Breakbulk Magazine Issue 4 2022 by Breakbulk Events & Media

BREAKBULK &

INDUSTRIAL PROJECT CARGO July-August 2022

THE EQUIPMENT ISSUE

KEEPING PACE WITH CHANGE Energy Transition, Cargo Size Pose Challenges for Equipment Providers

INSIDE THIS ISSUE

High Hydrogen Hopes A Watertight Solution No Blueprints for Historic Cargoes PLUS Breakbulk Europe Recap

North America Ports and Terminals Report

WE KNOW WHAT WE'RE DOING Höegh Autoliners is a global leader in deep sea RoRo transportation services. To transport wider, longer and higher breakbulk and project cargo, we have developed specialised handling equipment to ensure your cargo's smooth and safe transportation. With over 90 years of experience from shipping, we can safely say that we know what we're doing, and we do it well.

www.hoeghautoliners.com

INSIDE THIS ISSUE

Cover Story

BREAKBULK EQUIPMENT SPECIAL

22 INFRASTRUCTURE

40 CASE STUDY

Project Trickle Expected to Flood

Refinery Unit Move to Modernized Port of Everett Terminal

WITH CHANGE

PORTS & TERMINALS

43 THOUGHT LEADER

US Ports Welcome Back Breakbulk and Project Cargo

EPCs Learn Hard Lesson on Pricing

16 KEEPING PACE

Energy Transition, Cargo Size Pose Challenges for Providers

57 BREAKBULK

EUROPE RECAP

HIGH HYDROGEN HOPES

28 NORTH AMERICA PEDAL TO THE METAL

32 NORTH AMERICA PORTS & TERMINALS

CANADA’S BREAKBULK BOOM

A WATERTIGHT SOLUTION Saudi Arabia Expands Desalination Capacity as Water Demand Surges

38 PROFILE

Dual Support for Oil and Renewable Projects

39 THOUGHT LEADER EDITORIAL UPFRONT BREAKBULKONE BACK PAGE

44 INFRASTRUCTURE

48 ENERGY UPDATE

Grammare: ‘A Reinvention of How We Do Everything’

04 05 55 66

LUMPSUM CONTRACT PAIN

Energy Transition, Construction Drive Growth

NEW ERA FOR MPV SHIPPING

Also in this issue

TOWERING ACHIEVEMENT

ENERGY TRANSITION CHALLENGE

UAE’S ENERGY DRIVE

52 PROFILE

NO BLUEPRINT FOR HISTORIC CARGOES Hasenkamp’s Velte Revels in Unique Moves

Global Energy Crisis in ‘Unchartered Territory’

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BREAKBULK MAGAZINE 3

EDITORIAL

TURNING UP INDUSTRY VOICE Breakbulk Europe’s return as a live, in-person event in Rotterdam May 17-19 was an emotional setting for an industry whose challenges and setbacks have been running high for years. Talking casually one day before the event’s kickoff at the Rotterdam Ahoy, one carrier executive predicted that exhibitors and attendees would “smoke a lot, drink a lot and hug a lot.” And so it happened. Business was conducted. Issues were debated and explored in conGary Burrows tent sessions, in meeting rooms and lounges and on the sidelines of Ahoy’s sprawling corridors. But there was also a sense of celebration and relief, of engagement and – dare I say – optimism that’s been missing since the start of the pandemic. With the conclusion of Breakbulk Europe, we completed the cycle – the first successful run of Breakbulk’s cycle of events – Americas, Middle East and Europe – since 2019. And as summer rolls on, we look forward once again to returning to Houston for Breakbulk America. The industry is in a far different place than it was in 2019. Though some issues are similar, there are the additional layers of the pandemic, war in Ukraine, political upheaval, climate and energy transition. During these gatherings, executives are talking about businesses being more proactive, more engaged and working “across the aisle,” creating a new culture of partnership over adversary. Some speak almost in surprise or awe that each side sees value, real benefit and productivity. Muted is the pessimism of years past.

4 BREAKBULK MAGAZINE www.breakbulk.com

Maybe this was borne in those first Covid-era Teams calls with customers and clients. In the early days following March 2020, in conversations with people navigating dealing remotely, those calls would open with “How are you, really,” in sincere interest and concern. Becoming closer in the period of social distancing; who’d of thought?

BEST OF TIMES

From growing closer, now the industry recognizes its need to reach out. The “talent gap” has become more recognized in recent years, but with an exodus from the industry due to age, downturns and the Great Resignation, it has become a steady drumbeat across industry sessions and initiatives. (To note, it has been more than seven years since Breakbulk magazine first sought to point out the next generation of talent – dubbed “The New Blood” then (March-April 2015) and “NextGen” in Issue 6 2019). During a Teams call among panelists for the Talent Gap session at the Rotterdam event (see page 12), a reporter made the observation, “Is there not a better time to be in the breakbulk and project logistics industry?” Speaking with panelists Ben Liggins of JB Andrews and Christel Pullens, of Sea Ranger Service, before their session, they agreed that the question further colored their discussion. For a business often seen as dull, behind-the-times and old fashioned, the current environment is among the most challenging breakbulk and project purveyors have experienced. The next step for an industry showing strides to join together is to actively reach out, invite potential talent in and mentor them into the next generation of leaders. Evidenced during the sessions at Breakbulk Europe’s successful Education Day, students are interested, eager to learn and engaged with industry representatives. When you reach out, don’t forget to ask: “How are you, really?”

EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gary.burrows@hyve.group NEWS EDITOR Carly Fields carly.fields@hyve.group SENIOR REPORTER Simon West simon.west@hyve.group DESIGNER Mark Clubb REPORTERS Paul Scott Abbott Michael King Felicity Landon Lori Musser Thomas Timlen BREAKBULK EDITORIAL ADVISORY BOARD John Amos, emeritus Amos Logistics

Dennis Devlin Maersk

Dharmendra Gangrade Larsen & Toubro Limited

Margaret Kidd

University of Houston

Anders Maul

Blue Water Shipping

Dennis Mottola, emeritus Global Logistics Consultant

Sarah Schlüter Hapag-Lloyd

Stephen “Spo” Spoljaric Bechtel Corp

Roger Strevens

Wallenius Wilhelmsen

Jake Swanson

DHL Industrial Projects

Ulrich Ulrichs

BBC Chartering

Johan-Paul Verschuure Rebel Group

Grant Wattman

Combi Lift Americas

PORTFOLIO DIRECTOR Nick Davison nick.davison@hyve.group MARKETING & MEDIA DIRECTOR Leslie Meredith leslie.meredith@hyve.group To advertise in Breakbulk Media products, visit: http://breakbulk.com/page/advertise SUBSCRIPTIONS To subscribe, go to http://breakbulk.com/page/ subscribe-breakbulk-magazine, or email: gary.burrows@hyve.group A publication of Hyve Group plc. The Studios, 2 Kingdom Street Paddington, London W2 6JG, UK

JULY-AUGUST 2022

UpFront The People and Businesses that Lead This Thriving Industry

WHAT’S INSIDE:

One to One with Tim Killen, deugro Movers & Shakers Deeper Dive with Johan-Paul Verschuure Career Path – the Talent Gap Frame the Future By the Numbers

Discharge of a propylene storage tank at –17°C; Port Barkowy, Westoder, Poland

CREDIT: DTEQ TRANSPORT ENGINEERING SOLUTIONS

UpFront

BY THE NUMBERS Selected project opportunities from a Breakbulk Europe session led by Neil Golding, director, market intelligence, Energy Industries Council

Project Opportunities – Offshore Wind 250 200

Global capacity (MW) pipeline up to 2030 by region

2 2

Europe Asia South America

150 100

North America Australasia Indian sub-continent Middle East Africa

50 0

2022

2023

2024

2025

2026

Project Opportunities – Offshore Wind 1. Offshore Wind Farm Morven Operator: BP Alternative Energy Investments Project Stage: Feasibility Power Capacity: 2.9 GW Startup Year: 2030 2. Coastal Virginia Offshore Wind (CVOW) Operator: Dominion Energy Project Stage: EPC Power Capacity: 2.6 GW Startup Year: 2026 3. Turmalina Offshore Wind Farm Operator: BlueFloat Energy Project Stage: Feasibility Power Capacity: 3.18 GW Startup Year: 2030 4. Ventos do Sul Offshore Wind Farm Operator: Ocean Winds (OW) Project Stage: Feasibility Power Capacity: 6.5 GW Startup Year: 2030 5. Floating Offshore Wind Farm MarramWind Operator: Shell Project Stage: Feasibility Power Capacity: 3 GW Startup Year: 2030 6. Offshore Wind Farm Thor (Denmark) Operator: Thor Wind Farm US Project Stage: EPC Power Capacity: 1 GW Startup Year: 2027 7. Floating Offshore Wind Farm Favignana Operator: Renexia Project Stage: Feasibility Power Capacity: 2.8 GW Startup Year: 2028 6 BREAKBULK MAGAZINE www.breakbulk.com

2027

2028

2029

2030

Project Opportunities – Hydrogen Number of projects under development – Top 17 countries

Green Blue

30 20 0

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8: Offshore Wind Farm Loode-Easti (Hiiumaa) Operator: Hiiumaa Offshore Tuulepark OÜ Project Stage: Feasibility Power Capacity: 1.1 GW Startup Year: 2033 9. Offshore Wind Farm Star of the South Operator: Offshore Energy Project Stage: FEED Power Capacity: 2 GW Startup Year: 2028 10. Offshore Wind Farms South Taranki Bight Operator: Copenhagen Infrastructure Partners Project Stage: Feasibility Power Capacity: 1 GW Startup Year: 2032

Project Opportunities – Hydrogen 1. Alberta Hydrogen Hub: Operator: TC Energy Project Stage: Feasibility Startup Year: 2026 2. Hydrogen City Project: Operator: Green Hydrogen International Project Stage: Feasibility Startup Year: 2029 3. Villeta Green Hydrogen Plant Operator: Atome Project Stage: FEED Startup Year: 2025

JULY-AUGUST 2022

10. Sarulla Green Hydrogen and Ammonia Project Operator: Samsung Engineering Project Stage Feasibility Startup Year: 2027

5 6 1 5 7 4 6 3 5

Project Opportunities – Carbon Capture

1. Polaris Carbon Capture and Storage (Shell) Operator: Shell Project Stage: Pre-FEED Startup Year: 2025

2. Houston Ship Channel CCS Innovation Zone Operator: ExxonMobil Project Stage: Feasibility Startup Year: 2040 8

3. Port of Antwerp Carbon Capture, Utilisation and Storage Project Operator: Port of Antwerp Project Stage: Feasibility Startup Year: 2026

4. HyNet North West (CCUS Development) Operator: Progressive Energy Ltd. Project Stage: Pre-FEED Startup Year: 2025

Project Opportunities – Carbon Capture

Number of projects under development – Top 17 countries

Carbon capture and storage (CCS)

Carbon capture utilisation and storage (CCUS)

5. North Rhine-Westphalia Carbon Capture and Storage Operator: Equinor Project Stage: Feasibility Startup Year: 2027

25 20 15

6. Carbon Capture and Storage Rotterdam Port Operator: Port of Rotterdam Authority Project Stage: FEED Startup Year: 2024

10 5 0 U

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ds I

o nd

sia

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4. H2 Magallanes Green Hydrogen Project Operator: Total Eren Project Stage: Conceptual Design Startup Year: 2027 5. Kellas’ Blue Hydrogen Facility H2NorthEast Operator: Kellas Midstream Project Stage: Feasibility Startup Year: 2027 6. Tsau Khaeb National Park – Green Hydrogen Plan Operator: Hyphen Hydrogen Energy Project Stage: Feasibility Startup Year: 2028

y al

sia

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7. Green Wilhelmshaven – Green Hydrogen Hub Operator: Uniper Project Stage: Feasibility Startup Year: 2027 8. Egypt Green Hydrogen – Masdar Operator: Masdar Project Stage Feasibility Startup Year: 2025 9. Green Hydrogen Production Facility – NEOM and ACWA Power Operator: ACWA Power Project Stage: EPC Startup Year: 2025

7. Stockholm Exergi’s CHP Power Plant – Carbon Capture and Storage Facility Operator: Stockholm Energi Project Stage: FEED Startup Year: 2025 8. Aceh Blue Ammonia – Carbon Capture and Storage Operator: PT Pertamina Power Indonesiaa Project Stage: Feasibility Startup Year: 2025 9. Pulau Bukom Carbon Capture and Storage Hub (Shell) Operator: Shell Energy Project Stage: Feasibility Startup Year: 2025 10. Kasawari Phase 2: Carbon Capture and Utilization Project Operator: Petronas (Petroliam Nasional Berhad) Project Stage: FEED Startup Year: 2025 Source: EICDataStream

www.breakbulk.com

BREAKBULK MAGAZINE 7

UpFront

ONE TO ONE Managing Cargo Complications

deugro’s Tim Killen Extols the Power of Relationships By Carly Fields “Moving cargo has never been more complicated or more time consuming.” Tim Killen, chief sales officer of freight forwarder deugro, gets right to the nub of the challenges unsettling the breakbulk and project cargo industry today in conversation with Breakbulk. The obstacles are mounting up and top of the pile is costs, schedule, and availability of space. Tendering, pricing, contracting; with the current supply chain issues, these ‘standard’ practices now monopolize the time of forwarders. “Shipments that we used to do previously in a matter of hours or days now can take up to five times longer than they did before,” Killen said.

Killen said that many projects now coming back on stream need to be repriced, not just by forwarders but also by customers, because the landscape has completely changed. “There is a lot of work now being completed to revalidate or even completely refresh tenders and projects that we had looked at pre-pandemic.” Positively, deugro reports a strong pipeline with projects becoming more viable and approaching final investment decision.

CALL FOR COLLABORATION

This transformation of the business prompts Killen to recognize the importance of greater collaboration to better prepare the industry for what the future may bring. He urged project cargo logistics stakeholders to recognize, benchmark and get some commonality on the challenges that the industry faces in the supply chain, shipping, transport and logistics. “We need to reconnect, review and refocus for the future and get a robust and sustainable plan of action together,” he said.

Then there is the human factor to consider. “We are a people business, we are a skills business,” he said, and there isn’t a ready pool of qualified people to step into this highly technical business to take the pressure off. deugro has invested heavily in additional resources within its organization over the last 18 months to support these critical aspects of the business.

The upset of Covid inadvertently prompted industries to recognize the importance and need for better preparation for the unexpected and risk management contingency, which was a blessing when it came to dealing with the repercussions of Russia’s invasion of Ukraine and the resurgence of Covid, he said. Most importantly, there has been a shift in terms of the relationships between forwarders up the chain to customers and down the chain to partners. “Relationships have evolved and grown over the past two years. Before it could be very contract-led, but the changing landscape has allowed us a seat at the table to engage with customers and really discuss and highlight the challenges we are facing in terms of lockdowns, availability, supply chain security and cost.”

“The biggest risk we faced during the pandemic was trying to continue to deliver projects contracted in pre-pandemic times – which were contracted on fixed prices and/or strict contracts.”

