Breakbulk Magazine: Issue 3 / 2016 by Breakbulk Events & Media

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ISSUE 3 / 2016

DO KEY PERFORMANCE INDICATORS MEASURE UP?

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contents

Cover Story

18 REGIONAL REVIEW

BUCKING THE TREND Middle East Salves Global Slowdown Wounds

24 PROFILE

THE RAINMAKER

Fluor’s Jim Brittain: The Itinerant Problem Solver

30 REGIONAL REVIEW

NERVES OF STEEL Gas Projects Boost U.S. Gulf Project Prospects

8 MEASURE, ANALYZE, RINSE, REPEAT Do Key Performance Indicators Measure Up?

35 PORT FOCUS

SAFETY FIRST

Improving Safety No. 1 Issue for Port Labor

40 REGIONAL REVIEW

BUSINESS AS USUAL Shipping Avoids South China Sea Turmoil

44 VIP SHIPPER

GETTING HANDS ON Don’t Be Chained to The Desk

BONUS CONTENT

BREAKBULK AMERICAS 2016 PREVIEW

2016

6 Let’s Be Honest n 46 EU’s Not-so-Free Market n 50 Thought Leaders n 56 Breakbulk Europe Review 62 Last Mile Photo Contest Winner n 63 Breakbulk Index n 66 The Last Word: Beyond Capacity On the Cover: source images via Shutterstock / photo illustration and layout by Catherine Dorrough 4 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 3 / 2016

editorial

LET’S BE HONEST

egardless of where you stand on the value and merits of business metrics, the initials “KPI” can carry the same range of emotional response as “IRS” or “HMRC.” Key performance indicators are used to measure performance against shared business goals among shippers and logistics vendors. At its heart, the exercise should be an objective tool for all involved, an honest assessment of performance, practices and processes to meet the expectations of all partners. As our cover story reports (“Measure, Analyze, Rinse, Repeat,” page 8), KPIs’ potential Gary Burrows values are apparent, but attempts at application and reasoning lead to fear, confusion and opportunities lost somewhere between how to measure and how to process results and apply them toward improving performance. KPIs get knocked in the industry because some executives simply use them as a stunt, or stunt operations by struggling with too many measurements, setting goals without fully understanding the business they’re trying to measure. While the number of KPIs are overloaded, they dilute their value to measure anything meaningfully. Instead of applying KPIs across the stakeholder chain, they tend to weigh heavier on certain stakeholders, such as forwarders. One human resources consultant noted in the story claimed that KPIs spring completely from fear from higher-ups who don’t trust themselves enough to trust other people. For CEO and manager alike, one of the motivations for resistance in submitting operations to KPIs is the fear of what those results will show.

6 BREAKBULK MAGAZINE www.breakbulk.com

But let’s be honest: anyone who doesn’t have an inkling of expectations on the results of any metrics applied to performance is likely too out of touch to be in a decision-making role affected by those metrics. Who hasn’t gone into an exam, less than prepared, and experienced the despair of attempting to make your marks but finding your quiver empty? Short of a few lucky shots, you roughly know your score when you’re handing in the test. If your company is serious about measuring and improving its businesses, some serious soul-searching is in order. In recent conversations with EPCs, project owner representatives and various vendors along the supply chain, the consistent emphasis for each stakeholder is self-evaluation. You have to know your business to recognize the value and where it potentially can improve. You have to be prepared to receive the results and find effective methods of improvement. Interest and buy-in for KPIs are developed internally and externally. And in the latter, rather than a means to create a partnership, the partners and the intentional approach of growing an effective relationship will generate effective assessment and consistent improvement. Those who resist often fear the response from participants, internally and externally. Certainly, industry sources complain that results are invariably tied to vendor penalties and seldom incentives; sticks over carrots. With the sea of contract terms involved in any major project, incentives and sanctions are bargaining chips that differentiate potential partners simply on price. Companies focused on continued improvement – and success – focus on trusted performance and relationships and mutual success. As industry moves further towards modularization and standardization of design, measurements will become more meaningful and the drive towards consistent processes will further demand them. This needle points towards those who can produce consistent excellence and predictable performance. Ultimately KPIs are to serve uniformity of performance in the life cycle of a project. For a true business partnership with mutual goals and desires, KPIs are simply a tool to reinforce that relationship and to help it grow.

EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gburrows@breakbulk.com NEWS EDITOR Carly Fields carly@breakbulk.com HEAD DESIGNER Catherine Dorrough DESIGNER Mark Clubb REPORTERS Paul Scott Abbott Lori Musser Criselda Diala-McBride Mary Shacklett Alan Field VL Srinisvasan BREAKBULK EDITORIAL BOARD John Amos Amos Logistics

Ed Bastian

BBC Chartering

Murray Cooper

McDemott International Inc.

Etienne de Vel Fednav Belgium

Dennis Devlin DB Schenker

John Hark

Bertling Project Logistics

Dennis Mottola Bechtel Corp.

William Moyersoen

ArcelorMittal Antwerp Logistics

Albert Pegg

Antwerp Port Authority

Dirk Visser

Dynamar D.V.

Grant Wattman

Agility Project Logistics

MANAGING DIRECTOR Alli McEntyre / +353 21 477 3808 amcentyre@breakbulk.com ACCOUNT MANAGER Robert Janusauskas / +353 021 477 3808 rjanusauskas@breakbulk.com SUBSCRIPTIONS To subscribe, email bb.breakbulk@adsg.info, or call from inside the US +1 855 613 8186 between 8:00 am and 5:00 pm CST. A publication of ITE Group plc Transport & Logistics business 105 Salisbury Road London NW6 6RG, UK.

ISSUE 3 / 2016

cover story

MEASURE, ANALYZE, RINSE, REPEAT DO KEY PERFORMANCE INDICATORS MEASURE UP?

hether you live by legendary management consultant Peter Drucker’s mantra “What gets measured gets improved,” or decision analysis expert Douglas W Hubbard’s charge that you should “measure what matters,” the likelihood is that metrics in one form or another are an integral part of your everyday business. In an increasingly measured sector, companies can succeed or fail by their per8 BREAKBULK MAGAZINE www.breakbulk.com

BY CARLY FIELDS

formance-related data. The most meaningful and relevant metrics should be key performance indicators, or KPIs, a special subset of metrics used to measure performance against key business goals. However, all too often KPIs get associated with arbitrary metrics, which dilutes the value of appropriately assigned and accurately aligned KPIs. Supporting metrics can be meaningful when they provide useful insights into how KPIs are being impacted, but KPIs should take the starring role. ISSUE 3 / 2016

POINTERS FOR SETTING EFFECTIVE KPIs

1 2

Photo Credit: Shutterstock; Illustration: Catherine Dorrough

3 4 5 6 7

Be selective; too many KPIs can be distracting Listen to stakeholder input when setting KPIs, but be wary of differing motives or conflicting objectives One size does not fit all… …but you don’t have to reinvent the wheel for KPIs on every breakbulk project Plan in frequent rounds of assessment, analysis and validation Don’t overcomplicate… …and never forget that they are only indicators and not the only measure of the success of your project or business

www.breakbulk.com BREAKBULK MAGAZINE 9

cover story

“Without facts to discuss and show performance we can end up in situations where we are judged on emotions and perceptions rather than facts.” – Dominik Stehle, deugro If they are done well, KPIs can be much more than just a boardroom stunt. But the “if” can often be a significant stumbling block. One blogging human resources consultant recently claimed that KPIs spring completely from fear, that they have no business purpose at all except to assuage the anxieties of higher-ups who don’t trust themselves enough to trust other people. Clearly, this is an employee that has had misaligned and inappropriate KPIs repeatedly shoved down his throat. The path to KPI enlightenment should not elicit that level of pain. Grant Wattman, president and CEO of Agility, described KPIs as “critical” for managing its business in every functional area. At Agility, KPIs are developed specifically focused on the performance expectations for the particular activity,

whether it be financial, operational, performance or process. Crucially, they are not static, but modified as the team moves along the success curve for the measured activity. “KPIs are critical to the execution of our business to drive consistency of deliverables and performance,” Wattman said. “Without KPIs how would you understand when you have deviated from the agreed upon path? Without data, how would you manage your business or measure your performance towards a stated goal? How would you hold people accountable for performance and delivery?” John Hark, Bertling Logistics’ regional director, noted a definite increase in KPI interest and importance over the past five to seven years,

both internally from a management standpoint and externally from clients. Consequently, various KPIs have become a regular part of day-to-day activities and performance measurement. They also allow for proper assessment of activities, added Dominik Stehle, deugro’s regional vice president – North America: “Without facts to discuss and show performance we can end up in situations where we are judged on emotions and perceptions rather than facts. Or where the performance of a single shipment is used in place of performance to date. Overcoming these potential discrepancies between perceptions and reality is something that can be done

ABOVE: Unloading of some of the world’s largest engines and their ancillary components. They were transported to Corpus Christi aboard the BigLift Tramper, then transferred to 12-axle railcars bound for Mexico. When assembled, each unit weighed more than 300 tonnes. / Credit: deugro 10 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 3 / 2016

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cover story

“We want to keep the KPI list short, simple and meaningful so we can clearly show improvement.” – Doug Hickey, CB&I “KPIs open a dialogue and communications internally and externally, which always improves relationships when applied with the correct methods. KPIs will show areas of improvement and that need improvement, which then allows the teams to develop corrective actions before the problems escalate,” he added. Bertling uses KPIs to drive its own data integrity within its processes and to monitor various milestones on the project execution side of the business. Regular measuring of predetermined milestones allows the company to spot potential pinch points in the supply chain of a capital project, giving it time to suggest and make changes to the client before the problem worsens. 12 BREAKBULK MAGAZINE www.breakbulk.com

MAKING IT WORTH YOUR WHILE Key Performance Indicators are used by a range of stakeholders in projects from small to large, but what incentives are there for contractors to actually meet them? Should there be more “carrot” and less “stick”? In deugro’s experience there are almost never incentives, just penalties, something that resounds with Bertling Logistics’ John Hark. He commonly sees too much emphasis on pointing out poor performance on KPIs and not enough recognition in situations when KPIs indicate excellent performance. Agility’s Grant Wattman has experience of incentives in some projects, but not in others, highlighting the lack of standardization in applying KPIs. However, warns CB&I’s Doug Hickey, the industry needs to be cautious and not overwhelm the shipper and service providers with too many measuring tactics for incentives and/or penalties, losing sight of the objective of shipping the cargo on time, meeting the site delivery date with the cargo arriving safely and without incident. Another suggestion to bring up standards is that of a publically available forum showing a “league table” of KPIs from different stakeholders. But while it would be useful, there are hurdles to overcome. Namir Khanbabi,

AAL’s managing director – Tramp and Projects Division, asks who is going to police it, whether standards are going to be applied uniformly across the industry, and whether there are some stakeholders that may not truly represent the figures as they should. Khanbabi also questioned the worth of constant comparison with competitors: “Understanding and respecting one’s competitors is of vital importance to any industry. However, it’s of even greater significance to set service standards against our own customer expectations and aspire to ‘those’ goals regardless of how other carriers collectively judge themselves.” Added to which, companies such as AAL take little solace in the knowledge that another carrier’s safety record is poor, because nobody wants accidents or incidents in the industry. “Looking to our competitors for reassurances is not as interesting as letting our clients be the ultimate judges and make their own assessments based on safety, service and efficiency criteria most valid to them,” he said.

ISSUE 3 / 2016

Credit: Shutterstock

both internally and with clients.” For its part, engineering, procurement and construction company CB&I is at a pivotal point with its KPIs as it sets off on a journey of development of KPIs for its Dominik Stehle strategic logistics service providers. deugro Doug Hickey, the company’s global director of logistics, hopes that the new KPIs will help CB&I in its day-to-day operations, highlighting the weak points in its internal and external operations and helping it to focus on where it needs to improve. “We want to keep the KPI list short, simple and meaningful so we can clearly show improvement. KPIs are important to continuous improvement for our logistics team,” Hickey said.

cover story

MEASUREMENT ACROSS THE BOARD

The reality is that KPIs have become part of everyday business for conscientious breakbulk and project cargo companies. These companies create, apply and adapt KPIs in a process of constant evolution. But opinions vary on how advanced the project cargo industry is in using these KPIs to better manage the logistics process. Some are critical of the industry’s slow uptake. Others say this is an unfair generalization. “We have seen broad ranges of KPI usage across various clients,” Bertling’s Hark said. “Some clients are fairly advanced and pay close attention to KPIs with proactive use of the data, while others really pay no attention to the data even when it is provided.” Others still, do not use KPIs at all, he added. “In my opinion, the overall project cargo industry is behind on using and/ or developing KPIs,” Hickey said. Part of the problem is that there are too many disparate indicators, which detract from the key points of operations and execu14 BREAKBULK MAGAZINE www.breakbulk.com

tion. “We should have no more than four to five KPIs that can actually show value added Credit: Bertling Logistics when improving,” Hickey said, citing on-time cargo collection, and bookings and correct documentation as examples. So while there are plenty of KPIs, they are not as appropriate as they might be. “To some degree there still seems to be the perception that because every project has unique characteristics, everything about it is unique,” deugro’s Stehle said. “While that is not to say that a KPI report for retail logistics can be used for a project, there are similar activities across the majority of projects so it is not always necessary to reinvent the wheel for every project when it comes to KPI reporting. By spending time in advance to create a well thought out KPI template that same KPI framework can be customized for use on The HHL Valparaiso discharges six loop reactors at the Port of Houston’s Barbours Cut Terminal.

future projects, which is what deugro (USA) has done.” Sometimes the myriad KPIs in existence is a result of the project’s wish list rather than what is of value to the project. “There needs to be a discussion among all the stakeholders on a project with regard to which indicators are prudent to measure as well as defining how each metric will be assessed. What is the target and what is considered too high or too low?” Stehle said. Forwarders and carriers agree that KPIs have evolved very little when it comes to the typical logistics scope of a capital project. They are focused on transactional, historical data, of cargo movement from point A to B. “This is good data to understand where you came from, or what caused the performance failure, but little benefit when you are addressing that failure,” Agility’s Wattman said. The focus should be on amending existing KPIs to better fit the task in hand. “Moving away from the mentality that every project is 100 percent unique and obtaining the involvement of all stakeholders in determining what is ISSUE 3 / 2016

“What is generally missing in the industry is the forwarder putting meaningful KPIs on their subcontractors, but it is the logical next step. The forwarder has their internal KPIs to drive efficiency and operational effectiveness, and they often have KPIs with the client linked to financial penalties. In order to really be effective, these KPIs and their ramifications need to continue through the chain to all subcontractors.” But the challenge remains how to create more meaningful KPIs, a question to which there is no easy answer. Start with a small group, work up a shortlist of easily trackable KPIs and share the results with others, suggested Hickey. Better understand the purpose and benefits of KPIs and understand that KPIs can drive negative behavior as much as they can positive and contributing performance, offered Wattman. Encourage more collaboration past the forwarder in the chain of stakeholders and avoid contradictory KPIs in a single contract, Hark proposed.

EMBRACE KPIs IN A DOWNTURN

And now’s a good time to get into the KPI groove. With the commodity markets still languishing, more and better use could be made of KPIs to wring every last drop of efficiency and cost saving out of a project. A downturn makes KPIs more important as tighter budgets precipitate the need for efficiency wherever it can be found. However, there is a counter argument to this: “You would expect clients to focus more on KPIs in a downturn to squeeze out more efficiency and drive cost from the supply chain. We have seen this with some clients, but with others, we have seen the opposite in that staff cuts have lessened the attention to KPI measurement tools that are in place,” Bertling’s Hark said. Agility’s Wattman believed that KPIs are a critical tool in management regardless of the economic situation or size of your business. “You can call KPIs the backbone or guiding path to

“There needs to be a discussion among all the stakeholders on a project with regard to which indicators are prudent to measure.” – Dominik Stehle, deugro

Credit: Shutterstock

really meaningful to the project and realistic to implement would create more meaningful KPIs,” Stehle said. Wattman agreed that there are not necessarily too many KPIs, but there is certainly a significant amount of KPIs that have limited to no value in driving project success. “Many of them are irrelevant to the effort, no link to the desired outcome, really not measuring anything meaningful,” he said. Unfortunately, too many KPIs are established by individuals and companies who do not understand the business they are attempting to measure. “Therefore, those performing the activity provide the data, knowing full well the real measure of performance and processes are not under scrutiny, or at odds to the desired outcome,” Wattman added. Perhaps another issue is that some stakeholders view KPIs as a relationshipbuilding tool, rather than the objective tool that are designed to be. And setting the KPIs is only one part of the equation. Once the measurements have been made, there needs to be consensus on how that same data should be evaluated. There may also need to be a mechanism agreed upon for adjusting the targets for each indicator depending on changes to the project. There is also the challenge of aligning KPIs across the whole stakeholder chain, rather than having to accept those mandated by one stakeholder. “If we talk about logistics stakeholders on a typical capital project, we do often see a lack of alignment and accountability from the forwarder towards their subcontractors,” said Hark. “The challenge is to make all stakeholders accountable via the various KPIs. Unfortunately, the measurement and emphasis on KPIs often stops in the chain of stakeholders at the forwarder. The client and forwarder are aligned on KPIs and their measurement, but it often stops at that point.

www.breakbulk.com BREAKBULK MAGAZINE 15

cover story

“Unfortunately, the measurement and emphasis on KPIs often stops in the chain of stakeholders at the forwarder.” – John Hark, Bertling Logistics

determine if you are on the right track,” he said. From the carrier’s perspective, AAL pointed out that in an upbeat market, poor customer metrics can have a much more serious effect on a carrier’s revenues than in a down market. Customers have always been able to vote with their feet. Felix Schoeller, AAL’s general manager – Pacific liner service, added: “I think KPIs are important in helping our teams attain higher working standards and efficiencies. Externally, they provide a customer experience benchmark that we can build upon – a podium for our customers, from which they can air the negatives, as well as the positives.” And it’s not just commercial KPIs that are affected; the increasing importance of operational KPIs is also more evident in a downturn. “While the visibility on commercial

KPIs might seem the most likely to increase in a downturn, given that in many cases there are construction crews on a project site waiting for cargo, being able to perform at a high level is still very important to our Felix Schoeller clients to minimize costs down the line AAL rather than just in the supply chain,” deugro’s Stehle said. “In addition, this downturn has negatively impacted many of our clients’ supplier base, so being able to collect cargo and remove it from a troubled vendor’s custody can provide greater security for the project.” KPIs also keep third parties in check:

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keeping track of general operational and commercial KPIs not only helps deugro to make sure it has selected the right subcontractors, it also helps them to ensure client satisfaction. With that in mind, perhaps as an industry it would do well to recall another of Douglas W Hubbard’s quotes: “If a measurement is not informing your decisions, it could still be informing the decisions of others who are willing to pay for the information.” So even if you don’t believe in the value of KPIs, an existing stakeholder or potential client likely will. The KPI train is running, better get onboard. BB

AAL loads a 410-tonne, air-cooled condensing unit in Changshu, China, for discharge in Port Hedland, Western Australia. Credit: AAL

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www.breakbulk.com BREAKBULK MAGAZINE 17

regional review

BUCKING THE TREND Middle East Salves Global Slowdown Wounds

18 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 3 / 2016

t’s no secret that a dark cloud hangs over the global breakbulk and project cargo industry.

