than 70 percent, creating headaches for producers seeking to raise capital.

To tackle its financial crisis, Argentina was forced last year to seek a US$57.4 billion bailout package from the International Monetary Fund, or IMF. As part of a pledge to slash spending and reduce debt, Macri pulled back on a subsidy program for new natural gas projects at Vaca Muerta – operators had been guaranteed a minimum price of US$7.50 per million British thermal units, or Btu, for shale gas with the market price at about US$4.50 – a move that has further rotated drilling efforts from gas to oil.

ACCESS TO > 50 MILLION CUSTOMERS IN MONTREAL, TORONTO, CHICAGO, AND DETROIT WITHIN 72 HOURS ASSURED EXPORT TRANSFER FROM RAIL TO VESSEL AT 95% OR MORE

ZERO CONGESTION OPEN BERTH WINDOWS AND CAPABILITIES 24/7

WE’VE GOT YOUR NUMBER. The Port of Halifax is the data driven port you’ve been waiting for.

PortofHalifax.ca 72 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

The cut in subsidies shook producers, and sparked a legal battle between the government and Tecpetrol, which had been forced to lay off workers and reduce output amid higher operating costs.

To date, 65 percent of investments in Vaca Muerta have come from government or government-affiliated entities, according to a report by the U.S.-based Institute for Energy Economics and Financial Analysis.

The longer-term impact of the subsidy cut remains to be seen, although some investors would rather see them scrapped.

“Enterprise needs to be justified by natural fundamentals,” said David Tawil, president of Maglan Capital, the largest shareholder in Madalena Energy, which operates at Vaca Muerta.

“I don’t know whether the government will bring back subsidies, and, if so, to what level. However, I would encourage companies to think about achieving profitability without any reliance on subsidies. In addition, reaching

profitability without subsidies would be easier to achieve with reduced labor costs and red tape, lower provincial royalties and better infrastructure.”

POPULARITY CONTEST

Macri himself is in a dogfight to secure a second presidential term after he was trounced by center-left challenger Alberto Fernandez in a primary vote on Aug. 11. Fernandez is now odds-on favorite to head a new government.

The incumbent’s popularity with voters has plummeted in recent months amid his government’s painful austerity program that has included cuts to education, health and other public services.

For many Argentinians on the breadline, Macri’s free-market reforms have failed.

The result of the primaries – a taster perhaps of what can be expected in a first round of voting of Oct. 27 – sent Argentina’s currency and stocks plummeting further as investors panicked at the prospect of a return to populism and protectionism.

Macri’s best bet now is to force a

second-round runoff on Nov. 24.

Fernandez, whose running mate is former President Cristina Fernandez de Kirchner, has pledged to re-evaluate many of Macri’s economic policies, including the bailout with the IMF and a recent free trade deal between Mercosur and the EU. Crucially, though, he has backed the development of Vaca Muerta, and acknowledged its critical role in any plan to overturn Argentina’s economic woes.

“I think that most Argentina energy executives and investors are hopeful that the energy industry, particularly Vaca Muerta exploration and development, will continue to be clearly supported by the government into 2020 and beyond, regardless of which political party succeeds in the elections,” Maglan Capital’s Tawil said. BB Colombia-based Simon West is a freelance journalist specializing in energy and biofuels news and market movements in the Americas.

www.breakbulk.com BREAKBULK MAGAZINE 73

EQUIPMENT

SMALL BUT MIGHTY Super-Heavy-Lift World Poised for Takeoff

74 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

BY AMY MCLELLAN

M

Taisun holds the world record for “heaviest weight lifted by crane,” set at 20,133 tonnes by lifting a barge, ballasted with water.

CREDIT: CC-BY-SA3.0.

ost breakbulk cargo moves go under the radar, but nothing grabs headlines like the super-heavy-lift sector.

There are a number of recordbreakers out there, most notably China’s Taisun, the world’s biggest gantry crane with a capacity of 20,000 tonnes and its very own entry in the Guinness Book of World Records.

Then there is Heerema’s newbuild liquefied natural gas-powered crane vessel, Sleipnir, with its two 10,000tonne revolving cranes, which can lift loads of up to 20,000 tonnes in tandem.

When it comes to land-based mobile cranes, a number of companies have been busy in recent years developing new concepts to push the lifting envelope, development that comes in time to meet anticipated increased demand for super-heavylifts, defined as those weighing in at more than 800 tonnes for a single cargo move.

This increased demand is largely down to increased confidence in the outlook for the oil and gas industry.

This is an industry that felt the pinch as major projects were shelved following the oil price slump of 2014.

But after a period of sustained price recovery, with benchmark Brent prices holding north of US$60 per barrel, oil companies have found their confidence and dusted off stalled plans to meet the world’s growing energy needs.

According to DNV GL’s 2019 oil and gas industry outlook, confidence has more than doubled over the last two years, with more than two-thirds (67 percent) of senior oil and gas professionals believing more large, capital-intensive oil and gas projects will be approved this year and seven out of 10 expecting to increase or maintain capital expenditure this year.

This is good news for the heavy hitters of the crane world, as their specialist kit is vital to maneuver

oil and gas industry hardware, be it floating production and storage and offloading unit topsides or refinery plants. With Big Oil now greenlighting previously stalled mega-projects, contractors are lining up to tender for work – and that includes the specialists of the abnormal load world.

“Demand in this segment depends on the waves in the oil and gas sector,” said Paul van Gelder, CEO of Netherlands-based Mammoet, which takes the No. 1 spot in the IC Index of the world’s largest crane-owning companies. “We are seeing more oil and gas coming onstream and that’s helping demand in the super-lift category.”

INVESTMENT: UPSTREAM, DOWNSTREAM

Investment is up across the board, from upstream oil and gas to liquefied natural gas, or LNG, projects, petrochemicals and refineries.

Deepwater production is also picking up. Wood Mackenzie thinks 2019 will be the best since 2013, with project sanctions potentially hitting US$80 billion in total capital expenditure, up from just US$20 billion last year as a focus on cost-cutting and design optimization has driven down the breakeven price to US$50 per barrel of oil equivalent, triggering a wave of development in deep waters off Brazil, Guyana and Gulf of Mexico.

It’s not just upstream where there’s a renewed wave of investment. Billions of dollars are being spent on refining and petrochemicals projects in North America, Africa, the Middle East and China to add value to every precious barrel and therm of gas to meet the world’s surging demand for chemicals and plastics.

All of this is good news for the world’s heavy-lifters, with their specialist services increasingly in demand. Yannick Sel, director for global sales at ALE, said the Stafford, UK-based group is seeing increased demand in the number of requests for 800-tonne-plus single cargo moves for projects that will get underway in the next 24 months. www.breakbulk.com BREAKBULK MAGAZINE 75

ALE’s SK10,000 crane has been specifically designed for FLNG projects. / CREDIT: ALE.

INNOVATING IN PARTNERSHIP This is an industry that focuses on solving client problems.

ALE, for example, was quick to spot the opportunities presented by floating liquefied natural gas, or FLNG, solutions. Although FLNG has been around as a concept for decades, it is only over the last two to three years that it has started to gained traction as a real-world solution for remote or deepwater gas projects.

Stafford-headquartered ALE, the subject of an agreed takeover

by Mammoet, has developed its SK10,000 crane, (see related story, page 80) the world’s largest landbased crane with a lifting capacity of 10,000 tonnes, primarily to serve FLNG customers.

“It will allow modules to be installed directly onto ships’ hulls, to an unprecedented scale both in terms of weight and impact on project efficiency,” said ALE’s Yannick Sel. “It has a large outreach up to 200 meters, a ground-bearing pressure that compares favorably with the AL.SK350, and given that its ballast is located centrally, it can occupy a footprint appropriate to the project, allowing other critical-path activities to take place around it.”

Bigger lifts allow clients to build larger modules and therefore gain greater efficiencies from each location, a consideration that is forefront for a budget-conscious oil company.

The same thinking lies behind Mammoet’s new concept crane, the Focus (which comes in an A or Y frame), developed so that clients can think in bigger modules. Rather than just being a crane with more lift capacity, however, the Dutch company has focused on finding

76 BREAKBULK MAGAZINE www.breakbulk.com

smart ways to deal with today’s lifting challenges, which in many locations may mean working in confined or congested spaces, such as ports or urban areas. Vertically self-erecting, with the Y-Frame having a footprint of just 22 by 22 meters, the Mammoet Focus can tackle jobs in places where conventional cranes can’t be assembled. But this versatility doesn’t come at the expense of power; the Focus has a lift capacity of up to 5,000 tonnes.

The concept also resolves another challenge facing the super-heavy-lift segment; the time, cost and regulatory burden of transportation. The mast sections are assembled from separate chords and braces, allowing for efficient containerized transportation for quicker and cheaper mobilization.

“In the future, we see a lift capacity of over 5,000-6,000 tonnes so they can build an FPSO, for example, in larger modules in parallel in different locations,” Van Gelder said. “We are continuously in dialogue with our customers so they can come to us for solutions for whatever they want to do.”

Danny Cain of Edwards Moving points out that advances in crane technology are not just about capacity.

“It’s also about making the equipment more user friendly and safer to operate,” he said.

“Computerization means we can do things quickly and more accurately first time and there are also a lot more safety features built into the equipment. The industry continues to aggressively develop equipment to meet the specialized needs of the end user, but the No. 1 priority is safety and making sure everyone goes home safely at the end of the day.”

“Operations and project execution will start in one to two years, due to the amount of planning involved in significant projects of this type,” Sel said.

“The heaviest lifts will come for Yannick Sel FPSO/floating ALE LNG construction. We also see quite a few heavy-lifts coming up for the petrochemical industry in the future.”

INNOVATION TO MEET NEW ENERGY

With climate change increasingly topping the agenda, as countries around the world experience increased frequency of extreme weather events, there’s growing urgency to develop renewable and nuclear energy. This is placing increased demand on the heavy-lift sector to deliver innovative solutions for these essential projects.

Belgium’s Sarens, for example, is debuting its new crane, the largest in the world, at the Hinkley Point C nuclear power plant in Somerset, the first new nuclear power station to be built in the UK in more than 20 years. The SGC-250 arrived on site in August, due to the services of Collett, which discharged the components on their arrival at Port of Avonmouth and then delivered the massive structure in modular form in more than 400 deliveries in four months to the Hinkley Point construction site. With a lift capacity of 5,000 tonnes, the new Sarens crane will play a critical role in the construction of the power plant, positioning more than 600 heavy fabrications.

Similar innovation is required in wind power, particularly offshore, where turbines are getting ever heavier and are increasingly sited in countries with no experience of offshore operations, such as Japan, Taiwan and South Korea. The heavylift industry is constantly innovating and adapting to meet this new demand.