Projects that were awarded just before Covid hit in March 2020 and then continued to be delivered through 2020 brought sleepless nights. They called for fast thinking to solve the problem of equipment that couldn’t be moved from vendors because of the domino of lockdowns. When suspended or paused projects then started to move again, the crunch was amplified.

“It was really at that point that the supply chain, the logistics costs, availability, and ability to deliver really became apparent. The biggest risk we faced during the pandemic was trying to continue to deliver projects contracted in pre-pandemic times – which were contracted on fixed prices and/or strict contracts.” 8 BREAKBULK MAGAZINE www.breakbulk.com

This engagement was a “big challenge” in the beginning of Covid-19 because customers across the global supply JULY-AUGUST 2022

Killen is excited by the energy transition. CREDIT: deugro

chain were facing their own issues of business continuity and delivery. But today there is a greater interest to work collaboratively, an openness and a willingness to discuss potential challenges and design solutions more closely. “That’s supported the entire industry to be more aligned, have an improved understanding of the challenges each other faces and then to be able to look into the best solutions – rather than an autocratic client-to-vendor, vendor-to-shipper situation. It’s really about that collaboration to support supply chain transformation and resilience – that has been a positive outcome.” An upshot of closer working relationships is that deugro and the topic of logistics is now a central part of discussions on decentralized supply chains and decentralized energy demand. “We’re part of that conversation with our customers in order to design new supply chains and de-risk future project cargo deliveries,” Killen said. “These were conversations which we didn’t have as often before.”

LOGISTICS AS AN ENABLER

This new openness is helping to balance risk and helping suppliers to make more educated decisions on how projects can be delivered. “Clients understand the value of interaction not just with ourselves, but with their vendors and also with their customers as well. Senior procurement stakeholders in some of the global organizations that we work with have a greater understanding of the importance and the value of logistics in the supply chain, and see it as a proactive enabler rather than it being a reactive service that happens in the background during project execution.” Consequently, today there is a lot more interest in solutions, designs, de-risking and making sure project and critical equipment

can be delivered on time, on budget and on schedule. Some discussions were invariably easier than others, but Killen said that overall, through engagement and collaboration as an industry, we are heading in the right direction. Leveraging these enriched relations, Killen is excited by the energy transition and global sustainability goals, and how both are already shaping project cargo demand. “There’s a huge amount of weight behind both at a global level. And there is a fantastic amount of opportunity for us to get involved in.” Earlier this year, deugro launched a new sustainable energy division, providing a dedicated global team to lead deugro’s investment and commitment in delivering innovative logistics solutions to support the global energy transition. But they won’t be travelling on this road alone: “We need the commitment and engagement with our customers to deliver a sustainable and low carbon future, and so far we are seeing success.” Here, Killen highlights success in the offshore renewable field in partnership with Siemens Gamesa. “The scope and scale of how quickly this is going to grow in the next 5-10 years is exponential and we’re here to support that.” However, Killen acknowledges that while the potential is great, there are still concerns. “In terms of the potential growth, this industry needs to be supported, whether that’s through capacity and competence of people, technology investments and developments, as well as governmental support in legislation and common goals. The energy transition is a major global challenge in a world which, at the moment, is facing severe supply chain disruption and unpredictability.” www.breakbulk.com

BREAKBULK MAGAZINE 9

UpFront

MOVERS AND SHAKERS Highlighting Recent Industry Hires and Promotions Kristoffersen Takes Helm at Wallenius Wilhelmsen

Lasse Kristoffersen has taken over as president and CEO at Norway-based shipping company Wallenius Wilhelmsen. The executive replaced Torbjorn Wist, who had been acting CEO since March 2021. Among the new CEO’s priorities are the digitalization and decarbonizaLasse tion of logistics and Kristoffersen shipping, the company said. He would also continue his focus on helping to boost the number of women in the maritime sector. Kristoffersen previously worked for fellow Norwegian carrier Torvald Klaveness, serving as president and CEO since 2011. “I am convinced that Wallenius Wilhelmsen can shape the future of shipping and logistics, both with regards to application of technology and development of green and sustainable solutions,” Kristoffersen said. “My main job is to mobilize all the talented people at Wallenius Wilhelmsen, to ensure that we create the solutions for the challenges of tomorrow.” Wallenius Wilhelmsen, an exhibitor at Breakbulk events, is headquartered in Oslo. The carrier operates more than 130 vessels, nine marine terminals and 65 processing centers.

Spoljaric Selected for U.S. Maritime Committee

Stephen Spoljaric

Stephen Spoljaric, corporate manager of global logistics at engineering firm Bechtel, is among 25 new members appointed by U.S.

10 BREAKBULK MAGAZINE www.breakbulk.com

Transport Secretary Pete Buttigieg to the Maritime Transportation System National Advisory Committee. The MTSNAC, which comprises leaders from commercial transportation companies, trade groups, state and local public entities, labor organizations and academic and environmental associations, advises the secretary on issues relating to U.S. maritime transport and its integration with other segments of the transportation system. The committee, totaling 27 members, is chaired by Robert Wellner at Liberty Global Logistics and co-chaired by David Libatique from the Port of Los Angeles. “Our maritime industry plays a central role in our supply chains and our economic strength as a nation,” Buttigieg said in a statement. “These new members will help us deliver the maritime investments in the Bipartisan Infrastructure Law, fighting inflation and reducing delays for the American people.” Spoljaric, who joined Bechtel more than a decade ago, sits on the Breakbulk Americas Advisory Board, a group of industry professionals who help shape the program for the annual conference, taking place this year Sept. 27-29 in Houston. He is also a member of the Breakbulk Global Shipper Network, a worldwide network of EPC and project cargo shippers.

deugro’s New Sweden Appointments

Magnus Olsson and Joakim Malm have been added to the management team of deugro’s new office in Gothenburg, Sweden. Olsson will serve as head of operations and Malm will head sales and business development. Each have more than 20 years of experience in the Swedish project freight forwarding market, said Jan Rautio, branch manager, deugro (Sweden) AB.

Konecranes Sector CEO Announced

Anders Svensson has been named president and CEO of industrial machinery provider Konecranes. Svensson, who will Anders assume his role by Svensson year end, joins the company from engineering firm Sandvik, where he is president of the Sandvik Rock Processing Solutions Business Area. Prior to his current role, he has held various leadership positions within Sandvik since 2008, including president, crushing and screening division; president, customer services and senior vice president global sales, Sandvik Construction; as well as chief purchasing officer, Sandvik Construction and Sandvik Mining.

Siemens Gamesa Confirms COO Tim Dawidowsky has been named chief operating officer of Siemens Gamesa. He joined the company on May 5 and had been serving as senior vice president, project excellence.

Tim Dawidowsky

Dawidowski’s career spans more than 28 years in the Siemens group of companies, across a range of engineering and manufacturing sectors. He has held leading functional positions in service, supply chain management and manufacturing as well as a number of CEO roles in different countries. Siemens Gamesa and Siemens Energy are members of the Breakbulk Global Shipper Network.

JULY-AUGUST 2022

DEEPER DIVE Economic Outlook Truly ‘Uncertain’ Verschuure Drills Down into Challenges for Breakbulk

By Simon West Amid runaway inflation, rising interest rates and a devastating conflict in Ukraine, many analysts are predicting a global economic downturn sooner rather than later. Throw into the mix China’s Covid policies, port and border congestions and the ongoing capacity crunch, and it is fair to say breakbulk’s and project cargo’s rocky times are rolling into new and troubling directions. Breakbulk Europe 2022 kicked off its event program with its Global Economic Outlook session, led by Johan-Paul Verschuure, a senior port and transport economist and project director at consultancy Rebel Group. “People like to call economic situations ‘uncertain,’ but this time it really is uncertain,” Verschuure said during the “fireside chat” with Carly Fields, news editor at Breakbulk Events & Media.

Global Reaction

The threat of downturn has prompted global banks to act. In a bid to dampen consumer borrowing and rein in 40-year high inflation rates, the U.S. Federal Reserve in early May raised its benchmark interest rate by half a percentage point to a range of 0.75 to 1 percent. The Federal Reserve raised its rate a further 0.75-percentage point on June 15 to between 1.5 percent and 1.75 percent. The Bank of England followed suit, also hiking interest rates to 1 percent, the highest for more than a decade. The European Central Bank is also expected to bump up rates in the third quarter. Verschuure argued that high inflation could impact breakbulk in a number of ways. “If we have long inflation, then what does this mean for breakbulk and the terminals? And then you have to think about projects. What we see is more uncertainty for some projects to go ahead, as prices were fixed one or two years ago. “But, the most obvious impact (of inflation) is on the consumer side, which is not typically the first driver of demand for the breakbulk sector. What we are seeing now will only feed into the breakbulk sector much later.”

Renewables Resilient

Certain industries though are likely to fair better. For Verschuure, renewables are likely to withstand a downturn, with the crisis in Ukraine accelerating the shift to energy sources such as wind and solar as a way to reduce dependence on fossil fuels. “I do not think wind parks will lose momentum over this – they will go ahead. More luxury products such as cars, more

discretionary products will definitely take a first hit,” Verschuure said. “There are some structural dynamics that will not be affected by lower GDP, especially with governments having to step up their ambitions on energy independency,” he said. On the supply side though, challenges persist. Energy transition, high commodity prices and the lack of capacity are at risk of derailing green energy development, while at the same time pushing prices even higher. Another feature of the global uncertainty is re-routing of cargoes and the shift in sourcing, although Verschuure said so far, the impact had been limited. “The conflict is a big concern, driving up energy prices, but actually the volumes that have been affected on a global trade perspective are actually relatively limited. Russia is obviously a massive country on the map, but in terms of the size of its economy, and the size of trade other than oil, it is easy to overcome.” Meanwhile, the specter of Covid hangs over the global community. China’s zero-Covid strategy has intensified global supply chain problems, reducing capacities and pushing up prices even further. While authorities have announced an easing of restrictions starting in June, recovery to normal levels could take months. “It is good news that they are slowly starting to open up,” the economist said. “But they are really in a tricky situation. This is going to take one or two years before it settles down.” www.breakbulk.com

BREAKBULK MAGAZINE 11

UpFront

CAREER PATH Bridging Talent Gap an Urgent Priority Stakeholders Must Do More to Attract, Retain Talent

By Michael King Recognizing the current “talent gap” in the breakbulk sector, understanding its implications and finding new ways to recruit and retain personnel will be critical to the future of the project logistics industry, delegates at Breakbulk Europe heard. Session moderator Cyril Varghese, global logistics director, Fluor, said bridging the talent gap must be an urgent priority if personnel shortages are to be addressed. In particular, he urged sectoral stakeholders to do more to attract and retain talent by investing in suitable training programs. For example, he said, when compared to other sectors “we have a general lack of direction” in terms of offering proper training pathways to undergraduates. Thomas Skellingsted, president, 4D Supply Chain Consulting, said the industry had to compete aggressively for talent and address its image problem. “Our industry isn’t sexy enough,” he said. “We need to get out of our silo.” Skellingsted believes the sector can more effectively sell its pull points. “We should present to people the wide variety of opportunities in our industry,” he said. Many younger potential recruits, he added, were less enthusiastic than previous generations at embracing face-toface environments but were fantastic in digital settings. “The new generation, the first thing they ask is can they work from home? “The breakbulk industry should accept that in order to attract people. We need to advise them and show them that we are a flexible industry. Then we can talk salary. “We compete on freight; we need to compete for people.” Varghese said the challenge was also about retention, as well as understanding the aspirations of the next generation. “People come to the industry for a couple of years and then

move on after traveling, but how do we keep these people?” he said. “How do we make this industry more sexy?” One solution to immediate shortages, said Varghese, was widening the recruitment net: “Age discrimination is prevalent and a thing of concern.” Christel Pullens, president, WISTA Netherlands and managing director, Sea Ranger Service, said attracting women in larger numbers to the profession could help address shortages. “We have an image problem for sure,” she said. “We try to highlight success stories so other women can see what is possible.” According to Ben Liggins, managing director, JBAndrews, salary is not the prime challenge facing recruiters. He said awareness of the industry must be improved. “Many of the graduates we see – logistics doesn’t feature for them,” he said. “They don’t know how parcels have arrived at their door. So awareness is the first thing.” The second most acute obstacle for recruiters is pay, however. Fifty-six percent of respondents to a global survey online by JBAndrews said entry-level salaries for logistics were “lower” than average across all industries. Only 11 percent voted they were “higher” than average. “We need financial solutions to attract the next generation,” Liggins said. Offering flexible working conditions would also be a pull factor. “That flexibility, the work from home aspect, is so important now,” Liggins added. Panelists also identified that logistics and projects was such a global industry that its unique selling point should be used in recruitment. “How many other industries offer so much travel potential?” Liggins asked. The breakbulk sector’s technology transformation was also now helping attract talent. “Technology is on a lot of wish lists of this ‘talent,’ ” he said. Pullens said the logistics and shipping industry has an opportunity it must grasp. “I spoke to students at Delft Univeristy a few weeks ago,” she said. “Many chose maritime studies because they get a qualification that allows them to work in other industries. We need to do more to keep them. “We can offer young people an opportunity to continually learn things. They can see during the pandemic that they haven’t received things they’ve ordered online. We can show them that they can be part of the solution.”

Talent Gap panelists, from left, Cyril Varghese, Fluor; Thomas Skellingsted, 4D Supply Chain Consulting; Ben Liggins, JBAndrews; and Christel Pullens, Sea Ranger Service. 12 BREAKBULK MAGAZINE www.breakbulk.com

Breakbulk Studios See video interviews with session panelists: Cyril Varghese, Fluor, https://youtu.be/YduA1yVsKgU JULY-AUGUST 2022

FRAME THE FUTURE Surveying the Breakbulk Technology Landscape Industry on Verge of Major Changes, Panelists Agree

By Mark Dohmen Breakbulk Europe 2022 introduced the Discovery & Innovation Hub, to intrigue, inform and inspire professionals from the breakbulk and project cargo sector with sessions to discuss innovations that offer benefits to the entire supply chain. In a session assessing the technology landscape, moderator Sven Daniels, partner at Hamburg Port Consulting, said the breakbulk and project industry lags far behind other industries, but that also means there is enormous growth potential. Nuri Morava, program leader global R&D at DB Schenker, implied the industry may be on the verge of some major changes, such as DB Schenker’s developments in the field of heavy-lift drones. “Drones promise fast, cost-efficient and sustainable deliveries with a wide field of applications,” Morava said. “So, we are collaborating with Volocopter, one of the most advanced electric vertical take-off and landing (eVTOL) developers in the industry, to showcase and develop this technology.” The electric heavy-lift drone conducted its first public flight in October 2021. The fully electric drone can carry loads of up to 200 kilograms and has a range of 40 kilometers. With one battery charge, a VoloDrone can fly for 30 minutes and can be either operated remotely or automatically on a pre-programmed route. “In short, this drone is multipurpose, adaptable to any terrain, and ready to transport heavy loads cheaper than before and 100 percent electrically,” he said. He sees potential for application in shore-to-ship deliveries and project logistics, for example. “There, drones are definitely a faster and more efficient logistics solution.” DB Schenker is also focusing on digitalization. “Not only do we want to make processes more efficient and transparent. Digitizing also fits in perfectly with our pursuit of a sustainable future. It is definitely a main driver for the future,” Morava said.