Transportation projects bode well for the Middle East’s heavy-lift and project cargo market. TOP: Hapag-Lloyd BOTTOM LEFT: Bahri BOTTOM RIGHT: Hero Lang for Rickmers-Linie

The persistent decline in oil prices, a stagnant global economy, rock-bottom shipping rates, and tonnage oversupply have turned market sentiment bearish over the past year. But there is one region on earth that may represent a silver lining. As other parts of the world shy away from bold capital spend, the Middle East is in growth mode. In the U.A.E., Dubai’s winning of the rights to host World Expo 2020 has propelled heavy industry to evermore fevered activity. Meanwhile, Oman and Saudi Arabia have embarked upon ambitious expansion plans for their ports and airports. In Qatar, the 2022 FIFA World Cup soccer tournament is driving an unprecedented surge in construction projects. And to connect it all up, in the pipeline is the 2,200-kilometer rail network that will connect all six member-states within the Gulf Cooperation Council, or GCC. True, countries in the oil-rich GCC region are feeling the pinch from the hydrocarbons price slump. Fuel subsidies have been cut and a 5 percent value-added tax will soon be introduced to ease pressure on regional governments’ coffers. However, it appears that infrastructure projects will push ahead as governments intensify efforts to diversify their economies away from oil revenues. An estimated US$140 billion of projects are planned or underway in the GCC region this year. “The Kingdom of Saudi Arabia is in the process of implementing a number of transportation projects, such as modernization of roads, ports and industrial cities. As part of the 10-year expansion plan, US$90 billion is likely to be spent on transportation projects between 2015 and

BY CRISELDA DIALA-MCBRIDE

2025,” said J. Sivan, senior consultant, supply chain and logistics transformation practice at Frost & Sullivan. David Piel, senior manager, special cargo at Hapag-Lloyd, said these projects bode well for the Middle East’s heavy-lift and project cargo market. “Anywhere where infrastructure is to be built up you need machines to move dirt such as excavators, bulldozers and dumpers, as well as cranes to build and move bridges, rails and power plants, and they all have one thing in common – they are big and heavy,” he said. “The more money that is invested, the more cargo has to be transported.” However, Christian Monsted, managing director, Middle East and India at Intermarine LLC, believes that most construction and simple infrastructure projects bring very basic breakbulk cargo to the region. These projects “only drive demand for rebar, steel, etc., which produces marginal benefits for the project cargo industry at this time,” he said. “There are only a few major projects Christian Monsted that drive bigger Intermarine LLC breakbulk cargo, for example the Egypt power projects, but this is still not generating significant volume, and the volume that does come out is under such heavy competition that it only occupies a small portion of capacity while not significantly contributing to voyages.” Monsted raises another concern, the fact that some projects have been stalled, reduced in scale, rebid and repriced. www.breakbulk.com BREAKBULK MAGAZINE 19

regional review

THREATS AND OPPORTUNITIES PwC’s 2016 Middle East Capital Projects and Infrastructure Survey, Delivering During Change, surveyed more than 130 industry insiders across the Middle East region from a range of sectors including transport; cities and urban development; social infrastructure; mega events; and energy, utilities and mining. The respondents included project owners, developers, contractors, external advisors and financiers, all with a key role in delivering the region’s mega projects. The survey – conducted during the fourth quarter of 2015 and the first quarter of 2016 – had some revealing findings:

$$$$

3 IN 4 have already been impacted by funding constraints

33% of entities involved in delivering mega projects expect spending to be the same or greater in the next 12 months

44% believe public-private partnerships increase the likelihood of delivering capital projects on budget 62% had been involved in a dispute recently or expect to be involved in one in the next year

3 IN 5 expect a mix of private sector and government to fund infrastructure projects over the next year 1 IN 3 think that attracting and retaining skilled resources is now one of the top 3 improvement priorities 20 BREAKBULK MAGAZINE www.breakbulk.com

ENERGY INVESTMENT AND IRAN Although oil and gas prices may have been under pressure over the past 24 months, Dudi Hermanto, general manager, business development at Almajdouie Logistics Co., said expansion plans in this sector “are still ongoing, and the same holds true for petrochemical projects” in the Gulf region. Across the Middle East and North Africa, energy investment is expected to reach as much as US$900 billion in the next five years, despite global appetite for investment waning by 20 percent between 2014 and 2015, according to a report published by Arab Petroleum Investments Corp. “For the Middle East, oil and gas-related projects such as refineries and petrochemical plants have traditionally been the drivers for breakbulk cargoes, but also power, desalination and other infrastructure-related projects,” said Gerhard Janssen, director global sales and marketing at Rickmers-Linie. “There continues to be activity; however, once oil prices pick up – and drive investments in these other industrial sectors – one can assume that the demand for transportation into this area will pick up as well.” Frost & Sullivan’s Sivan believes that the lifting of international economic sanctions on Iran will fuel further growth in the Middle East breakbulk and heavy-lift cargo industry. But Intermarine’s Monsted is not convinced that the expected infrastructure revival in Iran will be a game-changer for the region. “The ‘rebuilding’ of Iran is reminiscent of the hype surrounding the rebuilding of Kuwait after the first Gulf War, and that memory doesn’t include ships full of project cargo,” Monsted said. Hapag-Lloyd’s Piel, meanwhile, sees potential in Iran. “The country has to make up a lot of things in the future and many shipping companies, such as Hapag-Lloyd, have already added Iranian ports to their services,” he said.

One of the acknowledged challenges faced by breakbulk players worldwide is an oversupply of vessels, and the Middle East is not immune. Hermanto said forging alliances between ship operators, charterers and respective freight forwarders is an emerging trend that is helping regional carriers circumvent the issue and get access to the right vessel at the right price. “This has helped us regain margins in some of our contracts that were priced low. This also led national ocean carriers to diversify to breakbulk, roll-on, roll-off and general cargo vessels to gain competitive advantage within the breakbulk cargo industry, supported by government mandates to use [state-owned] carriers,” Hermanto added. However, Monsted believes such policies contribute to the unsustainability of the breakbulk market. “Those ships that are directly or indirectly supported by governments and/or their policies have kept shipping markets operating below real cost levels. The real impact of what are now chronically poor financial results has yet to be realized by the cargo market. The industry, as a whole, cannot provide an improved, capable fleet for the coming years, and will struggle to attract, train and retain the caliber of people needed to service the project and heavy-lift cargo market.” Janssen admits that vessel oversupply is also a problem for Rickmers-Linie in the Middle East, especially in light of lower demand from the oil and gas sector. However, he foresees other challenges to the breakbulk business in the region and the rest of the world. “The challenges we face are, in general, low oil prices, a hesitating world economy, and an oversupply of tonnage in other shipping sectors such as containers, bulk and ro-ro, that are increasingly fishing in the breakbulk pond. Once demand in these sectors increases, and once investments in infrastructure and large-scale oil and gas projects return, this will change,” he said. ISSUE 3 / 2016

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regional review

DRIVERS OF BREAKBULK GROWTH Construction and infrastructure development will remain the key sectors fueling demand for special cargo services in the Middle East, Sivan believes. “Futuristic designs of commercial, infrastructure, and residential projects require the use of high-value equipment and material, which subsequently requires global sourcing, careful handling and transport,” the Frost & Sullivan consultant said. To this end, a commitment by governments to boost non-oil sectors by developing industrial cities and free zones and modernizing public facilities, will go a long way towards sustaining the level of activity in the construction sector. But Almajdouie’s Hermanto sees opportunities in industries such as petrochemicals, chemicals, automotive, petroleum and renewable energy, over the next four years. Renewable energy

projects are gaining ground in the Middle East, as governments seek to free up oil and gas for export and meet growing domestic electricity demand. According to the International Renewable Energy Authority, or Irena, by 2020 the Middle East and North Africa, or MENA, region will likely be injecting around US$35 billion per year into the renewable energy sector. The agency anticipates that this surge in spending will be driven by increasingly lower-cost solar photovoltaic modules. A series of solar, wind and hydropower projects are being undertaken in Egypt, Jordan, Kuwait, Qatar, Saudi Arabia and the U.A.E. as those governments seek to diversify their energy mix. But while MENA governments continue to pour money into mega-projects, economic uncertainty may still dampen prospects for the regional breakbulk sector, according to Janssen.

“We do see activity in the region,” he said. “But it is too early to tell whether this is already a strong indicator for an upswing. We feel that everyone is on the starting blocks, but it is difficult to predict as to when demand is really going to pick up. We believe it will still take some time, and a recovery in oil and gas prices before a real upwards trend becomes visible.” Janssen said Rickmers-Linie also does not expect a major change in its operations in 2016 compared with 2015, in the Middle East or elsewhere. “We believe the Middle East market will move sideways. The challenge will be to keep costs under control, as the market is something that we cannot influence,” he said. BB Criselda Diala-McBride is a Dubai-based journalist with more than 20 years of experience writing and editing articles on oil and gas and technology.

Blatt-Lifter Specialist for Green Power Project Transports

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22 BREAKBULK MAGAZINE www.breakbulk.com

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ISSUE 3 / 2016

Project activity in the Middle East is expected to ramp up when oil prices recover. Credit: Hapag-Lloyd

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profile

THE RAINMAKER Fluor’s Jim Brittain: The Itinerant Problem Solver

t is late on a Friday in early May, and Jim Brittain is quartered in his Texas office, conscientiously devoting himself to responding to inquiries. He is just as likely to be found in a refinery in Mexico meeting with an operator, ensconced in an office in Asia reviewing a fabrication innovation, or on a flight to a remote oil sand site. Brittain, president of Energy and Chemicals in the Americas for global engineering, procurement and construction company Fluor, is the face of the company to oil and gas and chemical companies the BY LORI MUSSER world over. He logs a lot of miles, has found himself in many interesting situations, and is passionately committed to the business, to Fluor, and to his team members. As a company, Fluor is very wellrespected among multinational EPCs. The sheer volume of accolades received by the company is heady stuff. In the last few months, recognition has rolled in from such industry heavyweights as Fortune magazine (top-ranked engineering and construction company on its 2016 World’s Most Admired Companies list), Engineering News-Record (naming Fluor’s Quest Carbon Capture Facility Project as a Global Best Project for 2015 in the Power/Industrial category), and the Project Management Institute 24 BREAKBULK MAGAZINE www.breakbulk.com

MEET JIM BRITTAIN JIM BRITTAIN is responsible for business development and operations in the upstream and downstream oil and gas markets and the chemical and petrochemical industries of North, South and Latin America. He has dedicated three decades to Fluor, serving previously as the energy and chemicals vice president of operations and general manager of Fluor Canada. He has held

progressive roles in operations, project management, engineering management and project controls for major refinery, upstream, gas processing, oil sands and petrochemical projects. In addition to Canada and the U.S., Brittain’s global experience includes assignments in Saudi Arabia, U.A.E., Japan, and the UK. He is a registered professional engineer in Canada.

ISSUE 3 / 2016

profile

(giving Chevron’s El Segundo Refinery Coke Drum Reliability Project, for which Fluor provided EPC management services, its 2015 Project of the Year award). A company that can rack up that kind of industry recognition is doing many things right. Jim Brittain, and his team, are doing many things right.

FOCUSED ON THE LIFE CYCLE Recruiting, preparing, assigning, motivating and retaining staff is critical to any EPC’s success, especially one that focuses on life-cycle solutions to projects. “We have a strong talent development culture in place,” Brittain said. “We … encourage our employees to think outside the box to develop innovative solutions that improve our project execution. We also encourage and support employees to take stretch assignments to grow their leadership capabilities.”

Shell’s Quest Carbon Capture and Storage (CCS) project near Fort Saskatchewan, Alberta, Canada. Credit: Fluor

26 BREAKBULK MAGAZINE www.breakbulk.com

Fluor hones skills with mentorship and professional development programs, including global assignments that broaden perspective and skill sets. That type of preparation is invaluable when taking on some of the “biggest, toughest, and most distinctive projects in the world,” according to Brittain, who, like many among the leadership team, is a product of this culture. “A year or two into my career, I began to recognize that my personal values were aligned with Fluor’s. We have a unique culture, based on these values, and I believe most of our employees feel the same. As a result, we are able to deliver some amazing projects and perform at a different level,” Brittain said. He added: “Our employees’ expertise and innovative thinking is the reason for our company’s success.” To Brittain, a move up through the ranks affords far more than institutional memory. “This progression inside the company gives you insight into our business. The practical, hands-on experience you gain from working in the various disciplines, whether working in project controls, project management, sales, engineering, etc., enables you to better understand the challenges faced in

the EPC business, the myriad solutions available and our clients’ needs and drivers,” Brittain said. Brittain said that clients are looking for the best the world has to offer – from the best solutions in supply chains to the latest advancements in engineering – to lower the capital intensity of projects, and that a creative, innovative, experienced team is able to do that. To that end, capital efficiency is vital given the industry’s current down market. “While the lower commodity prices are impacting our customers’ cash flows and their ability to fund projects at the same pace as they’ve done previously, we are seeing steady spending on projects that make economic sense for them. Our clients are looking at their slate of projects and continuing to fund priority projects that support their long-term strategy, albeit at a slower pace,” he said. Brittain sees opportunity in what some consider a setback because the current environment provides the opportunity to engage with clients as a strategic partner. “By getting engaged with our clients early on in a project, we have the opportunity to challenge traditional methods of project execution, bring innovative ideas to the table and deliver a solution that provides the delivery and cost predictability clients need to move forward with projects.” In addition to the chemical and petrochemical industries, Fluor has a strong presence in the renewables energy market. The company’s solar expertise dates back to 1981, when it completed the world’s firstever large-scale photovoltaic power plant in Carisa Plains, California. More recently, it has performed EPC services on the 170-megawatt Centinela Solar Energy Project in California, and the 125-megawatt Arlington Valley Solar Energy Project in Arizona. Fluor now provides operations and maintenance services for both facilities. Environmental regulations and/or tax credits continue to shape opportunity in the renewable market, Brittain said. “With the rise in renewable ISSUE 3 / 2016

MEET FLUOR TEXAS-BASED Fluor Corp. is a global engineering, procurement, fabrication, construction and maintenance company that designs, builds and maintains facilities for clients on six continents. With 59,000 employees, a 30,000-strong craft workforce, global

sourcing capabilities, and five global fabrication facilities, it supports clients across a range of industries, including the energy, chemicals, mining, industrial, infrastructure, power, government, maintenance, modification and assetintegrity markets.

generation, we expect to see solar and wind become more competitive in the energy landscape. Fluor is in a position to offer integrated solutions for these projects through our in-house engineering capabilities and self-perform construction and remote monitoring services for operations and maintenance.”

CAPITAL EFFICIENCY A KEY DRIVER In spite of its evident successes, there is room for improvement in every organization, Fluor being no exception. It has focused its efforts on finding ways to deliver projects with capital efficiency and schedule and quality certainty, via efforts relating mostly to fabrication, self-perform construction and supply chain efforts. In a recent joint venture, for example, Fluor acquired the Zhuhai Fabrication Yard in China – one of the largest fabrication yards in the world. “We now have five fabrication yards strategically located around the world … to better control project outcomes,” Brittain said. Fluor also acquired Netherlandsbased Stork Holding B.V., a leading global operations and maintenance provider, to enhance maintenance, modification and asset integrity services, and supporting Fluor’s goal of providing complete lifecycle services to clients. Equally, the market lull that is breeding capital-efficient solutions has sharpened Fluor’s focus on implementing integrated solutions strategies. “With this approach, we can take a project from

concept to start-up with turnkey control. one memorable occasion, there may have We reduce costs and improve safety and been a little divine intervention to anoint quality by integrating procurement, fabri- a seemingly insurmountable supply cation and construction at every phase.” chain snafu. Coming onto a U.K.-based Brittain provides hard numbers on project that was already in progress, cost savings for several recent projects. a young engineer approached Brittain Its patented 3rd Gen Modular Execuwith a challenge. The project had two tion process reduced the Shell Quest exchangers being fabricated in Italy. Carbon Capture and After fabrication, the Storage Project’s capiexchangers were to be tal costs by 30 percent driven to a nearby river from initial estimates. and loaded onto a barge, “We can take Its global sourcing where they could then a project from capabilities helped be transported via river concept to start-up to a port for onward unearth 25 percent cost savings on pipe, shipment. with turnkey fitting and flanges for a The problem was, control. We reduce recent U.S. Gulf Coast the river was dry. An costs and improve project, and 58 percent over-the-road haul savings on piping spool to port wasn’t possafety and quality fabrication on another sible due to weights. by integrating important project. Brittain said: “We procurement, Similarly, Fluor’s strong had two options – cut construction resources, the exchangers into fabrication and including 30,000 craft pieces, drive them and construction at employees globally, can then reassemble them every phase.” help develop betteror wait until there build designs and offer was water.” Knowing direct control of qualthat once there was ity, cost and schedule rain, they would have in the field. Its cost-effective integrated to move quickly to take advantage of scaffolding solution, for example, was the rising river, they transported the recently recognized with an innovation exchangers to an offloading point along award by Fiatech. the river and placed a crane on standby. Of course, Brittain’s projects have “After six weeks of waiting, it had their share of logistical challenges finally rained, and once the river was related to the procurement and carriage high enough, we loaded the equipment of critical goods. onto the barge and transported it up EPCs don’t pray for rain often, but on river. Thanks to having the crane and www.breakbulk.com BREAKBULK MAGAZINE 27

profile

FLUOR’S 10 VALUE PROPOSITIONS: 01 02

03 Fluor’s innovative integrated scaffolding solution on the North West Redwater Partnership Sturgeon Refinery Project in Alberta, Canada. Credit: Fluor

exchangers on standby and some adjustments we made to the schedule, we were able to get the exchangers on their way and everything worked out,” Brittain said.

IT’S A PEOPLE BUSINESS When asked about the allure of his job, Brittain’s passion for the EPC business, his company, and his associates shines through: “I love our business – we design and build amazing, world-class facilities that have a profound impact … I also love working at Fluor because it is constantly changing and improving … There are so many opportunities, both for your personal and professional growth; there is always a new challenge in front of you.” But as much as Brittain likes his work, for him, it is all about the people. “We have a great organization with incredible people – we all have a passion for what we do. When I come to work, there is a vibe of energy that feeds you. Fluor is an exciting, interesting and engaging place,” he said. Echoing his passion for developing 28 BREAKBULK MAGAZINE www.breakbulk.com

people, which he called the future of the company, he said: “By connecting people and giving them new opportunities, we not only strengthen them, but enable them to have a fresh perspective that they can share with others in their home office – opening the aperture for what’s possible. The Fluor-Brittain match appears to be fitting. At the reins of a company widely recognized as a problem solver, Brittain personifies the brand: ready to meet any challenges with an innovative mindset; offers breadth and depth of knowledge to provide a full-spectrum solution; delivers services by optimizing assets, improving competitive position and increasing long-term success; and develops, executes and maintain projects with operational excellence. When asked about the future Brittain’s response was predictably focused, not on his golf game, but on continuously trying to predict where the market is going so that Fluor can develop solutions and apply effort to those opportunities. He said that there are incredible opportunities out there; with a little synergistic effort and innovation, Brittain hopes to make them Fluor’s. BB

04 05 06 07 08 09 10

E xecuting tough projects in challenging locations Linking global

engineering resources through strategically placed execution centers Sourcing materials using its global procurement network and in-country suppliers Mobilizing diverse workforces Meeting compressed schedules Managing joint ventures and alliances Developing innovative and costeffective technical solutions Optimizing returns on client capital investments Aligning solutions to meet clients’ capital efficiency drivers

Delivering sustainable projects with HSE excellence

Based in the U.S., Lori Musser is a veteran shipping industry writer. ISSUE 3 / 2016

regional review

NERVES OF STEEL Gas Projects Boost U.S. Gulf Project Prospects BY ALAN M. FIELD

ABOVE: LNG storage and Calcasieu Shipping Channel, Hackberry, Louisiana. Credit: Matthew D. White / VWPics/ Newscom 30 BREAKBULK MAGAZINE www.breakbulk.com

verall U.S. imports of steel suffered a decline in 2016 with March volumes down 28.1 percent from March 2015, and down 19.4 percent from their 2015 average monthly volume of 2.93 million tonnes. Worse, steel mill imports in March were down 41.4 percent compared with their most recent volume peak in October 2014. But for CB&I, a large engineering, procurement and construction firm that specializes in projects for oil and gas companies, booming demand for export-capable, natural-gas liquefaction plants have sparked growth in the

use of imported structural steel used in such projects. Jake Swanson, CB&I’s regional logistics manager for the Americas, said the EPC has been importing more steel than in previous years for three domestic projects that it is working on in the U.S. Gulf. Each of three major CB&I projects involve purchasing structural steel from non-U.S. sources, and shipping that steel to one of three job sites along the U.S. Gulf Coast. At Hackberry, Louisiana, CB&I is building an LNG export facility for affiliates of Cameron LNG, which is jointly owned by Sempra LNG & Midstream; ENGIE (formerly GDF SUEZ); ISSUE 3 / 2016

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regional review

and Mitsui and Japan LNG Investment LLC, which is jointly owned by Japanese giants Mitsubishi Corp. and NYK Lines. The plant will have three trains’ worth of capacity for the liquefaction and purification of natural gas, which will enable gas volume to be reduced so it can be exported from the U.S. in LNG vessels. The LNG used in these facilities will likely be pipelined to Louisiana from various shale plays within the U.S., Swanson said. CB&I is also constructing a threetrain facility for Freeport LNG in Freeport, Texas, which will also use “quite a bit” of imported steel, he added. In the third project, CB&I recently began construction of an ethylene facility for Korea’s Lotte Chemical in Lake Charles, Louisiana. This, too, will use a great deal of imported steel. Much of the imported steel for these projects will be coming from China and the Middle East, Swanson said. While the bigger orders are coming from afar, the “top-up steel” for completing projects is often sourced from U.S. suppliers. 32 BREAKBULK MAGAZINE www.breakbulk.com

PAYING THE PRICE Each of the three projects carries a huge price tag. The Cameron and Freeport construction contracts will amount to US$7 billion each, depending on the price for add-ons to the projects, Swanson said, while the Lotte project will probably cost close to US$2 billion. It’s not just the imported steel that is expensive, but the cost of transporting it to job sites in Louisiana and Texas. In response to that challenge, CB&I has adopted a more strategic approach to managing the logistical complexities of steel supply chains. One key to success, noted Swanson, is collaboration with supply chain partners. “We do our best to work closely with the suppliers [of structural steel]. We can bundle shipments together and be able to work with ocean carriers directly and charter, and do long-term agreements with ocean carriers through contracts of affreightment,” he said. Contracts of affreightment are contracts between ship owners and charterers in which a ship owner agrees to carry goods for the charterer, or to give

Cameron LNG: CB&I is involved in one of the most advanced U.S. LNG export projects, Cameron LNG. Credit: Cameron LNG

STEEL IMPORTS SIGNIFICANTLY DOWN Annualized U.S. steel imports 2016 versus 2015 VIETNAM CHINA BRAZIL

2015 2016

GERMANY JAPAN TURKEY SOUTH KOREA ALL OTHER COUNTRIES

*In million net tons Source: American Iron and Steel Institute ISSUE 3 / 2016

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regional review

the charterer the use of the whole or part of the ship’s cargo-carrying space. The use of such contracts makes it possible to schedule fewer voyages and at lower cost, while at the same time, benefitting from lower freight rates, he explained. “We try to consolidate as much as we

can. Rather than having, say, 100 tons a week [of structural steel shipments to a particular CB&I project], we try to have shipments sent to a job site once every three weeks, or once a month, where we’re shipping substantially more cargo in each of those shipments,” Swanson said.