In Japan, for example, Shimizu is building the world’s largest offshore ISSUE 5 / 2019

Delaware River Stevedores, Inc. Serving The World Of Breakbulk

Visit www.d-r-s.com Corporate Office 441 North 5th Street, Suite 210 | Philadelphia, PA 19123 USA

Please send inquiries to drsrates@d-r-s.com

Increased funding for road and bridge infrastructure in the U.S. will fuel super-heavylifts. / CREDIT: EDWARDS MOVING & RIGGING.

blades. Verton has developed a remote rotating device that uses gyroscopic modules to rotate a suspended load.

“The system allows operators to rotate and install heavy loads without using tag lines,” Wouter de Wildt of Van Oord explained. “Not only is this safer for operators, but it also shortens the installation cycle times.”

installation jack-up vessel, capable of handling a new generation of mega-turbines to serve Japan’s offshore wind ambitions. The vessel will be equipped with a crane with lifting capacity of 2,500 tonnes and lifting height of 158 meters, making it capable of handling next-generation ultra-large-scale turbines.

Achieving these big lifts doesn’t always mean bigger cranes; sometimes it means forging new partnerships to deliver innovation. Mammoet, for example, has joined forces with Dutch maritime contracting company Van Oord and Australian technology company Verton to develop a new lifting method for installing wind turbine

INFRASTRUCTURE UPGRADES

It’s not just the energy sector that’s generating super-heavy-lift demand.

In the U.S., the US$287 billion America’s Transportation Infrastructure Act, or ATIA, aims to boost investment in the nation’s long-neglected roads, tunnels and bridges. But the infrastructure overhaul is not just focused on transport; the country’s

Your technical expert partner for the design and manufacture of custom lifting equipment ●

Custom designed Lifting Beams and Frames manufactured to your individual requirements

●

Enhanced QA options for all industry sectors. Proof load testing, DNV, Third Party Witnessing, full traceability, CG3 and CG4 certification available

●

Rig Design for all lifting projects

We’re more than just the standard!

08162_ad_engineered_products_Breakbulk_170x118_2019_06.indd 1

78 BREAKBULK MAGAZINE www.breakbulk.com

For more information contact +44 (0)1202 621511 sales@modulift.com www.modulift.com

20/06/2019 14:35

ISSUE 5 / 2019

power and utility sectors are also being overhauled to replace aging assets and meet the needs of a growing population.

All of this means work for superheavy-lift providers and, as Danny Cain, safety and risk manager at Kentucky-based Edwards Moving & Rigging, points out, these lifts are getting heavier all the time.

“We’re being asked to move bigger and heavier equipment every year,” Cain said, pointing out that utility companies like to future-proof their upgrades by installing excess capacity to accommodate anticipated growth in demand. “As the cargo gets bigger and bigger, the challenges for us get tougher and tougher, and you need to do a lot of due diligence and planning to undertake these multimodal transfers of equipment particularly as so much of our infrastructure isn’t equipped for these heavy moves.”

This is a highly specialized niche; only a handful of global operators are able to undertake the biggest lifts and have the financial resources to invest in developing next-generation cranes.

With new concepts taking years to move from drawing board to construction site, and each heavy-lift project taking at least a year of planning and permitting, new capacity doesn’t become available quickly, which could act as a drag on project timelines.

“With the increase in demand as well as weight and dimensions over several sectors, we can foresee a shortage in the next few years,” ALE’s Sel said, noting offshore renewables, floating LNG, floating production storage and offloading, or FPSO, and to an extent nuclear, although that would be a few years down the line. “Buyers have to be aware of this as it might jeopardize their projects.”

It’s not just hardware that could be in short supply. As Sel points out, this isn’t just about being able to mobilize the right equipment. “Having equipment is one thing, but even more important is having the people that come up with the solution and do the engineering,” he said. “Many of our projects require us to be the single point of contact for clients across international borders, sectors, languages and so on.”

Indeed, bigger and thus fewer lifts are seen as essential to manage the enduring problem of skills shortages because it enables modular construction.

“Modular construction is the only solution for some of these mega projects,” Mammoet’s van Gelder noted.

“Oil and gas are never found in a nice place like Amsterdam, it always tends to be a hostile or remote location, which creates a challenge not only in terms of equipment but also in getting people to work there.

Expert craftsmen are becoming scarce and the younger generation is less attracted to the industry.” BB Freelance journalist Amy McLellan has been reporting on the highs and lows of the upstream oil and gas and maritime industries for 20 years.

www.breakbulk.com BREAKBULK MAGAZINE 79

EQUIPMENT

TWO BECOME ONE Mammoet’s Marriage of Great Convenience

H

eavy-lift specialist Mammoet’s confirmation that it is to acquire UK-based breakbulk specialist ALE has certainly set the scene for a new global leader in the heavy-lift segment.

The deal, announced in early July, will create a combined heavy-lift and transport company with about 6,800 employees and some of the largest capacity cranes in the business.

Founded in 1807 in the Netherlands, Mammoet is one of the oldest heavy-lift firms in the world, and is today headquartered in Schiedam, in the outskirts of Rotterdam. Operating a network of about 90 offices and branches worldwide, the group employs about 5,000 staff and delivers a range of project cargo transportation, logistics planning and crane rental services.

ALE in contrast is a relatively small company, employing about 1,800 staff through 40 global branches. Operating as a privately held, family-run business from headquarters in Staffordshire in the UK since 1983, the company has built a strong reputation at the larger end of the heavy-lift market, creating some of the industry’s highest capacity cranes as well as a range of transport systems, ballast systems, jacking, barges, skidding systems, auxiliary, and weighing systems. In May, the firm introduced the “world’s largest capacity 80 BREAKBULK MAGAZINE www.breakbulk.com

BY MALCOLM RAMSEY

land-based crane,” promising new levels of project efficiencies and safety.

While the deal is pending regulatory approval, Mammoet has been reticent to comment, but Paul van Gelder, Mammoet CEO, has publicly outlined plans to create a “technologically leading player” that will manage a “well-balanced portfolio of activities worldwide.”

INDUSTRY THOUGHTS

Speaking to Breakbulk, Elisabeth Cosmatos, managing director of industry consultancy Cosmatos Group, highlighted the dominant position a combined entity would take in the sector: “Mammoet and ALE joining forces certainly brings them in the first rank for many years to come, leaving Sarens considerably behind in second position. So, we are faced with a colossal new company with dominant presence around the globe.”

Andrew Collister, director of heavylift consultancy Techlift, sees the deal as a win-win for Mammoet, increasing client diversity and geographical locations and removing one of their major competitors. While the value of the deal has not been disclosed, Collister estimates that it may be valued “around US$100 million to US$150 million.”

While on paper the two firms represent a surefire industry leader, the practicalities of any merger at this scale

present challenges, and Collister goes on to note the potential for culture clash.

“From our experience in working with both companies over the years, they have cultural differences in terms of their approach to sales, planning and execution. Although ALE has grown significantly in recent years to become a global business, it is still very much family run. Whereas, since the departure of the Van Seumeren family, Mammoet is very much a corporate animal run by an investment organization.

“It will be interesting to see to what extent the ALE business will be integrated within the Mammoet organization, as there are a number of markets and geographical locations where both organizations already have a strong presence.”

With little detail from Mammoet or ALE on the future shape of any combined operating company, the potential for disruption remains unclear, and uncertainty over the nature of project delivery in the short-term may create issues.

“As the heavy-lift and transport industry often requires long lead time commitment by clients for the hire of ultra-heavy cranes and multiple axle lines, there will be uncertainty for major EPCM [engineering, procurement and construction management] ISSUE 5 / 2019

customers when it comes to planning, tenders and upcoming projects, as to how and by whom they will be managed and resourced,” Collister said.

CONSOLIDATION AND LOCALIZATION

Despite these concerns the difficulties for integration are far from insurmountable, and Doug Ferguson, managing director of construction technology consultancy LowtherRolton, predicts that Mammoet will be assisted in the transition thanks to its experience “running global offices, each of which has some individual differences, while maintaining an effective brand and level of quality.” However, he warned that such a major consolidation could make the market somewhat uncompetitive until another player moves into the space.

Cosmatos sees the consolidation inevitably creating cost savings which could lead to a decrease of mobilization costs, given the global coverage and the introduction of innovative techniques, both of which could push the heavy-lift industry a step further.

Despite these advantages, job cuts are likely, as the majority of future activity is predicted to focus around global breakbulk hotpots and hubs where both firms already have a strong foothold.

“We think it will be inevitable that there will be job losses if the two businesses are completely integrated,” Collister said. “There are overlaps in geographical locations and head office support. We may also see a downsizing of their combined equipment fleet.”

Given the unprecedented scale of the proposed merger, economies of scale are likely to play in Mammoet’s favor, but as the nature of mega-breakbulk handling becomes increasingly specialized, the need for localization of services is likely to be paramount.

“Although this seems to be a rather successful strategic move for both companies, especially for ALE considering the forthcoming Brexit, there is concern if the merger brings more advantages to the customers compared to losing alternative choices and competing power,” Cosmatos said.

Lack of competition in the marketplace is also a driving concern for Collister: “Effectively we will have only two global heavy-lift and transport companies, with Mammoet becoming nearly twice the size of its nearest competitor.” However, he added, this could force clients to look further afield than the “big two” and the industry may start to see the development and expansion of regional heavy-lift and transport contractors.

But with market rates at record lows in some segments, the trend towards further consolidation in the breakbulk sector seems likely to continue for the mid-term, driven by the wider construction and engineering

industry. Takeovers and mergers between the likes of AMEC and Wood Group, Technip and FMC, along with Jacobs and Worley Parsons may have proved inspirational for the ALE and Mammoet tie-up.

In a parting comment, Collister said that he expects that this shift could bring unexpected opportunities, and he will not be alone in monitoring the reaction of the larger regional heavy-lift and transport companies and, of course, Sarens. BB Based in the UK, Malcolm Ramsay has a background in business analysis and technology writing, with an emphasis on transportation and ports.

ALE (top) has built a strong reputation at the larger end of the heavy-lift market, while Mammoet delivers a range of project cargo transportation, logistics planning and crane rental services. CREDIT: ALE, MAMMOET.

www.breakbulk.com BREAKBULK MAGAZINE 81

NORTH AMERICA PORTS SPECIAL

BEYOND TARIFF TOLL US Ports Build Capacity for Future Growth

BY MARY PARKER

E

conomic ups and downs, factories that open and close, cargoes that come and go – ports are accustomed to being in the fallout zone. But trade wars and tariffs take uncertainty to a whole new level. That tariffs have an impact on cargoes certainly doesn’t need to be told to those involved in handling breakbulk and project cargo at ports and terminals.

“Steel has been all over the place for the past 18 months. The imposition of Section 232 tariffs (on aluminum and steel) has impacted our importers dramatically,” said Pete 82 BREAKBULK MAGAZINE www.breakbulk.com

Grossgart, marketing manager at the Port of Stockton. “They have had to go through the exclusion process and quota process, which some of them were a bit surprised to learn existed, and this has hit our vessel calls.”