But communication is not the issue, according to Daniels: “Everyone is talking to everyone. What is lacking is standardization and solutions to channel that communication. The industry is still in an early stage of digitalization. Share to win – that should be the new path. Find the right starting point for your community. Build a good foundation and add value through quick wins.” “The biggest stumbling blocks at the moment,” Morava said, “are capacity shortages, both in the labor market as well as in ports and warehouses.” Gherciu also sees bottlenecks on several levels: “For us, the biggest challenge lies in regaining reliability. Today we too often do not know when ships will be loaded or arrive.” The pandemic accelerated technological developments in the public sector. Breakbulk and project cargo can benefit from that as well. “Without the right technology, we will not be able to achieve all those great sustainability goals. Now is the time to think out of the box,” Gherciu said. Morava added: “And the beauty of it is that those developments also make our industry sexier. Given the current shortage on the labor market, that is no luxury either.”

Schenker has defined six different areas in its course towards digital leadership: future of work, hyper automation and no touch processes, data and artificial intelligence, digital foundation, digital business operations and digital business models/SaaS.

Share to Win

The course towards digitalization is irreversible and, above all, indispensable, said Valentin Gherciu, AAL Shipping’s global head of operations. AAL was one of the first shipping lines to monitor its own fleet, using smart cameras. “We want to offer solutions to provide better insight into operations and enable further optimizations based on data analysis. Communication is key,” he said.

Panelists, from left, Capt. Valentin Gherciu, AAL Shipping; Nuri Morava, DB Scheker; and Sven Daniels, Hamburg Port Consulting.

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UpFront

FROM THE SIDELINES Here we present what was seen and heard at Breakbulk Europe in Rotterdam, May 17-19

On managing supply chain risk: “Where people have got caught out is that logistics is always the last thing they think of. My message to clients is: put logistics first.” Martyn Lawns Regional vice president European operations – Industrial Projects DHL Global Forwarding On the challenges of wind turbine size: “Every time we have a new blade in the market, this means new molds, bigger factories, new equipment and new transport systems. It is a rat-race … we are starting to go beyond what is a standard everywhere, and that is becoming a challenge.” Antonio Lázaro Director of global outbound logistics and transport solutions LM Wind Power

On business outlook: “We are entering a period of disruption. Everything that is cheap and easy to fix has been done. What’s left is difficult, destructive and dear.” Roger Strevens vice president, sustainability Wallenius Wilhelmsen

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JULY-AUGUST 2022

On African port infrastructure: “What I am interested to see happening next is who starts leading the way in terms of new fuels development – that will really tell us who is able to make the jump to the next level.” Lars Greiner Associate partner for Middle East and Africa Hamburg Port Consulting

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BREAKBULK MAGAZINE 15

EQUIPMENT SPECIAL

KEEPING PACE WITH CHANGE

Energy Transition, Cargo Size Pose Challenges for Providers

fter a two-year hiatus, Breakbulk Europe 2022 returned with a bang, with the buzz of excitement in Rotterdam Ahoy’s two gargantuan conference halls reflecting a real sense of optimism for the industry going forward. As Roger Strevens, head of sustainability at Wallenius Wilhelmsen, said at the conference: “If this is our new normal, then thank goodness for that!” The outlook for projects in the coming years is exceptional, driven by an offshore wind sector that is 16 BREAKBULK MAGAZINE www.breakbulk.com

expected to add a further 559 gigawatts of global capacity, or 46,000 new turbines, by the end of the decade, according to the Energy Industries Council. But challenges persist, with port and border congestion, conflict in eastern Europe and global economic uncertainty creating headaches for companies across the supply chain, including breakbulk equipment providers. A spokesperson for Faymonville, a manufacturer of heavy load and special transport vehicles, said sourcing of components and materials had

BY SIMON WEST

become a challenge for production planning over the last few months, although the company could count on “reliable partners and a powerful network of suppliers to get materials on time.” Jürgen Keller, product manager for mobile port equipment at heavy machinery maker SANY Europe, a division of the China-based SANY Group, said the whole industry faced significantly higher lead times for supply components and rising raw material costs. The executive pointed to the congestion at Shanghai port after the JULY-AUGUST 2022

EQUIPMENT SPECIAL

CREDIT: MANTSINEN

“Increased component lead times and component scarcity has forced us to be creative with sourcing parts from different locations and be more proactive with keeping large inventories of key components on hand” – Micah McDowell, Wiggins

recent citywide lockdown, leading to components, including vehicle transmissions, getting stuck in queues. “These are challenges we have to muddle through,” Keller said on the sidelines of Breakbulk Europe.

STEEL SUPPLY UPENDED

The conflict in Ukraine is also threatening to disrupt raw material supplies. Russia and Ukraine are among the world’s top steel producers, with facilities such as the Azovstal steelworks in Mariupol – a city in ruins following the relentless bombing campaign by Russia forces – a major regional exporter.

With uncertainty over supplies, steel prices have soared. “It is a real problem as all the steel comes out of Ukraine,” Raymond Cron, general manager of Rezayat Logistics Group, said during an interview at Breakbulk Europe. “There is going to be a real dearth in cranes for the next few years.” In the U.S., California-based high-capacity lift truck manufacturer Wiggins Lift said supply chain disruptions had been an issue for the industry for the last two years, coming to a head at the end of 2021 and the start of 2022. “Increased component lead times and component scarcity has forced us to be creative with sourcing parts from different locations and be more proactive with keeping large inventories of key components on hand until parts and raw materials return to more normal availability levels,” said Micah McDowell, director of sales at Wiggins. Longer-term challenges such as digitalization and energy transition are also having an impact, with the switch to more sustainable business practices in particular ramping up the pressure on suppliers to deliver less-polluting products for heavy-lift operations. But there is a sense of excitement that this is an industry on the move and ready to innovate. Major milestones are being reached. Mammoet said in April it had completed a “world-first” electricpowered heavy-lift move after deploying an electric power pack unit, or ePPU, to replace a production vessel at a petrochemical plant in the Netherlands. The ePPU was used at the Shell facility alongside a four-axle-line self-propelled modular transporter, or SPMT, to remove an existing vessel and maneuver its replacement into position. The operator has been working with Scheuerle, a division of Germany’s Transporter Industry International Group, or TII, on a long-term project to convert its SPMTs from diesel to renewable energy.

The ePPU is designed to lower carbon footprint and reduce emissions in built-up environments. Mammoet and Scheuerle were unwilling to provide details on the initiative’s specific goals and timelines, but said that work remained to ensure electric power was sufficient for deployment in larger-scale SPMT projects. “TII has been dealing with alternative drives for several years now and has already gained a lot of experience here,” a spokesperson for Scheuerle told Breakbulk. “We are working on series solutions and will offer these if the respective technology is economically viable. Until then, we will present the solution capability on a project-specific basis. The various applications are currently at different stages.”

BATTERIES ONE SOLUTION

Battery-electric solutions will be crucial for energy transition, and although the necessary technologies are largely available on the market, they still have to be tailored for heavy-duty breakbulk operations. “Electrification is not all news to us, most of our cranes are electrified anyway. But with mobile equipment, this is more challenging,” Keller said. SANY itself has already launched what it said is the world’s first full-size, fully electric empty container handler, or ECH. The ECH’s 332-kwh battery gives operators a continuous working shift of eight to 10 hours, with a full recharge taking about one hour. Energy consumption is 15 percent that of a diesel ECH, while noise is cut from 82 dBA to 66 dBA. Maintenance costs are just 25 percent of the diesel machine. According to Keller, SANY has also begun testing a fullyelectric reachstacker in China and neighboring countries. “In many areas we are moving forward with electrified solutions,” the executive said. Another major challenge for equipment is the ever-increasing size of turbines, monopiles and other components. For haulage experts, www.breakbulk.com

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EQUIPMENT SPECIAL

Breakbulk and project cargo components are getting heavier to handle. CREDIT: DEUFOL

transporting super-heavy cargo is often compounded by infrastructure flaws. “The state of the road network in the UK is generally in a poor condition, with little maintenance or repair,” said Charlie Latham, head of tendering and business development at UK-based Allelys. “This results in the capacity of roads and bridges being reduced. Couple this with the heavier loads being requested, and it is not hard to realize the increasing difficulties that we are having to overcome to meet our clients’ requirements.”

FUTURE PLANNING NECESSARY

And as component size evolves, so does the equipment used to transport it. According to Rainer Sasse, CEO at Luxembourg-based Luxtrailers, spending on equipment with a short shelf life was untenable for heavy-lift specialists using a transport leasing model. 18 BREAKBULK MAGAZINE www.breakbulk.com

“We need to know what’s going to be needed in five or seven or 10 years,” Sasse told listeners at a wind spotlight panel session at Breakbulk Europe. For crane suppliers such as Liebherr, producer of the LHM 800, the world’s most powerful mobile harbor crane with a capacity to lift 600 tonnes when deployed in twinlift operations, the constant upsizing of turbines and other components is good business. But the growing scale and reach of cranes is creating its own challenges, especially in ports and terminals, said Andreas Ritschel, Liebherr’s deputy sales director for mobile harbor cranes. “Mobile harbor cranes are usually the most versatile you can use in the port,” Ritschel said. “This means many of our clients are using this crane not just for heavy-lifts, but also for bulk and container handling. But, if you design a crane which is capable of

lifting 500 tonnes or 600 tonnes, it might just get too big, too heavy, too expensive to maintain and not be suitable for bulk and container anymore.” According to Ritschel, the solution would be more dialogue between wind technology manufacturers, logistics providers and equipment manufacturers to agree on standardization of wind component sizes. “The heavy-lift companies and others are in close contact with the wind energy producers, with the generator producers – they are in close contact. With the crane companies, nobody is talking to us. It is very tough. “If someone could say, right, for the next ten years 800 tonnes is the maximum that we could expect for a turbine, then we would know which way to go.” Simon West is senior reporter for Breakbulk. JULY-AUGUST 2022

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EQUIPMENT SPECIAL

Deufol is putting pressure on suppliers to develop reduced carbon equipment for heavyduty breakbulk operations.

CREDIT: DEUFOL

DEUFOL: TERMINALS ARE WILLING TO INVEST After completing last year the acquisition of the Wallmann Terminal – one of two major breakbulk terminals at the Port of Hamburg – industrial goods packaging specialist Deufol has set about converting the 130,000 square-meter site into a textbook example of a low-carbon, sustainable logistics hub. Heavy-fuel oil has been ditched for liquefied natural gas, normal roofs are being equipped with solar panels and diesel-guzzling forklifts are being swapped for trucks powered by renewably sourced electricity. Securing less-polluting equipment for heavy-duty breakbulk operations though has been a trickier task. “If you look at the area of reachstackers or our Liebherr cranes – the big LHM 500s and 600s – it is still rather challenging to find green equipment that can replace that diesel power,” said Deufol’s Marc Hübner, head of business development and an executive board member. “We need maximum flexibility from a location point of view.” Deufol is targeting net-zero emissions from its operations at Wallmann by 2030, although Hübner conceded that the heavyweight cranes would unlikely be ready for carbon-neutral output by the end of the decade. The company operates four Liebherr cranes at Wallmann, alongside

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more than 40 forklift trucks and reachstackers with lifting capacities of up to 50 tonnes, 80 terminal trailers and four towing vehicles. The Hofheim-based operator is looking at hybrid systems with reachstacker suppliers such as Kalmar, and has offered its premises at Hamburg and at its other breakbulk terminal at the Port of Antwerp as testing grounds for electric MAFI tractors. “We are putting pressure on suppliers to develop and think about those things, and we are very happy to test new products,” Hübner said.

SIZE GROWTH COMPLICATIONS

The terminal is also contending with the ever-increasing size and weight of components. The offshore wind industry in particular is driven by constant technical innovation, with pieces such as monopiles and turbines getting bigger and more powerful by the year. The size of gas turbines, steel pressers and hydrogen compressors – components that Deufol frequently handles – is also creeping up, resulting in challenges for companies right across the supply chain. “The big question is, do we buy the LHM 800s now and increase our capacity, then in two years they are outdated again due to heavier cargo? And not

only because of heavier cargo, but also because then there is the technology out there that supports the cranes being carbon-neutral?” Deufol, which has just completed an expansion of breakbulk handling capacity at its Antwerp terminal, has operations in 90 locations in 12 countries. The company is planning to expand its network and is targeting a number of breakbulk terminals around the world. High turnover of equipment has resulted in shorter amortization periods for investments, but with such global reach, the operator can easily move older assets to other locations in its network. “We also see that with terminal providers like HHLA – they are taking down the big gantry cranes that they had in Hamburg and they are now moving them to their Tallin port, for example. This is something similar that we are doing across our location network as well.” Despite the challenges, Hübner said terminals such as Wallmann would learn to evolve. “We are investing in more equipment, we are willing to invest in higher tonnages, and that is not a problem,” the executive said. “I think terminals are willing to provide more, grow further and always find solutions. We are not at the maximum limit yet.”

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EQUIPMENT SPECIAL

DEMAND SURGES FOR ELECTRIC HANDLING EQUIPMENT

The pressure on ports and terminals to decarbonize has sparked runaway demand for electric cargo-handling equipment, with providers of cranes, forklifts, reachstackers and other machinery for transporting breakbulk working overtime to stay ahead of the curve. For material handling specialist Mantsinen, electrification is nothing new. The Finnish firm has been offering customers electricpowered cranes and other machinery for 15 years. Until recently, 60 percent of the equipment it sold was dieselbased, with the remainder powered by supply from the local grid. Now though, the split is more even. “We are now at 50-50,” said Patrik Starck, sales director at Mantsinen. “The increase towards electric is getting quicker as we speak.” Although battery technology will be crucial for energy transition, the kilowatts required for handling heavy-duty breakbulk means electric-powered machines still rely on cable reels to connect to the local grid – not always an option in sprawling ports and terminals where power supply may be difficult to access. To address this, Mantsinen has launched what it says is the first-ever dual-power concept in material handlers, whereby operators can work using either shore power through a cable reel, or if shore power is unavailable, using a diesel engine connected directly to the pump gear powering the hydraulic circuit. The machine’s motor and engine sit side by side, operated by the same control system. A separation clutch allows the driver to easily switch from one source to the other. “You basically have two options,” Starck said. “You can operate at a quay where you have electric power, then when you move the machine to another side of the port, with no electricity available, you can switch to the diesel engine.”

“Moving the machine is not limited to the electric cable length or electric supply location. And it is not such a big thing environmentally if you are just moving the machine from one side to the other with the diesel.” The dual power option can be fitted to all of the company’s material handlers, from the Mantsinen 120 up to its largest machine, the Mantsinen 300.