If it’s big and heavy, the Port of Lake Charles makes easy work of it. Huge industrial plant components and oversize equipment arrive regularly at the Port by ship for transport to sites throughout the United States. And overdimensional cargo manufactured in the U.S. is loaded aboard vessels at the Port of Lake Charles to ship out to world destinations. The cargo-handling capabilities of the Port of Lake Charles and its strategic mid-Gulf location make it an easy choice for the region’s inbound and outbound project cargo.

Visit us at the Breakbulk Conference in Houston September 26–29 at booth 1009. Lake Charles, Louisiana, USA • +1 337 439-3661 • portlc.com 34 BREAKBULK MAGAZINE www.breakbulk.com

Achieving that goal may not be as easy as it sounds. “It requires more communication and coordination between us and the buyer, and the ability to forecast” changes in product supply and other variables, Swanson said. “Suppliers aren’t very good at knowing exactly how much they’re going to have (in terms of their product inventory), on a week-toweek basis. Especially, well in advance. So historically, they just released their exports whenever they were ready. And you would react to the availability of that cargo whenever it was ready. “What we’re trying to do, instead, is to get in much earlier and work with them, and learn their systems more; and have a better understanding of when they’re going to be releasing cargo so that we can consolidate and not just be in a reactive mode. Instead, proactively look at when our shipments will be ready, and at when the job site will need those shipments. That is how we look for opportunities to leverage the ocean carriers and get better pricing for the transportation.” Without forward planning, EPCs are at the mercy of production lines, with suppliers fabricating and releasing as soon as possible to get the steel out of their factory. “As 100 tons or 1,000 tons becomes available, you look to ship that 1,000 tons. But if you get in early, figure out the schedule, and work the schedule based on what the job site’s schedule is, then you can find ways to have fewer, larger shipments, instead of having lots of little shipments.” CB&I uses up to three suppliers for most projects, but there are many more suppliers standing in the wings, hoping for contracts. “We bid it out and choose two or three, although in some cases we do only use one. That’s a decision that is made from project to project.” It seems LNG has been good for CB&I in the U.S. Gulf. Nevertheless, given the decline in demand for other types of energy-sector construction, Swanson said, “It’s going to take maybe a year to go back to where we’d like us to be. But I’m optimistic about that.” BB International news correspondent Alan M. Field has reported on trade, logistics and related technologies from numerous countries in North America, Latin America and East Asia (Japan, Taiwan and Korea) over the past two decades. ISSUE 3 / 2016

PREVIEW CAPT. WILLIAM SCHUBERT DEFENDS EX-IM BANK

SHIPPERS PANEL

Wrangling the Economic Roller Coaster

CARGO RISK Q&A WITH VIMAR GLOBALâ&#x20AC;&#x2122;S THOMAS DAMSGAARD

PLANNING TOOL:

+ MICRO-SEMINAR:

MANAGING THROUGH TURBULENT TIMES

EXHIBITOR CHECKLIST

BREAKBULK AMERICAS 2016 SEPTEMBER 26-29, GEORGE R. BROWN CONVENTION CENTER, HOUSTON, TEXAS

event preview

BREAKBULK AMERICAS 2016 SPONSORS Dear industry colleagues, As our 27th Breakbulk Americas is quickly approaching, I have lots to share and look forward to explaining some new happenings you will find at this year’s event. This year is shaping to be our largest to date. I want you to know how much we want this to be a success for you. Below are ways we are working to ensure Breakbulk Americas continues to be the largest exhibition event of its kind in the Americas, bringing top-tier shippers together with breakbulk and project cargo service providers. 1. We are expanding our VIP Shipper’s Club program. Our global team is busy organizing an annual luncheon and monthly newsletters to encourage more direct interface. This will ensure our content and programming is truly engaging and covering what the industry wants and needs to know more about. I encourage you look at our Conference Sessions schedule and attend as many sessions as you can. 2. We will launch the Breakbulk Hosted Buyers Program. This meeting concept has been discussed for years and recently raised by Houston VIP shippers. It will give us the face-to-face interaction onsite that often takes place behind the scenes. The details are being worked out and I look forward to sharing them with you. 3. We will continue to offer Exhibitor-led Sessions. A proven success last year, we will be doing this again. This reserved space on the exhibition floor gives exhibitors a forum to share their latest and noteworthy news. Spaces here are limited, so please reach out to me soon to discuss these opportunities. We take immense pride in helping you – from registration to your exhibition details – don’t hesitate to contact me. You are the reason why Breakbulk is a success.

HOST PORT

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GOLF TOURNAMENT

TRANSPORTATION

WEDNESDAY BRUNCH

HEAVY LIFT TECHNICAL WORKSHOPS

Stand out from the crowd at Breakbulk Americas as an Official Sponsor. Contact Kathleen Pinson (below) for more information.

CONTACTS

Advertising Robert Janusauskas / +353 021 477 3808 robert@breakbulk.com

Event Director, Americas Christian Blair Thompson / +1 281 416-4672 cthompson@breakbulk.com Sales Manager, Americas and TransAsia Kathleen Pinson / +1 423 598 2264 kpinson@breakbulk.com

Editorial Director Gary G. Burrows / +1 904 535 5460 gburrows@breakbulk.com Head Designer Catherine Dorrough

Get Social! #bbam2016

Extend your conversations from the exhibition floor to all of our social media channels. Feel free to promote your company and share your experiences!

Best Regards,

Christian Blair Thompson Event Director Breakbulk Americas

ON THE COVER: BBC makes its first port call to Stewart World Port, a new port in Stewart, British Columbia. The vessel carried over-dimensional wind farm cargo. / Credit: Stewart World Port

AM2 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

ISSUE 3 / 2016

2015 event gallery

Build Your Business Network at Breakbulk Americas Breakbulk Americas, now in its 27th year, brings together an unprecedented number of cargo owners, along with specialized logistics, transport, ports & terminals and related services representatives. This event is for all involved in project cargo and breakbulk transport in Canada, the U.S., Mexico, Central America, South America and the Caribbean. Build new business connections at the pre-exhibition workshops, at the golf tournament, the Welcome Reception, the annual BUSINESSrun and during the activity-packed exhibition and conference. See full agenda on page 8.

Air Liquide • Amec Foster Wheeler • Anadarko Petroleum • Aramco Services • Baker Hu AM4 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

ISSUE 3 / 2016

BREAKBULK

AMERICAS By The Numbers 20,000

NUMBER OF TIMES THE DOORS OF THE GEORGE R. BROWN CONVENTION CENTER ARE OPENED OVER THE THREE DAYS OF THE EXHIBITION

506

MINIMUM NUMBER OF TRUCKS REQUIRED TO MOVE ALL OF THE EXHIBITS AND EQUIPMENT INTO THE EXHIBITION CENTER

5,860

STEPS TO WALK THE ENTIRE SHOW FLOOR

123,780

GROSS SQUARE FEET OF EXHIBITION SPACE AT THE GEORGE R. BROWN CONVENTION CENTER MORE THAN

260,000

POUNDS OF FREIGHT WILL BE MOVED BY MATERIAL HANDLING PERSONNEL

3,136

CONSTRUCTION PERSONNEL ARE NEEDED TO BUILD THE EVENT

ughes • BASF • Bechtel • BP • Cameron International • CB&I • CH2M • Chevron • Crane Worldwide • Exiros www.breakbulk.com/americas BREAKBULK AMERICAS PREVIEW AM5

event preview

Credit: Shutterstock

EX-IM BANK KEEPS CHUGGING 2016

Conference Session Wednesday, Sept. 28, 11:30 a.m. – 12:20 p.m.

US Ex-Im – Capital Projects in the Balance » MODERATOR:

The Honorable Capt. William Schubert President International Trade & Transportation, Inc.

» Will Terrill VP US Ocean and General Counsel Intermarine » John Masterson Global Export Credit Agency Finance Director, Financial Derivatives CB&I

Export Credit Agency Survives So U.S. Projects Can Too

Listen to a full interview with Capt. Schubert at breakbulk.com/americas, in the conference agenda.

without authorization for the first time he U.S. Export-Import Bank in its 81-year history. has been the little economic However, Congress voted to reaudevelopment engine that could. thorize the bank in late 2015, as part of a Until it couldn’t. massive transportation bill. U.S. exports who couldn’t think of The Ex-Im Bank is an independent surviving without the export credit federal agency that bridges the gap in agency of the U.S. government were forced to face that reality when Congress private export finance, helping U.S. exporters make failed to re-authorize overseas sales and the 81-year-old Ex-Im supporting U.S. jobs. Bank in mid-2015. Despite U.S. exporters say its Right wing reauthorization, trade financing soluopponents of the tions – export credit bank have claimed Ex-Im continues to insurance, working that its financing is suffer from political capital guarantees, effectively corpoand commercial rate welfare which shenanigans. loan guarantees for amounts to governforeign buyers – are ment interference necessary for them in the free market to compete globally. In providing these despite support from some of the countools, the bank says it levels the playing try’s largest manufacturers such as General Electric, Caterpillar and Boeing. field for U.S. exporters of all sizes who are facing foreign competition. The GOP-led decision to allow Ex-Im In 2014 it authorized about US$20 Bank’s charter to expire June 30, left it

ExxonMobil • Exterran • Fluor • FMC Technologies • GE • Halliburton • Holland AM6 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

ISSUE 3 / 2016

billion worth of transactions. The bank estimates that this funding helped to support about US$27.5 billion of U.S. exports and 164,000 U.S. jobs. U.S. Chamber President Thomas J. Donohue applauded Congress’ reauthorization success, and the “congressional leaders who have acted to protect the competitiveness of American companies.” Still, conservatives have criticized the bank as unwarranted government finance for private exporters, labeling it “corporate welfare” and “crony capitalism.” The Ex-Im Bank is primarily needed to maintain strategic U.S. manufacturing and services and global competitiveness, according to Lori Baer, with AECOM, in a recent Breakbulk magazine article. U.S. jobs rely on it. It provides financing for U.S. customers abroad, provides peace of mind for exporters, fills market gaps, lowers risk and is relatively transparent. The fact that it makes money for taxpayers is an incidental benefit. William G. Schubert, former U.S. maritime administrator, and scheduled speaker at Breakbulk Americas, said during the fight for reauthorization that, “The failure to reauthorize the Ex-Im Bank would have left U.S.-domiciled companies virtually defenseless to compete for capital projects that require some level of ECA support.” There are nearly 60 export credit agencies, or ECAs, active in the world, which some countries’ programs many times larger than the U.S. China, for instance, invests twice as much as Ex-Im, while Japan invests five times as much. Brackett Denniston, who recently retired as GC general counsel and senior vice president, called Ex-Im Bank’s lapse “a naïve gamble with American jobs as the victim.” Denniston said lack of Ex-Im financing threatened GE’s ability to compete for three projects totaling US$1.15 billion. Despite reauthorization, Ex-Im continues to suffer from political shenanigans, as Republican Senate Banking Chairman Richard Shelby has refused to advance nominees to the Ex-Im Bank’s board, essentially tying the undermanned bank from financing any new deals over US$10 million, effectively blocking

financing for major export projects that are the lifeblood of the breakbulk, heavylift and project cargo industry. “It’s a simple reality in today’s world that project sponsors will not proceed to Final Investment Decision for major capital projects unless there is some level

of ECA support. This is particularly true for projects in developing countries,” Schubert warned. Without the Ex-Im Bank, U.S. businesses and employees compete on a very uneven playing field; U.S. industry would be wise to work hard to preserve this tool. BB

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GLOBAL

TRADE collide.

THE PORT OF MOBILE Alabama State Port Authority www.asdd.com

d Southwest International • KBR www.breakbulk.com/americas BREAKBULK AMERICAS PREVIEW AM7

event preview

BREAKBULK AMERICAS

Agenda MONDAY, SEPT. 26 8:30 a.m. – 5:00 p.m.

HEAVY-LIFT TECHNICAL WORKSHOP: LAND & BARGE TRANSPORT 8:30 a.m. – 5:00 p.m.

WORKSHOP: PROJECT FREIGHT MANAGEMENT – THE SHIPPERS’ PERSPECTIVE 8:30 a.m. – 5:00 p.m.

PPG CERTIFICATE OF ACHIEVEMENT IN PROJECT FORWARDING WORKSHOP

TUESDAY, SEPT. 27

6:30 a.m. (registration) 8:00 a.m. (shotgun start)

CHRÖDER MARINE AND S COOPER/T.SMITH GOLF TOURNAMENT (Wildcat Golf Club)

SEE FULL AGENDA AT BREAKBULK.COM

WEDNESDAY, SEPT. 28 7:45 a.m.

10:15 a.m. – 10:30 a.m.

PORT WELCOME & OPENING REMARKS

# A

10:30 a.m. – 11:20 a.m.

CONFERENCE SESSION: ENERGY & GLOBAL CAPEX OUTLOOK 11:30 a.m. – 12:20 p.m.

CONFERENCE SESSION: U.S. EX-IM – CAPITAL PROJECTS IN THE BALANCE 2:00 p.m. – 2:50 p.m.

CONFERENCE SESSION: SHIPPERS PANEL – WRANGLING THE ECONOMIC ROLLER COASTER 2:00 p.m. – 4:00 p.m.

8:00 a.m. – 4:00 p.m.

8:30 a.m. – 5:00 p.m.

HEAVY-LIFT TECHNICAL WORKSHOP: OCEAN TRANSPORT 8:30 a.m. – 5:00 p.m.

WORKSHOP: PROJECT FREIGHT MANAGEMENT – THE SHIPPERS’ PERSPECTIVE 8:30 a.m. – 5:00 p.m.

PPG CERTIFICATE OF ACHIEVEMENT IN PROJECT FORWARDING WORKSHOP 5:00 p.m. – 8:00 p.m.

WELCOME RECEPTION

SPONSORED BY:

BREAKBULK BUSINESSRUN

Use this guide to keep track of exhibitors you don’t want to miss at Breakbulk Americas.

3:00 p.m. – 3:50 p.m.

CONFERENCE SESSION: GREAT LAKES SAINT LAWRENCE SEAWAY OVERVIEW

THURSDAY, SEPT. 29 10:00 a.m. – 4:00 p.m.

EXHIBITION HALL HOURS 10:30 a.m. – 10:55 a.m.

CONFERENCE SESSION: BLUE WATER BLUES, PART I: GLOBAL FLEET OUTLOOK 11:00 a.m. – 11:50 a.m.

CONFERENCE SESSION: BLUE WATER BLUES, PART II: ASSESSING AND MITIGATING CARGO RISK 12:00 p.m. – 12:50 p.m.

CONFERENCE SESSION: GULF COAST PROJECT CASE STUDY AM8 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

3T Cameroun

1440

AAL ACE Heavy Haul LLC Ace World Companies Adobe Equipment Agility Project Logistics, Inc. Air Charter Service Alliance Navigation LLC American Packing & Crating American Roll-On Roll-Off Carrier Anchor36 Trucking & Logistics, LLC Anvil Attachments LLC APM Argosy Transportation Group, Inc. ASSEKURANSA USA Inc. Astec Bulk Handling Solutions Atlantic Ro-Ro Carriers, Inc. Atlantic Shrink Wrapping ATS Maritime Avalon Risk Management

731 1107 221 557 1308 1211 448 514 1141 1212 1300

Bahri General Cargo Barnhart Crane & Rigging Basic Crating & Packaging BBC Chartering USA LLC BBT Logistics, Inc.

1031 1000 225 705 505

737 1149 353 619 950 837 309

B DP International Inc. Global Project Logistics

510

B engal Crane, Logistics, Transportation Bennett Motor Express, LLC Berard Transportation Bertling Logistics, Inc. Beyel Brothers, Inc. Big Top Manufacturing Bigge Crane and Rigging Co. Blue Water Shipping US, Inc. BNSF Logistics, LLC Boaz Export Crating Co.

1349 1101 1404 614 1422 1238 1217 507 522 1106

ISSUE 3 / 2016

Boh Bros. Construction

1224

Edwards Moving & Rigging EIMC, LLC Emmert International Engineered Rigging

B raemar Incorporating The Salvage Association & Cory Brothers (USA) Inc. 1622

Bremenports GmbH & Co. KG Buckner HeavyLift Cranes LLC Buffers USA Inc. Burkhalter Rigging, Inc.

943 1631 942 637

C.H. Robinson Project Logistics Cabezut Group CAI International Inc. Canal Barge Company Inc. Canyon Logistics Carlile Transportation Systems

1109 1445 1122 719 553 1200

C arolina Strapping & Buckles Company

1213

Cashman Equipment Corporation 1401 Central Boat Rentals 412 Central Oceans USA LLC 306 Ceres Barge Line 1041 Ceres Terminals, Inc. 110 CEVA Logistics 1233

Chipolbrok America, Inc. ClearSpan Fabric Structures CM Labs Simulations CMA CGM (America) LLC CN Coastal Cargo Group Conceptum Logistics Contractors Cargo Company Cooper/T. Smith Corporation Cordstrap USA, Inc. Cornerstone Logistics COSCO Shipping Co., Ltd. CSAL

631 545 1627 1239 913 1123 427 608 1227 1223 1413 931 619

D D /C Group, Maryland Overpak, Cal-Coast Packing & Crating Dan-Gulf Shipping, Inc. DB Schenker Deep South Crane & Rigging d eugro (USA) Inc./dship Carriers (USA), Inc. DGM USA Houston DHL Industrial Projects Donjon Marine Co., Inc. DP World Caucedo

420 1108 207 1332 905 855 449 205 1634

East West Bank 1248 Eastern Car Liner (Americas), Inc. 1319

E quipment Management Services, LLC

530

EUKOR Car Carriers Inc. Expeditors

442 1131

Fagioli, Inc. Faymonville Distribution Fednav Filog Fletes Mex Flinter FLOGIS Internatioal Fortune Global Foss Maritime Fracht USA

1117 1444 818 1408 519 1037 1740

Georgia Ports Authority

535

1201 1539

G lobal Project Logistics Network (GPLN)

C hapman Freeborn Airchartering, Inc. 1519

1327 1439 1632 643

J J .E. Oswalt & Sons Heavy Hauling & Rigging, Inc. 1206 J&B Pavelka J acksonville Port Authority (JAXPORT) Jade Software Jaeckel Mund + Bruns LLC JAS Projects – Oil & Gas

318

Goldhofer Greenfield Products Greentree Transportation Company Grieg Star Gulf Stream Marine, Inc. Guy M. Turner

1339 1400 640 443 305 1317

H. Brown Inc. H.W. Farren LLC. HAL, Inc. Hapag-Lloyd (America) LLC Harbor Freight Transport Corp Heavy Transport Hoegh Autoliners Hoist Liftruck Mfg. Inc. Holloway Houston, Inc. Hughes Bros. Inc. Hutchinson Industries Hwy H2O Hydra-Slide Hyster Company

539 1604 437 204 1017 940 450 1431 137 1515 1316 1311 1639 743

Ibrakom 1417 Ilya Shipping Ltd. 1240 Innovative Heavy Haul 408 Intercomp 648 Intermarine, LLC 821 Intermountain Rigging & Heavy Haul 541

Kenco Bucket Trucks

1513 1531 1305 1105 605

250

K OG Transport, Inc., A Member of the Rhenus Group

1007

Konecranes lift trucks Kuehne + Nagel Inc.