In fact, there was a “significant” decline in the number of steel ships coming into the Port of Stockton, according to Grossgart. “We spent three months without a single ship with steel, and once they did come back the product mix had changed – so we are not seeing much rebar, which was roughly one-third of our steel cargo mix two years ago.”

This scenario has impacted tonnage and income, as steel is the cargo

that generates Stockton’s highest revenue per tonne.

Cement is another cargo that has been affected at Stockton. The port has historically been a major import point for specialist cement used in California. Before the global financial crisis, volumes were about 2.2 million tonnes annually. It came in from five Southeast Asian countries, with about 40 percent from China. Volumes dropped to virtually nothing between 2006 and 2009. Cement started to flow again in 2012, but by then it was 100 percent Chinese, the only country still producing this grade. Volumes then dramatically increased year on year – until 2018.

ISSUE 5 / 2019

Main image: Stockton has 500 acres available for development.

Above: The breakbulk cargo mix at U.S. ports has changed on the back of tariffs.

CREDIT: STOCKTON

California uses a specialized type of cement produced in China, Grossgart said. “Once again this has been the target of Trump’s tariffs. We have two tenants importing cement. One has increased the capacity of their kilns so they are primarily supplying themselves domestically.”

Cement has returned, albeit at levels about 14 percent lower than this time last year. However, right now the economy is strong.

“There is a lot of growth and building going on in the Central Valley – homes are starting to be built again, and there is a lot of building related to transportation too,” Grossgart said.

“We have a lot of projects under way

that haven’t come online yet – but in the next two years we think we will start handling.”

However, uncertainty is making planning difficult, especially when you don’t know “what side of the bed Trump is going to wake up on,” Grossgart said.

CONSOLIDATION FOR FOREST PRODUCTS

On the opposite side of the country, Jacksonville Port Authority, or Jaxport, has also been impacted by tariffs. Its primary breakbulk cargo is forest products – rolled paper and wood pulp – and that has continued to be very strong from Europe and South America. However, it is seeing

some consolidation in that industry, with a number of producers looking to increase tonnage through the South Atlantic as tariffs are put on some forest products.

“Logs particularly have been a challenge for our exporters,” said Frank Camp, director of cargo sales at Jaxport. “Historically, a lot of logs go out to China for use for various applications.

This is a commodity that when tariffs come in, the margins are small. Those importing logs into China are looking for other areas to source that product.”

Jaxport has also seen ups and downs in the various types of metals and steel products it handles, again due to tariffs, Camp said. www.breakbulk.com BREAKBULK MAGAZINE 83

NORTH AMERICA PORTS SPECIAL PORTS SPECIAL

LEFT: There has been a “significant” decline in the number of steel ships calling at Stockton as a result of tariffs.

CREDIT: STOCKTON

However, Port Houston says it has experienced minimal disruption from the China-U.S. trade dispute, a fact that it attributes to being the No. 1 U.S. steel port in tonnage volume.

Steel in various forms move through Port Houston to support the petroleum exploration, production and refinement in the Permian Basin and the region. Its public general cargo facilities at the Turning Basin (City Docks) are well equipped to handle all general cargo types, including high, wide and heavy, breakbulk, project and heavy-lift cargo.

The predominance of project and heavy-lift cargo that moves through Port Houston City Docks is also to support the petroleum and petrochemical industry in either upstream or downstream production activities.

“And in 2019, we are seeing increases in volume of project and heavy-lift cargo for the traditional energy sector, and now also in the wind energy sector,” said Dominic Sun, director, trade development for the port. “This means that we have seen increased volumes of machinery, capacitors and other equipment for plant construction, along with windmill towers and blades to support further development of wind energy in the region.”

On the opposite coast, the Port of Long Beach handles steel through the breakbulk terminal at Pier F. That flow has been maintained because the port does not receive steel from China, but mostly from Australia and Japan.

84 BREAKBULK MAGAZINE www.breakbulk.com

Media Relations Manager Lee Peterson said that when it comes to breakbulk and project cargoes, technically volume is down about 25 percent calendar year to-date, but that’s due to a spike in volumes last year. “Last year we were so busy. We had the LA Rams Stadium project and the two AES power plant projects.

Because last year was so high, this year is down.”

INFRASTRUCTURE INVESTMENT BOOM

On both West and East coasts of the U.S., infrastructure investment is driving demand for breakbulk and project cargo flows. In the Southeast, Florida, Georgia, South Carolina and North Carolina are all in the top 10 fastest-growing U.S. states, and are attracting eager employees. With so many people inbound, there is a tremendous amount of investment.

“Population growth drives the need for investment in new infrastructure and replacing infrastructure,” Jaxport’s Camp noted.

“That is where we are seeing a lot of opportunity – in power generation updates and replacements. We are seeing a shift from coal-fired to natural gas-powered generation, which requires different equipment – these are the kind of enquiries we are getting on power.”

There is also growth in manufacturing and replacement of parts, which sits comfortably with Jaxport’s facilities. “We have stevedores here that have an excellent skillset,” Camp

said. “They have the experience in handling big and heavy project pieces, and we have good rail infrastructure to the berth and the main line, with clearances of 20-foot high and more than 13-foot width.”

Stockton is also seeing an uptick in project cargo, much of it energyrelated, especially transformers.

Grossgart explained that infrastructure destroyed by fires in California has had to be replaced. “At the start of the year we handled around 12 transformers; we will have two more in August, and I have received an enquiry for another 11.”

Stockton is handling components for wind energy and renewable power projects and biofuel projects as well, with renewables a primary target for the port. Grossgart points to the fact that within 50 miles of the port there are hundreds of orchards: “Typically trees will be productive for 15 to 25 years. In the past they have been pulled out and burned in the fields.

Now they are being ground and used to produce energy.” Stockton is looking to ship this product to Europe and to expand markets in Japan, Korea and elsewhere.

The orchards are not the only “crop” offering new opportunities.

Rice paddies within two hours of Stockton are producing mediumgrain rice for export, including to Japan. Meanwhile, a new MDF plant has been built, which uses the discarded rice hulls as the raw material.

The port handled project shipments in support of the construction of this new plant.

BIGGER AND BETTER

Houston, Jaxport, Long Beach and Stockton are all investing in new and upgraded port infrastructure.

Port Houston is “continuously exploring opportunities” to add acreage and densify its facilities to support increased volumes in breakbulk, project and heavy-lift cargo, Sun said. For example, Dock 23 has been upgraded and its fender systems have been improved. Two years ago, the port added 18 acres of paved laydown area ISSUE 5 / 2019

1-800-362-5743

ENVISION PortFreeport.com

YOUR FUTURE Do More And Grow More With Over 500 Acres Of Available Land At Port Freeport Partner With Us

NORTH AMERICA PORTS SPECIAL

Population growth has driven infrastructure investment around Jaxport.

CREDIT: JACKSONVILLE PORT AUTHORITY

at City Dock 32, doubling the amount of total laydown areas available. At present, Port Houston is carrying out improvements to City Dock 9, including upgrading the load capability from 500 pounds per square foot to 700 pounds per square foot.

To complement this, improvements to the Houston Ship Channel are needed as soon as possible to ensure safety of the waterway as energy and manufacturing exports, as well as the size of vessels, grow at the Port of Houston, Sun said.

Widening the nation’s busiest waterway to allow for improved twoway traffic would mean safer and more efficient economic growth. The ship channel is described as one of the most complex to navigate due to high traffic volume and its narrow, shallow and winding characteristics.

Currently a 100-foot bypass makes for near impossible and dangerous maneuvers. The push is for widening of the Bay Reach segment of the channel from 530 feet to 700 feet, along with channel deepening.

Rail is a major focus for many ports, not least at the Port of Long Beach.

“We’re always working on our rail system and have one major capital improvement project, the US$870 million Pier B On-Dock Rail Support Facility, and at least three smaller projects that we are moving forward 86 BREAKBULK MAGAZINE www.breakbulk.com

with in the next decade,” Peterson said. “Yes, these help us move containers, but as we improve the efficiency of the rail system, building in more flexibility and reducing wait times, bulk and project cargo will also move more fluidly through the Port of Long Beach.”

Altogether, the port is looking at about US$1 billion in capital improvements for rail, and that will strengthen its competitiveness and improve speed-to-market. These rail projects will help to reduce truck traffic in the ports as well.

GOING DEEP

Jaxport is midway through a major channel deepening project – the world’s larger container ships are clearly the focus here, but there will be a knock-on benefit for project cargo shipments, Camp said. The channel deepening is a federal project and will increase draft from 40 feet to 47 feet. “The project started in February 2018 and is on track for completion in 2023,” he said. “We have been in the process of rebuilding all our berths over the past couple of years.”

Notably, Berth 31, a heavy-lift berth at Blount Island Marine Terminal, has been rebuilt. It is now among the country’s highest weight-bearing capacity docks, with load capacity of up to 1,800 pounds per square foot.

At Stockton, access to the port has been significantly improved in the past couple of years. This has included a new link from Interstate 5, the main north-south thoroughfare for the western U.S., a new bridge and a number of road widening projects.

Rail traffic at the port has doubled in the past five years, reflecting high demand for the port’s warehousing and transloading operation – train capacity was doubled about three years ago. A series of other projects are under way to expand existing port facilities or build new ones.

“Obviously the items being transported are getting bigger and bigger – what used to be no problem, such as windmill towers, are now so big that we struggle at times with rail clearance,” Grossgart said. “Having said that, wind components are getting to be so big that they can’t be handled in one piece and some come in three pieces now.”

Stockton has a total of 15 berths and provides a lot of flexibility in terms of where a vessel is worked, he said. “We have 500 acres available for development and on the U.S. West Coast that is more than anybody else.

We do have a lot of land – and a lot of it near the dock.” BB Mary Parker is a veteran shipping industry writer.

ISSUE 5 / 2019

Port Of Pascagoula On the Mississippi Gulf Coast

15 miles to Gulf Shipping Lanes 42 ft deep channels 2 Harbors - 10 General Cargo Berths Covered storage / Open storage Served by CSX and CN railroads Specializing in: · Breakbulk · Project Cargoes · Bulk Cargoes

PortofPascagoula.com

ADVERTORIAL

SOHAR Port Anticipates Potential Business Opportunities With several developmental plans underway, including future projects, SOHAR Port and Freezone continues to seek possibilities for growth and expansion. In line with this principle, SOHAR is now looking forward to leasing out their Terminal 2D. The sizable land area was initially developed in 2009 as a container terminal expansion but has now been dedicated to businesses involved in the logistics and metal sectors. The waterfront location hosts an area of a 100-hectares with easy access to cool water and the surrounding industrial clusters.

Commenting on the potential of Terminal 2D, Mark Geilenkirchen, CEO of SOHAR Port and Freezone said, “SOHAR is strategically positioned at the centre of global possibilities, and has a consumer reach of over 2.2 billion across Africa, Asia and the Middle East. Potential customers are generally based outside Oman, so we aim to garner as many opportunities as possible to support them in setting up at SOHAR. Additionally, with the help of our One-Stop-Shop facility and the benefits we offer, investors will receive a favourable return on investment.”