SUPPLY CHAIN DEMANDS

Surging demand for this kind of less-polluting, innovative equipment is leading to fierce competition among suppliers. Customers themselves are often under pressure from their own stakeholders to take responsibility for activities that occur throughout the supply chain. “It is really like a domino effect where one big player is asking for something, then all the stack in that logistics chain have to follow,” Starck said. “We are one of the last ones in the chain, but we also have to be part of it.” Although electric-powered machines are more costly – Starck estimated a 5 percent to 10 percent differential, as users may have to invest in transformers and other components – the benefits of cutting carbon emissions and saving on energy costs are clear. The shift to electric benefits the company, as ongoing supply chain problems mean acquiring diesel engines is more of a challenge than sourcing electric motors and components. Machinery powered by electric sources can also offer operators more power. “You are not limited in the kilowatt rate that the motor gives you, so you can do more over a certain period of time. The electric motor actually gives you a little bit extra juice, if you are just looking at raw kilowatts.” BB

Mantsinen’s dual-power concept allows operators to work using either shore power through a cable reel or a diesel engine. CREDIT: MANTSINEN

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INFRASTRUCTURE

CREDIT: SHUTTERSTOCK

HIGH HYDROGEN HOPES

Project Trickle Expected to Flood

hile there might not be a sizable pipeline of hydrogen-related work buoying the project lists of engineering, procurement and construction companies today, make no mistake, progress in the sector is rapidly gathering a head of steam. First movers in the project cargo world have much to gain from early involvement in hydrogen infrastructure projects. Neil Golding, director of market intelligence at the Energy Industries Council, or EIC, notes that hydrogen strategies continue to be developed and released for domestic and export 22 BREAKBULK MAGAZINE www.breakbulk.com

BY CARLY FIELDS

focused geographies. New energy players are also emerging in the global market and project announcements are increasing for “all colors” of hydrogen projects. While hydrogen is a colorless gas, depending on the type of production used, different colors are assigned to the hydrogen. Green hydrogen and blue hydrogen are most commonly heard, but you may even hear of brown, yellow, turquoise and even pink hydrogen. There is no universal naming convention and these color definitions may change over time, and even between countries. Golding said: “We are beginning to get a clearer line of sight of the

pipeline of opportunities globally.” There is huge growth potential, but he questioned whether the projects can be delivered with current supply chain capabilities and capacities, and whether the required scale up of electrolyzer manufacturing can be delivered. “Will hydrogen demand keep up with the supply?” he asked. “We’ve got green, we’ve got blue, we’ve got pink and I’ve even heard of white. All these particular colors are not helpful; what is helpful is knowing what components go into these. Green hydrogen needs electrolyzers, typically 5 to 10 megawatts, that need to be transported to market.” JULY-AUGUST 2022

INFRASTRUCTURE

There has already been recognition of the increasing need for electrolyzers in Europe, with a pledge to increase production 10-fold to 17 gigawatts, or GW, by 2050. “That commitment is crucial to speed up the energy transition and to help wean us off gas from other markets,” Golding said. Looking at the global opportunities for hydrogen, the EIC calculates that 93 percent of investment is going to be made in green hydrogen. “We continue to see projects being announced in the non-traditional markets, but also now in the traditional markets.” Golding noted that some of the most exciting projects moving forward right now are in the Middle East. “An example of that is in Saudi Arabia where thyssenkrupp has been awarded a contract to deliver 2 GW of electrolyzers. They are going to use a 20 MW model; if you scale that up, that’s a lot of modules that need to be moved, a lot of infrastructure that needs to be put in place and then there is the transporting of the hydrogen. An awful lot of equipment is needed too and perhaps that points to a supply chain crunch going forward as well.” Golding also noted that there is a changing dynamic in terms of the developers of hydrogen projects: “We will continue to see major oil and gas companies, but we will also see major mining companies playing a role.”

PROJECT TAKE-OFF

Globally, project announcements are starting to trickle in. Earlier this year, French renewable power company Total Eren (formerly Eren RE) announced commissioning of an initial engineering study for a mega-scale green hydrogen and green ammonia plant in the Magallanes region of southern Chile. UK-based energy engineering consultancy Wood is to provide a conceptual engineering study for Total Eren’s H2 Magallanes Project, a giant green hydrogen plant located on the windy Strait of Magellan. The plan calls for development of 10 GW of onshore wind power capacity, a desalination plant to make

Number of Hydrogen Projects Announced 2016 - May 2022

180 160 140 120 100 80 60 40 20 0

2016

2017 Green Blue

2018

2019

Pink Alternative

2020

2021

2022

Liquefaction Source: Energy Industries Council

clean water to feed the electrolyzers, 8 GW of electrolysis capacity, and an ammonia plant to turn the hydrogen product into green ammonia. Chile has a national goal of building out 25 GW of green hydrogen capacity by 2030. In Egypt, Prime Minister Mustafa Madbouli has allocated areas for producing green hydrogen in the Suez Canal Economic Zone. Egypt is upgrading its energy strategy to include green hydrogen as a source of power and is to provide incentives for the production of green hydrogen. In Canada, Hy2gen Canada and the SAF+ Consortium signed a memorandum of understanding in May that will see them working together on

the development of Québec’s hydrogen sector. The two companies will work towards the development of structuring projects in the hydrogen industry sector, more specifically green aviation fuels, starting with a Quebec-based project. Hy2gen AG raised E200 million (US$10.7 million) earlier in 2022 and will use those funds for the construction of installations worldwide that will produce synthetic green hydrogen-based fuels, or “e-fuels,” for land and sea transportation, aviation and the industry. There is also the accelerated energy transition to consider as countries in the West seek to lessen their energy dependence on Russia as the war in Ukraine continues. www.breakbulk.com

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INFRASTRUCTURE

POLITICAL SUPPORT LIFTS PROGRESS

Hydrogen production in the U.S., meanwhile, is benefiting from political support. Marty Chiaramonte, global business development director at Engineering, Procurement & Construction LLC., or epc4h2, a specialist in delivering hydrogen systems-related engineering, design, procurement, permitting, construction, operations, maintenance and consulting services, points to development of hydrogen hubs as part of the Bipartisan Infrastructure Law passed Nov. 15, 2021. “There is US$8 billion in funding for these hydrogen hubs for the production, storage, transportation/logistics, and dispensing of hydrogen in support of the U.S. Department of Energy’s ‘111’ initiative,” he said to Breakbulk. Launched in June 2021, the DOE’s Hydrogen Shot seeks to reduce the

cost of clean hydrogen by 80 percent to US$1 per 1 kilogram in 1 decade, or “111”. As well as the US$8 billion Regional Clean Hydrogen Hubs, the Bipartisan Infrastructure Law includes US$1 billion for a Clean Hydrogen Electrolysis Program to reduce costs of hydrogen produced from clean electricity; and US$500 million for Clean Hydrogen Manufacturing and Recycling Initiatives to support equipment manufacturing and strong domestic supply chains. U.S. states are already competing hard for the pot of federal funds earmarked for the hydrogen hubs. Biden’s infrastructure plan includes funding to build at least four hubs – described as places where the gas can be produced and used in a self-reinforcing cycle. Two of the hubs must be in regions with plentiful natural gas reserves, a

provision that helped secure backing from U.S. Senator Joe Manchin of West Virginia. Subsidizing the transition from fossil fuels to hydrogen is helping this sector develop in the U.S. “While slow and bureaucratic, this has helped germinate the seeds for a hydrogen economy in the U.S.,” Chiaramonte said. One of the proposed U.S. hydrogen hubs is expected to be the world’s largest hydrogen production and storage facility. The DOE issued a conditional commitment for up to US$504.4 million in debt financing for a hydrogen hub planned for Delta, Utah, that is designed to convert renewable energy into hydrogen. Developers of the Advanced Clean Energy Storage Project, which is expected to start operating in 2025, include Mitsubishi Power Americas Inc. and Magnum

Identified Potential Carbon and Hydrogen Hubs in North US Greater region Hub

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Increasing concentration of emissions and facilities

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INFRASTRUCTURE

Development LLC. The project will include 220 MW of electrolyzers and will initially provide more than 300 gigawatt-hours of clean energy to the region each year. Construction is already underway.

CREDIT: SHUTTERSTOCK

LOGISTICS ‘CRITICAL’ TO SECTOR DEVELOPMENT

HEAVY TRUCKS EYE HYDROGEN POTENTIAL

As well as the potential for hydrogen infrastructure, there is another side of the hydrogen coin that involves the heavy-lift and outof-gauge sector: hydrogen fueling for trucks carrying over-dimensional cargoes. While ESTA Director Ton Kijn concedes that it is too early to see any significant impact from the development of a hydrogen energy sector on the workload for the Ton Kijn heavy transport ESTA industry, the development of hydrogen combustion engines is an area that he sees as “very exciting.” “I personally think hydrogen has the best potential for heavy transport in the long run, provided the ‘direct combustion’ solutions like those being worked on by JCB and Cummins among others – that

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is to say, without fuel cells – are perfected to a reliable and economically feasible solution,” he said to Breakbulk. However, he warned that political leaders in Brussels and European Union member states will need to keep up with the pace of change. “If industry is to develop the new supply chains that will be required, we will need our politicians to show clear thinking and leadership – and that means agreeing the necessary standards as a matter of urgency.” Kijn explained that hydrogen’s energy density is relatively low, so for it to work it has to be kept at a high pressure. “This raises a lot of questions about standards, regulation and safety – all issues that will need sorting out. We know from bitter experience – and our long campaign for harmonized European standards in abnormal transport – that such aims are far easier to debate than deliver. “We can only hope that the climate emergency will induce a much greater sense of urgency.”

epc4h2’s Chiaramonte said that logistics are “critical to a robust interconnected plan to deliver the H2 to that ‘last mile’ to the customer.” His advice for project cargo movers looking to position themselves to get involved in hydrogen infrastructure projects worldwide is to “follow developments, regulations, and projects in marine, heavy duty trucking, and drayage applications because these modes are changing due to regulations and eventually parts of the market will be switching to hydrogen due to the economics.” There are many U.S. subsidy programs to help the adoption of hydrogen as a fuel or energy source, he added. But there are hurdles too. “The costs of the equipment and operation (capex and opex) expenses need to come down for both the vehicle and the infrastructure,” Chiaramonte said. Here, the arrival of new manufacturers of hydrogen capital equipment entering the market will help to reduce the costs, while DOE funding of research and projects to reduce the cost per kilogram of hydrogen will help stimulate the sale of hydrogen as a fuel and energy source. “The other issue is lead time and supply chain,” Chiaramonte added. “We are currently facing long lead times that affect the development, rapid deployment, and adoption of hydrogen. We believe that serial production of containerized hydrogen infrastructure is the economic and optimal method for rapid deployment and adoption of hydrogen in our economy.” He points to Europe as a source of inspiration for the U.S. as it ploughs ahead on its hydrogen journey as the continent is “ahead of the U.S. with hydrogen infrastructure strategy, roadmap, and deployment.” Carly Fields has reported on the shipping industry for the past 22 years, covering bunkers and broking and much in between. JULY-AUGUST 2022

ENERGY UPDATE

OPTIMISTIC ENERGY OUTLOOK

In addition to oil and gas and sustained demand for offshore wind, breakbulk and project cargo can look forward to a raft of promising cargo-carrying opportunities in other energy sectors including nuclear, given a recent boost at COP26 after members recognized its crucial role in the pathway towards net-zero. That was a key message from Neil Golding, director of market intelligence at the Energy Industries Council, the UK’s largest energy supply chain trade association, during a breakbulk and project market outlook session at Breakbulk Europe. “There is some really exciting technology being developed, especially with small modular reactors,” Golding said. “These reactors have capacities of anything between 350 to 500 megawatts and are made up of 1,500 modules – that is a lot of modules that are going to have to be transported from factory to site.” According to the director, some 40 projects are slated to be built in the UK alone, while a further 100 small modular reactors could potentially be

installed in Canada. “At the later end of this decade there are going to be some real sizeable opportunities,” he said. Other opportunities lie in hydrogen, with the scaling up of electrolyzers and other heavy pieces likely to require significant breakbulk support, and carbon capture, with Europe leading worldwide development. “Capex in carbon capture projects at the moment is going to be relatively slow, about US$48 billion globally between now and 2026, but once policy, legislation and financial support is given, this is a market that will absolutely take off.” According to Golding, 2021 saw significant growth across all energy sectors, with 2,500 capex projects added during the year, of which renewables made up more than half. For this year, renewables will constitute 61 percent of new projects that have been announced. Some 559 gigawatts of additional offshore wind energy is expected to come online by 2030, with global capex of US$1.37 trillion. While China and the UK remain the top

BY SIMON WEST

markets for capacity, new markets are emerging, such as the Philippines, New Zealand, Azerbaijan and Brazil. By 2030, the number of new turbines to become operational is expected to soar to 10,000, from 2,000 this year. Oil and gas meanwhile still have a “key role” in the energy matrix, Golding said, with an estimated US$3.6 trillion worth of expenditure in the industry over the next five years. “We are seeing increasing activity for projects put on hold in 2020 due to Covid which are now coming back online, and projects even older, stopped mid-decade – again, coming alive due to energy security. “The investment levels in oil and gas over the next five years will remain high.” BB Breakbulk Studios See a video interview with Neil Golding, Energy Industries Council at Breakbulk Europe https://youtu.be/LLv2PBgEsv8

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NORTH AMERICA PORTS & TERMINALS

PEDAL TO THE METAL BY LORI MUSSER

CREDIT: PORT OF SOUTH LOUISIANA

US Ports Welcome Back Breakbulk and Project Cargo

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or U.S. ports and terminals that watched their spacious laydown yards lie fallow for a few years, a return of some project cargo and high volumes of breakbulk has been a welcome sight. Business at over-dimensional cargo terminals is brisk, but may be somewhat distorted due to overspill from container markets – with containers carried on multipurpose vessels and moving through non-containerized yards. Other spillover cargo includes products, such as plywood, which may have moved via container in recent years but have switched back to breakbulk now that containers are at a premium. Jessica Ragusa, communications manager at the Port of New Orleans, said New Orleans has taken steps to position itself as an alternative gateway during supply chain disruptions: Jessica Ragusa “Many shippers Port of New Orleans have turned to breakbulk shipping solutions at Port NOLA due to global container equipment shortages and current market dynamics.” At the Alabama State Port Authority’s Port of Mobile too, “soaring containerized cargo rates, and to some degree, congestion at East and West coasts ports, have shippers rethinking supply chains. We have seen [some] shippers shift from containers back to general cargo carriage,” said Judith Adams, vice president of internal and external affairs. Some growth is simply driven by America’s pent-up demand as the pandemic eases. Construction markets and infrastructure projects are making headlines. The Biden Administration has committed to a five-year game of catch-up, as laid out in its new infrastructure law. Adams said the federal government will be driving consumption for iron, steel, non-ferrous metals, energy

components and timber for years as federal funding flows into public infrastructure projects. The rise of super sacks may also give general cargo a boost. For rice, resins, cement and other products – that might alternatively move loose as bulk or in small packages for containerization – super sacks can be an eco-friendly option (less packaging than container, less waste than bulk) for niche markets. The global energy transition is also an important driver, according to Lisa Ashley-Daniels, director of public relations for Port Houston. She anticipates project cargo will be kindled by renewable energy for at least a decade.