949 1727

Lamar University L andstar Transportation Logistics Inc. Leatherbury-Kalhagen Legacy Building Solutions LGH Lifting Gear Hire Liebherr Mcc-Tec Rostock GmbH Lockwood Brothers, Inc. Logistec Stevedoring Logistics Group International, Inc. Logisticus Group Lone Star Transportation LoneStar Forklift, Inc. Lynden

1637 1244 624 518 1641 227 1407 419 839 618 1023 237 1306

Maersk Line Mantsinen Martin Bencher Group

613 1418 1045

M axim Crane Works/Crane Rental Corporation

425

McDonough Marine Service 1333 McKeil Marine 410 McTyre Trucking Co., Inc. 601 Metro Ports 405 Millard Maritime 344 Miller Transfer 416 MIQ Logistics 401 Morris Export Services 1209 Mountain Crane 339 Multiport Ship Agencies Network 413

NC State Ports Authority 1116 NCSG Crane & Heavy Haul Services 1140 Nefab Packaging 321 NEK Group 414

www.breakbulk.com/americas BREAKBULK AMERICAS PREVIEW AM9

event preview

NHH Services, LLC Nord-Sud Shipping, Inc. Nordana Northwest Logistics Heavy Haul Northwest Seaport Alliance Norton Lilly International Novatech NYK Bulk & Projects Carriers Ltd

1141 1011 725 1222 531 1225 753 300

Odessa Pumps Orion SLM Osprey Line, LLC

114 1039 1324

Palletized Trucking Inc. Panalpina, Inc. Paper Pak Industries Pasha Hawaii

Ports of Indiana 1113 Precision Specialized Division Inc. 200 PSC Crane & Rigging 501 Puerto de Barranquilla 406

755 748 315 1421

T eras Cargo Transport (America), LLC.

R.H. Shipping & Chartering R&L Transport, C.A.

1410 141

R ailway Industrial Clearance Association (RICA)

1234 349 516

R ichardson Stevedoring & Logistics Services, Inc. 1225 Rickmers-Linie (America) Inc. Roanoke Trade Rubb Building Systems Rukert Terminals Corporation Ruslan International Ltd.

P hiladelphia Regional Port Authority 938 415 1127 1323 523 604 1232 1338 827 524 1432 1123 1615 1216 417 515 1640 1013 925 1009 527 1145 622 1019 1523 1725 919 342 1507 1405 337 1133 1124 937

TAL International Container Corp. 1505 Taylor Machine Works, Inc. 125

Q Line Trucking 219 Qingdao Yuedasite Rigging Co. Ltd. 240 QSL 1230

Redhook Terminals Richards Transport

P erkins Specialized Transportation Contracting, Inc. 1504 Phoenix International Piazza Trucking Port Canaveral Port Contractors, Inc. Port Freeport Port Manatee Port Metro Vancouver Port of Antwerp Port of Baltimore Port of Beaumont Port of Belledune Port of Bilbao Port of Brownsville Port of Coeymans Port of Corpus Christi Port of Everett Port of Galveston Port of Houston Authority Port of Lake Charles Port of Longview Port of Marseille Fos Port of Palm Beach Port of Pascagoula Port of Portland Port of Prince Rupert Port of Rotterdam Port of San Diego Port of San Francisco Port of Stockton, California Port of Vancouver USA Port of Virginia Port Tampa Bay Ports America

805 1205 151 313 1427

U Sackson Logistics 1501 Santini Export Packing Corporation 327 Sarens 343 Sarjak Container Lines Pvt. Ltd. 625 SCHEUERLE Fahrzeugfabrik GmbH 1533 Seaonus & Portus 630 Sennebogen LLC 404 Shanghai Union Lashing Co., Ltd 1325 S henzhen Huayuan International Logistics Co., Ltd

1438 411

S outh Atlantic Gulf Coast District ILA

1516

S pliethoff Americas & BigLift Shipping Americas

1309

AM10 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

815

Sprague Operating Resources 543 Sprung Structures 1307 SRT Transportation Solutions 1231 SSA Marine 713 State Service – Industrie Cometto 1424 Stevens Transportation LLC 311 Stewart World Port 512 Swan Transportation Services, Ltd 650 Swire Shipping 751

T rans American Trucking & Warehouse

1125

Transaction Packing, Inc. TransPak Transport Bellemare Int’l Inc. Triton Transport Ltd. TrueBlue Tulsa Port of Catoosa

551 331 1219 1112 220 1138

Unified Logistics Holdings LLC Universal Africa Lines UTC Overseas Inc.

601 900 439

Verstegen Grijpers B.V.

121

Wagenborg Shipping B.V. 1416 Wallenius Wilhelmsen Logistics 831 Watco Companies, LLC 843 WCS Permits 251 Weeks Marine Inc. 642 W est Coast Packer & Port Services, Ltd. 423 World Logistics Services Corporation 600 World Trade Distribution 653

South Carolina State Ports Authority 549 South Jersey Port Corporation 216 S pecialized Carriers & Rigging Association (SC&RA)

504 1144 1005 1626 431 1425 1202 525 1118 1619

317

Shippers Products Siem Car Carriers

400

Terex Port Solutions Terminal Link Texas Terminals TGS Cedar Port Partners Thorco Shipping America, Inc. Tidal Transport & Trading Ltd TOTE Maritime Totran Transportation Service Ltd. Tradelossa Trak Transportaciones SA de CV

Y Z

851 451

XL Specialized Trailers XLProjects

Yard Mule Specialists, Inc. Yusen Logistics (Americas), Inc.

231 1208

ZMac Transportation Solutions

1331

ISSUE 3 / 2016

Looking to add efficiency to your supply chain?

AN EFFICIENT PART OF YOUR SUPPLY CHAIN

Just add Galveston.

SAVE TIME AND MONEY

SAVE TIME AND Competitive Rates and Efﬁcient LaborMONEY.

Port of Galveston P.O. Box 328 Galveston, TX 77553 409-766-6112

• Competitive Rates and Efficient Labor. • Immediate Proximity to Interstate Highway System. Direct Connection to BNSF and UP Railroads • Direct Connection to BNSF and UP Railroads. 30 Minutes to Open Sea • 30 Minutes to Open Sea. www.portofgalveston.com No Port Congestion • No Port Congestion. Immediate Proximity to Interstate Highway System

www.portofgalveston.com Port of Galveston ∙ P.O. Box 328 ∙ Galveston, TX 77553 ∙ 409-766-6112

event preview

1449

1351

1448

1349

1446 Cabezut Group

Breakbulk Booth & Lounge

HydraSlide

1738

1639 Lamar University

1736

1637

1640

20'

1638

1539

DP WorldCaucedo

1537

20'

1735 1733

1441

20'

EIMC, LLC

1538

1439

1245

Goldhofer

Port Metro CGM Vancouver (America)

20'

1438

1339

20'

1338

Port Of McDonough Marine Beaumont Service

Hoist Liftruck Mfg. Inc.

1239

Deep South

20'

LLC

1432

1145

NHH Services

1141 American Roll-On Roll-Off

Big Top Shelters

1238

1139

RICA

Tu C

R Ste

Port of Virginia

1234

20'

1333

1332

1233

20'

Buckner HeavyLift Cranes LLC

JAXPORT

ZMac Transportation Solutions

SRT Transportation Solutions

1431

1531

Te L

1240

Ceva

20'

1147 Port of Marseille

1244

Ilya Shipping

20'

Port Manatee

30'

1533

1345

1440 Shippers Products

1149

Landstar

CMA

Scheuerle

1632

1631

Kuehne + Nagel Inc.

1443

1535

Emmert International

1633

1542

ASSEKURANSA

1246

20'

1444

20'

1634 20'

1445

40'

1300 aisle

1737

1641

Fracht

1544

East West Bank

1248

Faymonville

1400 aisle

1739

1700 aisle

20'

1740

Port of Everett

1500 aisle

Lifting Gear Hire

Flogis

1600 aisle

BREAKBULK CONFERENCE SUITE

Contact Dana Rice (dana.rice@ite-exhibitions.com) for more information and pricing.

1331

1232

1133

Quebec Stevedoring Company Limited

1231

Expeditors

1230

1131

30'

20'

1625

1427

20'

1622

20'

1720 1718 1716

40'

1615

20'

1710

1611

1614 1612

1608

20'

1706

1705

1704

1701 Breakbulk Swim-Up

1606

20'

1605

South Atlantic Gulf Coast District ILA

1521 1519

H.W. Farren Int'l

1604

1601

1600 20'

1516

Hughes Bros. Inc.

1513

1509 Port of San Francisco

1507

TAL International Container Corp.

1505

1512

1508 1506 Perkins Specialized Transportation Contracting, Inc.

1504

1501 Sackson Logistics

American BOH Bros. Trans Trucking & Construction Warehouse

Port Canaveral

Cordstrap USA, Inc.

1227 1225

1324

1224

20'

1323

1127

1223

1125

Northwest Coastal HH Cargo Logistics

Int

1222

1123

Pasha Hawaii

1421

Mantsinen Group

Misnak

Wagenborg Shipping B.V.

20'

Eastern Car Liner (Americas), Inc.

1317

1217

1316

20'

Bigge Crane and Rigging Co.

Fagioli, Inc.

Port of Brownsville

1219

20'

Guy M. Turner

1416

1417

Transport

Hutchinson Bellemare Industries

1319

1418

1216

1117

Anchor 36

Ports of Indiana

Cornerstone Logistics

1515

JB Pavelka

Osprey Norton Line, LLC Lily

1422

30'

20'

Shanghai Union Lashing

1500 20'

1413

1409

20'

Filog

20'

Port of Stockton, California

20'

SCRA

1309

Berard Transportation

1407

Seaway)

1311

1410 1408

Lockwood Brothers, Inc.

Carolina Strapping & Buckles Company

1213

Agility 30'

1404

1401

Cashman Equipment

1400 Greenfield Products

Morris Export Services

1308

Sprung Structures

1209

Lynden

1307 1305

Air Charter Service

1211

20'

Jade Software

1405

20'

Hwy H2O

RH (St. Shipping Lawrence

1306

1300

Anvil Attachments LLC 20'

Roanoke Trade 20'

*VERTICAL PIPES*

1700 aisle

1618

Port of Bilbao

1712

1707

Beyel Bros

1523

Piazza Trucking

1325

1424

1425

Port Of Portland

Chapman Freeborn

1619

1714 1713

1620

20'

Tidal Transport & Trading Ltd

1525

Trak Transportaciones SA de CV

1600 aisle

1721

20'

Cooper T. Smith Corporation

1212 Yusen Logistics (Americas), Inc.

1113 C.H. Robinson

20'

1208

1100 aisle

1724

1725

20'

State Edwards & Service Moving Rigging & 1327 Cometto

Ruslan International Ltd.

1200 aisle

1626 Braemar Incorporating The Salvage 20' Association & Cory Brothers (USA) Inc.

TGS

1300 aisle

CM Labs Simulation 1627

1400 aisle

20'

1727 Port of Prince Rupert

1500 aisle

Make an extra splash at Breakbulk Americas! Dive into the Sponsorship Menu for details on all sponsorship offerings.

1450

20'

ATTENTION EXHIBITORS! Upgrade your exhibit look with Breakbulk’s Turnkey Exhibit Package. Get that extra polished look with a hard wall (shell scheme) booth. Your upgrade includes everything you need.

20'

1100 aisle

20'

Breakbulk Studios

1200 aisle

Floor Plan

1109

1206

111

Dan Ship In

110

Ace Heavy Haul

JE Oswalt

Tr Tran L

B Ex

1107

110

20'

Jaeckel, Mund, & Bruns LLC 1105

1205

1201

1200

TOTE Foss Maritime Maritime

1202

Carlile Transportation Systems

1101

Bennett Motor Express, LLC 20'

20' 20'

Please note, this plan is subject to change at the discretion of the Event Organizer AM12 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

ISSUE 3 / 2016

EXHIBITOR SERVICE AREA TRUCK 53' x 8'6"

CATERING

30'

Palletized Trucking Inc.

20'

Adobe Equipment 20'

20'

DGM USA Houston

755

WiFi Recharge Lounge Sponsored By Port of Long Beach

557

20'

855 20'

20'

753

950

30'

Martin Bencher 40'

Swire Shipping 751

851

Panalpina 20'

949

748

551 549

648

20'

Watco Companies, LLC

20'

1037

1136

20'

937

938

839 20'

ATS Maritime

Millard Maritime

344

20'

443

543

642

20'

Argosy Transportation Group, Inc. 20'

737

837

20'

Burkhalter Rigging, Inc.

20'

637

600 aisle

Ports America

20'

700 aisle

20'

940 Philadelphia Regional Port Auth.

643

20'

Sprague Operating Resources

541

640 20'

H. Brown Inc. 539

20'

244

145

242

143

20'

1031

20'

Wallenius Wilhelmsen Logistics

COSCO Shipping Co., Ltd.

442

343

243

342

20'

UTC Overseas, Inc. 439 20'

HAL, Inc.

Mountain Crane 20' 339 Port of Vancouver USA 20' 337

20'

LoneStar Forklift, Inc. 20'

237

141

240

20'

Holloway Houston, Inc.

20'

AAL

20'

931

20'

Thorco Shipping

137

20'

TransPak

Yard Mule Specialists

20'

731

30'

20'

831

631

531

630

530

331

431

231

YOU ARE HERE MAP

CAI ternational Inc.

1023

Port of Rotterdam

821

919

1019 Corp

1017

20'

815

1011

20'

Port of Lake Charles

1009

Boaz xport

KOG USA

1007 20'

Texas Terminals 1005

20'

deugro (USA) Inc./dship Carriers (USA), Inc.

20'

905

20'

BBC Chartering

20'

RickmersLinie (America) Inc.

30'

20'

Maersk Line

713

30'

805

523

20'

JAS ProjectsOil & Gas

20'

Basic Crating & Packing 20' 225

519

618

20'

Ace World Co.

608 Port Freeport

30'

20'

605

604

Blue Water Shipping US, Inc.

416

417

516

20'

Multiport Ship Agencies Network

512

413

Car BDP Int'l Siem Carriers

510

411

Rukert Central Terminals Boat Rentals Corporation

313

412

Stevens Transportation

410

311

Innovative Heavy Haul

Avalon Risk Management

408

Terex Port Solutions

20'

507

20'

BBT Logistics, Inc.

Puerto Baranquilla

Metro Ports

406

20'

504

309 Gulf Stream Marine, Inc.

20'

213

Central DB Oceans Schenker USA LLC 20'

20'

111

20'

306

112 Ceres Terminals

110

20'

HapagLloyd (America) LLC

207 20'

Donjon Marine Co., Inc.

305

404

116 114

20'

312

20'

405

117

Odessa Pumps 20'

Sennebogen

505

118

20'

South Jersey Port Corp.

216

315

McKeil Marine

121

218

219

123 Verstegen Grijpers B.V.

Paper Pak

414

415

Stewart World Port

318

317

NEK Group

American Phoenix Packing & Int'l Crating Holdings

514

220

221

20'

Miller Shenzhen Transfer Huayuan

Richards Port of Transport Coeymans

515

Contractors Cargo Company

321

Q-Line Trucking

419

518

TrueBlue

Nefab 20'

GPLN

20'

613

423

227

20'

Legacy Logistec Building Stevedoring Solutions

Fletes Mex

614

705

522

Bertling Port of Logistics, Corpus Inc. Christi

20'

D/C Group

BNSF West Logistics, Coast LLC Packers

420 Logisticus Group

619

719

SSA Marine

800 aisle

Nord Sud

913

900 aisle

n-Gulf pping, nc.

1013

1000 aisle

20' Port of Galveston

818

20'

Spliethoff Group (Spliethoff & BigLift)

CN Rail

Atlantic RoRo Carriers & CSAL

20'

Harbor

riton nsport Ltd.

20'

Canal Barge

20'

Freight radelossa Transport

1116

Fednav Group

425

524

Port Contractors, Inc.

622

20'

700 aisle

1118

Port of Palm Beach

327

Maxim Crane

525

624

125

Liebherr

Santini Export Packing Corporation

427

20'

Totran Leatherbury- Transportation Kalhagen Service Ltd.

625

Intermarine, 20' LLC.

20'

NC State Port of Ports Pascagoula Authority

20'

725

20'

527

200 aisle

925

Conceptum

Port of Logistics Baltimore

Port of Longview

300 aisle

20'

1124

1122

20'

Sarjak Container Lines Pvt. Ltd.

Nordana 20'

600 aisle

Lone Star Transportation 30'

20'

Port of Antwerp 827

Taylor Machine Works, Inc.

20'

400 aisle

Port of Houston Authority

20'

500 aisle

20'

Port Tampa Bay

30'

20'

138

135 Equipment Management Services, LLC

Alliance

30'

140

20'

Seaonus Northwest & Portus Seaport

20'

142

R&L Qingdao Yuedasite Transport, C.A. Rigging

437

Chipolbrok America, Inc.

20'

Port of San Diego

535

20'

Bahri General Cargo

146

147

20'

EUKOR Car Sarens Carriers Inc. 20'

Grieg Star

Georgia Ports

20'

150

249

Greentree Intermountain Transportation Rigging & Heavy Haul Company

800 aisle

Flinter

900 aisle

1039

Richardson evedoring & Logistics ervices, Inc.

1000 aisle

1138

20'

743

843 Logistics Group International, Inc.

20'

Weeks ClearSpan Fabric Marine Structures Inc. 545

Engineered Rigging

30'

20'

942 Heavy Transport

1041

151

100 aisle

Bremen Ports 943

Orion

348

349

200 aisle

20'

Buffers USA Inc.

20'

ulsa Port of Catoosa

250

Varamar

300 aisle

1045

1140

251

20'

448

400 aisle

20'

Ceres Barge Line

Alliance Navigation LLC

449

152 Rubb Building Systems

Kenco Bucket Trucks

WCS Permits

Redhook Terminals

450

451 20'

DHL

DESIGNATED DINING AREA

Astec Bulk

353

100 aisle

Hyster Company

146

NCSG Crane & HH

XLProjects

South Intercomp Carolina Ports Auth

649

20'

Transaction Packing, Inc.

650

20'

Hoegh Autoliners

553

20'

erminal Link

144

20'

500 aisle

148

Swan Logistics Transport

20'

XL Atlantic Shrink Specialized Wrapping Trailers

konecranes

Canyon

World Trade Distribution 653

Novatech

205

40'

1000

Barnhart Crane & Rigging

Universal Africa Lines (UAL)

20'

30'

900

701 YOU ARE HERE MAP

ENTRANCE TO HALL E

McTyre

601

600

Unified Logistics Holdings, LLC

World Logistics Services Corporation

PSC

20'

501

401

MIQ Logistics 20'

400

300

200

Teras Cargo Transport NYK Bulk & Projects Precision Specialized (America), LLC. Division Inc. Carriers Ltd 20'

20'

204

BREAKBULK AMERICAS 2016

www.breakbulk.com/americas BREAKBULK AMERICAS PREVIEW AM13

event preview

5 TIPS TO MITIGATE RISK Thomas Damsgaard, an arbitrator with the Houston Maritime Arbitration Association and president of consultancy Vimar Global, speaks of a “new normal” in assessing risk. In addition to issues of oversupply and weakened demand, several dynamics are affecting relationships with vessel operators and cargo owners. Damsgaard offers some key strategies for mitigating these risks.

FIND OUT WHAT CUSTOMERS WANT: CAPACITY AND CAPABILITY

Complex project cargoes are growing in size, quantity and complexity, driving an increased focus on competency, driven by higher project cost and tighter timelines. It has always been good business to listen to the customers, thus I believe a key strategy is to create deeper relationships with clients. There is a notion that it is not companies that compete against each other, but it is the supply chains that compete. Carriers should look deeper into the supply chain, identify opportunities where value may be added by the carriers to the customers. This is both in form the traditional carrier service offerings, but also going beyond. For example, don’t be stuck on traditional freight payment terms. Customers should have a strong

vetting focus on competency over compliance, and get closer to the carrier in order to help manage expectations.

Listen to the full interview with Thomas Damsgaard at breakbulk.com/americas, in the conference agenda.

FORM STRATEGIC

ALLIANCES ON SERVICE AND CAPABILITIES

Look at hybrids – working with competitors (including handy-size) in strategic alliances, pairing assets and know-how for innovative solutions to meet complex challenges. If you can’t beat them, join them. And that goes for freight forwarders too.