The One-Stop-Shop service at SOHAR Port and Freezone acts as a single window for clients to obtain all necessary documentations and operate their businesses efficiently and effectively. It provides multiple key amenities – including company Mark Geilenkirchen registration and licensing, labour permits, visas, etc. – with a single point of contact to deliver high-quality services.

“With several regional ports currently running out of space, SOHAR still has the capacity to further expand and attract prospective investments. Clustering is an innovative form of business. Therefore, the close proximity to our petrochemical, logistics and food clusters will also support the creation of upstream and downstream opportunities for further business developments. Moreover, as the Port and Freezone are both managed under a single entity, this allows for a seamless connection between the two, while also enhancing efficiency for feedstock imports and product exports,” Geilenkirchen added.

Strategically located by the sea, Terminal 2D waterfront location is perfect for businesses looking to take advantage of the deep-water facilities and the accessibility of logistic services surrounding SOHAR Port and Freezone.

For more information on SOHAR Port and Freezone, visit soharportandfreezone.com.

88 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

CASE STUDY

BY AMY MCLELLAN

T

An Abnormal Load for an Ambitious Plan

he world’s growing population needs more energy, but it can’t afford to keep burning carbon if it is to avoid potentially catastrophic climate change. In a bid to produce more with less carbon, countries around the world are setting ambitious targets to decarbonize their economies and investing heavily in renewable energies and nuclear power.

Yet intermittency remains an issue for renewables, while nuclear energy faces a number of challenges, including high cost, public opposition and ongoing concerns about long-life radioactive waste management.

Enter fusion: the nuclear reaction that powers the Sun and the stars and is a potential source of safe, non-carbon-emitting and virtually

limitless energy. It sounds like the stuff of science fiction, but in the south of France an international team is busy building an experimental fusion device – known as ITER – that could bridge the gap between today’s fusion research machines and tomorrow’s commercial-scale fusion power plants.

ITER is a collaboration between China, the European Union, India, Japan, Korea, Russia and the U.S., with the manufacturing of components spread across factories spanning three continents. Europe is responsible for the largest portion of construction costs (45.6 percent), with the remainder shared equally by China, India, Japan, Korea, Russia and the U.S. There’s little monetary contribution, however; instead 90

percent of contributions are in the form of completed components, systems or buildings.

Construction of the buildings on a 180-hectare site in Saint Paullez-Durance, Cadarache, southern France started in 2010. Since then, key contractors have been busy, with specialist factories around the world finishing key components ready for major assembly that will kick off next year. As of June 2019, this hugely ambitious project was 63 percent complete and on track for “First Plasma” in December 2025.

PAN-INDUSTRY PROJECT

This is a huge logistical exercise, coordinating parallel construction projects and the transportation of vital scientific equipment from across Aerial view of the ITER construction site, Cadarache, France, as of March 2019.

CREDIT: ITER

90 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

When shippers around the globe move specialty cargoes that come with exacting demands and require precise, large-scale handling, they rely on the Port of Lake Charles, the go-to port near the center of the U.S. Gulf Coast.

We’re a top-12 port in the United States, based on tonnage. Our capacity and efficiency have long made the Port of Lake Charles the choice for cargoes of all weights, dimensions, and handling requirements.

Make us your choice, too. Put our 21st-century capabilities to work for you. Tell us your needs and we’ll show you how.

Lake Charles, Louisiana, USA • +1 337 439-3661 • portlc.com

Visit us at the Breakbulk Conference in Houston October 8–10 at booth E10.

the fusion of atoms is absorbed as heat in the walls of the vessel. Should the ITER experiments prove successful, then in the future this heat would be used to produce steam and then electricity by way of turbines and generators.

MOVING THE MAGNETS

TOP: Inserting Europe’s first toroidal field coil winding pack into the cryostat at SIMIC, Port of Marghera. / CREDIT: SIMIC ABOVE: Technicians carry out ground insulation on a winding pack at ASG Superconductors, La Spezia, Italy. / CREDIT: ANDREA BOTTO

the globe to ensure the efficient integration and assembly of more than 1 million components.

In all, there will be 39 buildings and technical areas, with the ITER “Tokamak” device itself comprising a seven-story structure in reinforced concrete. Other key structures will be cooling towers, electrical installations, a control room, facilities for the management of waste, and the cryogenics plant that will provide liquid helium to cool the ITER magnets, which are the basis of fusion reactions.

The Tokamak – a Russian acronym that means “toroidal chamber with magnetic coils” – will weigh 23,000 tonnes, equivalent to the weight of three Eiffel Towers, making it the 92 BREAKBULK MAGAZINE www.breakbulk.com

largest and most powerful fusion machine ever built.

Inside its vacuum vessel, hydrogen isotopes will be heated to temperatures in excess of 150 million degrees Centigrade – 10 times as hot as the sun’s core – to form 830 cubic meters of hot plasma. Magnetic fields created by an array of giant superconducting coils and a strong electrical current will act as a powerful magnetic cage to shape and confine the superhot plasma so that it floats within the magnetic field without touching the walls of the ITER vacuum vessel.

This superhot plasma will generate fusion reactions that will release 4 million times more energy than the burning of oil or gas. Inside a Tokamak, the energy produced through

The 18 huge toroidal field coils that are being manufactured in Japan and Europe are already beginning their journeys towards ITER. On the European side, Italy’s ASG Superconductors was charged with building 10 of the coils at a dedicated 28,000-square-kilometer facility at La Spezia, a job that involves high precision design and manufacturing involving robotized and computerized machining.

The coil contains high performance, internally cooled superconductive cables, which can carry higher current and produce a stronger magnetic field than their conventional counterparts. The ITER coils involve 100,000 kilometers of niobium-tin, or Nb3Sn, superconducting strands, which have taken five years to produce at a rate of about 150 tonnes per year, a 10-fold increase in worldwide production. Stretched end to end, the Nb3Sn strand produced for ITER would wrap around the Earth at the equator twice. These bundled superconducting strands — mixed with copper — are cabled together and contained in a structural steel jacket. The resulting coil winding packs are huge – each one weighs 120 tonnes and measures 9 meters by 16 meters – but at this stage they are not yet a magnet.

The transformation from coil to magnet will take place at the SIMIC facility on the opposite side of Italy, just outside Venice. Here the coil winding pack will undergo cryogenic tests before being inserted into the coil cases, which have been manufactured by Japan’s Mitsubishi Heavy Industries and Korea’s Hyundai Heavy Industries, and will act as a very heavy “overcoat” to protect the magnets.

For insertion, the winding pack is lifted and positioned on an assembly rig, then a one-of-a-kind automated tool will embrace the massive coil from left and right, and from top to bottom, in an operation that lasts roughly one month. What makes insertion such a delicate process is the ISSUE 5 / 2019

WIGGINS YARD BULL.

25 Tonne Coil Ram Quick Change Fork Carriage Optional Stage III or Stage IV Diesel Customer located in Kingdom of Saudi Arabia

Safety & Efficiency

No one is better than Wiggins when it comes to safety and efficiency.

From backup cameras and sensors to overload warning systems, we maximize return on investment because of our unique ability to customize features and technology to your specific application. +1 805-485-7821

info@wigginslift.com

www.wigginslift.com

Dual Purpose RoRo; 3.7m Lift With 2.8m Drive Height; 25 Tonne Capacity

size and weight of the component plus the extreme precision required.

As a member of the magnets team for Fusion for Energy, the EU organization managing Europe’s contribution to ITER, puts it, the team is working with accuracies of just 0.2 millimeter on a structure that weighs in at more than 300 tonnes. After insertion, there then begins four to six months of welding – both manual and using robots – followed by the injection of resin and machining of the magnet.

TAKING THE SCENIC ROUTE

Getting the coil winding pack from La Spezia to SIMIC’s facility on the other side of Italy is a huge project in itself. This is ordinarily a 350-kilometer road journey that would take 3.5 hours by car, but which is out of the question for this heavy, precious load. Instead the coils need to be transported by ship around the boot of Italy to reach Port of Marghera, a five-day transit.

“The load is too big for the road, so ASG built the factory as close as possible to the port at La Spezia to minimize the time on the road,” said Alessandro Bonito-Oliva, Fusion for Energy’s program manager for magnets.

Stefano Pittaluga, Magnets & Systems Unit at ASG Superconductors, added: “It is only a 2 kilometer journey from the workshop to the harbor, but we travel very slowly, at a maximum of 0.5 kilometers per hour, so it takes all night.”

The reason for the cautious speed is that the high-performance superconducting properties of the coil are highly sensitive to deformation, making it vital that it is handled with care to adhere to strict tolerances for vibration and acceleration. A special-purpose lifting tool was used to prevent deformation, Pittaluga explained.

Special permits had to be arranged with the local authorities and the port authority, a bridge had to be strengthened to handle the heavy load and it all took place at night to minimize disruption to local communities.

The coils are also sensitive to humidity and corrosion, the risks of which are heightened given the sea journey that lies ahead. Before the journey, the coils were packed in a special watertight cylinder and sealed with dry nitrogen to ensure no external atmospheric agents could enter.

HIGH PRESSURE

Among those handling this precious cargo is Master Projects, a

It is only a 2 kilometer journey from the workshop to the harbor, but we travel very slowly, at a maximum of 0.5 kilometers per hour, so it takes all night.”

–S tefano Pittaluga, Magnets & Systems Unit at ASG Superconductors

94 BREAKBULK MAGAZINE www.breakbulk.com

Tarros Group Co., which deployed 20 workers, two self-propelled modular trailers, support vehicles and two mobile cranes to handle the heavy load, which, once packed for traveling, weighed in at more than 200 tonnes. The team worked through the night and into the following morning to complete the load out of the magnets at Tarros’ Terminal del Golfo facility. Paolo Pellegrini, CEO of Master Projects, said these oversize superconductors require “technical skills and top-grade specialization that are not so common in the project cargo sector.”

This was a high-pressure job. “It is so important to do this right,” said Fusion for Energy’s Bonito-Oliva. “It has taken three to four years to get to this point, and if we had to produce a new one it would knock out timings for everything, which would be very expensive.”

On arrival at Port of Marghera just outside Venice, the whole process was reversed, although the SIMIC premises are very close to the harbor reducing the road portion of the journey, Pittaluga said.

He admits it was a stressful time.

“I did not sleep well the night before, but it did go according to plan; there were no real problems,” he said.

“We’ve never done anything on this scale, it’s a really huge coil. I’m not a logistics manager, I’m a physicist, so this was a new experience for me.”

After the work at Venice, the coils will become a magnet and then be specially packed ready for their long journey by sea to Marseille, from where they will be loaded on a special convoy truck for delivery to the ITER facility, a route that has been planned and prepped to every last detail to ensure everything goes smoothly, as the multiple components from across the globe arrive ready for assembly.