KEEPING AHEAD OF POPULATION

Wade Elliott, vice president of business development at Port Tampa Bay, said the port’s breakbulk volume rose 131 percent for the first six months of FY2022, reaching 365,000 tons. This includes a 110 percent increase in steel, totaling 235,000 tons, and a 180 percent increase in lumber, up to 66,000 tons. Other significant and growing breakbulk commodities include bagged cement, racking for solar panel installations, bagged resins, and fresh produce. Elliott said that the primary factor fueling the increase is Florida’s continued population growth. At 22 million residents, Florida ranks third in the nation; the Tampa Bay/Orlando I-4 Corridor is the fastest growing region of the state. “The red-hot local real estate market is fueling demand for construction and building materials. Also the availability of competitive northbound backhaul trucking capacity (rates are typically 50 percent less than southbound) allows us to reach customers in Georgia and the Carolinas, in addition to our core Florida market,” Elliott said. Meanwhile, steel is ramping up at Port Houston. In 2021, it handled 3.37 million tons of steel, up almost 50 percent over 2020 tonnage. Steel volumes for April 2022 year-to-date were up 106 percent.

Other non-containerized general cargoes were even more prolific, almost doubling to 1.39 million tons in 2021. Much of the port’s project cargo has historically been linked to the oil and gas industry. However, moving forward, port cargo growth is expected to mirror progress in alternative energy industries. In 2021, the port handled wind and solar energy components. To keep up with general cargo growth, Ashley-Daniels said: “The port continues its investments … It is adding yard space, opening additional gates, widening road access to facilities and developing the workforce pipeline.” “The US$1 billion Houston Ship Channel deepening and widening program, called Project 11, remains on track,” Ashley-Daniels said. Port Houston also announced a goal to be carbon neutral in 30 years, by upgrading technology, improving infrastructure and equipment, and utilizing alternative fuels and clean energy sources.

MOBILE’S MULTIPLE DRIVERS

The Port of Mobile is well-positioned with two interstate systems, five Class I and three regional railroads, and 2,000 miles of inland and intracoastal waterway connections. In calendar year 2021, its noncontainerized general cargo volumes reached 6.59 million tons, up 21 percent over 2020 tonnage. The cargo was mostly metals. “The Port of Mobile is considered the second-largest iron/steel port in the country behind Houston,” Adams said. In 2021, public seaport terminals handled nearly 6 million short tons, showing a 20 percent gain. Forest products grew 14 percent in 2021 to 1.33 million tons. The port handles a variety of products, including lumber, baled and rolled pulp, KLB, newsprint/paper, timber and plywood. “Our forestry and steel products sector is hot,” Adams said, citing domestic and international demand for products that support infrastructure development and industrial construction, and housing market demand, as major drivers. www.breakbulk.com

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NORTH AMERICA PORTS & TERMINALS

GPA handles iron and steel, machinery, forest products, rubber, boats, vehicles and animal feed in breakbulk.

CREDIT: GEORGIA PORTS AUTHORITY

Mobile’s wind energy cargo has also grown, driven by improved “costs and performance of wind technologies,” coupled with production tax credits, Adams said. The region’s burgeoning aerospace industry continues to drive over-dimensional port cargoes, such as fuselage, wings and tail sections. Airbus just announced a 350,000-square-foot expansion to ramp up global production of A320 jets at its billion-dollar Mobile production facility.

SOUTH LOUISIANA SUPPORTS TRANSITION

The Port of South Louisiana handled 229 million tons of cargo via 3,160 vessels and 55,284 barges in 2021. The cargo included more than a million tons of import/export steel, largely from India and Brazil, and another 3.6 million tons of domestic steel movements. Paul Matthews, the port’s CEO, sees room for steel growth related to 30 BREAKBULK MAGAZINE www.breakbulk.com

continued regional infrastructure development that will require breakbulk and project cargo. The port’s general cargo facility at Globalplex terminal is undergoing upgrades that include two new highcapacity harbor cranes, warehouse improvements, and construction of a second access bridge. “The bridge will create efficiencies and allow us to triple truck throughput,” Matthews said. He anticipated project completion in the second quarter of 2023. The port also plans on future wind energy cargo. Louisiana’s governor is bullish on climate action, proposing five gigawatts of offshore wind power generation by 2035. “We see opportunity in energy transition,” Matthews said. “We applied for a Build Back Better grant to allow for eMethanol liquid bulk,” he said, noting that tugs and vessels operating under new energy will make an important carbon emission difference given their sheer number.

The Georgia Ports Authority, or GPA, handles iron and steel, machinery, forest products, rubber, boats, vehicles and animal feed. Bobby Keel, GPA regional sales manager, reported for the fiscal year to date (July-April), GPA handled 2.5 million tons of breakbulk cargo, a nearly 15 percent increase. The trade is two-thirds imports. “Mayor’s Point Terminal in Brunswick has seen phenomenal growth in export forest products to Europe. Wood pulp and linerboard have grown from 25,000 tons through April last fiscal year to 154,000 over the same period this year,” Keel said. It offers a 1,750foot berth and direct CSX and Norfolk Southern rail service. Warehouse space at Mayor’s Point currently totals 355,000 square feet, although a pending replacement will increase that number by 50,000 square feet. Ocean Terminal in Savannah has also seen strong growth across commodities, with a particularly large jump JULY-AUGUST 2022

NORTH AMERICA PORTS & TERMINALS

in import steel from Korea and Europe. Steel rose more than 54 percent to 396,000 tons through April. Much of the increase in breakbulk is related to container pricing and the lower cost of breakbulk movement, as well as having capacity in Brunswick to take on additional trade, Keel said. The port is in the process of adding 400,000 square feet of storage space at its roll on/roll off facility at Colonel’s Island Terminal in Brunswick, which serves vehicle and heavy machinery trades.

BALTIMORE’S INLAND ACCESS

Steel was the lead commodity for Port NOLA in 2021.

CREDIT: PORT OF NEW ORLEANS

COFFEE IN BULK WELCOMED BY NOLA The Port of New Orleans, or Port NOLA, ended the year with 2.4 million tons of breakbulk in 2021 versus 1.7 million in 2020. At more than a million tons, steel was the lead commodity. With its existing breakbulk capabilities featuring six dedicated breakbulk wharves, “we are uniquely positioned to offer breakbulk alternatives to coffee importers seeking to diversify and mitigate their exposure to container shipping challenges,” said Jessica Ragusa, communications manager at the Port of New Orleans. Port NOLA welcomed its first bulk coffee vessel in 30 years in December. Poultry is also on the rise. A US$42 million Lineage Logistics Jourdan Road project almost doubled cold-storage capacity to 304,000 square feet and helped Port NOLA move more than a half-million pounds of poultry in 2021, up markedly from modest volumes in 2020. NOLA’s terminals also handle steel, rubber, project cargo,

plywood, and cargo in super sacks such as sand, tapioca, and now coffee. A substantial increase in breakbulk plywood was largely attributable to global supply chain challenges and importers turning to breakbulk as an alternative to containers. “We expect this trend to continue and see strong opportunities to become a distribution hub for plywood,” Ragusa said. Port NOLA reports no congestion. It is marketing the region as a true alternate gateway, Ragusa said, emphasizing that NOLA’s cargo has traditionally skewed towards exports, which have been slower to recover than imports. Import-heavy ports have been simply overwhelmed, which helps the NOLA value proposition. “Shippers are realizing the importance, now more than ever, of supply-chain diversification. Using only one gateway, one ocean carrier, one railroad, becomes too risky when supply chains are stressed,” she said.

The Port of Baltimore is located within the nation’s third-largest consumer market. It handles forest products, steel and various metals, and other breakbulk and project cargoes. The port’s East Coast “inland” advantage is its location, which provides a shorter routing to the Midwest and beyond. In the first quarter of 2022, Baltimore logged 237,000 tons of breakbulk and project cargo, up 23 percent over the first quarter 2021. Paper products are booming, led by a new contract with Finland’s Metsä Group to consolidate the company’s mid-Atlantic volumes through Baltimore. Industrial and agricultural machinery are also important cargoes; global leader CNH Industrial ships up to 4,000 units annually from Baltimore, according to the port. Improvements to the port’s Dundalk Marine and Fairfield terminals will strengthen berths to better accommodate the increasing size of heavy machinery and project cargo. Many breakbulk and project cargo berths, yards and warehouses are full again, however, with multiple overlapping factors driving the surge, circumspection seems a good idea. The construction boom looks like it will be around for a while, and energy transition cargoes undoubtedly will, so U.S. ports and terminals are investing in breakbulk and project cargo facilities. For now, the pedal is to the metal, but the longevity of the surge is unpredictable. BB Based in the U.S., Lori Musser is a veteran shipping industry writer. www.breakbulk.com

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CREDIT: STEVE FARMER

CANADA’S BREAKBULK BOOM

Energy Transition, Construction Drive Growth

win drivers of breakbulk and project cargo volumes are supporting Canada’s journey toward net-zero emissions, coupled with a blazing North American construction market that may see some longevity. Wind energy and steel cargo are the lead shipments at many of the country’s general cargo terminals. Canada’s ports may also soon see project cargo import growth spurred by the Investing in Canada Plan, a US$180 billion, 12-year government infrastructure plan meant to create long-term economic growth in a lowcarbon manner. 32 BREAKBULK MAGAZINE www.breakbulk.com

BY LORI MUSSER

Many of the plan’s projects are under way, including a few trade and transportation improvements, such as the Detroit River bridge project, and major investments in greener communities and city transit systems. The Canadian Renewable Energy Association, or CanREA, indicates great promise for new wind energy cargo. Senior Director of Operations Phil McKay said to Breakbulk: “Canada added 677 megawatt (MW) of wind energy in 2021 – the most we’ve seen … since 2016. 2022 is on track to exceed that with over 1,000 MW under construction and 2023 could double that figure again.”

The main driver is Canada’s 2050 net-zero and 2035 decarbonized electricity system targets. McKay said that wind energy, alongside solar, will be essential to help double electricity production and reach net zero. “Corporate power purchase agreements in Alberta’s unique, open market are driving a large portion of this growth, [as is] Saskatchewan’s Golden South project,” McKay said. Other projects continue to come online. Recent procurement announcements have been issued in Quebec and Nova Scotia. Canada’s wind fleet regions mirror its population loads, which JULY-AUGUST 2022

NORTH AMERICA PORTS & TERMINALS

largely run along the Canada-U.S. border. As Canada’s wind industry matures, McKay said there will be supply chain opportunities for “repowering, repairing, and recycling components.” Opportunities to improve supply chains, McKay said, include using U.S. port capacity to support Canada’s wind energy projects, and embedding resilience so supply chains better accommodate Canada’s extreme weather conditions. McKay confirmed “massive, untapped potential to expand lowcost wind and solar energy” in Canada, with the majority of components arriving by water, then moving to road and rail, but inflated supply chain prices, delays and uncertainty in workforce are challenging the industry.

ROOM TO SPARE ON EAST COAST

In decades past, New Brunswick’s Port Saint John was blanketed with forest products. Now they typically move by container. The port’s breakbulk business is lighter today, but John Runcie, commercial partnership manager, said that means there is room for growth. The port has two general-user facilities at Lower Cove and Long Wharf, reinforced to 1,000 pounds per square foot, or PSF, plus an overflow yard near Piers 10 and 11. Its CDN$205 million West Side Modernization project will be complete in 2023, introducing a 2,000-PSF pier strength and additional laydown space at DP World’s terminal. “That gives optionality for a lot of different cargoes,” Runcie said. The port has four large warehouses, three stevedoring options, and two Class 1 railroads, CN and now CP, and a third Class 1 on its way, if CSX works through its Pan Am Railways acquisition. “Our new rail options … change the game as to our hinterland,” Runcie said to Breakbulk. Port Saint John is moving one ton super sacks of barytes by rail to the

John Runcie

Lane Farguson

Port Saint John

Port of Halifax

Canadian prairies, and shipments of onshore wind blades, towers and nacelles destined for Maine, Nova Scotia and New Brunswick. The port has also served the northeastern U.S. offshore oil and gas industry with suction anchors and monopiles, and the tidal/ wave power industry of the Maritime Provinces and Maine. Runcie said: “We may also handle offshore wind monopiles and other components headed to the northeastern U.S. There is an opportunity for transshipment, because of the Jones Act. We can be a creative solution for offshore wind.” Meanwhile, the Port of Belledune in northern New Brunswick is touted as the choice for moving project cargo north, into the eastern Arctic as well as into Newfoundland and Labrador. Belledune offers two facilities for breakbulk and project cargo, including the 455-meter (1,493-foot) Terminal 3, the 184-meter (604-foot) Terminal 4, and 24 hectares (60 acres) for laydown. It also offers a fabrication facility. The Port of Halifax’s main breakbulk and project cargo facility, Richmond Terminals, has on-dock rail, a 1,400-linear-meter (4,500-linear-foot) berth, up to 14 meters (45 feet) of water, enhanced heavy-lift capabilities, and four warehouses. The facility is uncongested and is located between the two harbor bridges, offering easy highway access. In 2021, the Halifax Port Authority facilities welcomed 553,809 tonnes of non-containerized cargo, registering a 43 percent increase over 2020 figures.

Lane Farguson, director of communications and marketing for the Port of Halifax, said the port’s specialized cargoes have included steel rails, steel coils for tire production, components from offshore oil decommissioning work, some lumber, fiber-optic cables and some heavy-lift. “While container cargo accounts for 90 percent of what we do, the noncontainerized cargo is very important to the regional economy,” Farguson said to Breakbulk. By nature, it is labor intensive – that is significant for the workforce. The cargo moved is also important to regional manufacturing. Future breakbulk and project cargo volumes will be boosted by Canada’s interest in renewables, such as tidal and wind power, Farguson said. It is too soon to know whether the current oil and gas turmoil might trigger renewed interest in Canada’s offshore exploration, but to be prepared, the port is finalizing a 50-year master plan that outlines triggers that necessitate expansion.