LEARN FROM OTHER

TRANSPORTATION SEGMENTS AND INDUSTRY

Keeping an open mind learning from other industries is a key ingredient. For example, how does trucking manage their workforce to reduce accidents? Also we have already seen several companies making strategic decisions, putting leaders in place who have experience and relations outside the traditional project cargo segment. I believe moving from selling ocean freight, to offering transport solutions does require a paradigm shift in carriers’ thinking. It is a move away from being asset-fixated and more customercentric. That’s a hard thing to do for a very conservative industry which still relies on contracts that refer to boilers and steamers in their contract language.

EMBRACE TECHNOLOGY – DO NOT BE FEARFUL

Turn Big Data into Smart Data. Use smart data to identify trends that could improve operations and adopting latest technologies which interfaces with all stake holders in the supply chain, may carve out a competitive advantage for MPV operators. Examples would be tracking cargo in real time and move towards e-documents.

EDUCATE EDUCATE EDUCATE

For the strategic partnership to be of mutual benefit, the MPV owner/ operators traditional vessel asset focus and A to Z transport philosophy must be complemented with an understanding of customer driven total cost and value in the supply chain. This will require a broader and higher educated workforce working on solutions across financial, commercial, operational and technical disciplines within the MPV organizations. BB

Thursday, Sept. 29, 11:00 a.m. – 11:50 a.m.

Assessing and Mitigating Cargo Risk 2016

Conference Session

ODERATOR: » M Thomas Damsgaard President Vimar Global Maritime Arbitrator Houston Maritime Arbitrators Association

» Dennis Mottola Corporate Traffic and Logistics Process Owner Bechtel Global Logistics

» Susan Oatway Senior Analyst Drewry Shipping Consultants

» Dennis Devlin Senior Director/ Head of Bus. Dev. – North America Global Projects/ Oil&Gas Schenker, Inc.

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ISSUE 3 / 2016

Port of EVERETT

SEAPORT

G O B I G. G O E V E R E T T.

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event preview

PAIN OR PRODUCTIVITY? Coping with Today’s Market

THIS YEAR’S SHIPPERS PANEL will tackle “Wrangling the Economic Roller Coaster,” which promises to be a lively discussion among prominent cargo owners. Here panel moderator Greg Gowans, Director of Logistics & Expediting for CH2M, offers a preview.

epending on the range of industries served by an engineering, procurement and construction company, the current economic picture looks quite different. “We’ve certainly seen a significant impact in the energy business: massive declines in exploration, offshore energy construction and development,” Gowans said. “These declines are seen somewhat in midstream, but not nearly as much in downstream. Low energy costs are promoting a very large increase in downstream activity such as petro-

chemicals both in the United States and around the world.” Customer base diversification is fundamental to this period. CH2M supports a very broad range of industries in terms of who their clients are: energy, infrastructure, government and more. “Our other businesses are doing quite well. Our diversity is helping us,” Gowans said. “Other engineering companies that have a much greater focus on energy are being impacted as our mutual clients decrease capital expenditures and operations.”

2016

Conference Session Wednesday, Sept. 28, 2:00 p.m. – 2:50 p.m.

Shippers Panel – Wrangling the Economic Roller Coaster

STRATEGIC RESPONSE

Gowans said there is no question that CH2M and its peers have had to adjust to the market. “We have to react in terms of where our engineering forces are located and their size. The same holds true for our logistics and procurement forces,” he said. The company is reallocating its resources across other industries and doing some consolidation (geographic and corporate) as are its peer companies. Cost management has become top priority. “We’re helping our clients manage costs and in doing that we have to do that ourselves,” Gowans said. “We have to find ways to execute our work more efficiently and more effectively.” This pressure affects the value chain from one end to the other, including ports and transportation providers. “Cost reduction can be done painfully or productively by finding ways to improve efficiency such as eliminating waste and duplication of effort” he said. Done right, cost reduction is sustainable. BB

ABOVE: Oil rigs moored in Cromarty Firth. Invergordon, Scotland, UK. Offshore energy construction and development have dramatically declined during the current economic climate. / Credit: Berardo62 / Flickr

Saipem America • SBM Offshore • Shell • Siemens • Solar Turbines Inc. • TAS Energy • Tata AM16 BREAKBULK AMERICAS PREVIEW www.breakbulk.com/americas

ISSUE 3 / 2016

INFLUENTIAL ECONOMIC FACTORS AHEAD Gowans admits he has no crystal ball for foretelling the industry’s economic future. But with years of experience under his belt, he can tell us what key factors we should watch:

1. U.S. election this fall will have

an economic impact, regardless of the outcome. Typically, following a major election there’s a period of freezing where nothing happens in terms of government spending.

2. With Iran coming back into the market to globally monetize its energy resources, we will have to be very attentive to the effect on oil prices. 3. How BRIC countries perform over the next few years is important because they are major growth economies. 4. Issues with the EU and potential UK disengagement from the currency will be important. 5. The U.S. economy is not as

strong as we’d like it to be, but it’s strong. If it continues, that’s good, but if it gets better that will have a global impact.

6. Commodities prices will have a major impact on the mining industry and that has a major impact on capital expenditures. 7. If investment in North

American infrastructure continues on its projected course, it will have a major beneficial impact on the capital industry here in the U.S. and elsewhere.

Q+ A with Jennifer Ledet

we are a not able to see those opportunities, and we are not able to think creatively. But one of the things we will talk about in the session is to how we can reframe problems into challenges.

Q: What materials will

be covered and what takeaways will you have during this two-hour session?

We want to give folks tools that they can use to more effectively deal with the challenges they are experiencing, the constant change. Once we think we have figured out all the answers, they seem to change the questions. So it is about developJennifer Ledet, of Ledet Consulting, ing a resiliency, not just for the current will be delivering a micro-seminar state we are going through but for the at Breakbulk Americas 2016. This future, for the constant changes. presentation will be free to all attendees. This is going to be an interactive session. I believe totally that there is a lot Why is it important now to of wisdom in the room, understand manand so I want folks to aging through share their experiences, turbulent times? their ideas and their knowledge so that othI think we can all ers can benefit. It is agree that constant 2016 going to be engaging change is the new noras opposed to a lecturemal. We are all living Micro-seminar style presentation. through it and dealing And then at the end with it. Breakbulk was I’m going to challenge very wise to address this Wednesday, Sept. 28, everyone to create their topic right now with the 2:00 p.m. – 4:00 p.m. own action plan. So they industry in the state that Managing Through may have a particular ‘ah it is in. We are all expeha’ moment, or they may riencing tremendous Turbulent Times have some ideas that change. And what we they gleaned from this session. I’m going want to do is give folks some tools that to encourage everyone to write them they can use to better and more effectively not just survive change, but literally down and create your own action plan because I believe that knowledge is not thrive through the change. And it really boils down to the individual and how you power; applied knowledge is power. BB perceive change. And this isn’t just some fluffy positive thinking kind of ‘woo-woo’ talk; this is sound business practices. In fact, research in neuroscience shows that when we experience what we perceive Listen to the full interview as a problem, we tend to go into more with Jennifer Ledet at anxiety or have anxiety mode and breakbulk.com/americas, stress. When we go into stress mode, in the conference agenda.

Q: A:

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Member of the Rhenus Group

BIG ENOUGH TO HANDLE, SMALL ENOUGH TO CARE

Truly a Project Forwarder, we work with our clients from feasibility to execution, no matter where the cargo originates or destined, specializing in North America, Europe, The Middle and Far East.

Your Worldwide Project Coordination Centers:

USA: KOG TRANSPORT, INC. 299 Broadway, Suite 1815 New York, NY 10007 Contact: Colin D'Abreo Telephone: + 1 212 346 9800 Telefax: + 1 212 748 6133 cdabreo@ kogusa.com Email:

SWITZERLAND: KOG TRANSPORT, AG Zugerstrasse 1 CH-6330 Cham, Switzerland Contact: Roger KÃ¼ndig Telephone: + 41 (0) 41 784 2356 Telefax: + 41 (0) 41 781 1530 Email: rkuendig@ kogzug.ch

JAPAN: KOG JAPAN KK WBG Marive West 23rd Floor 2-6 Nakase, Mihama-ku, Chiba-shi Chiba 261-7123, Japan Contact: Masahiro Kosaka Telephone: + 81 43 297 3155 Telefax: + 81 43 297 3166 Email: mkosaka@ kog-japan.co.jp

port focus

Steel at the Port of Antwerp. Operators at the port aim to reduce accidents by 50 percent by 2020. Credit: Port of Antwerp

SAFETY FIRST Improving Safety No. 1 Issue for Port Labor BY PAUL SCOTT ABBOTT

“SAFETY FIRST,” the time-honored

phrase, is seldom more applicable than in the arena of handling breakbulk and project cargoes. Handling of either provide unique challenges for longshoremen, with different sizes, shapes and weights and centers of gravity that all need to be considered. There’s an inherent need for the right training, planning and communication to deal with what can potentially be dangerous work. According to Ed Ferris, president of Oakland, California-based Local 10 of the International Longshore and Warehouse Union, there are still too many

preventable accidents and deaths that occur on the waterfront. Ferris was appointed in February as one of 15 members of the U.S. Department of Labor’s Maritime Advisory Committee for Occupational Safety and Health, or MACOSH. He has a great deal of experience to call on, as he started work on the Northern California waterfront a quarter century ago. “We’ve had a reduction in injury rates in recent years, but there’s always room for improving. I think the goal of the entire industry should be to make cargo operations as safe as possible,” he said. Technological advances bring new hazards, making training all the more essential. ILWU works in partnership with the Pacific Maritime Association, with each bargaining session including negotiations on the Pacific Coast Marine Safety Code and a standing committee developing a general safety training program. On a U.S.-wide level, entities such as MACOSH and the National Maritime Safety Association are actively developing products and guidance to improve worker safety. But concerns remain. There are concerns that the experienced labor pool is diminishing, said Ron Signorino, who before founding The Blueoceana Co. Inc. consulting firm, was director of regulatory affairs for Maersk in North America and before that head of the U.S. Occupational Safety & Health Administration Office of Maritime Standards. “Over time, it appears, the knowledge and skill associated with the art of rigging shore-based and shipboard cargo-handling gear have been gradually eroding,” Signorino said. “And, while there are still a few authoritative gear men employed by stevedoring firms at various – not all – U.S. ports, their numbers have slimmed down, concurrent with the volumes of breakbulk and project cargoes being handled at U.S. ports. “Moreover,” he continued, “while I have seen some stevedores and marine www.breakbulk.com BREAKBULK MAGAZINE 35

port focus

terminal operators taking the time to extend an effort in the training of successor gear men, I haven’t noticed any significant trend in that regard.” The situation deteriorates even further when considering many of the non-union stevedoring firms doing business in right-to-work states. In his view, training provided to the industry’s workers has improved over the last two decades, but is still not where it should be. “From my perspective, a comprehensive, well-thought-out training component is essential. It’s equally essential that such training is presented by individuals who are, or can quickly become, popular and credible in the eyes of the rather unique workforce encountered on the waterfront. Without their buy-in, training becomes almost meaningless,” he said.

ANTWERP SETS SAFETY GOALS Among seaports where continuous training and a large-scale safety plan are proving beneficial is the Port of Antwerp, where port operators aim to reduce the number of accidents by 50 percent by 2020, according to Yann Pauwels, senior advisor with Centrale der Werkgevers aan de Haven van Antwerpen, or Cepa, which represents employers and is responsible for personnel and payroll administration at the Belgian port. The goal was set in 2014 as part of an intensive plan, Gemeenschappelijk Globaal PreventiePlan. The plan contains seven topics and focuses on a safe work environment, training and technical improvements

A 138-ton transformer is loaded onto ARRC’s Baltic Mercur II prior to its first transAtlantic voyage, from Antwerp to Houston. Operators at the Port of Antwerp aim to separate people from machines at breakbulk terminals. Credit: ARRC 36 BREAKBULK MAGAZINE www.breakbulk.com

to reduce risks, all while highlighting the importance of a safety culture in the port. “The port community of Antwerp believes that giant steps in our safety figures can be achieved by investing in Yann Pauwels improved safety awareness among Centrale der Werkgevers aan de all stakeholders and Haven van Antwerpen certainly within the (Cepa) chain of operations, from CEO to the individual docker,” said Pauwels. “We are currently on track to reach our goal.” The undertaking includes endeavors to monitor circulation plans on breakbulk terminals, with the aim of trying to separate people and machines as much as possible. One worrying trend is container lines increasingly taking large project cargoes on their vessels. Here, while workers might be familiar with moving containers, they will be less prepared for handling project cargoes and find themselves facing a steep learning curve. Raymond Fisch, senior vice president of BBC Chartering GmbH, said the carrier puts a great deal of importance on regular training as one of the most effective tools to foster safety awareness. BBC Chartering distributes its safety policy at each terminal it calls, and holds advance “toolbox” meetings and hazardrelated workshops. This is regularly repeated to refresh knowledge and to reach potential new port workers.

CARRIERS TAKE ROLE SERIOUSLY

Andreas Mayer, director of operations for Hamburg-based Rickmers-Linie GmbH & Cie., said training allows the company to maintain inhouse cargo handling experts. “Those times when all learning could be done by doing are long gone,” Mayer said. “Training has its own central role in our company’s structure. A basic tool to success is, among other things, safety procedures which are updated frequently. Also, our climate of teamwork, multiple checks and setting of responsibilities ensures a high quality of output.” Mayer added that training for those joining Rickmers-Linie takes several months, with progress monitored through a progression from small projects to more complicated tasks. Additionally, staff in the stowage planning team are regularly sent to ports to experience what they do day-to-day at their desk. Hamburg’s Hansa Heavy Lift GmbH employs a “stop-the-job” training process where any perceived deficiency or problem must be satisfactorily addressed before the job can proceed. “Our work processes require extensive consultation between office and vessel in deciding the best method statement for each project,” Chief Commercial Officer Joerg Roehl said. “Significant time is spent on hazard identification, risk analysis and the implementation of riskmitigating measures. Contingency plans are drafted for each lift to accommodate a worst-case scenario so all involved are aware of and have practiced their assigned duties in case of emergency.” Equipment and machinery undergo exhaustive checking and testing. Initial meetings are held with all parties, including shore authorities, stevedores, port representatives, cargo interest groups, underwriters, receivers and shippers; toolbox meetings are carried out immediately before undertaking work; and, in the case of all heavy, super-heavy and/or extraordinary project lifts, office representatives are in attendance to ensure processes and procedures are followed. A veteran transportation writer for the past 40 years, U.S.-based Paul Scott Abbott specializes in maritime topics. ISSUE 3 / 2016

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THE PORT OF

Possibility

port focus

AVERTING HAZARDS HANDLING CARGOES Meeting challenges posed by specific hazards is critical to the safe handling of project and breakbulk cargoes. Sharing photos from various sources used for training purposes in ensuring Chipolbrok’s safe operations, the company’s Marek Orent pointed out that issues related to frequently occurring hazards are often beyond the control of the carrier, making it all the more important that ships’ port captains representing carriers carefully check each cargo’s readiness for shipment. Also, Orent said, in highly competitive times like today, cost-cutting measures by some in the industry can have safety repercussions. “They save money by using worse quality of lashing and stowage materials, as well as not maintaining ship equipment in a proper way,” Orent said. “They also use cheaper ship crews and contractors in ports. All of these may have an impact on safety of ships, cargoes and staff. Therefore, it is important for the clients of ocean carriers to choose contractors very carefully, recognizing well-established and reputable liner carriers like Chipolbrok over unknown carriers and ship operators who don’t have their own fleet.” Orent specified five of the most recurrent safety concerns faced in the handling of project and breakbulk cargoes:

Center of gravity being incorrectly marked or not marked at all can result in lifting by an improper sling

angle, causing risk of exceeding calculated lifting force. Breaking slings and dropping cargo may have devastating consequences.

Improper marking of lifting points poses similar concerns.

Wrong packing, often discovered in lashing or lifting processes, can create dangerous situations.

When boxed, cargo is not correctly secured inside its packing – not observable from the outside – it may shift in voyage, with dangerous repercussions.

Insufficient footage of the bottom surface can be a problem with heavy-lifts, resulting in weight being spread unevenly, but can easily be corrected by building a strong floor below.

While training and safety efforts for crew aboard ocean-going vessels are generally appropriate and sufficient, concerns remain related to shoreside operations. “There are not enough stevedores with experience in handling projects,” Orent said. “Stevedoring companies very often employ cheap and inexperienced workers from the pools on a case-by-case basis when there is a job to be done and keep only a skeleton of permanent employees. This minimizes their costs but is bad for safety and proper job performance.”

5. PICTURED AT RIGHT:

1. Not properly marking center of gravity can lead to lifting cargo at an incorrect angle. 2. Improper marking of lifting points on crates and other heavy-lifts poses similar concerns. 3. When cargo is not properly packed, workers can be placed in a dangerous situation. 4. Boxed cargoes not correctly secured within packing may shift and pose hazards. 5. Insufficient bottom surface footage can make heavy-lift cargo an ill fit for ocean transport. Credit: Chipolbrok 38 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 3 / 2016

Yo u r w i n d ow to t h e f u t u r e t r a n s p o rt t ec h n o lo g i es # n at r a n s _ E x po

regional review

An offshore platform in the South China Sea. / Credit: Shutterstock

TRILLION $ US$5.3 total trade passing through the South China Sea every year

11 BILLION barrels of oil in the South China Sea

190 BILLION cubic feet of natural gas in the South China Sea

90% of Middle Eastern fossil fuel exports are projected to go to Asia by 2035 Sources: The White House; U.S. Energy Information Administration; International Energy Agency; Council on Foreign Relations

BUSINESS AS USUAL Shipping Avoids Escalating South China Sea Turmoil BY V L SRINIVASAN

ension over disputed ownership of vast areas in the South China Sea, one of the busiest shipping lanes in the world, has heightened this year. So far, commercial shipping has avoided getting caught in the political crossfire, but a deliberate move by the U.S. to test the increasingly acrimonious relationships in the sea led China to scramble fighter jets in May to escort a U.S. warship out of one of the contested zones. How long can commercial shipping continue to count on safe passage through the South China Sea? China denies that it is trying to control shipping through the area, but fears persist that China may try to block the sea, playing copycat to Iran, which has already threatened to close the Strait of Hormuz if the U.S. Navy increases its activities in the Middle East Gulf. Some commentators assert that an opportune time for China to make its move would be when the construction of artificial islands in the South China Sea is completed in 2017. Comprising a stretch of roughly 3.5 mil-

40 BREAKBULK MAGAZINE www.breakbulk.com

lion square kilometers in the Pacific Ocean, the South China Sea is home to hundreds of islands including the hotly contended Spratly and Paracel Islands. It’s a vital link between the Western Pacific and Indian Ocean and seaborne trade valued at US$5.3 trillion moves through the sea every year. Citing decades-old “historical” maps and documents in its possession, China has claimed almost all of the South China Sea. But other coastal states such as Vietnam, Indonesia, Malaysia, Taiwan, Philippines and Brunei have staked their own, overlapping claims. These countries are lured by the sea’s rich natural resources, including oil and gas in the Exclusive Economic Zones of the Philippines, Malaysia and Vietnam, resulting in territorial disputes among these nations. These nations have turned to Russia as a mediator for the disagreement. At an informal meeting held in Moscow in April, the Philippines Undersecretary of Defense Natalio C Ecarma III told Association of South East Asia Nations defense ministers that Russia, with its global stature and wide experience in conflict prevention and management, could significantly contribute to the maintenance of peace and stability in the Asia Pacific. ISSUE 3 / 2016

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regional review

CHINA South China Sea

Parace ls

Scarborough S h o al V IET NA M

S pratly s PHIL IPPIN ES

China’s claimed territorial waters United Nations 200 nautical mile Exclusive Economic Zone Disputed islands

BRU NEI

MA L AYS IA MA L AYS IA

“The Philippines believes that Russia can be a strong voice for moderation and peace in a region that is at risk of spiraling into instability,” Ecarma said. “The possibility of these multi-actor maritime disputes escalating into actual conflict is real. And its consequences would be dire for everyone. Conflict will undo the major strides we have made and deny us a future of prosperity that is ours for the taking.”