With more of the critical path magnets to deliver in the coming months, Stefano Pittaluga and his team can look forward to more sleepless nights as part of one of the most complex and most ambitious science projects anywhere on the planet. BB Freelance journalist Amy McLellan has been reporting on the highs and lows of the upstream oil and gas and maritime industries for 20 years.

ISSUE 5 / 2019

HOUSTON TERMINAL LLC

­ ­

Bayport (281) 291-6181

houstonterminal.com

Barbours Cut (832) 655-4236

REGIONAL REVIEW

THE WAITING GAME

BY DALE CRISP

Minerals Reach Turning Point as Renewables Fly

I

t’s sometimes said Australia’s economy is largely comprised of a multitude of holes in the ground, spewing forth ores, oils and gases for shipment to overseas buyers.

Whatever the truth of that assertion, project logistics practitioners have reason to be grateful as the country’s mining and resources industries have been a source of really good health for more than a decade, even if there’s currently something of a lull.

According to official figures, Australia’s resources exports have doubled over the last 10 years, with A$250 billion of investment in the mining industry delivering substantial growth in minerals production and jobs in that period. New records were set in 201819, attributed to iron ore (A$77 billion), coal (A$69 billion), aluminum (A$15.6 billion) and copper (A$9.9 billion).

This year has also seen Australia overtake Qatar as the world’s largest liquefied natural gas, or LNG, producer, thanks to huge projects such as Shell’s Prelude and INPEX’s Ichthys coming on stream to join Chevron’s Gorgon and Wheatstone, Woodside’s Pluto and the four Gladstone, Queensland-based coal seam gas-toLNG plants.

Most of these projects have reached completion, but unexpectedly high demand and prices for iron ore and coal – at least until the middle of this year – and new and urgent requirements 96 BREAKBULK MAGAZINE www.breakbulk.com

for rare earths and other metals used in batteries for mobile technology, electric vehicles and energy storage are firing plans for revival, expansion and brand new developments. Gas producers are lining up the next on- and offshore fields.

The latest Australian Resources and Energy Quarterly from the Office of the Chief Economist contains a “significant change” to commodity forecasts.

“In recent years, we have predicted commodity export earnings would peak in 2018-19,” wrote Mark Cully, chief economist of the Department of Industry, Innovation and Science. “As recently as March 2019, we suggested record earnings of A$278 billion in 2018-19, before earnings fell back in the following years. Our forecast for 2018-19 looks to be largely on target but, massive as this revenue is, it is increasingly likely that the peak will now be in 2019-20. Resource and energy commodity earnings in 201920 have been revised up by A$12.9 billion to A$285 billion.”

Cully noted geopolitics is raising uncertainties, however, and economic turning points are hard to predict.

“The prospect of one in the near future adds a significant element of uncertainty to our higher forecast. Should a turning point occur, our strength – record commodity exports – could also be our vulnerability,” Cully concluded.

Seaway Group is undertaking the project logistics work for the Bungala Solar Farm, claimed as Australia’s largest photovoltaic solar project. / CREDIT: SEAWAY.

MINING ‘AWASH’ WITH INVESTORS

It’s a case of carry on regardless for iron ore producers, however, with the big three – BHP, Rio Tinto and Fortescue Metals Group – all embarking on major mining projects. While to some extent these are to replace exhausting deposits, the opportunities for the project logistics sector are significant, and there are at least 20 more mining endeavors in train or proposed.

Speaking from the mining industry’s annual Diggers and Dealers Forum in Kalgoorlie, Western Australia, Craig McElvaney, CEO of the Melbourne-based Seaway Group of Cos., described the atmosphere as “buzzing.”

“There are a lot of smug-looking people here,” he said, “the place is awash with investors’ money looking for a home and a lot of people have been doing very nicely out of resource prices this year.”

Paul Dean, Seaway’s executive general manager of mining, construction and projects, said with iron ore and gold at near-record prices the company expects to see a resurgence in investment in new mining projects.

ISSUE 5 / 2019

However, there is typically a time lag between planning and shipping, a sentiment echoed by Steven Lofaro, Agility’s vice president for project logistics, Asia-Pacific region.

“Opportunities have picked up, miners are spending, especially the iron ore guys in Western Australia and potentially the coal producers in Queensland,” he said. But he remains a bit wary. The rate of expressions of interest, requests for quotations and

requests for information is picking up, however too many engineering, procurement and construction companies are looking for logistics studies, but don’t want to pay up front.

riage in containers – much to certain project forwarders’ frustration, as they believe some componentry could be more efficiently handled as breakbulk, thereby obviating the need and cost of repositioning empty boxes – the wind turbine manufacturers and suppliers are almost wholly dependent on project cargo specialists.

According to research company Macromonitor, the A$9 billion increase in renewable energy construction in

RENEWABLES DRIVE

One sector that has been sustaining project and breakbulk in Australia is renewable energy, principally wind and solar farms. While the fragility of materials for the latter dictates car-

Table 1 – Australasian Mining Projects – August 2019 Snapshot Project

Location

Owner

Description

Status

South Flank

Pilbara, West Aust

BHP

Iron ore mine & infra; 80Mtpa; A$4.8 billion

Major contracts signed

Koodaideri

Pilbara, West Aust

Rio Tinto

Iron ore mine & infra; 43Mtpa, A$3.8 billion

Early contracts signed

West Angeles

Pilbara, West Aust

Rio Tinto JV

Iron ore expansion; 34Mtpa; A$1.55 billion

Investment approved, first ore 2021

Eliwana

Pilbara, Western Australia

Fortescue Metals Group

Iron ore mine & infra; 30Mtpa, A$1.8 billion

Construction started July 2019

Iron Bridge

Pilbara, Western Australia

Fortescue Metals Group

Magnetite mine & infra; 22Mtpa; US$2.6 billion

Under construction

Queen Valley

Pilbara, Western Australia

Fortescue Metals Group

Iron ore expansion; A$417 million

Approvals granted

Marillana

Western Australia

MinRes/Brockman

Iron ore mine, rail, port; 20Mtpa

Delayed 12 months due to design complexity

Beyondie

Western Australia

Kalium Lakes

Australia’s first potash mine

Funding underway

Browns Range

Western Australia

Northern Minerals

Rare earth carbonate

Pilot plant; offtake agreement signed

Carmichael

Galilee Basin, Qld

Adani Australia

Thermal coal mine & rail; 30Mtpa Stage 1

All final approvals granted mid-May

Alpha North

Galilee Basin, Qld

Clive Palmer

Thermal coal mine; 33% larger than Carmichael

Federal government enviromental approvals sought

Olive Downs

Bowen Basin, Qld

Pembroke Resources

Metallurgical coal; 15Mtpa; A$1billion

State government approvals received

Winchester South

Bowen Basin, Qld

Whitehaven Coal

Metallurgical coal; 8Mtpa; A$1billion

‘Coordinated project’ status

Bauxite Hills

Cape York, Qld

Metro Mining

Bauxite mine expansion; 6Mtpa

Expected company approval

Hawsons Iron

Broken Hill, NSW

Carpentaria Resources

Fe 70 Magnetite; Stage 1 10Mtpa

Negotiating offtake agreements

Sources: Various, including www.bhp.com, www.riotinto.com, www.fmgl.com.au, www.mineralresources.com.au, www.carpentariares.com.au, www.adaniaustralia.com, www.pembrokeresources.com.au, www.whitehavencoal.com.au, www.metromining.com.au, www.hydroenergysupplychain.com.

www.breakbulk.com BREAKBULK MAGAZINE 97

the three years to and including 201920 exceeded the growth in road, rail and other infrastructure.

“The extraordinary boom in the renewables sector is currently the largest contributor to overall growth in construction in Australia,” Macromonitor economist Natalie Keogh said in a statement. “Solar projects, in particular, combined with wind and storage projects, are driving solid growth in overall utilities sector construction, despite falling levels of work on the National Broadband Network and weak activity in water, gas and the nonrenewable segments of electricity.

“New renewables projects continue to be committed, even though we already have enough capacity in train to more than meet the 2020 renewable energy target,” Keogh said. “This means projects are now being driven by their own commercial viability, with some additional stimulus coming from state government schemes.”

However, she doesn’t expect this phase to last, anticipating a sharp downturn after this financial year: “Renewable energy investment will be permanently higher than in the past, but it will experience investment cycles just like most other asset types,” Keogh

said. Macromonitor expects the next boom will be in energy storage in the middle of the next decade.

Nevertheless, according to the Clean Energy Council, or CEC, of Australia, the renewables sector is seeing “unprecedented activity.” The CEC lists just 12 energy projects completed in 2017, rising to 38 in 2018. According to the council’s July 2019 update, 13 projects have been completed so far this year, of which eight were solar, four were wind and one was hybrid. The largest was Edify Energy’s 150-megawatt solar farm in Queensland, followed by APA Power Holdings’

Table 2 – Australasian Oil & Gas Projects - August 2019 Snapshot Project

Location

Lead Partner

Description

Status

Scarborough

Carnarvon Basin, NW Western

Woodside Energy

Pluto backfill

Selected FEEDs awarded.

Australia

FID 2020

Barossa

Timor Sea, N Aust

ConocoPhillips

Bayu-Undan backfill

FEED awarded

Browse upstream

Browse Basin, Western Australia

Woodside Energy

Remote offshore –FPSO or pipe to NWS, Karratha

Shareholder alignment awaited

Browse satellites

Greater Poseidon, Browse Basin, Western Australia

ConocoPhillips

FLNG or tie-back to Darwin LNG

Current priority to Barossa

Arrow

Surat Basin, Qld

Arrow Energy

Onshore – export through FID pending Qld Curtis LNG

Crux

Browse Basin, Western Australia

Shell

Prelude backfill

FEED awarded

Dorado

NW Shelf, Western Australia

Santos

New field

FID late 2020

HESC

Hastings, Victoria

Kawasaki JV

Brown coal-to-hydrogen gas pilot project

Trial plant/ terminal, ships

Papua

Onshore Papua New Guinea

Total

Processing via duplication of PNG LNG

FEED agreed, FID 2020

Sources: Various, including www.woodside.com.au, www.concocophillips.com, www.shell.com.au, www.fircroft.com, www.arrowenergy.com.au, www.postcourier.com.pg.