THE SEAWAY’S OPPORTUNITY BELT

Canada’s St. Lawrence Seaway Management Corp. jointly operates the 15-lock, 3,700-kilometer (2,300-mile) waterway with the U.S. Saint Lawrence Seaway Development Corporation. They have welcomed nearly 3 billion tonnes of cargo since 1959. General cargo on the Seaway includes iron and steel, machinery, wind energy components, transformers, gas and electric turbines, and other products. The Seaway is a green route; one ship moving 30,000 tons removes almost 1,000 trucks or 300 railcars from land routes. If the Great Lakes region were a country, it would rank as the world’s fourth-largest economy, behind only the U.S., China and Japan, according to the Seaway’s economic impact study. Quebec’s Port of Trois-Rivières is an eastern Seaway gateway and important economic development engine for regional industries including aluminum, forestry and agri-food. It moved www.breakbulk.com

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Large, reinforced laydown areas cater to the growing renewables trade. CREDIT: PORT SAINT JOHN

350,000 tonnes of general cargo including steel, bagged cocoa beans, pulp and aluminum ingots in 2021. Steel has been the main source of breakbulk growth in the past few years. Anick Métivier, vice president

of strategic development at the port, expects that growth to continue. The port’s master plan, On Course for 2030, heralds a CDN$130 million, multi-cargo, three-berth Terminal 21 project with a 716-meter

“Canada added 677 megawatt of wind energy in 2021. 2022 is on track to exceed that with over 1,000 MW under construction and 2023 could double that figure again.” – Phil McKay, Canadian Renewable Energy Association

34 BREAKBULK MAGAZINE www.breakbulk.com

(2,349-foot) wharf. The port and its operators have invested in breakbulk facilities which now include three docks, three sheds totaling 17,700 square meters (191,000 square feet) and nearly 70,000 square meters (753,000 square feet) of outdoor storage space. Operators have also invested in handling equipment and in specialized workforce training. The Port of Trois-Rivières, the City and Innovation et développement économique Trois-Rivières, in cooperation with the Québec government, are developing an “industrial port zone,” looking to build on the existing machining cluster and to create a transportation corridor for out-of-gauge/project cargo, according to Métivier. The Port of Montreal is seeing growth in non-containerized general cargo volumes, which skyrocketed to more than 211,000 tonnes in 2021. Its breakbulk and heavy-lift facilities include those operated by Logistec Stevedoring at Laurier and Contrecoeur terminals, with tandem lift Wind projects are buoying Canada’s ports. CREDIT: PORT SAINT JOHN

JULY-AUGUST 2022

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NORTH AMERICA PORTS & TERMINALS

Westfal-Larsen ship docked at Lynnterm Terminals in North Vancouver takes on pulp with Vancouver skyline in background. CREDIT: VANCOUVER FRASER PORT AUTHORITY; DAVE ROELS PHOTOGRAPHY

IRREPRESSIBLE WEST COAST Hats are off to the Port of Vancouver. After facing a year like none other – complete with floods, fires, a federal ban on cruise, and ongoing supply chain stressors – it still posted a cargo increase. Breakbulk rose 18 percent, reaching a whopping 19.8 million tonnes. “The last few years have been challenging. A series of events separated the port from the rest of Canada and created quite a backlog,” Doug Mills, senior account representative for customer engagement at the Vancouver Fraser Port Authority, said to Breakbulk. Rebuilding after the devastating events and replenishing inventories has created a very high demand for products such as steel. The Port of Vancouver dubs itself as the consolidation center for Pacific Northwest breakbulk cargo, for good reason. Mills said: “We have been a breakbulk port forever – the port’s original cargoes were logs and lumber. We continue to be a major gateway for forest product exports, and we import yellow metal, steel, machinery and project

36 BREAKBULK MAGAZINE www.breakbulk.com

cargoes such as pressure valves for the oil and gas industry.” The port’s two breakbulk terminals, Lynnterm and DP World Fraser Surrey are served by CN and CP with BNSF and Southern Railway of British Columbia links. While the port community met challenge after challenge in 2021, its project cargo corridor initiative stalled somewhat. Mills said the time has come for multijurisdictional permits: “We have some built-in natural limitations in the size of loads that can move from the west coast to Alberta [the Rocky Mountains, for instance], but the government is creating a digital platform. Stakeholders are ready.” The platform will simplify and expedite the truck-permit approval process, while reducing risk. The corridors allow for “non-reducible loads” with pre-approved configurations to obtain permits to travel between Fraser Surrey Docks or Lynnterm East Gate, and the British Colombia/Alberta border at Highway 16, without requiring them to complete the traditional extraordinary-load approval process.

capacity up to 240 tonnes. Empire Stevedoring operates seven berths and three large sheds at Bickerdike. The Port of Thunder Bay is inimitable in its position at the head of the Great Lakes/St. Lawrence Seaway System. Built to get Canadian grain to European markets, it is also becoming a hub for dimensional cargo moving between Western Canada and international markets. In 2021, the port handled 53,000 tonnes of breakbulk. It is projecting 70,000 tons in 2022 and 100,000 in 2023. “Steel product is particularly strong,” said Chris Heikkinen, director of business development and communication for the port. General cargoes include structural steel from Europe, project components for Alberta’s oilsands, and wind energy components heading west – nacelles, blades and power segments. “Western Canada is our niche. This year we have a number of wind projects already committed. Carriers like our available backhaul [bulk cargo] that helps introduce economies, and CN and CP’s exceptional rail clearances,” Heikkinen said to Breakbulk. Main drivers for Thunder Bay cargo growth are western Canada’s transition to renewable energy and green projects, and the need to lower the supply chain’s carbon footprint. Using the port maximizes the marine transport leg of supply chains, which is important to the greening economy, Heikkinen said. Thunder Bay’s uncongested facilities include the 32-hectare (79-acre) Keefer Terminal with on-dock rail and 50,000 square meters (550,000 square feet) of warehousing. The port reconfigured its general cargo terminal in a recent CDN$14 million investment, partly funded by the federal government and the Northern Ontario Heritage Fund. Ports on Canada’s east coast, seaway and west coast are expecting continued spikes in project cargo and breakbulk, as construction and renewable energy sectors continue to thrive. BB

Based in the U.S., Lori Musser is a veteran shipping industry writer. JULY-AUGUST 2022

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PROFILE

NEW ERA FOR MPV SHIPPING Grammare: ‘A Reinvention of How We Do Everything” BY CARLY FIELDS

xcitement is building for “a new era” in shipping for AAL Shipping Managing Director Christophe Grammare. Sticking to the status quo has been replaced by wholesale change over the past couple of years, with the sector shifting to low sulfur fuels and ballast water management, and leading into the incoming focus on reducing carbon emissions from ships and new intelligent systems for port control. A former engineer, Grammare believes that comparisons with the transformative shift from sail to steam hit the mark. “The industry is changing. For a sector that is rather ancient to have so many changes back-to-back really speaks to a new era for shipping coming up.”

Speaking with Breakbulk, he described the change as “a reinvention of how we do everything. It’s a new design and new thinking as opposed to this is how we have always done it.” Tempering that positivity are the current market prospects, with Grammare admitting that his greatest concern is the current geopolitical trend of countries slowly shutting themselves out of global trade. He noted that China-U.S. steel volumes have been decreasing for the past five years on the back of U.S. protectionism. While change on just one trade lane is manageable, a shutdown of a number of major trades lanes would be another matter entirely. “If what we have seen with Russia shutting down from the rest of the world happened in China that would be a huge worry.” He also expects a rebalancing of the freight market in the short term with the ‘truth’ somewhere in the middle of the long trough of the past 15 years and the current peak.

RISK MANAGEMENT

Christophe Grammare. CREDIT: AAL SHIPPING

38 BREAKBULK MAGAZINE www.breakbulk.com

AAL Shipping is mitigating freight and geopolitical risk by forward-booking its fleet of multipurpose carriers. While forward booking completely disappeared in the down market, shippers are

now keen to commit to a high – but not peak – rate to forward fix tonnage for a long period of time. Grammare confirmed that AAL has signed some forward contracts for its newbuildings, due to be delivered in 2025. AAL has six ships on order, which will join its near 30-strong managed fleet. Further newbuild orders are not on the immediate agenda, despite Grammare’s acknowledgement of a looming capacity crunch. “AAL is quite conservative. We run long haul on specific trades and the new ships currently on order fit that model. But we are not speculating.” AAL will, however, continue to invest in second-hand tonnage if it fits with its existing capabilities. AAL is also putting the cash from the current rate spike to good use, paying off fleet financing debts in readiness for the next downturn. Grammare recognised that the market can still change extremely quickly, and carriers need to prepare for every eventuality. “100 percent closure of China would be catastrophic, for example. Also, breakbulk is in the middle of two trades: containers and bulk – we need them all to be doing well,” he said. Meanwhile, investment is being made in exploring the latest systems and getting them “to talk to each other … We want to create harmony and reduce manual impact,” he said. There is also an expansion of the AAL staff base, with Grammare predicting an increase of 10 percent to cover the increased ship capacity. “We have been running quite lean for the last 10 years – we have had to,” he said. “Now we are focusing on the next generation, picking people out of school so that they can grow with the company.” However, he admitted that it is “tough” to find people, and once they are in, there is the additional challenge of retaining them. BB Carly Fields has reported on the shipping industry for the past 22 years, covering bunkers and broking and much in between. JULY-AUGUST 2022

THOUGHT LEADER

Energy Transition Challenge Global Energy Crisis in ‘Unchartered Territory’

panish sociologist Manuel Castells said in The Information Age: Economy, Society and Culture, Volume I, The Rise of the Network Society, that “the global economy is now characterized by the almost instantaneous flow and exchange of information, capital, and cultural communication. These flows order and condition both consumption and production. The networks themselves reflect and create distinctive cultures. Both they and the traffic they carry are largely outside national regulation.” There is no question that our current global economy and community have been presented enormous challenges in a Covid-19 world, one that was focused on energy transition. Now those challenges have grown exponentially with the Russian war on Ukraine, but within those challenges there lay many opportunities for those willing to meet these obstacles head on in the global energy capital projects sector. As a result of environmental, social and governance, or ESG, pressures from the financial community, there has been tremendous underinvestment in the oil and gas sector. Listening to a session during CERAWeek featuring H.E. Mohammad Sanusi Barkindo, secretary general of the Organization of the Petroleum Exporting Countries, or OPEC, and Jeffrey Currie, global head of commodities research in global investment research at Goldman Sachs International, was an additional reminder of the necessity to have parallel systems during energy transition. OPEC Secretary General Barkindo frankly shared during CERAWeek “that in the 60 years of OPEC there had been seven major cycles in the oil and gas sector, OPEC’s role was not political but one of assuring stability in the energy markets, and OPEC never anticipated what is occurring today in terms of a

global energy crisis of historic proportions – simply in unchartered territory.” Notably, Barkindo said that there’s a perception of shortages, but the impact of sanctions placed on Russia would catch up and it would “take a magician” to continue the production and export of seven to eight million barrels of oil a day in Russia.

SHORTAGES CANNOT BE ABSORBED

Adding to the conversation during CERAWeek was Goldman Sachs’s Currie, who shared “that the war on climate change and ESG investing has led to significant underinvestment in the entire commodity complex of oil and gas, metals, and grains at a time of tightness in the market and low inventories hit with shortages that the system cannot absorb.” Russia is the second-largest producer of commodities and the reaction of sanctions on Russia has created a great deal of uncertainty around risk and corporate social responsibility. Currie said, “we are seeing a revenge of the old economy as investments were redirected into the new economy that aligned with ESG and the resulting underinvestment has circled back at the worst time for the global interconnected economy.” During what is materializing as one of the most unprecedented times in history in terms of climate crisis, environment, and energy security, there remains opportunity in the global energy capital projects sector. Every citizen of the world needs unregulated access to energy, on a viable and affordable basis. Clearly one more reminder that it’s time to take energy security seriously and meet these obstacles head on in the global energy capital projects sector with new investments. BB Margaret Kidd is program director, supply chain & logistics technology at the University of Houston.

BY MARGARET KIDD

OPEC Secretary General Barkindo. CREDIT: SHUTTERSTOCK

www.breakbulk.com

BREAKBULK MAGAZINE 39

CASE STUDY

TOWERING ACHIEVEMENT

Refinery Unit Move to Modernized Port of Everett Terminal BY PAUL SCOTT ABBOTT

rmed with a 114-page technical document, AAL Shipping successfully completed the trans-Pacific move of a 461tonne, 165-foot-long refinery vacuum tower unit from Korea to the newly enhanced South Terminal at the Port of Everett, Washington, in the U.S. Pacific Northwest. “Due to the importance of the project and cargo, a fully detailed engineering methodology was needed,” Nicola Pacifico, global head of transport engineering for Singapore-based AAL Shipping, told Breakbulk in describing the fall 2021 move via the AAL Pusan. “Lifting and swinging in between the [shipboard] cranes due to the length of the unit needed particular study and care to avoid any possible clash.”

Pacifico said AAL deployed finite element analysis using Ansys engineering simulation software to verify the AAL Pusan weather deck and load spreading under the cargo’s saddles Nicola Pacifico would safely AAL Shipping provide sufficient strength throughout the 15-day ocean passage. The solution complied with stringent DNV-ST-N001 standards – the benchmark for marine operations as set forth by Høvik, Norway-based DNV – and helped keep costs down for the customer.

Furthermore, poor weather encountered while crossing the Pacific Ocean required around-the-clock meteorological monitoring, Pacifico said. In addition, routing analysis was furnished via AAL’s cargo optimization control room team in Cyprus. “In short terms, a full technical package from A to Z was supplied from AAL to the various parties to ensure safe transport and handling of the vacuum tower,” Pacifico said, noting that the effort succeeded through a broadly international collaboration.

FUEL FOR THOUGHT

Adding extra fuel for thought to the operation was the fact that jet fuel that will be produced at the destination BP oil refinery will be used to power Boeing aircraft manufactured in Everett, built using components

TOP: A 461-tonne, 165-foot-long vacuum tower is offloaded from AAL Shipping’s AAL Pusan at the Port of Everett, Washington, following a 15-day trans-Pacific journey from Korea. CREDIT: AAL SHIPPING

40 BREAKBULK MAGAZINE www.breakbulk.com

JULY-AUGUST 2022

CASE STUDY

that will arrive across Port of Everett docks. Indeed, the US$57 million upgrade completed in early 2021 at the Port of Everett’s South Terminal was largely spurred by the need to accommodate receipt of heavier and wider ocean shipments bringing in components for manufacture of Boeing 777x craft at what the Chicago-headquartered aerospace firm heralds as the largest manufacturing building in the world, encompassing 472 million cubic feet, just 8 miles from port berths. “While the infrastructure upgrade was critical to our aerospace business, it has also added many new capabilities to the port’s offerings,” Walter Seidl, marine terminal Walter Seidl director at the Port of Everett Port of Everett, told Breakbulk. According to Seidl, the fortification of the South Terminal wharf to handle loads of up to 1,000 pounds per square foot, plus the addition of two post-Panamax cranes, has allowed the Port of Everett to handle more project and roll-on/roll-off cargoes, including a recent deployment of more than 850 components for the U.S. Army. “The addition of container cranes has also positioned Everett to expand into new areas like 53-foot domestic shipping boxes that, prior to the upgrade, would not have been practical,” Seidl said. “And timing of the new terminal opening has been a game changer as ports across our region combat supply chain challenges.”