OIL RESERVES A BIG LURE The South China Sea is estimated to have about 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proven and probable reserves, according to the U.S. Energy Information Administration Oil and Gas Analysis Report on the South China Sea. These impressive oil and gas reserves put the dispute on the global agenda, not least for the U.S. and its allies in the region, but also for energy-hungry China. The U.S. has publicly opposed the reclamation projects undertaken by China in the South China Sea, where the latter has conducted its first test flights on a newly built runway in the Spratly Islands, drawing protests from Vietnam and the Philippines, which have claimed three and eight islands, respectively. Refuting the U.S. allegations, Chinese Foreign Minister Wang Yi, who was in Washington three days later, said that China and the U.S. shared common interests regarding the South China Sea, 42 BREAKBULK MAGAZINE www.breakbulk.com

INDONES IA Sources: UNCLOS and CIA Asia map via Shutterstock; graphic by Catherine Dorrough

and both sides should maintain peace and stability in the region by resolving disputes amicably. “There have not been any problems with regard to freedom of navigation in the South China Sea, and many shipowners and insurers have said that the insurance premium has not gone up. No commercial vessel has encountered any problem in the area of freedom of navigation,” Wang Yi said. He reiterated the same on the sidelines of the Twelfth National People’s Congress held in March, asserting that the Nansha Islands were China’s integral territory. “China is the largest country bordering the South China Sea, so we hope, more than any other country, to uphold the freedom of navigation. Thanks to the concerted efforts of China and other regional countries, it is one of the freest and safest sea lanes in the world,” he said. The strong military presence from China and the U.S. has so far not deterred shipping companies from navigating in the troubled waterways in South China Sea. Arthur Bowring, Hong Kong Ship Owners’ Association managing director,

confirmed that despite tensions, there has been no restriction on merchant ships passing through the area and ships continued to trade through the area without issue. “There is no need for peacekeeping forces, because there is no war or other danger,” Bowring said. According to him, the South China Sea development is a political situation, one that has not deteriorated, and is not expected to deteriorate, into any kind of military conflict. “Due to the importance of maritime trade to the region, it is extremely unlikely to deteriorate to the extent that maritime trade is affected,” he said. However, Bowring said: “There are rumors that China-bound ships could be attacked to put pressure on China, but if this happened, then it is likely that the situation would deteriorate very quickly, in ways that neither the countries concerned nor China would want.” The claimant nations are aware that any disturbance to the commercial shipping in the South China Sea that forces a shift of cargo onto alternate shipping routes would financially cripple shippers, who will have to shell out millions of additional dollars for the privilege. ISSUE 3 / 2016

remained China’s thirdlargest trading partner since 2011. Two-way trade reached US$366.5 billion in 2014, accounting for 14.5 percent of ASEAN’s total trade. ASEAN received US$8.9 billion in foreign direct investment inflows from China, accounting for 7.1 percent of total inflows to ASEAN in the same year. Khalid Moinuddin Hashim, managing director of Bangkok-based shipowner Precious Shipping, said that the geopolitical tensions in the South China Sea are being stirred by bigpower politics but have had zero impact on commercial shipping. To date, there has been no slowdown in the movement of cargoes because of the tension in Rig workers are transported to offshore rigs in the South China Sea, off the coast of Brunei. Workers use a the South China Sea. swing rope to enter the platform. / Credit: corlaffra / Shutterstock.com “One should keep in mind that if there was MILITARY PRESENCE apprehensions that Australia’s trade any form of real tension concerning A REASSURANCE with China, worth more than US$78 the safety of merchant ships traversing Greg Austin, visiting professor at the billion each year, according to statistics the South China Sea, the underwritAustralian Centre for Cyber Security, fur- from the Australian Trade Commisers sitting at Lloyds in London would ther discounted fears, pointing out that sion, might be have demanded an extra war risk precommercial shipping can pass through affected. China is mium. That did not happen because the South China Sea – which is twice as the largest marthere is no real ‘tension’ for shipping big as the Gulf of Mexico and 50 percent ket for Australia cargoes safely via the South China Sea,” bigger than the Mediterranean Sea – accounting for Hashim said. without ever seeing a naval ship or the 37 percent of its Germany-based Hapag-Lloyd also disputed coral reefs and small islands. exports followed moves its cargo through South China Sea Since China and the U.S. have comby Japan. and confirmed that it had yet to see any mitted to protecting international “The Austraimpact on commercial shipping. Rainer commercial shipping, the presence of lian government is Horn, Hapag-Lloyd director public relanaval forces from both sides adds to the using this exaggertions, said: “We have not experienced security offered to project cargo carriated and invented anything negative yet. However, we are ers in the sea. “Even if military clashes threat as part of an monitoring closely local disputes as they Khalid take place over the disputed islands, it alliance campaign can have an effect on trade. The same Moinuddin will have zero impact on commercial against China, to holds true with regard to the safety of Hashim shipping,” Austin said. “By contrast, a support the U.S. our ships, which we have to ensure at all Precious Shipping military clash involving Taiwan, which rebalancing strattimes.” BB sits at the northern end of the South egy in the region,” China, could have an impact on shipping he said. into and out of Taiwan, or Chinese mainThe South China Sea is also V L Srinivasan is a senior journalist based in land ports near Taiwan.” important to the Association of South Hyderabad, India, covering finance, infraAustin, who is the author of the East Asia Nations, or ASEAN, and structure, energy, shipping, transportation, IT, book entitled China’s Ocean Frontier: its relationship with China. The latenvironment and political and regional develInternational Law, Military Force and ter has been ASEAN’s largest trading opments in India and the Gulf Cooperation National Development, also dismissed partner since 2009, while ASEAN has Council region. www.breakbulk.com BREAKBULK MAGAZINE 43

vip shipper

Q + GETTING HANDS-ON A Don’t Be Chained to The Desk

ee Tipton, Breakbulk VIP Shipper and corporate logistics specialist at FMC Technologies Inc., explains why deeper understanding of the project industry can only come from cradle-to-grave experience of logistics moves. BB: Describe your career. LT: I was with ship agents and owners

for many years, and that gave me the opportunity to gain experience in not only ocean freight, vessel operation and port operations, but also trucking, rail, dangerous goods, heavy-lift and finance. It also provided for some interesting travel and fascinating experiences working aboard the vessels. I’d say I was very lucky mid-career to have worked for a Danish company that believed in giving women opportunities and to also have great colleagues that taught me so much. When I arrived in Houston in 1979, I worked inventory with a small drilling company before moving to work for ship agent Biehl & Co. That began a long journey in ocean transportation work which took some twists and turns through FA Voigt, Hellenic Lines, Hong Kong Island and finally Clipper Americas where I worked for 15 years.

BB:

What do you feel is unique about your experience?

LT: I had the opportunity to be handson with the trucks, cargo and vessels. This taught me not only operational experience, but also gave me an appreciation for the work done by drivers, stevedores, vessel crews and officers. It allowed me to learn to handle cargo from cradle to grave, not just on paper.

44 BREAKBULK MAGAZINE www.breakbulk.com

gram that eventually reached around the globe, training a team of associates and watching them grow as professionals were some of the best times in my career.

BB:

What is the most complex part of your role?

LT:

I do a lot of contract work now and explaining to tender teams, engineers, sales and product groups the practicality of logistics along with the regulatory requirements of trade compliance is sometimes challenging. I’m now involved with every business unit both domestically and globally, so I get a wide variety of issues to work with and that keeps me on my toes.

BB:

How can shippers and vendors improve their relationships?

LT: Communication is key. Vendors are

BB: What is your proudest achievement?

LT:

Of course you mean aside from raising my son while operating 15 vessels and taking phone calls in the wee hours of the night and now being the proud grandmother of four remarkable children? When I came to FMCTI (Subsea) in 2006 there was no logistics department and no transportation safety program. Building the shipping, packing and crating, import, export and trade compliance from the ground up, implementing a safety pro-

normally happy to cooperate with shipper’s requirements if they are correctly instructed in a clear and precise manner. You cannot expect a small vendor in the UK to understand every aspect of U.S. import law, and if they are new to exporting then they may not understand export packing either. Write clear requirements for them. Call them and review the requirements. Get to know the vendor, where they are located and what their challenges are. They will be much more willing to comply if they feel you are listening and taking the time to explain exactly what you expect.

BB: What is the most serious issue facing the industry?

LT: There are so many issues now and

each mode of transportation is facing serious challenges, from the security issues in air freight, to freight capacity in ocean shipping growing faster than demand, to increased regulations in the ISSUE 3 / 2016

trucking industry. But the global political and economic uncertainties seem to me the most fragile of all issues. As we have seen in the oil and gas industry, our fates can turn on a dime and literally overnight our business environment was turned upside down. Contingency planning then becomes one of the most important tools in our repertoire.

BB: If you could change one thing in

your job or industry, what would it be?

LT: I would change the way other dis-

ciplines view the logistics and trade compliance discipline. We are the Rodney Dangerfields of our companies most of the time (a reference to an American comedian whose catchphrase was, “I don’t get no respect”). Although things are changing in the new millennium there is still a philosophy of “shipping: they just throw stuff up on a

truck and tie a rope around it – what’s so hard about that?” In other words, it’s sometimes viewed as a simplistic, physical act that any person of even minimal intelligence could accomplish. When other disciplines are required to delve into actual logistics and trade compliance issues they are often very surprised at the complexity of the transportation and the voluminous regulatory issues involved. I had a new associate come into the logistics department in 2010 and about three weeks into his training he came in my office and said, “Gosh, you guys are like lawyers!” Never mind the physics, equipment, planning, routing, cost analysis and safety plans involved in moving a huge piece of equipment from the U.S. to China – stop and think of the U.S. export regulations and the Chinese import regulations that if done incorrectly will stop your shipment cold.

BB: As a VIP shipper, what role do you feel you play in the industry?

LT: Share your experiences as best you

can and advocate for a mode of transportation that you’re most interested in.

BB: What advice would you give someone entering the industry?

LT:

Don’t stay at your desk all the time. Get out in the yard, the port, the manufacturing plant, the warehouse, the truck yard, to a vessel or the airport or the forwarder’s facility. Get your hands dirty. Watch the crew strap cargo on a pallet and load it on a truck and stuff a container so you understand what the cargo goes through. Know your 19 and 15 and 49 CFR back to front. Never compromise safety or quality, never – and don’t let anyone pressure you to compromise. BB

www.breakbulk.com BREAKBULK MAGAZINE 45

regional review

NOT-SO-FREE MARKET Europe’s Union

≠ Facilitated Breakbulk Trade BY MARY SHACKLETT

46 BREAKBULK MAGAZINE www.breakbulk.com

ISSUE 3 / 2016

Images via Shutterstock; Photo illustration by Catherine Dorrough

he unique characteristics and the extraordinary dimensions of an out-of-gauge project cargo is an exception in any place. But in Southern Europe and in Europe in general, the diversity of customs and regulations, and variations in permitting processes, paperwork and infrastructure can create even more complications for out-of-gauge cargo transport. “In my experience, U.S. and Asian ports for inbound and outbound breakbulk and roll-on, roll-off cargo are the best for us to work with,” said Peter Moe, president at Trans-NET, a global transportation logistics company. “Some of this is attributable to experience of working in these regions and just knowing how to get things done, and it seems to be Asia and the U.S. that have some of the most technologically advanced port operations, which tends to make things easier and more streamlined for customers to work with. “When I compare this to areas of Europe such as Russia, where we also have offices and vetted agents, the bureaucracy and the limited investment in technology and port infrastructure still make cargo handling more difficult,” Moe said. The challenges are similiar in Southern Europe, where differences in administrative requirements coupled with difficulties in infrastructure often force transporters to make on-the-spot adjustments and project changes while in the process of moving the cargo.

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PPG Certificate of Achievement in Project Cargo Management Workshop

ducation Day: Breakbulk E Industry Overview

Opening Ceremony

The region’s LEADING EVENT for the project cargo and breakbulk industry

23-26 October 2016 Abu Dhabi National Exhibition Centre Abu Dhabi, UAE

(by invitation) 25 OCTOBER

Exhibition, Conference Sessions, Micro-seminars, Exhibitor-led Sessions, Networking Luncheons 25-26 OCTOBER

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regional review

ABOVE AND BELOW: Administrative requirements and infrastructure issues challenge breakbulk operations in Europe. Credit: Hapag-Lloyd

“We encounter major challenges in administration and in differences in customs when we ship out-of-gauge cargo in certain areas in Southern Europe,” said Neel Ratti, manager at freight forwarder and global logistics provider Tuscor Lloyds. “A good example is when cargo must go through Las Palmas or the Canary Islands. Both are or contain ports of Spain, but they are also overseas territories. In these areas, we are required to use barges that are locally run and that are under the Spanish flag when we move cargo between Spain and these Islands. This can be troublesome if you are unable to find a Spanish-flagged vessel that can accommodate your project cargo. You then might have to apply

48 BREAKBULK MAGAZINE www.breakbulk.com

for a special dispensation under the circumstance. This requires extra time and administration at a time when the cargo needs to move urgently. “It’s tough to operate in situations like this because you always want as much flexibility as possible so you can move quickly when you need to,” Ratti said.

CONSTANT CHANGE A REALITY

That said, Ratti acknowledges that constant change is a reality whenever you are transporting project cargo. “Sometimes you only get part of the cargo that is ready to ship, so you might find yourself in a position where you have to change vessels to accommodate the cargo,” he said. “Having the flexibility to engage any vessel carrier is important in these cases, and you are constricted when you can only use certain carriers because of local regulations.” In addition, there are language barriers in administration and customs. This makes it important to partner with trusted local agents in different countries that already understand the administrative, customs, language and

infrastructure aspects of the areas where they work. “We have colleagues who take care of these transports from the sales or technical side, and they know what to do and where possible challenges have to be mastered. Having these local experts is invaluable to the out-of-gauge cargo transport process,” said Christian Denso, Hapag-Lloyd’s director of public relations and corporate communications. Tuscor Lloyd’s Ratti agreed that having local agents on the ground who understand the languages and the transport particularities of the locales in which they operate is absolutely critical. “Sometimes you have to troubleshoot a project on the spot,” he said. “It is because we generally use local, trusted agents that we have already vetted and that we have longterm relationships with, that we know that we can depend upon whatever local strategies and problem solving that must be done. We go forward from that point actively coordinating with our partners through the transport process.” Hapag-Lloyd instructs local supervisors to take special care of the loading and unloading of special cargo so that if and when a problem arises it can be solved on the spot by specialists. “For example, an out-of-gauge cargo shipment like a propeller can be more challenging to load because the diameter of the cargo is more than 900 centimeters but the resting area is only the size of a propeller shaft, which is about 100 centimeters,” said Denso. “That means that the weight of more than 100 tonnes is resting on less than one square meter. If you know your equipment and if you have the technical and nautical experience, you can ISSUE 3 / 2016

calculate and find the right solution for nearly every cargo. For this example, we used strong steel beams to distribute the weight on a double layer of flat racks.” Special challenges faced by transporters of project cargoes through Southern Europe are not confined to water transport and port facilities. Transporters also encounter their share of challenges when they move out-ofgauge cargo over land. “In France, which is divided into separate provinces, road permits must be

BEST PRACTICES

lenges: “And to the credit of most local operators, they understand not only the issues concerning a particular out-ofgauge cargo shipment, but also the time and cost considerations. We are in an industry where we must always work within the frameworks that are given to us.” BB Mary E. Shacklett is a technology analyst, commentator and keynote speaker, based in the U.S.

IMPROVE EUROPEAN COMPETITIVENESS

TO OPTIMIZE out-of-gauge project transport performance in Southern Europe, and to place performance in this region of the world at stronger parity with transport performance elsewhere, project cargo specialists offer up the following best practices:

stamped by each province that you travel through when you are moving heavy haulage goods,” said Ratti. “In Italy, on the other hand, road permits can be obtained very easily, but there are issues with the transportation infrastructure because different municipal authorities do road work at different times. To get around this, you must be flexible because you may need to change routings on the fly so you can keep trucks moving.” Tenacity and determination are important to overcome these chal-

EARLY ROUTE PLANNING

“To best position ourselves for outof-gauge project transport in Southern Europe, we get our cargo specifications very early in the project definition process and we tailor the cargo transport plan to the different countries that we must traverse,” said Tuscor Lloyds’ Neel Ratti. “For instance, if we are hauling out-of-gauge cargo through Italy, we identify all of the possible routes that we can travel and we also have other contingency options available if issues arise. Our partners in the different localities are especially savvy about this, since they are very familiar with the areas.”

PRESENCE OF LOCAL AND IN-TRANSIT CARGO HANDLING FACILITIES

“We carefully review the feasibility of shipping the cargo,” said HapagLloyd’s Christian Denso. “Depending

on the destination of the cargo, we have to check if loading and discharging ports are able to handle it. We also need to know if we can load or discharge the cargo with a gantry, or with a mobile or floating crane. Then, we have to check if our vessels can accommodate our cargo since on some of our services, we have seasonal overbooking situations and we can face allocation problems. Finally, we check into whether flat rack equipment is readily available in the locations through which the cargo is passing. For all of these checkpoints, we must know the specific cargo dimensions, footprints, lashing and lifting points, weight distribution – and the space availability for the cargo onboard the vessel.”

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CAREFULLY SELECTED LOCAL BUSINESS PARTNERS

“It is vital to us to carefully identify and vet our business partners in the different local areas that we transport out-of-gauge cargo in,” said Ratti. “These business partners must be in good standing, fully compliant with the rules and regulations that they are subject to, accredited in the localities where they operate, and highly knowledgeable of transport operations and requirements in these localities. “We also look for our partners

to be in compliance with regulations issued by both the International Federation of Freight Forwarders Associations (FIATA) and Convention on the Contract for the International Carriage of Goods by Road (CMR Convention), which is in force in the European Union and which standardizes documents for cross-border transport of cargo by road, based on UN recommendations for uniform international rules. We also vet our business partners for financial stability because we want long term viable partners, and we want to make sure that they are properly insured.”