Table 3 – Australasian Infrastructure Projects – August 2019 Snapshot Project

Location

Developer

Description

Status

Second Harbour

Sydney

Sydney Metro (rail)

Twin tunnels under Sydney

Underway

Crossing

Harbour

Melbourne Metro

Melbourne CBD

Victorian Govt

Underground rail

Underway

West Gate Tunnel

Melbourne urban

Victorian Govt

Under/above road

Underway

North-East Link

Melbourne urban

Victorian Govt

Freeway/tollway

EEF underway

Airport Rail

Melbourne urban

Vic/Federal Govts

Passenger rail

Business case

Outer Urban Rail Loop

Melbourne urban

Victorian Govt

Passenger rail

Construction 2022

Cross River Rail

Brisbane

Queensland Govt

Urban rail/tunnel

First contracts let

Inland Rail

Melb-Brisbane

ARTC (Fed Govt)

Heavy freight rail

First stages underway

Sources: Various, including www.bigbuild.vic.gov.au, www.crossriverrail.qld.gov.au, www.sydneymetro.info, www.infrastructureaustralia.gov.au, www.inlandrail.artc.com.au.

98 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

147.5-megawatt hybrid wind and solar farm in Western Australia.

There are more than 90 projects under construction or due to start soon, spread across Queensland (20), New South Wales (25), Victoria (18), Tasmania (two), South Australia (13), Western Australia (nine) and the Northern Territory (three): 24 are wind, seven are hybrid, one is bio and the rest are solar.

As well as Australia, investors/developers come from the People’s Republic of China, South Korea, Japan, Spain, France, The Netherlands, Canada, New Zealand, Singapore and India.

Across the Tasman, the New Zealand Wind Energy Association noted no new projects have been commissioned since 2016, but there are 12 with planning consent on which construction is yet to commence. Seven more are under investigation, with renewed interest likely in view of New Zealand’s ban on new oil and gas exploration licenses in its territorial waters.

WIND IN THE SAILS

Frank Mueller, AAL Shipping’s general manager Australia/Oceania, is more than grateful for the wind farm frenzy. The company operates two breakbulk liner services from Asia to Australia, one to the West Coast using two of its 19,000-deadweight-tonne S class ships and one to the East Coast with three 31,000 dwt A class ships, one of which is chartered by service partner Swire Shipping. All have 700-tonne lift capacity, which is put to good use.

Although the liner sailings do service wind farm contracts, they are underpinned by typical inbound cargoes of steel, machinery, port equipment, boats and mining gear and usually load logs and semi-bulk outbound. “I’m pleased to say we haven’t had an empty ship northbound, but competition can be a pain in the butt because it drives the backload rates down,” Mueller said.

Outside the scheduled liner services, AAL has been busy covering various Australasian contracts, including for tunnel-boring machines for urban infrastructure projects in Melbourne and Sydney, rolling stock for Australian and New Zealand customers and, of course, wind farms. Mueller said that as turbine towers have grown taller and blades longer, AAL’s A-class in particular have come into their own, with shippers attracted to their ability to move more per shipment. At times

over the past 12 months AAL has had up to a dozen ships in Australian waters at once and at time of writing there were at least three in local ports and six en route.

Mueller identifies the company’s long history in Australia – it originated as AustralAsia Line – as a key strength, along with its willingness to accept parcel cargoes and change port rotations to suit. “Parceling is too much hard work for many project carriers,” he said, “anything less than 5,000-6,000 tonnes is not worth their while.”

There’s also the tyranny of distance: carriers are loathe to sail further south than the “activity areas” of northwest Western Australia and northern Queensland. “It’s a long way to go for a backload; they’d rather discharge and get back to Asia in search of the next [paying] cargo.”

Mueller is also amused by a number of operators claiming to offer shippers regular services to Australia: “It depends on your definition of ‘regular,’” he quipped. “For some, once a year is regular!”

100 BREAKBULK MAGAZINE www.breakbulk.com

Seaway Group’s mining, construction and projects division delivered a fully assembled ship unloader from China to Brisbane in early June. / CREDIT: SEAWAY.

Nonetheless, the decline from the crazy boom years is quietly welcomed by the constants in the Australasian market who, apart from AAL, include BBC, Thorco Projects, Swire Shipping, Spliethoff and, increasingly Zeamarine, which has just been awarded the prize ocean freight contract for BHP’s A$4.8 billion South Flank iron ore mine, by Schenker Australia.

As one broker commented, desiring anonymity, it was not uncommon to see names in the market like Lucky Elephant Shipping, or Golden Dawn Maritime, and discover they had different personnel, market offerings and websites but, curiously, the same contact details. “You booked with them at your risk,” he said. “There was a lot of phantom tonnage around and a lot of advertised sailings never took place.”

ISSUE 5 / 2019

the world is waiting for you Where the Networking Never Stops And New Project Business Is Made UPCOMING EVENTS

8-10 October 2019 | Houston

25-26 February 2020 | Dubai

18-19 March 2020 | Shanghai

26-28 May 2020 | Bremen

www.breakbulk.com/exhibit

www.breakbulk.com BREAKBULK MAGAZINE 101

The entire industry will need to work together and utilize all available transport modes to meet a very ambitious build plan.”

–A aron Barr, Wood Mackenzie

AAL brings in pontoons from Asia to Sydney. / CREDIT: AAL.

GOVERNMENT INVESTMENT SUPPORT The project business has been bolstered in Australia by considerable investment, mostly by state governments, in infrastructure such as multibillion-dollar extensions to

the underground and surface public transport systems in Melbourne and Sydney. As well as headline-grabbing big lifts, such as tunnel-boring machines and associated equipment, AAL, BBC and others have been shipping in large quantities of construction

and structural steel demand for which Australian manufacturers were unable to meet, despite governments incorporating local content clauses in contracts. This activity looks likely to continue with a mid-August audit by federal government advisory body

Table 4 – Australasian Renewable Energy Projects – August 2019 Snapshot Project

Location

Developer

Description

Status

Dundonnell Wind

Victoria

Tilt Renewables

336 MW, A$560 million

Under construction

Stockyard Hill Wind

Victoria

Origin Energy

536MW, A$700 million

Under construction

Coopers Gap Wind

Queensland

AGL

453 MW, A$850 million

Under construction

Clarke Creek Wind Queensland

Pacific Hydro

877 MW, A$1billion

Construction end- 2019

Warwick Solar

Southern Downs, Qld

University of Queensland

64 MW, A$125 million

Under construction

Darlington Point Solar

New South Wales

Edify Energy

275 MW, A$450 million

EPC contract awarded

CoppaBella Wind

New South Wales

Goldwind (China)

295 MW, A$650 million

Construction imminent

Snowy 2.0

NSW Snowy Mountains

Federal Govt/ Snowy Hydro

Pumped hydro: tunnels, pipelines

Feasibility/business case

Warradarge Wind

Western Australia

Bright Energy

180 MW, A$500 million

Under construction

Kwinana Wasterto-Energy

Western Australia

Acciona

36 MW, A$668 million

Under construction

Bungala Solar

South Australia

Enel Green Power & Dutch Infra Fund

220 MW, A$450 million

Under construction

Cattle Hill Wind

Tasmania

Goldwind Australia

148 MW, A$350 million

Under construction

Granville Harbour Wind

Tasmania

Pallisade Investment Partners

112 MW, A$280 million

Under construction

Sources: Various, including www.cleanenergycouncil.org.au, www.windenregy.org.nz, www.sustainability.uq.edu.au, www.terrainsolar.com, www.edifyenergy.com, www.enelgreenpower.com, www.clarkecreekwindandsolar.com.au, www.coppabellawindfarm.com, www.granvilleharbourwindfarm.com.au.

102 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 5 / 2019

Handling of coal washing equipment, including thickners and floatation cells. / CREDIT: AGILITY.

Infrastructure Australia suggesting a A$500 billion major projects pipeline over the next five years must be replicated on an ongoing basis for the next 15 if living standards are not to decline.

In Papua New Guinea, an Agility stronghold for more than 30 years, Lofaro is watching what moves the new Marape government will make. It has already reduced the number of ex-pats in key positions and is undertaking an inquiry into the financial arrangements of the previous government’s loss-making

investment in the Total/ExxonMobil/Oil Search Papua LNG project. As yet the partners have not established a procurement team; Papua LNG will likely tie back to ExxonMobil’s PNG LNG near Port Moresby.

Meanwhile, Lofaro has set up a team “dedicated to hunting projects.

We have good, long-running resupply and replacement contracts that provide bread-and-butter. But projects are the cream,” he said.

For all the players it’s a matter of waiting patiently.

Seaway’s Dean expects a slight

improvement in the project market over the next 12-24 months, with continued “good opportunities” in mining and renewables work.

“Infrastructure projects are typically more difficult to predict, as the local input versus overseas input can vary greatly across projects,” Dean said. “Our book is already building so we are quietly confident, despite a highly competitive market.”

Perhaps the last word should go to AAL’s Mueller who is optimistic, with caveats: “Mostly at the moment it’s a lot of talk … but I do think there’s going to be an upturn later this year. I’ve never been one to say ‘next year, next year things will be better,’ but there are definitely things happening in this market. We just have to ignore Trump versus Xi, Brexit, Iran, Japan v South Korea...” BB Dale Crisp is a Melbourne-based specialist maritime photojournalist.

Our Increased Capacity

Your Competitive Advantage.

39 FT

More Depth.

More Capacity.

We know your cargo is precious. So is your time and money. At Canton Maritime, now we can accommodate your surging needs better than ever.

We’ve increased the depth at our terminal to 39 feet, so we’re able to handle about 50% more of your cargo at one time.

This means greater cost savings and increased time efficiency for you.

Stevedoring | Warehousing | Third-Party Facility Management Port Services in Baltimore, MD

Visit cantonmaritime.com/breakbulk or call 410-633-1601 to learn more.

www.breakbulk.com BREAKBULK MAGAZINE 103

REGIONAL REVIEW

BY DAVID WHITEHOUSE

WEST AFRICA’S LABYRINTH igeria’s ports present a range of unusual challenges for heavy-lift and breakbulk cargoes.

Many years ago, Steve Cameron, managing director at Cameron Maritime Resources in London, arrived at Warri port in Nigeria with a heavy-lift cargo. But despite the assurances of the port authority, the promised crane had many missing parts and was unfit for use.

By chance, the shipmaster spotted a Spanish ship that was induced to allow them to use its heavy-lift derrick. Cameron learned from that

experience that it’s essential to have a good local shipping agent to do preproject planning.

“There is a big difference between email promises and what is delivered,” said Cameron, who has 20 years of project cargo experience in West Africa. “In short it comes down to being prepared.”

Even at the stage of quoting for a project cargo, you need to have a relationship with a local agent, Cameron added. Investing in a local office is one solution. But for one-off projects, he said, there’s no choice but to rely on third-party agents, who must be

104 BREAKBULK MAGAZINE www.breakbulk.com

able to protect against equipment parts being removed. They must also be able to prepare a comprehensive report on the state of the cargo at the moment of discharge. The quality of local agents in Nigeria has “improved significantly,” Cameron said, but it’s still essential to take up references from other users.

UNRIVALLED OIL PRESENCE

Nigeria is Africa’s largest economy and the continent’s biggest oil producer, making its market impossible to ignore. The World Bank’s Doing ISSUE 5 / 2019

CREDIT: SHUTTERSTOCK.