“All project cargoes are unique, each requiring advanced planning and coordination with the many parties involved to set the stage for a successful move when a ship meets dock,” Seidl said. “With a solid framework in place, and with our project capabilities and experience here in Everett, the rest is a wellgreased machine,” he continued. “Complicated and complex is our specialty.” Having invested more than US$150 million over the past decade in infrastructure improvements, the Port of Everett is nearing completion, on target for late this year, of a new US$36 million, 40-acre Norton Terminal to add further upland capacity to support project moves, Seidl said. “We continue to prioritize maritime infrastructure investments that support growth in the breakbulk/ project sector,” he said. As for last fall’s move of the vacuum tower unit via the AAL Pusan, the Port of Everett was perfectly positioned, situated 80 miles south of the cargo’s destination of the BP Cherry Point Refinery in Blaine, Washington, just south of the U.S.Canada border. Initially opened in

1971 by Los Angeles-based Atlantic Richfield (doing business as ARCO) to process crude brought by tankers from the Alaska North Slope and now accepting crude via pipeline and rail as well, the refinery is undergoing a US$269 million expansion by London-headquartered BP, which acquired ARCO at the turn of the millennium. The water journey of the tower unit began and ended via barge, starting with its short barge transport from its place of fabrication at the Ulsan plant of Foosung Hantech to the Port of Ulsan in South Korea. The AAL Pusan left the Port of Ulsan with the unit aboard on Oct. 31 and arrived Nov. 15 at the Port of Everett. There it was discharged onto a barge for transport to the refinery through a series of bays and straits. North Sydney, Australia-based Worley served as consultant for the project, with Levallois-Perret, France-headquartered Geodis as freight forwarder. The tower unit, more than half the length of an American football field and with a diameter of 27 feet, forms part of a vacuum distillation unit at the BP refinery. The unit

A closer view exhibits the immensity of the 165-foot-long, 27-foot-diameter refinery vacuum tower unit delivered to the Port of Everett’s recently upgraded South Terminal. CREDIT: PORT OF EVERETT

‘WELL-GREASED MACHINE’ Seidl said the Port of Everett, located 30 miles north of Seattle, has become accustomed to handling a variety of customers and cargo types and is a particularly good fit for highvalue, over-dimensional units.

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BREAKBULK MAGAZINE 41

At the Port of Everett, a massive vacuum tower is discharged from the AAL Pusan onto a barge for the 80-mile final leg of its transport to BP’s Cherry Point Refinery near the U.S.-Canada border. CREDIT: PORT OF EVERETT

The Port of Everett’s newly modernized South Terminal features two post-Panamax cranes and a fortified wharf strengthened to handle loads of up to 1,000 pounds per square foot. CREDIT: PORT OF EVERETT

produces several types of gas oil that are heavier than middle distillates; these include jet fuel, kerosene and diesel. The distillates can be further refined to make products such as lightcycle oil, gasoline and naphtha. According to BP, the Cherry Point Refinery accounts for 85 percent of the aviation fuel used at SeattleTacoma International Airport and also is the largest supplier to Portland International Airport in Oregon and Vancouver International Airport in the Canadian province of British Columbia.

ADDING EFFICIENCIES

Part of BP investments at Cherry Point of more than US$1.5 billion over the course of a decade, the nearly US$270 million in improvements currently taking place at the refinery aim to: 42 BREAKBULK MAGAZINE www.breakbulk.com

• Enhance efficiencies and reduce periods of planned maintenance. • Cut down on carbon dioxide emissions by bolstering cooling water infrastructure. • Double the facility’s renewable diesel production capabilities to an estimated 2.6 million barrels a year. In total, the refinery can annually process more than 90 million barrels of crude oil. The undertaking is anticipated, over a three-year period, to create more than 300 local jobs, including about 200 construction jobs, 25 engineering positions and 40 support positions. “BP’s new investment in Cherry Point builds on a half-century of innovation in Washington state,” said David Lawler, chairman and president of Houston-headquartered BP America. “It will position us to provide lower carbon energy while creating jobs and

reducing emissions in our operations.” The investment aligns with BP’s aims to be net-zero across its operations by 2050 or sooner and to reduce carbon intensity of the products it sells by 50 percent by 2050 or sooner. Renewable diesel has the same properties as conventional ultra-low-sulfur diesel but a lower carbon footprint, according to BP. As the energy industry continues to advance infrastructure investments, including in projects to reduce carbon footprint, cargo moves such as the delivery of the vacuum tower to the BP refinery can be expected to increase throughout the world. BB A professional journalist for more than 50 years, U.S.-based Paul Scott Abbott has focused on transportation topics since the late 1980s. JULY-AUGUST 2022

THOUGHT LEADER

Lumpsum Contract Pain EPCs Learn Hard Lesson on Pricing

t the start of this year, Italian engineering, procurement and construction giant Saipem delivered some disturbing news. A review of its backlog of projects led to the company concluding that its adjusted EBITDA for the second half of 2021 would be €1 billion (US$1.1 billion) less compared to its outlook delivered in October 2021. These figures were staggering, even for a company like Saipem, which has become accustomed to financial losses over the past few years. The reasons given for these losses, which eventually translated into annual net loss of US$2.8 billion, were even more interesting. Saipem claimed that some of its onshore EPC contracts had been significantly impacted by increasing costs of material and logistics, as well as cost and supply challenges with some offshore wind projects. Crucially, global cost escalations were impacting Saipem more than most of their contemporaries because its sizeable backlog contained projects light on reimbursable agreements. In layman’s terms, this meant that when costs skyrocketed in 2021, Saipem was forced to pick up the tab. However, heavy losses are old news. Following the previous major market downturn in 2014, low oil prices, reduced capex and an increased focus on cost-cutting by operators meant that contractors had to be very aggressive if they wanted to win contracts and retain market share. With operators also keen to transfer risk through lumpsum contracts, this resulted in some prominent victims, such as Chiyoda and McDermott, who in 2019 were forced to swallow total cost overruns of about US$2.6 billion on the Cameron LNG project in the U.S. This ultimately led to Chiyoda seeking refinancing and McDermott filing for Chapter 11. Losses were mounting across the onshore EPC market, forcing several contractors to rethink their strategies before the Covid-19 pandemic. KBR was first out of the blocks. Following combined net

losses of more than US$1 billion between 2014 and 2016, the U.S contractor gradually began descaling its lumpsum oil and gas business, finally announcing in June 2020 that it was completely exiting lumpsum oil and gas contracts. Fellow U.S. contractor Fluor was next in line, initially reducing its lumpsum exposure in 2019 and then announcing in September 2020 that it was exiting competitive lumpsum energy contracts.

RISK-AVERSE MARKET

BY WILLIAM CUNNINGHAM

Although not all players have taken things to the same lengths as KBR and Fluor, a risk-averse environment now prevails among EPC contractors, where the general focus is now on improving margins and diversifying away from the oil and gas industry. While the latter will be a long road, the first goal is being dealt with as a matter of urgency, particularly since Covid-19 driven project delays, supply chain constraints and a range of extra costs have served to exacerbate matters. Although not all contractors are exiting lumpsum work, several are seeking to mitigate their participation in these kinds of contracts. Saipem is, unsurprisingly, taking action. The Italian contractor now intends to adopt “greater commercial selectivity” on onshore EPC contracts going forward and will seek more cost reimbursable elements to contracts, particularly when it comes to procurement. With further Covid-19 flare-ups reported in China, and the war in Ukraine continuing to rage, supply chain issues and cost volatility appear to be here to stay. However, high oil prices and global demand for energy security are also creating a favorable market environment, which is expected to lead to strong growth in new orders in 2022 and 2023. The nature of these contracts will reveal whether EPC contractors have slipped back into their old habits or if the era of caution will prevail. BB William Cunningham is a senior research analyst at S&P Global Commodity Insights.

The pricing lessons learned by Saipem have been a bitter pill to swallow. CREDIT: SHUTTERSTOCK

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BREAKBULK MAGAZINE 43

INFRASTRUCTURE

A WATERTIGHT SOLUTION T BY SIMON WEST

Saudi Arabia Expands Desalination Capacity as Water Demand Surges he Saudi government’s approval this year of more than 60 commercial-scale water projects worth about US$9.3 billion has strengthened the nation’s status as the world’s largest water desalination market. Once completed, these projects are expected to add an additional 5 million cubic meters per day of desalination capacity, according to state-run utility Saudi Water Partnership Co., or SWPC. More than US$5.5 billion worth of projects are being built, the SWPC said, a construction drive that is providing breakbulk and project cargo with a raft of cargo-carrying opportunities. “There is a lot of development happening in desalination,” said Eyad Hamza Arafah, heavy transportation and project logistics director at

Almajdouie Logistics, a Saudi-based company that transported cargo for Ras Al Khair, one of the world’s largest desalination plants with a capacity of more than 1 million cubic meters per day. “It is the main source of our water – the country is using it domestically and for industrial and agriculture needs.” Saudi Arabia consumes more than 8 million cubic meters per day of water, one of the highest rates in the world, according to the U.S.-Saudi Business Council. Consumption is forecast to reach 12.3 million cubic meters per day by 2040. But arid landscape, low rainfall and a lack of lakes and rivers, along with aggressive industrialization and rapid population growth, are putting huge pressure on the country’s ability to quench its thirst.

About 7.6 million cubic meters are produced daily, accounting for 22 percent of global output. In 2019, 60 percent was produced from desalination, with the remainder sourced from non-renewable groundwater, reclaimed wastewater and surface water supplies.

WATER PRODUCTION GOALS

The government is aiming to double water production capacity to about 16 million cubic meters per day, as part of its Vision 2030 strategy to reduce dependence on oil and gas and invest in more sustainable forms of energy. The Saline Water Conversion Corp., or SWCC, a Saudi state-owned company that produces about 70 percent of the country’s desalinated water, is investing billions of dollars

Top: Saudi state-owned Saline Water Conversion Corp. is investing billions of dollars in world-scale water and wastewater systems. CREDIT: SWCC

44 BREAKBULK MAGAZINE www.breakbulk.com

JULY-AUGUST 2022

INFRASTRUCTURE

in world-scale water and wastewater systems. More recently, the government has adopted public-private-partnership, or PPP models, as a procurement strategy, as the country seeks international investment and know-how to support its diversification plans. “The Kingdom is driven to attract and house homegrown and international industrial development with a focus on high-tech industries – semiconductors, electric cars, renewable energy related industries – all of which require water,” said Nikolay Voutchkov, president of the U.S.-based Water Globe Consultants, and advisor to the SWCC. “In order to fulfil this vision, Saudi Arabia has to double its water availability.” According to Voutchkov, costs to produce water are falling, with developers able to recoup their investments by selling high-quality minerals extracted from brine, the concentrated saltwater produced as a by-product of desalination. “The cost of desalinated water based on the last several large project bids is less than 50 cents per cubic meter – the cost of direct or indirect potable water reuse in California is two times this cost,” the advisor said. “Energy to produce desalinated water is comparable to producing drinking water by direct potable reuse.” More efficient methods to purify seawater are proving profitable. Most existing plants in Saudi Arabia use multistage flash, or MSF, distillation, a technique whereby seawater is heated to make steam and then condensed to produce desalinated water; or the multi-effect distillation, or MED, process that uses steam and evaporators to process seawater. MSF and MED are typically integrated with combined-cycle power systems. More modern facilities rely on reverse osmosis, or RO, whereby high pressure is applied to pre-treated seawater, forcing it through semipermeable membranes to produce drinking water. Some plants, such as

Ras Al Khair, are hybrid, employing MSF and RO technologies. According to Frederic Claux, managing director of thermal and supply for French power company Engie’s Asia, Middle East and Africa region, all current desalination tenders in the Middle East are based on RO technology. “Reverse osmosis is gaining ground very fast. This is a more recent technology which is proving more efficient – especially regarding energy consumption – and can produce desalinated water at a cheaper tariff,” Claux said. “I certainly see RO becoming the dominant technology.” According to Arafah, RO-based plants are more compact than those that use MSF or MED technologies and combined-cycle power systems, although they still call for significant logistics support to shift heavy components such as substations, storage tanks and pipelines. In a bid to reduce pressure on the grid, newer projects are turning to

renewable energy – especially solar – to supply their power needs. Demand for transformers, solar panels, trackers, steel structures and other heavy-lift components means more business for breakbulk.

PROJECT RAMP UP

More world-scale projects are slated for start-up in the coming years. The Yanbu 4 independent water project, or IWP, located close to the port city of Yanbu on the Red Sea coast, will be the country’s first renewably integrated, seawater RO facility. The 450,000 cubic meter plant will include 20 megawatts of solar PV capacity. Yanbu 4 will be operated and maintained as a PPP project by Engie. Luis Pascual, Yanbu 4’s CEO, told Breakbulk the plant was on track for start-up in November 2023. “Currently we are working with civil works for different buildings and the erection of the product water tanks,” Pascual said. The Yanbu 4 independent water project will be Saudi Arabia’s first renewably integrated, seawater RO facility. CREDIT: ENGIE

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BREAKBULK MAGAZINE 45

INFRASTRUCTURE Almajdouie is preparing a bid to support the construction of a solar-powered water and wastewater system at Neom. CREDIT: ALMAJDOUIE LOGISTICS

“Major equipment is expected to start installation from July and August, while erection of the towers for the transmission line is expected to start in June. With regards to the substation, civil works for buildings will finish in July, and from August onwards we will start with the installation of all the major electrical equipment.” Engie is also developing the Jubail 3B project on Saudi’s eastern Middle East Gulf coast, with ground-breaking slated to begin at the end of May. The plant will also use RO technology to produce 570,000 cubic meters per day of water destined for the regions of Riyadh and Qassim, and will be powered by a 61-megawatt solar facility – the largest in-house solar capacity for a Saudi water project. Construction work on the solar facility will begin in November, with the complex’s commercial operations starting in early 2024. “With rapid demographic and economic growth taking place across the kingdom, the Jubail 3B IWP plant will be essential in providing a secure and sustainable source of water to local populations,” Engie said. According to the SWPC, six water and wastewater projects are being built, with a further 16 under procurement, including the Rabigh 4 IWP, also on the Red Sea coast. 46 BREAKBULK MAGAZINE www.breakbulk.com

The SWPC late last year said eight bidders had been pre-qualified to take part in a tender for the 600,000 cubicmeters-per-day plant, including Saudi renewable energy utility ACWA Power, Spain’s Acciona Agua and France’s Veolia.

READY FOR PROJECT SUPPORT

Commercial operations at the RObased facility are expected to begin in 2025. Companies such as Almajdouie Logistics are ready to support the build-out. In 2014, the operator deployed 200 axle lines of self-propelled modular trailers to carry an evaporator weighing 5,737 tonnes – the world’s heaviest at the time – for the Yanbu 3 power and desalination project. The company told Breakbulk it is preparing a bid to support the construction of a solar-powered water and wastewater system at Neom, a US$500 billion “smart city” on the Red Sea coast that will also house port facilities, sports stadiums, green hydrogen plants and a 170-kilometer metro line dubbed The Line. The government signed a deal two years ago with UK-based Solar Water Ltd. to construct the Neom plant using “solar dome” technology, which uses solar radiation to heat and evaporate

seawater to produce potable water. Investment in desalination is also a priority for other countries in the region, with governments facing similar challenges to ensure water security. In early May, the UAE’s energy ministry revealed that spending on new projects in the emirates of Abu Dhabi, Dubai and Umm Al Qaiwain totaled some US$2.1 billion, with the sector growing at 3 percent every year. The country boasts what is being billed as the world’s largest pure RO-based plant – the 909,000 cubicmeters-per-day Taweelah facility in Abu Dhabi. Full commercial operations are slated to begin by the end of 2022. The UAE is the world’s secondlargest desalination market, with some 70 commercial-scale plants generating about 14 percent of total worldwide output. “Desalination (in the region) has great potential,” said Peter K Matthew, managing director at Dubai-based Fleet Line Shipping. “We already have many units, but with the growing population and the modern technology, these existing ones will also need upgrading or replacing.” BB Colombia-based Simon West is senior reporter for Breakbulk. JULY-AUGUST 2022

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ENERGY UPDATE

UAE’S ENERGY DRIVE Dual Support for Oil and Renewable Projects

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Furthermore, skilled employment opportunities will be created for UAE nationals by these companies who will also work to identify local manufacturing opportunities. Yaser Saeed Almazrouei, ADNOC upstream executive director, said: “the awards for cementing services will support the ongoing expansion of ADNOC’s drilling activities as we grow our production capacity, strengthening our position as a reliable global supplier of some of Yaser Saeed the world’s most Almazrouei carbon-efficient

barrels. ADNOC “In line with the UAE leadership’s wise directives and as part of our strategy, we are prioritizing in-country value and these awards will enable

careers for UAE nationals and new opportunities for the private sector, directly supporting the objectives of the UAE’s Principles of the 50.” As evidenced by ADNOC’s recent moves, the UAE is experiencing a concerted push to boost the energy sector, through a combination of initiatives that together will serve as a sustained driver for project cargo transportation and heavy-lift services. Several goals are being pursued, namely: the drilling of thousands of new oil wells, and expansion of oil storage capacity under the “Operation 300 Billion” plan; and the creation of 13,500 industrial companies between 2021 and 2031 in the manufacturing, construction, electricity, gas, mining, and quarrying sectors.