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ACTIVE CONTINGENCY PLANNING

“In southern Europe, the issue is often one of inadequate infrastructure development for out-of-gauge cargo shipments,” said Ratti. “When you are shipping this type of cargo, you want flexible infrastructures and choices, whether it is at a port, or even in the type of shipping method that you choose. In certain areas, like the south of Italy, there are fewer out-of-gauge cargo options than we would like. Conversely, in other areas like northern Italy, the infrastructure is more developed. The bottom line is that there is really no limit to what you can do as far as contingency planning for out-ofgauge cargo is concerned.” www.breakbulk.com BREAKBULK MAGAZINE 49

thought leaders

GUIDING LIGHT Poland’s Escort Services Poised For Overhaul

he Polish Heavy Transport Association, known as OSPTN, has long been a supporter of heavy transport companies in the country. At the end of 2015 it extended its scope to cover escorts, aiming to educate and raise awareness of other road users and ensure traffic safety. Following a period of consultation with the European Association of Heavy Transport, or ESTA, OSPTN has sought to harmonize escort requirements in Poland to increase safety on the nation’s roads and to also standardize escort rules across the European Union. A significant issue in the oversize vehicle escort sector in Poland is that escort companies are able to compete solely on price. This means that an ordinary black car with two lights on the roof driving in front of a vehicle with an oversized load can win the job. However, such an unprofessional escort service does not provide secure and safe movement of the vehicle or its load. To address this, OSPTN representatives submitted proposals for a comprehensive change in regulations on escorts of heavy vehicles in Poland at a meeting with the Ministry of Infrastructure on April 8, 2016. These proposed changes included: • The escort vehicle is to be a minimum of 1.7 meters in length. This will increase the visibility of the vehicle. • Appearance of escort vehicles. Current laws do not impose any mandatory obligations related to reflective taping of escort vehicles. Many escort companies use company livery on their escort

vehicles. But as the majority of oversized transportation takes place at night, there is a pressing need for standardized rules on the reflective appearance of vehicles. In response to feedback from experienced escort companies, OSPTN has submitted draft standards on reflective taping to the Polish Ministry. • Inspection of vehicle dimensions. The new regulation adds the obligation to verify the actual dimensions of the vehicle to be escorted before the start of the journey. Currently, the escort driver has no obligation to check the dimensions of the vehicle. The Proposed Protocol Dimensional Control of the vehicle, to be signed by all escorts and the driver of the heavy vehicle, aims to provide a reliable check of the real dimensions of the vehicle, which will better protect Polish road infrastructure and increase safety on public roads. In addition to these BY ŁUKASZ changes, profes- CHWALCZUK sional escort POLISH HEAVY companies have TRANSPORT ASSN. committed to ensuring that all escort vehicles will be either white or silver in color. This uniformity will allow the general public to instantly recognize an escort vehicle on the road, in much the same way as a police car or fire engine can be easily identified. Unfortunately, current exemptions allow unprofessional and often unreliable escort providers to continue operating at cut-rate prices in Poland. OSPTN’s draft escort proposal aims to stamp out such practices and improve escort services in Poland through safer and standardized operations. BB Łukasz Chwalczuk is president of the Polish Heavy Transport Association and ESTA Transport Section Executive. He specializes in transport, shipping and compensation law and is a frequent speaker at transport conferences in Poland. ISSUE 3 / 2016

RISING SUN Japan’s Dynamic Energy, Infrastructure Changes Create Opportunities

he world’s third-largest economy, Japan is also the world’s leading importer of liquefied natural gas, or LNG, second in coal imports and fourth in crude oil. It stands to reason therefore that global attention is focused on the outcome of Japan’s renewable energy bill. In the bill, the country outlines plans for LNG to be its biggest domestic electricity generator by 2030, followed by renewables, coal and nuclear power. These plans allow little room for any generation from crude and fuel oil, which is a sharp turnaround from the current situation. This changing dynamic is good news for specialist project carriers, who’ve traditionally served these industries through the country’s leading forwarders and engineering, procurement and construction companies. AAL recently invited the country’s leading shipping industry stakeholders to celebrate the anniversary of our Japan office in Tokyo. There was cautious

Credit: Shutterstock

optimism in the room about the market’s economic outlook and predictions that heavy-lift/breakbulk cargo movement into and out of Japan would grow over the next 18 months – although the cargo profile is forecasted to change dramatically due to ongoing energy reforms. The government wants to reduce the country’s dependence on nuclear power for electricity generation to 20 percent, from 30 percent, by 2030, which would reduce energy costs and greenhouse gas emissions. They plan to enhance competition within the energy sector and facilitate nationwide expansion of LNG and renewable energy infrastructure, both wind and solar. Major energy projects and supporting infrastructure will come on line over the next few years, and their components and necessary commodities will be shipped in from across Asia. Beyond its own borders, Japan’s world-class engineering companies are heavily involved with important energy projects planned in Taiwan, Vietnam, Thailand, Indonesia, Malaysia and Myanmar, and oil and gas developments in Indonesia, Vietnam and Thailand. Beyond Asian borders, too, upcoming energy projects are being targeted in Africa and oil and gas projects on the U.S. West Coast, Canada and the Middle East all serve to raise confidence and draw focus away from a slowing China trade. Japan’s position as the world’s thirdlargest economy is very much by design. Its engineering, industrial and commercial infrastructure and capabilities, domestically and those offered to foreign companies overseas, are a leading example to the rest of Asia and many other markets around the world. Even with the slowdown in the global economy and the

“green light” for so many global projects index-linked to an increased oil price, Japan is still looking beyond its traditional markets and strongholds. The government is working hard to reform the country’s emissions footprint and at the same time reignite its economic fortunes. This is being shaped through domestic monetary policy to boost trade and consumer spending to an inflation target of 2 percent and through widespread infrastructure developments and the building of stronger trade outside of Asia – a policy which helped exports rise in the last quarter of 2015, after a sustained period of decline. Being part of this very traditional and close-knit local shipping community for many years, we’ve learned that Japan is unlike many Asian markets in that freight shipping decisions are not based upon price. Quality, transparency and reliability are critical to successful shipping operations here and we BY WOLFGANG will continue to HARMS work alongside AAL the rest of the Japanese shipping community to support and even build upon these green shoots of growth in the market. BB Wolfgang Harms is deputy managing director of heavy-lift multipurpose operator AAL.

www.breakbulk.com BREAKBULK MAGAZINE 51

thought leaders

Slow-filling Backlogs Raise Further Concerns

imes are tough, there’s no denying it: depressed commodity rates, cancelations and deferments of projects, continuing global economic malaise … however you spin it the special cargo market is not so special. But as bad as it undeniably is, the worst may still be to come. There are concerns from forwarding corners that the project replacement rate, or backlog, is simply not filling up at the rate needed to keep freight forwarders in business. The whispers are that by as soon as yearend project forwarders will simply run out of work. While the engineering, procurement and production companies, or EPCs, are taking in orders at a sustainable rate, there’s concern that not enough is going to trickle down to the project forwarding sector.

52 BREAKBULK MAGAZINE www.breakbulk.com

bells and whistles on projects near to completion to push production. They need to appease shareholders, and producing to earn is a surefire way of making that a reality. Another door shut on project forwarders. There is an upside though: today’s projects are of better quality, with stricter controls – both good news for quality forwarders. In the boom days, every Tom, Dick and Harry with a project was throwing it out onto the market, with scant care for standards. But the flipside here is that everything is that much more urgent. There’s no slack in the schedule, and the need to bring a project online as soon as possible is more and more pressing. One shipper at Breakbulk Europe commented that the cycle for contracting has decreased rapidly. Where previously power plants were being made in a year, that timeline is now six months. This means early involvement of forwarders is a necessity and makes the knowledge base that a forwarder brings of more worth than ever, small positives in a sea of negatives. The sector is certainly in a state of flux, where there are many potential downsides and little in the way of upsides. Forwarders need to keep a careful eye on the growing gaps in project backlogs; theirs, shippers and other forwarders that they may partner with on projects. Dig deep and spread the web wide, you may need to cover some sizable holes before the year is out. BB

ISSUE 3 / 2016

Credit: Shutterstock

GOING DOWN

There’s still perceived value in the EPC-freight forwarder relationship, but necessity dictates that not everyone that might participate in a deal today would be invited to the deal tomorrow. Cost cutting takes no prisoners. Where the trend has been to use more than one forwarder in a deal, will too many cooks finally spoil the broth? Equipment manufacturers are facing the same bleak outlook. With new orders slipping away in line with worldwide projects slowdowns, they will quite simply run out of work. “It’s BY CARLY FIELDS definitely a con- BREAKBULK NEWS cern,” confided EDITOR a large global forwarder at Breakbulk Europe. For their part, oil companies are hunkering down, focusing on any areas that make returns and turning away from any speculative plays. Rather than worry about the lifeless development side, they are going into production mode, concentrating on putting the

ALL EYES ON STEEL Rotterdam Deserves More Breakbulk Appreciation

otterdam is steadily growing as a breakbulk port, with 2015 throughput increasing 6.5 percent. Together with the Port of Rotterdam Authority and our fellow breakbulk terminals, Broekman Logistics is proud that its recent substantial investments are starting to pay off. In terms of quality and total costs, the breakbulk route through Rotterdam demonstrably saves euros per tonne. In recent years, Rotterdam’s breakbulk terminals have made substantial investments to facilitate breakbulk. Broekman Logistics has commissioned a dedicated heavy-lift center with four covered warehouses and a crane capacity of 700 tonnes that is unique in Europe. Furthermore, the company has substantially invested in deep-sea quays and an all-weather terminal at its breakbulk terminals. Combined with the investments made by other breakbulk players in Rotterdam, this has resulted in various breakbulk shipping lines incorporating Rotterdam in their loops and regularly calling at the port with their services, connecting Rotterdam to all continents. Rotterdam also offers better nautical access than the neighboring port of Antwerp. From the North Sea, a vessel is moored alongside a quay in Rotterdam in 1.5 hours. Calling at Antwerp from the North Sea involves navigating the Scheldt and its locks for 10 hours in both directions. So opting for Rotterdam can save almost a day. For any shipping line, this automatically translates into cost savings. Rotterdam’s labor structure offers another advantage to the breakbulk sector. On average, we have younger employees, committed people on the payroll, who work in different configurations than those in Antwerp. These employees are skilled in their tasks, which raises the quality of the services

rendered. Rotterdam is also able to flexibly and cost-effectively deploy gangs to meet customer requirements. Rotterdam also offers transparency. Most agreeBY RIK PEK ments are BROEKMAN LOGISTICS made directly between the customer and the breakbulk terminals, while in Antwerp, the freight forwarder acts as an intermediary, which can affect total costs. Rotterdam is also well connected to Europe’s major industrial centers, especially in terms of inland shipping. Sailing to the main steel hub in Germany is 40 percent more time-efficient from Rotterdam than from Antwerp. Furthermore, the Netherlands has recently made substantial investments in improving the road and rail infrastructure. In comparison, since April 1 a toll system has been in place for road transport throughout Belgium. Regarding rail, the liberalization of the sector in Belgium means higher tariffs for customers. Combined, these developments have clearly revitalized Rotterdam as a breakbulk port, and Broekman Logistics is proud of that. At the same time, I

however still feel somewhat dissatisfied. Over the last three years, the supply of steel from the Far East – especially from China and India – to Europe has increased tremendously. Ninety percent of this traffic still runs through Antwerp. Broekman Logistics has demonstrated to Japanese and Korean steel customers that euros per tonne can be saved and reliability can be improved by using Rotterdam. The steel industry faces low margins and vast pressure. As it turns out, however, it is very difficult to break away from the tradition of Antwerp being the port in Europe for steel. Broekman Logistics therefore wants to invite all the parties in the logistics chain – from the steel producers and traders in the Far East to the shipping lines and the traders in Europe – to get together with us to further lower overall costs. I am fully convinced of the proposition that Rotterdam can offer the steel and other breakbulk sectors. BB Rik Pek is managing director of Breakbulk Terminals at Broekman Logistics.

www.breakbulk.com BREAKBULK MAGAZINE 53

thought leaders

BETTER TOGETHER Forwarders Benefit From Network Collaboration

roject freight forwarders need networking organizations. They recognize that while they might be highly specialized in their own country or region, they do not necessarily have a global presence, so it is important for them to be part of a trusted group of similar companies with the shared goal of increasing revenues. The various existing network organizations greatly differ in what and how much they offer their members. Some offer a basic network infrastructure package, others offer their members collective insurance, payment protection plans, or other programs to meet their needs. Complete IT suites, systems for operating and managing project logistics, project freight management, or custom relation management systems similar to Salesforce may also be offered as benefits of membership. Whatever they offer their members, the main purpose of a network organization is to bring together a trusted network of peers for collaboration on, for example, international capital projects, project freight and heavy-lift shipments.

Project Freight Net member Central Oceans delivers an oversized bunker barge from the Port of Antwerp to Malta. Credit: PFN

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In a sector in which larger forwarders also cover project freight and logistics these networks have proved themselves essential to the survival of most of project forwarders. While larger companies have logistics operation systems in place that can do some of the needed processing, very few have a system specifically designed for project logistics. Instead, they tend to focus more on shipment tracking and general freight forwardBY PETER BOUWHUIS ing. Project iBRABBLE BV logistics calls for more rigorous project freight management to cope with its inherent complexity. The power of bringing together project freight and heavy-lift specialists from various dedicated project freight forwarders is incredible. The combined expertise in a network organization

often far exceeds the expertise available in any large freight forwarding company, and as such network organizations have proved themselves to be technically capable of taking on any complex project. Network organizations offer a safe haven for small and midsize project forwarders and bring value to both their organization and their customers. In my corporate years in the energy sector as a shipper and cargo owner, I often opted for small and midsize project forwarders over large ones precisely because of their local expertise and know-how in their country or region. Larger forwarders are generally not always able to offer this value add. That said, the project world is changing due to low oil prices and the global financial crisis. In addition, shippers are increasingly seeking innovative approaches from their project logistics services and support. In my view, the entire heavy-lift, project freight, and breakbulk sector will undergo significant change both in terms of existing services as well as in the scope of new services over the next five years. The level of innovation and the extent of that change will determine whether companies will be able to survive in these new times. Networking will become evermore essential during these challenging times and the extent to which a network organization is able to offer support and expand business will ultimately determine the success of its members. BB Peter Bouwhuis is managing director of Netherlands-based iBrabble BV, an organizer of training programs and events for industries. Educated as an electronic engineer and logistics manager, Bouwhuis is a certified customs broker, customs compliance expert and European VAT expert with more than 34 years of industry and project freight experience. ISSUE 3 / 2016

COMMITMENT TO COMPLIANCE

the world permits the bribery of its government officials. Every official demanding a bribe makes him or herself vulnerable to national prosecution, in addition to putting their job, reputation and integrity on the line. Governments can address corruption in their customs and ports as part of their international commitments, such as the Arusha Countering Bribe Demands in Customs and Ports Declaration. These governments can even fire high-ranking customs officials in an attempt to demonstrate emand-side bribery remains the participation of civil society. their commitments – something that a very real challenge for • Avoidance of ports, to the extent recently happened in Kenya and Tanzamultinational shipping and possible, known for high levels of bribe nia. Most governments have long realized logistics companies having demands by custhat by not doing enough to improve their to deal with port and customs officials toms officials. customs’ integrity, their budgets lose much around the world. In addineeded revenues, smugglers threaten Despite greater awareness of bribery tion, companies national security, and their populations risks in particular ports and customs operating in carry the burden of the extra costs associdepartments, rigorous risk assessments the breakbulk, ated with bribery. But as everyone knows, and specialized training for staff on the heavy-lift and such international commitments are volfrontlines, companies still find themproject cargo untary and are hardly enforceable. selves confronted with sophisticated and sectors can proIn contrast, global companies operblunt demands for “facilitating” payactively undergo ating in environments with a high risk ments, as well as other types of bribes. a comprehensive of bribery are ultimately in jeopardy of Unfortunately, it is not surprising due diligence ruining their reputations and losing sigthat according to the findings of Sandra review, such as nificant funds as a result of enforcement BY KATYA LYSOVA Sequeira of the London School of EcoTRACEcertifiactions related to bribery of foreign govTRACE nomics, about 53 percent of all shipments cation, thereby ernment officials. BB going through Maputo, Mozambique’s demonstrating main port, involve bribery. What can their commitment to transparency and companies facing demand side bribery anti-bribery compliance to everyone in the Katya Lysova is an associate in TRACE’s do to protect themselves? industry, including government officials. Member Services and Advocacy It appears that the most powerful Companies’ commitments should department. A Russian-trained lawyer tool in companies’ possession against be supported by the strict adherence to with a background in fraud and corruption bribe demands is their genuine commitclean and transparent business pracinvestigations focused on Eastern Europe ment to clean and transparent business tices. Companies should be consistent in and Central Asia, she assists companies in practices, effectively broadcast to port their interactions with customs and port developing and supporting anti-bribery and customs government officials, comofficials and avoid cutting corners by compliance programs, including through petitors, customers and other players in offering bribes themselves. managing and supporting resources for the industry. This message can be conCorrupt customs and port officials act TRACE member companies. veyed in a number of ways, including: against everyone’s interest, except their • Visual anti-bribery campaigns, for own, and contribute to waste, inefficiency instance posters in several languages and further crime. With stakes higher announcing “Don’t Ask; We Don’t Bribe; than ever before, shipping and logistics We Report” displayed on vessels. companies can increasingly rely on national • Active resistance to paying bribes, governments to find partners in combatfollowed by recording and reporting ing demand-side bribery. It’s important of the incidents to the company’s manto remember that not a single country in agement and leading industry players, such as MACN, BIMCO, Intercargo, Intertanko, relevant P&I Clubs and shipowners’ associations. • Collective action initiatives, such as Integrity Observatory composed of customs and business representatives with www.breakbulk.com BREAKBULK MAGAZINE 55

Credit: Shutterstock

EUROPE

breakbulk europe 2016

EVENT COVERAGE

Breakbulk Europe is the largest exhibition and educational forum in the world, addressing the needs of traditional breakbulk and project cargo logistics professionals. The 2016 event surpassed 2015, when Breakbulk Europe celebrated its 10-year anniversary with 350 exhibitors and sponsors 56â&#x20AC;&#x192; BREAKBULK MAGAZINEâ&#x20AC;&#x192; www.breakbulk.com

and nearly 7,200 qualified attendees. One year later, Breakbulk Europe returned to the Antwerp Expo, topping 8,000 attendees and more than 360 exhibitors and sponsors. Over four days the breakbulk community participates in workshops ISSUE 3 / 2016

and other education sessions, conference sessions featuring the industry’s top leaders, and networking activities. This year’s event included two professional workshops, micro-seminars and exhibitor-led sessions, and seven conference sessions.

Networking opportunities included the welcome reception, Ports America’s Happy Hour, Breakbulk Business Run, private receptions and parties, as well as chances to walk the exhibit hall floor and interact with exhibitors, colleagues and potential business partners. www.breakbulk.com BREAKBULK MAGAZINE 57

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breakbulk europe 2016

EVENT COVERAGE

LOW OIL PRICES OFFER OPPORTUNITIES Osterwald: Don’t Underestimate Tech’s Impact

reakbulk operators exclusively focused on the downsides of a low oil price could miss valuable opportunities, attendees at Breakbulk Europe 2016 heard. Ed Osterwald, senior partner at CEG Europe, told attendees that it is still the age of hydrocarbon fuels, with global oil reserves increasing much quicker than consumption. “When prices go down there’s always a lot of doom and gloom, but it creates opportunities,” said Osterwald. When oil prices go down, so too do capital and labor costs, maintaining the available returns from oil sands refining, he pointed out. “When you hear people saying that you need a breakeven price of US$100 on a project they are often including the upfront cost. These projects can still make sense in a low-price environment. Just because oil prices go down it

doesn’t mean that it’s bad for investment and that we won’t be moving heavy equipment all around the world.” Technological advancements will be a driver ED OSTERWALD of oil and gas SENIOR PARTNER extraction going CEG EUROPE forward, with the extraction of plentiful hydrate resources a potential game-changer for the industry. Hydrate resources could be two to 10 times that of conventional reserves. “It is important not to underestimate the potential impact of unexpected

changes in technology,” Osterwald said. These include radical improvements in energy and/or hydrogen storage capabilities, making renewables and electric cars economically viable without subsidies; sweeping shifts away from transport fuels, leading to increased conversion of oil and gas to chemicals; and consensus between Europe and the U.S. on carbon pricing, allowing markets to assess the value of energy supplies having lower carbon content. Osterwald added that while many projects, especially in frontier regions, are likely to be cancelled in this new low oil price era, this will provide excess capital and create operational surplus capacity in the oil services sector, which will work to the advantage of companies that are still willing to take a long term view of the oil industry. “Recent industry commentators have suggested that capital and operating costs are likely to decrease by about 20 percent to 30 percent, if not more. A breakeven analysis of a project’s viability must factor in new lower levels of capital and operating costs as well as a lower oil price in order to be meaningful,” he said. Osterwald also expressed surprise that China has not become a major unconventional producer as yet. “If anyone’s going to do it, it’s going to be China.” BB

BREAKBULK FLEET CREEPS UP Ship Decline Reflects Growing Ship Sizes

he deadweight ton capacity of the fleet of the top 10 multipurpose, project and heavy-lift operators has increased 2.5 percent year-on-year to reach 7.4 million dwt, according to research exclusively supplied to Breakbulk by Dynamar. But the number of ships has decreased 3 percent to 423 ships, emphasizing the growth in ship size to deal with everlarger project cargoes and improved cargo flexibility of the top 10 operators. With an average age of nine years the fleet remains relatively young, according 58 BREAKBULK MAGAZINE www.breakbulk.com

to Dynamar’s research. The order book of the top 10 operators numbers 41 vessels of 18,400-dwt average, two more than a year ago. Once delivered, they will further pull up the average age of the fleet. While the top 10 operators in terms of dwt in Dynamar’s BREAKBULK IV – Operators, Fleets, Markets (May 2016) analysis are the same as the previous year’s report, there has been some shifting of actual ranks within that top 10. “As a result of the delivery of some larger newbuildings, as predicted Coscol has regained the first spot from BBC

Chartering as the current largest operator of multipurpose/heavy-lift/project tonnage,” Dynamar’s Dirk Visser said to Breakbulk. “Considering the current order books of both operators, the Chinese fleet will continue to grow faster than that of the Germans over the next two years.” Thorco Shipping retained its No. 3 ranking despite a fall in its fleet size. The 49 ships of Dutch Spliethoff put it in the No. 4 position. With an average age of 14 years, Spliethoff has the oldest fleet of all 10 operators. ISSUE 3 / 2016

Chipolbrok climbed two spots to No. 5 with its 23-unit fleet, including four 36,000 dwt newbuildings operated by subsidiary Shanghai HongFa. The Chinese/Polish carrier will take delivery of a further three new 32,000 dwt ships this year. Next up is AAL Shipping at No. 6 with its fleet of 19 ships, totaling 512,000 dwt. It’s followed by Swire Shipping, MACS, Rickmers-Linie and Intermarine. At 21, Houston’s Intermarine has the largest order book by number of ships, all due for delivery this year and next. “Only eight of its current 32 operated ships are owned and given the current state of the market, it may be expected that many of them will be returned to owners upon the delivery of the newbuildings,” Visser said. Dynamar’s analysis is based on the number of general cargo/multipurpose ships, with and without crane capacity, operated by the 10 operators. Other specialist vessels types have not been

TOP 10 MULTIPURPOSE OPERATORS 2016 Existing fleet

On order

TOTAL AVG. AVG. TOTAL AVG. AVG. OPERATOR SHIPS DWT DWT AGE SHIPS DWT DWT AGE SHARE 1 Coscol 2 BBC

58 1,501,000 26,900 2012 131 1,449,000 11,100 2008

–

6 83,000 13,900 2016

–

5.7%

3 Thorco

71 965,000 28,500 2004

4 Spliethoff

49 786,000 25,900 2007

3 96,000 32,000 2016 14.6% 9 276,000 30,700 2017 18.4%

5 Chipolbrok

23 656,000 10,600 2007

21 267,000 12,700 2016 78.5%

6 AAL

512,000 32,900 2005

–

7 Swire Shipping

404,000

–

29,800

2005

8 MACS

12 395,000 16,000 2002

–

9 Rickmers Linie

357,000

–

340,000

13,600

2009

34,000

17,000

2017

3.5%

423 7,365,000

17,400

2007

41 756,000

18,400

2016

10.3%

10 Intermarine

Top 10 MPV

25,200

2005

Ranked by deadweight / Source: Dynamar

considered, including open hatch general cargo, roll-on, roll-off, vehicle carrier, specialist heavy load, open deck ship, as well as semi-submersible units. BB

Breakbulk will have further exclusive coverage from Dynamar’s analysis in Issue 4.