N

Local Agents Key to Navigating Nigerian Maze

Business report, an indicator for measuring the effectiveness of a country’s ports, ranked Nigeria at 182 out of 190 countries in 2019.

A paper from the Nigerian Ports Authority in July found that a combination of poor external infrastructure and security challenges in the waterways are imposing costs on charterers which are passed on in the form of higher insurance premiums.

Les Rice is an ex-mariner turned consultant to protection and indemnity clubs and cargo insurers. He investigates insurance claims that have been made against carriers and in major cases serves as an expert court witness. Rice would expect to pay US$2,000 to US$2,500 per day for a competent surveyor to remain on board throughout the cargo operation. Hiring a professional may be expensive, but it beats employing an amateur. “A good agent can make this run like clockwork,” Rice said.

Claiming from insurers is “systematic” in some Nigerian trades, Rice added. “There is a longstanding and well-established claims industry operating in Nigerian ports, involving a number of local surveyors, tally clerks and insurance company correspondents. Fraudulent or inflated

claims by cargo receivers are prosecuted by local lawyers.”

Rice has made some 300 trips to West Africa over the last 35 years.

He said that he has never known a bagged cargo that has not been the subject of an insurance claim. These are often rice cargoes coming from Asia, which are invariably claimed to be short of the promised amount when they arrive in Nigeria. The Lagos Chamber of Commerce and Industry, or LCCI, has called for stiffer consequences for wrongful or underdeclaration of imported goods, including naming and shaming of serial violators.

EASTERN PORT NEGLECT

A succession of post-independence governments in Nigeria favored the ports in Lagos at the expense of those in the east of the country. Decades of neglect created a vicious circle as the abandoned ports silted and became too shallow.

The eastern ports have berth depths of six to 11 meters, compared with nine to 13.5 meters available in Lagos. The LCCI said there is concern over the safety and cost implications of wrecked ships and abandoned vessels littering Nigeria’s

waters. It estimates that there are about 200 derelict ships there.

The government is trying to encourage ships to use the eastern ports rather than those in Lagos by cutting tariffs for some users. But the perception is that the eastern ports are more dangerous in terms of piracy than those in Lagos. The ports of Apapa and Tin Can in Lagos still handle about 70 percent of all Nigerian imports.

Some dredging has been done at the eastern ports in a bid to ease the congestion. Nigeria is also building a new deep-sea port in the Lekki Free Trade Zone in Lagos through a public-private partnership, and is considering two additional facilities to help ease congestion. The country’s ports authority says that a port master plan to cover the maritime industrial environment is needed.

According to stakeholders convened by the Nigerian Chamber of Shipping in March, a “comprehensive shipping policy derivable from an equally comprehensive transport policy” is needed to improve port infrastructure. As far as possible, ports should be automated to reduce corruption and congestion, the stakeholders added.

Nigeria has favored the ports in Lagos at the expense of those in the east of the country.

CREDIT: SHUTTERSTOCK.

www.breakbulk.com BREAKBULK MAGAZINE 105

Nigerian pirates are considered to be among the most violent in the world. According to the International Maritime Bureau, or IMB, out of 75 seafarers kidnapped so far this year, 62 were captured in the Gulf of Guinea, off the coasts of Nigeria, Guinea, Togo, Benin and Cameroon.

CREDIT: SHUTTERSTOCK.

PIRATES ‘RUTHLESS AND DESPERATE’

Rice sees piracy as a principal risk. He considers Nigerian pirates to be among the most violent in the world. According to the International Maritime Bureau, or IMB, out of 75 seafarers kidnapped so far this year, 62 were captured in the Gulf of Guinea, off the coasts of Nigeria, Guinea, Togo, Benin and Cameroon. Of the nine vessels fired upon worldwide, eight were off the coast of Nigeria. The IMB said there are some signs of improvement, reflecting the Nigerian navy’s increased efforts to actively respond with patrol boats.

Rice said that Nigerian piracy is much more frequent than reported.

The pirates are extremely ruthless and desperate, coming from Lagos where, he said, there are levels of poverty – and concentrations of wealth – without parallel in Africa.

Multipurpose and heavy-lift ship operators should consider having armed guards and hardening the vessels, for example with razor wire, to make it more difficult to board, he said. Rice also advised the use of a navy patrol escort to the Safe Anchorage Area, or SAA, at Lagos port or arranging naval escort from the SAA to ports other than Lagos, such as Port Harcourt or Bonny River. There needs to be 24-hour

security with regular deck patrols while the vessel is alongside the discharge berth, he added.

That task is made more complex by the fact that Nigerian ports are too shallow for large vessels carrying heavy equipment. Lagos ports are restricted in size because of warehouses and residential homes built around them.

Femi Ademola is a consultant who was commissioned by the LCCI to co-write a report on Nigeria’s ports in 2018. He said that large vessels are usually anchored in the middle of the sea, while smaller vessels are used to transport the cargoes to the port terminals. Space constraints at the terminals can then lead to longer-than-usual waiting times before cargoes are cleared.

Cost overruns often result, he said, and advised sending required documentation well ahead of berthing in Nigeria to shorten waiting times.

SL OW IMPROVEMENT

In his 2018 report, Maritime Ports Reform in Nigeria, Ademola pointed to the need to streamline the number of security agencies involved in breakbulk and heavy-lift port operations, with the number of agencies involved in the cargo clearance processes currently between six and 10. About 10 percent of cargoes are

106 BREAKBULK MAGAZINE www.breakbulk.com

cleared within the official timeframe of 48 hours. Most take between five to 14 days to clear, with some needing 20 days or more. Deliberate official delays account for about 65 percent of import clearance times, Ademola’s report found. According to the Maritime Anti-Corruption Network and the United Nations Development Program, it can take more than 140 signatures to get a vessel or cargo cleared by the local authorities.

On top of that is the risk of industrial action. In July, Nigeria’s ports ground to a halt as the Maritime Workers Union of Nigeria held a three-day strike claiming that stevedores employed by international oil companies hadn’t been paid.

That said, the country’s ports are slowly improving, Rice said, with insurance claims being incrementally reduced. Nigeria’s ports are slowly becoming easier to use than other ports in West Africa, which Rice said are moving in the opposite direction.

An independent pre-discharge survey remains essential, he said, and is much easier for project cargo than for breakbulk, with the cargo accessibility being the key difference. For project cargo, it’s usually possible to verify that lashings are in place, that the cargo is complete and has not moved in transit, and to take photos. That’s much harder in the case of bagged cargo. Breakbulk is the “problem area” for insurers in Nigeria, Rice said.

GRIDLOCK SHUTTERS MOVES

For project cargoes, problems can often start at the gate. Cameron described the congestion on the roads around Nigeria’s ports as “absolutely shocking.” Trips from ports that should take 30 to 45 minutes routinely take two to three hours, he said. Part of the problem is caused by container trucks which, ISSUE 5 / 2019

There is a big difference between email promises and what is delivered.”

–S teve Cameron, Cameron Maritime Resources

Cameron said, cut bridge capacity by about one-third. Add in tanker trucks and you have a recipe for gridlock. Cameron recalled finding it impossible to hold business meetings around the ports as people couldn’t get there. The only way to do it was to call meetings at his hotel in Lagos.

Onward project cargo transportation, Cameron added, requires a proper route survey by the local agent to check load clearances and bridge heights and some overhead cables might need to be removed.

Additionally, bridges may be unsafe due to lack of maintenance.

The roads around Apapa and Tin Can were originally built to handle a daily volume of 1,500 trucks – but about 5,000 trucks now try to access the ports every day. There is a direct domino effect between the blocked roads and conditions within the ports. If trucks can’t get in, imports remain in the port, leaving no room for incoming vessels to berth.

Demola Akinkunmi, of Africa Port Services, pointed to the use of Lagos port space to store equipment for the construction of Dangote oil refinery,

planned to be Africa’s largest, as exacerbating the problem. The refinery is not expected to be completed before the end of 2020, Dangote executives have said.

Meanwhile, Kehinde Arowoselu, from Koeman Nigeria, reported potholes around the Lagos ports that are big enough to absorb a family car. According to the LCCI, bad port access roads account for 90 percent of accidents that cause damage to fragile project cargoes.

A small amount of work carried out on a stretch of road in the port area of Apapa doesn’t begin to fix the problem, Cameron said. There needs to be a truck booking system and proper application of rules on parking.

Rice pointed to an absence of traffic control, truck parks and traffic lights. The result is that roads around the ports are clogged up with hundreds of trucks. He once spent 24 hours in a single jam in Lagos, Africa’s largest city. “It needs fundamental attention,” he said.

Despite everything, Rice believed that it can be done: “With sufficient

Estimates put 200 derelict ships in Nigeria’s waters, causing navigational issues for multipurpose and heavy-lift ships.

CREDIT: SHUTTERSTOCK.

capital investment and political will, it will be possible to transform the transport infrastructure in and around the Lagos port terminals within five years.”

Ademola likewise remained optimistic, predicting that efficiency at the country’s ports will improve and corruption will be reduced with a stronger economy. However, that may be too long for some to wait, so for a project cargo operator coming to a Nigerian port for the first time today, Ademola said there remains no substitute for “strong local experience.” BB David Whitehouse is a journalist who spent 18 years with Bloomberg, before turning to a career as a freelancer. He regularly contributes to The Africa Report in Paris. www.breakbulk.com BREAKBULK MAGAZINE 107

ADVERTORIAL

Port of Zeebrugge: Hub of Excellence for Breakbulk Cargoes Port of Zeebrugge lays claim to a strong reputation for the handling of breakbulk cargoes.

The port constitutes an authoritative port for roll-on/roll-off traffic, new cars and project cargo.

Handling almost 3 million new cars annually, the port ranks at the top of the world’s leading automotive ports. These cars are shipped within Europe and worldwide. The port accommodates several automotive centres for vehicle modifications and other value added logistics. Zeebrugge is also highly specialized in the handling of high & heavy loads such as agricultural and industrial machinery.

Almost 3 million tonnes of forest products pass through the Port of Zeebrugge. Paper products are distributed in Europe by train and by lorry and are shipped overseas by container or breakbulk vessels.

Port of Zeebrugge, being a clean or pollution free port, has evolved into a major distribution hub for food and perishables such as fresh fruit, fruit juices, vegetables, coffee, meat, fish and dairy products.

The coastal port also offers large expertise in the handling of project & heavy-lift cargoes, the Yamal LNG modules project being the latest succesful test piece. All terminals are equipped to load and unload project cargo such as offshore wind industry components, boats, towers, military equipment, etc.

Zeebrugge is also known as a London Metal Exchange/LME recognized zone for steel and non-ferrous metals.

108 BREAKBULK MAGAZINE www.breakbulk.com

HINTERLAND AND MARITIME ACCESSIBILITY

The substantial water depth and the easy maritime accessibility of the coastal port allows it to receive any type of ship 24 hours a day.

The extensive range of intra-European and intercontinental services, combined with an inland waterway, estuary barge, railway and road network, and the immediate connection to the new highway A11, safeguards your links to the markets in continental Europe and the UK, or overseas markets.

SKILLED LABOUR FORCE AND SPECIALIZED TERMINALS

Lashing and securing is performed by more than 250 highly skilled, experienced and trained dockers for breakbulk.

Solid support from the port authority contributes to the success of your logistic project. Your logistics can also be streamlined via partnerships with terminals, and shipping lines such as Wallenius Wilhelmsen Solutions, ICO, PSA Zeebrugge, C.Ro Ports, PortConnect, EML, Sea-Invest, CSP Zeebrugge, UECC, Flota Suardiaz, Finnlines, Minne Port Services and many other companies that offer specialized handling of breakbulk cargoes.

Port of Zeebrugge will point you towards the best possible transport solutions for your breakbulk volumes or challenging projects.

ISSUE 5 / 2019

DEDICATED BREAKBULK PORT

commercial.department@mbz.be

ADVERTORIAL

Your First Choice for Heavy Haul Trucking Services 1960

Supor Heavy Haul is a leader

in heavy hauling, trucking, heavy rigging, crane service, warehousing, and catastrophic recovery.

Founded in 1960 with a single truck by Joseph Supor, Sr., we now serve commercial, industrial, and public utility sectors across North America. Supor gained national attention by leading the aircraft recovery project that lifted the damaged “Miracle on the Hudson” plane from the Hudson River in New York City.

We also transported the plane to the Carolinas Aviation Museum in Charlotte, North Carolina.

At Supor, we make it possible for clients to move more — and do it more efficiently and effectively than ever before.

We take heavy haul trucking to the next level The Supor team has the resources, expertise, and experience you can trust. Whether it’s a heavy-duty transformer, a fuel tank, or an infrastructure component to be installed across the country — or the heavy equipment needed to put it in place — we can provide safe and secure transport of highly specialized, “Supor-Sized” loads up to 1,000 tons or more.

Major players in the utility, petrochemical, engineering, and pharmaceutical industries have relied on Supor to prepare and execute the delivery of specially configured, heavyweight, and overdimensional loads — whether by long-haul trucking or connections with rail and water-based transport to any destination in the continental United States, Canada, or Mexico.

110 BREAKBULK MAGAZINE www.breakbulk.com

■

2020

Our business is helping your business Supor Heavy Haul offers a

complete collection of equipment and software that complies with the most rigorous safety standards.

We put our resources to work for you as a trusted one-stop partner for the “heavy lifting,” allowing you to focus on new ways to grow your operation.

Our full range of turnkey project services means we can handle everything. It’s why the Supor team has earned the premier reputation for attention to detail and exemplary customer service.

A complete collection of equipment n

Scheuerle Hydraulic and Self-Propelled Modular Trailers

n

Dual Lane Transportation Systems

n

Truck Fleet

n

Prime Movers

n

Heavy Haul and Road Tractors

n

Trailers

n

9-axle, 11-axle, 13-axle, and 19-axle Trailers

n

Steerable Dollies

n

Perimeter Frame Trailers from 2 to more than 34 axles

n

Hydraulic Truck Cranes from 15 to 600 tons

n

Gantry Systems from 40 to 1,000 tons

n

Slide Systems from 400 to 500 tons

n

Hydraulic Jacking Systems up to 1,000 tons

n

Hi-Bridge Girders

Advanced equipment, unbeatable support Along with Supor’s heavy haul and trucking equipment comes our world-class 24/7 technical support.

With our proficient planning team and state-of-the-art software system, we can choose the right tool for the job.

Our long-standing customers are proof of the personal care and attention we give to each project.

Now in our third generation as a family owned and operated business, we regard our customers as part of that family. And we take pride in knowing our clients chose Supor because they want the best.

Call us today: 800.423.8670 Or go to: www.jsupor.com Stop by our booth at Breakbulk Americas: Booth E57 Visit our NEWEST port-accessible location in Houston, TX

ISSUE 5 / 2019

For heavy haul trucking, there’s no substitute for experience.

From our humble beginnings nearly 60 years ago to our current fleet of specialized trucking equipment, Supor Heavy Haul have been experts in transporting goods and materials across ARS OF SERVICE North America.

0 YE 6

We can handle every detail of a project, from early planning stages through project completion.

With cutting-edge technology and state-of-the-art equipment, we make it possible for you to move more — and do it more efficiently and effectively than ever before.

Call us today for a free quote: 800.423.8670 Or go to www.jsupor.com

1960

■

2020

24-Hour Emergency & Recovery: 800.422.6041 Visit our newest location in Houston, TX (Port-Accessible)

Visit us at booth E57

CELEBRATING 60 YEARS OF SERVICE: 1960 n 2020

PHOTO CONTEST

WINNER Maersk Chock-a-block!

Year: 2019 Location: DP World, Turkey Description: “This was one of several yachts loaded in Turkey destined for various locations within the Americas. In fact, this was one of the longest pieces of breakbulk that we have ever loaded in Turkey!

Maersk has more than 40 years of experience handling breakbulk, so our customers trust us to transport their special cargo ‘All The Way.’” Learn more about us at Breakbulk Americas 2019, Stand K14

EDITOR’S CHOICE Tote Maritime Alaska Year: 2017 Location: Anchorage, Alaska Description: “The North Star in the Cook Inlet outside of Anchorage, sailing into the sun. The North Star has completed the first of two phases in converting her to run on LNG. The tanks you see were installed in the winter of 2017-2018.“ Learn more about us at Breakbulk Americas 2019, Stand K2

See all the entries at ‘Just Add Water’ Breakbulk Americas 8-10 October 2019 Houston, Texas, U.S.

112 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 3 / 2019

http://nbpc.co.jp/home.html

NBP TO BUILD TWO HEAVY-LIFT VESSELS

NYK BULK & PROJECTS CARRIERS LTD., a wholly owned subsidiary of NYK LINE, has signed the contract to build two nextgeneration energy-saving heavy-lift vessels.

We will maintain and accumulate the technical know-how of heavy lift vessels by owning and operating heavy lift vessels.

We will respond to the needs of plant cargo customers all over the world.

SAIL THE NEW ERA WITH US!!

Vessel Particular

LOA

Abt 138m

DRAFT

Abt 8.30m

DWT

12,470M/T

GEAR

400 tons X 2 (Tandem 800tons)

DELIVERY

(1st) August, 2021 (2nd) January. 2022

BACK PAGE

AMERICAS ECONOMIC ACTIVITY 2018-2020 GDP FORECAST

Economists anticipate a slow recovery in GDP for Argentina, Venezuela and Nicaragua while North America’s Big 3 – Canada, United States and Mexico – face tepid growth through 2020.

5 0 -5 -10

2018

-15

2020*

2019*

-20

PA RA GU AY

PA NA MA

NIC AR AG UA

PE RU UN ITE DS TA TE S UR UG UA Y VE NE ZU EL A

*Forecast

ME XIC O

CO LO MB IA CO STA RIC A DO MI NIC AN RE P. EC UA DO R EL SA LVA DO R GU AT EM AL A HO ND UR AS

CH ILE

CA NA DA

BR AZ IL

BO LIV IA

AR GE NT INA

-25

INFLATION FORECAST Inflation rates throughout the Americas remain relatively under control, with the exception of Argentina which is seeing a deepening of last year’s recession (see related story, page 68)

50 40 30

2018 2019*

20

2020*

10

PE RU UN ITE DS TA TE S UR UG UA Y VE NE ZU EL A

PA RA GU AY

PA NA MA

NIC AR AG UA

ME XIC O

CO LO MB IA CO STA RIC A DO MI NIC AN RE P. EC UA DO R EL SA LVA DO R GU AT EM AL A HO ND UR AS

*Forecast

CH ILE

CA NA DA

BR AZ IL

BO LIV IA

AR GE NT INA

0

CURRENT ACCOUNT FORECAST

Current account balances are the difference between a given nation’s imported and exported goods, services and transfers and are an indicator of foreign trade trends.

0 -10 -20

2018

-30

2019* 2020*

-40

*Forecast, in US$billions

114 BREAKBULK MAGAZINE www.breakbulk.com

PA RA GU AY

PA NA MA

NIC AR AG UA

ME XIC O

CO LO MB IA CO STA RIC A DO MI NIC AN RE P. EC UA DO R EL SA LVA DO R GU AT EM AL A HO ND UR AS

CH ILE

CA NA DA

BR AZ IL

BO LIV IA

AR GE NT INA

-60

PE RU UN ITE DS TA TE S UR UG UA Y VE NE ZU EL A

-491.0 -532.1 -565.6

-50

Source: Consensus Economics, www.consensuseconomics.com

ISSUE 5 / 2019

IT ’S A

MOD MOD WO

Modu larizati on Bri ng

CURE FO ‘PERM R MIDDLE ANEN TLY TE EAST’S MPORA RY’

SUBSCRIBE to the industry’s leading source of information for cargo owners, logisticians and transport specialists.

s Bene

RLD

fits, Ch alleng es to P rojec t Logisti cs

NORT H AFR TIME TO SH ICA’S INE

SOUTH BLEND EAST ASIA S ENER GY MIX

The Pu bl Projec ication fo r t Supp ly Chai the Indust rial n Indu stry

Issue

KEE SENSPIING A HEAD BLE

2 / 20

19

Don’t Sid Menta estep l Healt h Issue s

PROJECT CARGO CASE STUDIES REGIONAL REPORTS MARKET ANALYSIS AND COMMENTARY PORTS & TERMINALS ENERGY

EXPO RT CRE PROP UP PR DIT AGENC OJECTS IES

OCEAN CARRIERS ROAD/RAIL/BARGE/AIR

MPV FR CHASE EIGHT MA RK S THE SMART ET MO

NEY

TECHNOLOGY & EQUIPMENT BREAKBULK EVENTS

To start your subscription, visit www.breakbulk.com/subscribe/ For advertising, contact Robert Janusauskas at robert.janusauskas@breakbulk.com or call him at +66 62 804 6746.

PE TH

A NN U AL E

INFRASTRUCTURE

EURO PE OF IN ’S CRISIS FRAST RUCTU RE

Servin g the C h

The Pu bl Projec ication fo r t Supp ly Chai the Indust rial n Indu stry

+9.1% POP BILLI:O7.6 N

US$ 4 TRIL1 LION Gettin g Heart to the of Glo bal Tre nds

DELVI N THE D G INTO A CONTR RK ART OF ACTIN G

CORP ORATE G

6 / 20

2.1 MILL BPD ION

18

TH E PU PR OJE BL ICAT IO N CT SU PP LY FO R T C H A IN

US$ .94 TRIL2 LION

BY TH NUMBE ERS TK tk

Issue

GTB SCO 58 RE:

1.2% GROWGDP TH

DIS RUP TION

Creati ng from S Opportun it upply Chain y Enigm