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www.breakbulk.com BREAKBULK MAGAZINE 59

EUROPE

breakbulk europe 2016

EVENT COVERAGE

DREWRY: FLIES IN MPV OINTMENT Improvement ‘At Least 12-18 Months Away’

ompeting sectors continue to be the “fly in the ointment” for the project cargo market, with demand improvement relying heavily on growth in the handysize bulk carrier and container ship markets, according to Drewry. But, with competition expected to increase as both markets weaken amid concerns about China and project cargo, this improvement is still at least 12-18 months away, said Susan Oatway, the company’s senior analyst. By way of illustration, Oatway pointed to the strong correlation between one-year time charter rates for a 17,500-deadweight-ton multipurpose vessel, or MPV, and one-year period rates for a handysize bulk carrier and a 13,500-dwt container ship. MPV rates have fallen along with the other sectors, though not as steeply. “Of possibly more interest to any

investor is that there is significantly less volatility in the MPV sector,” Oatway added. Container ship rates were expected to continue falling well into 2017, with any meaningful recovery SUSAN OATWAY SENIOR ANALYST not expected DREWRY until 2018 at the earliest. Freight rates for handysizes fell last year and were likely to continue to do so in 2016. In terms of cargo, the multipurpose share of general/project breakbulk cargo has fallen to around 17 percent, compared to a high of 20 percent in

2011. “Going forward, we expect to see further erosion of this share in the medium term,” Oatway said. The order book stands at just 6 percent of the operating fleet in deadweight-ton terms with 107 vessels on order, of which 60 have declared heavy-lift capability. “The main takeaway here is that this is a very manageable order book – particularly in comparison to the bulk and container sectors.” Demolitions have also dropped significantly since their peak in 2009 and record low recycling numbers are expected in 2016. “However, we believe that is unsustainable and expect them to rise back to nearer to 700,000 deadweight-ton in 2016-17, due to a combination of aging fleet, forecast rising steel prices in 2016 and further market weakness,” Oatway said. BB

FUELING PROJECT CARGO DEMAND Middle East Promises Gas Infrastructure Opportunities

roject cargo operators should look to emerging opportunities in gas infrastructure in the Middle East, attendees at Breakbulk Europe in Antwerp were told. Eduard Gracia, principal of A.T. Kearney’s energy practice, Middle East, said that the region will likely pose “substantial logistics opportunities” around gas, during a presentation May 26. Global gas demand is likely to grow rapidly over the next 25 years, and the Middle East will increase its production to meet this demand, with Iran, Iraq and Saudi Arabia becoming substantial net exporters from 2020. 60 BREAKBULK MAGAZINE www.breakbulk.com

However, while Iran is the No. 2 holder of gas reserves in the world, the country has significant logistical challenges and lacks the means to export the gas. Oil and gas reserves in Iran have been growing by 3 percent annually since 1980. But despite large reserves, its hydrocarbon output has been held back by geopolitical and capital expenditure issues. “In the next few years, Iran is likely to invest heavily in gas export infrastructure, and to try to attract foreign investors into this, in order to monetize its natural gas resources,” Gracia said. This will most likely translate into faster development of

both gas pipelines and LNG terminals, he added. The end of U.S. and European Union shipping insurance bans on Iranian trade will also help to open up the country’s transportation business. Likewise, low oil and gas prices will encourage development in oil and gas infrastructure in the Middle East, where the cost of extraction is that much lower than for costlier shale and deepwater reserves. “In a world where oil and gas prices remain low for a long time, there is more incentive than ever for these countries to step up their exports to cover their fiscal needs,” Gracia said. BB ISSUE 3 / 2016

BBEU BOOTH WINNER

BEST IN SHOW

MOST INTERACTIVE

PORT OF ANTWERP

NORDIC IT

Port of Antwerp took Best in Show with a basketball competition and guest appearances from players with the Port of Antwerp Giants basketball team, and a chance to take a virtual reality tour of the port.

Software purveyors Nordic IT clinched the most interactive category with their “Dream Work Location” contest. Participants were given bracelets that lit up at various times during the show. They could then race back to the Nordic IT stand, where the winner was awarded a GoPro camera, iPad or AppleTV.

CONTACT INFORMATION

Entrepotkaai 1, 2000 Antwerp Belgium Contact: Wim Dillen, Manager Business Development Phone: +32 3 229 6592 customerservice@portofantwerp.com www.portofantwerp.com/en/breakbulk

CONTACT INFORMATION

Maglebjergvej 6, Lyngby DK-2800 Denmark Contact: Linnea Kira Birk, Stine Dichow Phone: +45 39403997 lkb@nordic-it.com, sd@nordic-it.com

BBEU BOOTH WINNER

MOST EDUCATIONAL

MOST WELCOMING

HYUNDAI HEAVY INDUSTRIES EUROPE In its first exhibition at Breakbulk Europe, the Hyundai Heavy Industries team got an “A”: the prize for Most Educational Booth.

CONTACT INFORMATION www.hyundai.eu

AGILITY LOGISTICS It was hard to get a photo of the Agility team, winners of Most Welcoming Staff, due to the number of people being welcomed at their stand!

CONTACT INFORMATION

Unit 6, North Radius Park, Faggs Road, Feltham Middlesex TW14 0NG UK Contact: Frank Barnett, Edith Letay Phone: +44 20 8917 3185 (Barnett), +49 17 1979 3139 (Letay) fbarnett@agility.com, eletay@agility.com www.agility.com

www.breakbulk.com BREAKBULK MAGAZINE 61

photo contest

WINNER:

BBT Logistics, Inc. LOCATION: Newark, New Jersey YEAR: 2016 DESCRIPTION: An Embraer EMB-505 Phenom 300 corporate jet is unloaded by a Krupp 60-tonne crane and set to be used as parts. The jet was damaged in 2012 following a runway excursion accident.

62 BREAKBULK MAGAZINE www.breakbulk.com

NEXT ISSUE: On The Waterfront Submission Deadline: July 31 Submit entries at Breakbulk.com. ISSUE 3 / 2016

INDEX Breakbulk cargo is an eclectic mix, encompassing forest products, steel, pressure vessels, windmill blades, rolling stock and out-of-gauge items. With this in mind, BREAKBULK INDEX data ranges from steel production to details of planned capital projects.

The global nature of today’s breakbulk and heavylift sectors requires transportation professionals to be on top of economic trends worldwide, which calls for inclusion of focused macro-economic data on prices and events that affect EPCs, the breakbulk community and the multipurpose fleet.

LEADING LATIN AMERICA INFRASTRUCTURE PROJECTS As ranked by CG/LA Infrastructure, its list of top 100 Latin American infrastructure projects covers 19 countries, eight sectors and US$180 billion. Total South America project value increased to US$160 billion, from US$96 billion in 2015. Following are the top 50 infrastructure projects from that report. RANK COUNTRY

SPONSOR

STAGE

SECTOR

1 Peru Lima Metro Lines 3 and 4

Ministerio de Transportes y Comunicaciones de Peru (MTC)

Feasibility Study

Urban Mass Transit

$9,500

Argentina

PROJECT NAME

Plan Belgrano

VALUE

La Unidad Plan Belgrano

Planning

Ports and Logistics

$16,000

3 Colombia 4G Concessions – 2017 Pipeline

National Infrastructure Agency (ANI)

Preparing Tenders

Highways, Bridges, Urban Roads

$9,000

4 Mexico

Grupo Aeroportuario de la Ciudad de Mexico (GACM)

Tendering

Airports

$9,400

Aeropuerto Internacional de la Ciudad de Mexico (AICM)

5 Argentina Paseo del Bajo Urban Highway Autopistas Urbanas (AUSA) Tendering

Highways, Bridges, Urban Roads

$650

Highways, Bridges, Urban Roads

$1,700

Argentina- Agua Negra Binational Tunnel Chile

Entidad Binacional Tunel de Agua Design Negra (EBITAN)

7 Brazil AP5 Wastewater – Rio de Janeiro CEDAE and SAAB Planning

Water and Wastewater

$640

8 Mexico- Mexico-Guatemala-Honduras Guatemala- Pipeline PPP Honduras

Pemex and MEM Guatemala

Planning

Energy – Oil and Gas

$650

9 Panama

New Container Terminal at Corozal

Panama Canal Authority (ACP)

Design

Ports and Logistics

$800

El Dorado II International Airport

Colombian Aviation Authority

Planning

Airports

13,750GW Energy Supply Tenders

Comision Nacional de Energia (CNE)

Tenders Due July 27, 2016

Electricity – Generation

12 Colombia Bogota Metro

Financiera de Desarrollo Nacional (FDN)

Tendering – Q2 2017

Urban Mass Transit

$4,800

13 Brazil

Ferrograo Railway: Mato Grosso-Para

Estacao da Luz Participacoes (EDPL)

Pre-Tender

Railways

$2,800

Panama

Panama Metro Line 3

Metro de Panama

Feasibility Study Urban Mass Transit

Peru

Almirante Miguel Grau Port

Autoridad Portuaria Nacional (APN)

Feasibility Study Ports and Logistics

Colombia

11 Chile

16 Brazil

Sao Paulo Highway PPP Sao Paulo State Government – 3rd Round Concession

Magdalena River Waterway PPP

Colombia

Bidding – Q2 2016

$589 $24,000

$2,620 $600

Highways, Bridges, Urban Roads

$11,500

National Infrastructure Agency (ANI)

On-Going

Ports and Logistics

$2,800

18 Argentina Regional Express Network for Buenos Aires

Ciudad de Buenos Aires – Subsecretaria de Transito y Transporte

Planning

Urban Mass Transit

$850

19 Brazil Sao Paulo Desalination PPP

Companhia de Saneamento Basico Conceptual do Estado de Sao Paulo (SABESP)

Water and Wastewater

$538

20 Honduras

Coalianza

Airports

$135

Palmerola International Airport PPP

Tendering

(continued on next page) www.breakbulk.com BREAKBULK MAGAZINE 63

bb index (continued from previous page) RANK COUNTRY

PROJECT NAME

SPONSOR

21 Colombia

Cartagena-Barranquilla National Infrastructure Agency (ANI) Tender Awarded Highways, Bridges, Corridor Concession Urban Roads

22 Brazil

Maracaju-Lapa Railroad Concession

23 Colombia

Bucaramanga-Pamplona National Infrastructure Agency (ANI) Tendering Highway Concession

Ministry of Planning (EPL)

STAGE

Bidding

SECTOR

Railways

Empresa Nacional de Electricidad Pre-Tender (ENDE)

Electricity – Generation

25 Argentina

Agua y Saneamiento Argentino Announced (AYSA)

Water and Wastewater

$844 $3,130

Highways, Bridges, Urban Roads

24 Bolivia Rositas Hydro Plant Water Treatment Plants in City of Buenos Aires

VALUE

$661 $1,200 $367

26 Guatemala Pacific Freight Rail Line PPP

Agencia Nacional de Alianzas para el Desarrollo de Infraestructura Economica (ANADIE)

Feasibility Study Railways

$250

27 Paraguay Asuncion Light Rail Network

Ferrocarriles del Paraguay (FEPASA)

Tendering

Urban Mass Transit

$300

Empresa Portuaria San Antonio

Conceptual

Ports and Logistics

$2,800

29 Brazil Sao Paulo Line 6

Chile

San Antonio Port Expansion

Companhia do Metropolitano de Sao Paulo (CMSP)

Construction

Urban Mass Transit

$4,300

30 Peru Chincheros International Airport

Ministerio de Transportes y Comunicaciones de Peru (MTC)

Planning

Airports

31 Brazil

MetroRio

Planning

Urban Mass Transit

$2,200

32 Argentina Water Priority Projects Province of Buenos Aires Announced

Water and Wastewater

$3,200

33 Paraguay Asuncion Airport PPP

Ministerio de Obras Publicas y Comunicaciones (MOPC)

Airports

34 Argentina

GNEA – Natural Gas Transport Project

Energia Argentina Sociedad Tendering Anonima (ENARSA)

35 Panama

Costa Norte CCP Plant and LNG AES Panama and POSCO EandC Terminal

Contract Awarded

Electricity – Generation

$650

36 Mexico

Rehabilitation of the Chiapas Mayab Line

Planning

Railways

$356

Water and Wastewater

$430

Rio de Janeiro Line 2 Upgrade and Extension

Secretariat of Communications and Transportation (SCT)

Pre-Feasibility

37 Mexico Rosarito Desalination PPP

Consolidated Water and North Announced American Development Bank

38 Brazil

Bioceanic Railway Corridor: Sapezal-Porto Velho

Ministerio do Planejamento, Orcamento e Gestao (MP)

39 El Salvador

150 MW of Renewable Energy DELSUR El Salvador Tendering Tenders

$660

$148

Energy – Oil and Gas

$2,800

Feasibility Study Railways Electricity – Generation

$300

Airports

$760

40 Brazil Salvador International Airport Concession

Civil Aviation Secretary (SAC) and National Civil Aviation Agency (ANAC)

41 Paraguay

Bio-Oceanic Corridor Carmelo Peralta-Loma Plata

Secretaria Tecnica de Tendering Planificacion (STP)

Highways, Bridges, Urban Roads

$444

42 Chile

Highway 78-Highway 68 road connection

Ministerio de Obras Publicas Planning (MOP)

Highways, Bridges, Urban Roads

$108

43 Panama 4th Panama Canal Bridge – Ministerio de Obras Publicas with Line 3 crossing de Panama (MOP)

Pre-Feasibility – Highways, Bridges, Recruiting Urban Roads Technical Advisor

$2,000

44 Colombia 400MW La Guajira Wind Park Isagen

Announced – April 2016

Electricity – Generation

45 Costa Rica

Greater Metropolitan Area Rapid Transport System

Conceptual

Urban Mass Transit

46 Mexico

Los Santos II, III and IV Solar OCI Solar Power Announced Farms

Electricity – Generation

$120

47 Chile

Alameda-Providencia BRT Corridor

Urban Mass Transit

$225

Instituto Costarricense de Ferrocarriles (INCOFER)

DPT Metropolitano

Bidding – FY16

$3,800

Announced

$610 $1,400

48 Dominican 33MW Monte Plata Solar Farm3 Phanes Group Pre-Construction Electricity – Republic Generation

$130

49 Peru

518km Pan-American Highway on the Inca Trail

50 Colombia Rio Magdalena 2 Highway 64 BREAKBULK MAGAZINE www.breakbulk.com

Ministerio de Transportes y Comunicaciones de Peru (MTC)

Tendering 4Q 2016

Highways, Bridges, Urban Roads

$550

National Infrastructure Agency (ANI)

Advanced Design

Highways, Bridges, Urban Roads

$761

ISSUE 3 / 2016

FOREST PRODUCTS: PULP INDEX EUROPE Pulp prices cost, insurance and freight to main European ports were normalized to 100 in January 2000 and are based on average euro prices of northern and southern bleached softwood and eucalyptus kraft and northern bleached hardwood kraft pulp weighted by production volume. 150 125 100 75 50 25 0

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMA 2010

2011

2012

2013

2014

2015

2016

NORTH AMERICA Delivered pulp prices were normalized to 100 in January 2000 and are based on average US$ prices of northern and southern bleached softwood kraft, bleached eucalyptus kraft, and northern bleached hardwood kraft pulp weighted by production volume. 200 150 100 50 0

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMA 2010

2011

2012

2013

2014

2015

2016

ASIA Pulp prices cost, insurance and freight to main East and Southeast Asian ports were normalized to 100 in January 2003 and are based on average US$ prices of northern, southern and Russian bleached softwood, radiata, eucalyptus and mixed tropical hardwood pulp weighted by production volume. 250 200 150 100 50 0

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMA 2010

2011

2012

2013

2014

2015

2016

Source: RISI, www.risi.com

EUROPEAN FREIGHT FORWARDING INDEX The index is based on European forwarders’ actual and expected freight volumes. Values below 50 on the zero-to-100 scale indicate a decline. 100 90 Actual

Forecast

70 60 50 40 30 20 10 0

MJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJ 2010

2011

2012

2013

2014

2015

2016

Source: Danske Market Equities, www.danskebank.dk www.breakbulk.com BREAKBULK MAGAZINE 65

the last word

BEYOND CAPACITY BY JANET NODAR

Credit: Keith Necaise Photography

There is new pressure from key clients such as the energy majors to integrate service providers – i.e. ocean carriers – into their own supply chains.

ates are off, demand is down, capacity is swollen – and that ain’t all that’s pressuring project shipping. Long-held, even ancient, conventions underlying shipping, one of the world’s oldest trades, are under pressure, according to Thomas Damsgaard, who spoke recently with Breakbulk. Damsgaard has spent a quarter-century in the maritime trade with several global project carriers and is an arbitrator with the Houston Maritime Arbitration Association and president of consultancy Vimar Global. Over millennia, ocean carriers have developed their own system of contracting, booking cargoes under booking note and charter party terms, and carrying cargo under specialized bills of lading or waybills. These have been developed and refined through centuries of trade, and adopted and interpreted by interested entities such as BIMCO and the maritime legal system. However, Damsgaard says, there is new pressure from key clients such as the energy majors to integrate service providers – i.e. ocean carriers – into their own supply chains, and this may mean bowing to the terms of master service agreements that arise out of procurement contracts rather than traditional contracts of carriage law. Doing so could, among other game changers, jeopardize the carriers’ insurance cover. In this buyer’s market, will shippers have the clout to change the game so dramatically? It’s been tried before, most notably in the days of the Seven Sisters, the seven oil companies of the “Consortium for Iran” cartel in the global petroleum industry from the mid-1940s to the 1970s. The shippers’ urge for stronger control of the fleet lost its luster in the aftermath of the Exxon Valdez disaster, but the pendulum may swing back again. Modularization also continues to be a game changer for the carrier side. When large segments of a project are built offsite and transported assembled, fewer voyages are called for, while the risk tied to a failed ocean transport becomes ever more

66 BREAKBULK MAGAZINE www.breakbulk.com

significant. A failed voyage always has repercussions, but the loss of a key module means starting over, and can cost (somebody) billions. Thus, vessel vetting “is moving beyond compliance and into competency verification,” Damsgaard said. Requirements such as certifying each performing vessel on an oil and gas project for the Offshore Vessel Inspection Database raise entry barriers substantially. If MPV operators rely on several different tonnage providers and don’t control technical and crew management, these types of compliance requirements will hold them back, he said. Owners, of course, will be less affected. It will be intriguing to see if and how carrier alliances work together to meet these challenges. Another pressure lingers from the 20082009 recession. In the aftermath, a number of European KS, KG and CV investment vehicles defaulted and the vessels affected were taken over by their underwriting banks. Many of these bankers have little to no interest in understanding the shipping industry, and are paid fees not affected by voyage profitability. This continues to exacerbate a “destructive pricing environment,” Damsgaard said – yet another factor fueling the freight rate plunge, even beyond falling demand, overcapacity and competition from the bulk and container sectors, competition only increased when many MPV carriers present themselves as liner-type or semiliner services. The traditional project tramp model is far harder to predict and cost, but yields a competitive edge, particularly when it comes to dealing with high-value, time-sensitive project cargo, Damsgaard notes. The harsh truth, however, is that carriers must adapt to shipping’s new normal, even when that means changes to long-held traditions in contracting, vetting, financing or competition. Janet Nodar Content Director

ISSUE 3 / 2016

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BREAKBULK FCL HIGH & HEAVY MILITARY PROJECT RO/RO