BLACK PEARL PROJECT

Fujairah port has been expanding its storage capacity and its ability to accommodate ever-larger vessels under the Black Pearl project over several years. Ports such as Fujairah will play an important role, as the equipment and JULY-AUGUST 2022

CREDIT: SHUTTERSTOCK

bu Dhabi National Oil Co., or ADNOC, a leading diversified energy and petrochemicals group wholly owned by the Emirate of Abu Dhabi, recently awarded US$658 million in framework agreements for new oil wells. This speaks to the emirate’s ambition of creating the preeminent oil storage and supply hub in the Middle East, while enhancing opportunities for the project cargo sector. The framework agreements were awarded to Haliburton Worldwide Ltd. Abu Dhabi, Baker Middle East, Emirates Western Oil Well Drilling & Maintenance Co., NESR Energy Services and Emjel Oil Field Services, following a competitive tender process. These awards cover ADNOC’s onshore and offshore fields and will run for five years with an option for a further two years. More than 65 percent of the award value could flow back into the UAE economy under ADNOC’s In-Country Value program over the duration of the agreements.

BY THOMAS TIMLEN

ENERGY UPDATE

materials required for the energy sector growth will put increasing burdens on key links in the logistics chain. Johan Thuresson, general manager for shipping services at GAC Dubai and GAC Johan Thuresson Fujairah, said that Fujairah’s expanGAC sion – of both container and general cargo capacities – is expected to continue as a result of these initiatives, thereby maintaining steady demand for project cargo transportation services. “The expansion project increases the terminal’s general cargo and multipurpose area for general cargo and roll-on, roll-off services,” he told Breakbulk. “It also increases container capacity, which creates a high demand for project cargo under general and containerized cargo.” Thuresson added that Fujairah’s expansion covers a location that bridges shipping routes between east and west, potentially tapping into business opportunities in emerging trade routes and new partnerships. “AD Ports has expanded its capabilities and reach within Abu Dhabi by serving new locations such as Freeport, Al Dhafra and others and increasing capacity by dredging and infrastructure development. In Fujairah, they are more into dredging and increasing vessel capacity within its existing facility with infrastructure development for the energy industry,” he said. ADNOC has not restricted new initiatives solely to wells; Thuresson points to ADNOC’s recent announcement regarding its new carbon-efficient liquefied natural gas plant in Fujairah that is moving to the design stage. “The project is expected to increase ADNOC’s LNG production capacity by 9 Mtpa (million tonnes per annum), as they respond to the growing global demand for natural gas. The plant is also set to become one of the world’s lowest carbon intensity LNG production facilities

by incorporating new technologies and running on clean power.” The design stage is expected to be followed by the award of an engineering, procurement and construction contract in 2023. There have been many noteworthy energy-related project cargo developments of late. One Thuresson describes as a milestone for AD Ports: “Fujairah Terminals is part of Abu Dhabi Ports, the region’s premier facilitator of logistics, transport and trade,” he explained. “The terminal has recently completed another significant milestone as part of the ongoing developments of Fujairah F3 Power Plant Project with a successful handover of three of the largest gas turbines to have ever been deployed in the UAE region. Scheduled for commissioning in 2023, the Fujairah F3 Power Plant Project will be the largest Combined Cycle Power Plant (CCPP) facility in the UAE, generating sufficient electricity to power the equivalent of 380,000 households.” It is one of the largest and most technical projects in the region. One move saw the shipment of three gas

turbines, each weighing 528 tonnes and measuring 13.85 meters in length, 6.12 meters in width and 5.98 meters in height.

‘SUSTAINED SUPPORT’ FOR PROJECT CARGO

In view of the ongoing development and expansion of the UAE’s offshore fields, onshore fields, port storage facilities, and port vessel facilities in addition to the UAE’s plans to expand mining, quarrying and the related demands for infrastructure, Thuresson sees this activity, taken together, as acting to support sustained and increasing demand for project cargo transport for movements. “The UAE seaports serve as both international and regional hubs, and are essential in driving and facilitating economic growth and diversification. Investment in augmenting both on- and offshore infrastructure puts the UAE in a good position to meet growing demands for project cargo movement by both sea and road. In addition, it ensures each emirate will sustain their businesses from these initiatives.

His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, Special Envoy for Climate Change and managing director and group CEO of Abu Dhabi National Oil Co. (ADNOC) addresses the Atlantic Council Global Energy Forum. CREDIT: ADNOC

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BREAKBULK MAGAZINE 49

ENERGY UPDATE

ADNOC is investing in new wells and a new carbon-efficient liquefied natural gas plant. CREDIT: ADNOC

“Moreover,” he continues, “the UAE railway program, Etihad Rail, linking the seven Emirates, establishes an integrated system for transporting goods and passengers across the country.” The program includes three key projects: freight rail, rail passenger services and integrated transportation. By 2030, the project is expected to create economic and business opportunities in the rail, logistics and transportation industries by transporting cargoes efficiently across the country.

GREEN TRANSITION SUPPORT

The UAE is adopting a balanced, proactive and positive approach to the energy transition that is “pro-growth, pro-sustainability, pro-prosperity and pro-climate,” according to Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, special envoy for climate change and managing director and group CEO of ADNOC. “Abu Dhabi has ongoing energy expansion and upgrade projects, whereas Dubai is engaged with construction projects contributing to the increased project cargo shipping and logistics requirements.” 50 BREAKBULK MAGAZINE www.breakbulk.com

Al Jaber added that the region’s drydocks are busy with vessel conversions to meet green regulations. In addition, new rig building orders are in development at Hamriya and Ras Al Kaimah. Power projects is another focus area where the UAE authorities are busy building up additional capacity. The UAE has an official goal of expanding its crude oil production capacity from 4 million bpd today to 5 million bpd before 2030. Some may wonder if the goal of achieving 5 million barrels per day production capacity is realistic in the short term, or whether there are reasons to expect that will this be a longer-term endeavor. In view of the committed actions backing up the pursuit of this goal, Thuresson is an optimist. “Yes, with the ongoing efforts to progress the country’s trade, logistics and other developments, the UAE aims to achieve its goal ahead of the official 2030 target year.” While seeking to reach such benchmarks in the near term, the UAE is simultaneously playing the long game. Addressing the Atlantic Council Global Energy Forum in March, Al Jaber explained that the UAE is driving a new low-carbon, high-growth

economic model that will guide its development for the next 50 years. He credited the UAE Leadership’s wisdom and foresight for laying the foundation for the country’s progressive approach to climate action that has ensured it is well-positioned to capitalize on the opportunities created by the energy transition. “When the UAE began its investments in renewable energy over 15 years ago, the economic case was difficult to make,” he said. “But our leadership’s vision has been verified by hard facts. And today, the UAE is home to the three largest and lowest cost solar plants in the world.” Clearly, while renewable energy facilities are expanded over the long term, production capacities of oil and gas facilities are not being ignored. It seems there is project cargo support to cover all eventualities in the UAE. BB Thomas Timlen is a Singaporebased analyst, researcher, writer and spokesperson with 31 years of experience addressing the regulatory and operational issues that impact all sectors of the maritime industry. JULY-AUGUST 2022

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Stefan Velte, head of Hasenkamp’s logistics and engineering solutions

PROFILE

CREDIT: HASENKAMP

NO BLUEPRINT FOR HISTORIC CARGOES

Hasenkamp’s Velte Revels in Unique Moves

roject cargo operations by their very nature depend on creative thinking and one-off solutions, and involve highvalue, out-of-the ordinary cargoes. Having said that, the specialists tasked with providing the solutions can often refer back to previous, somewhat similar challenges. Not so when one is talking about packing, lifting and transporting a pair of 11th century copper cathedral doors, measuring 4.72 meters high and with a width of 1.25 meters (left) and 1.14 meters (right), each door weighing 1.85 tonnes, with little room for maneuver, let alone full-size cranes. And not so when an artist creates such an enormous painting in his studio that it can’t be taken out via the door or window – the only solution being to raise the roof instead. 52 BREAKBULK MAGAZINE www.breakbulk.com

It would be flippant to describe such challenges as ‘all in a day’s work’ for Stefan Velte, but these are the type of challenges he handles on a regular basis as head of Hasenkamp’s logistics & engineering solutions, or LES, department. Velte’s department was well known as the ‘art inspection’ unit of the Cologne-based logistics company until the end of last year, so why rename it? Cologne-based Hasenkamp says: “LES sounds international and very technical. And that’s exactly how it should sound. In the many years that the department for special logistics challenges has existed, the demands on the team of 10 have steadily increased. The new English name is intended to reflect this better; and furthermore, it’s used to underline ever-increasing internationalization.”

BY FELICITY LANDON

Velte joined Hasenkamp 15 years ago and joined the department after a three-year traineeship. Since then, he has been involved in moving high-value works of art, including relocations for VIPs with large art collections and valuable furniture, transporting artwork to and from the world’s top auction houses, shipping artwork to and from exhibitions, and supporting museum renovations and relocations. As well as historical artifacts, the team handles highly sensitive and challenging scientific and technical items. “When we are moving artwork, we don’t have a manual for it – there is no blueprint when you are moving something that has maybe not been moved for 100 years or more,” he said. “We have been a pioneer in this business for 70 years. However, this is not classical engineering.” JULY-AUGUST 2022

PROFILE

TRANSPORTATION CONSIDERATIONS

Manufacturers of huge generators, transformers and other units usually give some thought to how the items are going to be transported to their end destination. An artist who creates a painting measuring 7 by 4 meters and weighing 500 kilograms probably hasn’t. Hasenkamp’s team has moved the entire contents of museums, including artworks and items of stone and wood; that has included de-installing, packing, transporting and reinstalling unique and irreplaceable items that were clearly not created with transport in mind. “There are nights when I do not sleep very well. When there is expensive art or difficult art to move, then I might lie awake, going through the process step by step, while I have the time to think it through. It is always in your mind – is this the right step? Can we do it another way? What happens if you do this step or that one?” The most challenging move was that of the Bernward Doors, which were originally made around 1015 for Hildesheim Cathedral in Germany. The largest of their era and each cast in one piece, the doors show relief images from the Bible, and are considered a masterpiece of Ottonian art. “Those doors were hightech for their time,” Velte said. “Our challenge was absolutely huge. The doors were being moved because the old church was being renovated; they were moved to another church close by, and afterwards we put the doors back again.” At the other end of the size scale, the team has moved the Nebra Sky Disk several times. “We always get to accompany it on its travels,” Velte said. “For me, it is as outstandingly valuable as it is beautiful, because with its estimated 3,600 years, it is the oldest testimony to the astronomical knowledge of our ancestors.

Moving the Bernward Doors proved to be one of Velte’s most challenging projects. CREDIT: SHUTTERSTOCK

Away from art, the team also moved the Alpha Magnetic Spectrometer (AMS-02), a €2 billion scientific experiment which was transported across Europe on its way to the International Space Station; Hasenkamp was in charge of planning and implementing the trip to the U.S., to NASA in Florida.

FROM ‘NAIL TO HOOK’

“It is a challenge because the glass is very thin and fragile. We have to create a good crate for it while thinking about any vibration or shocks during transport.” When moving enormous paintings, part of the challenge is the construction behind the wall at the destination site, ensuring this is strong enough to hold the weight. “Our job is to calculate everything, to plan with our customers, to find the solutions for the museum for them to have their show.”

The team likes to talk about business ‘from nail or hook to nail or hook.’ “We prefer to handle the whole process for transport – planning, dispatch, packaging and installation. There is also Customs to organize, which is very special regarding artworks or cultural goods, and of course insurance.” Founded in 1903, Hasenkamp remains family owned. It is managed today by fifth-generation owners Hans Ewald Schneider and Thomas Georg Schneider and by Ralf Ritscher. The company has more than 40 locations worldwide, operations in more than 30 countries and divides its activities into four business units: Fine Art, Relocation, Archive Depot and Final Mile Services. Increasingly active in the Middle East, supporting the construction of museums and modern art collections in the region, Velte’s team was part of the first move of artwork to the Louvre Abu Dhabi before it opened in 2017. The ‘small and agile’ core team draws on expert support from the wider company as required, including packers and drivers. “We have art packers who know exactly how to pack the artwork depending on material and climate and temperature conditions,” he said. “We find the right packaging and we have our own carpenters to create our own crates.” The company operates with partner companies and agents where it does not have its own location. Hasenkamp’s assets range from 600 trucks across the group to intricately developed cranes. These include small cranes designed to lift up to 5 tonnes, www.breakbulk.com

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Clockwise from top: Gantry cranes of different sizes and load capacities are part of the basic equipment of art logistics specialists. They can be used to move objects with millimeter precision. The often light and lively sculptures of Japanese-American sculptor Isamu Noguchi are real heavyweights. Lift trucks are an important tool for transporting them and placing them inside the museum. Employees of Hasenkamp pack a fossilized mammoth skeleton for transport to a museum exhibition in the U.S. CREDIT: HASENKAMP

to meet the challenges of limited access to museums and other premises. Mobile cranes, forklifts and other equipment are rented in if appropriate. “Sometimes it is better to ship a crane from Germany or wherever – or we can rent on site. It depends on costs and what is required,” Velte said. Packaging is only one consideration. For artwork and cultural items, storage must be kept at a constant 20-22°C or 68-72°F, the museum standard. “Our warehouses and trucks always keep to this temperature – no matter what they transport, we always guarantee this,” Velte said. Hasenkamp has 120,000 square meters of storage worldwide, and this is mainly used for this kind of art and other valuable goods. The temperature and humidity are maintained via a geothermal solution, combined with solar power. The company was also a trailblazer with the development of crates to maximize sustainability. “Forty years ago, Hasenkamp decided to build crates for art shipments from wood,” Velte said. 54 BREAKBULK MAGAZINE www.breakbulk.com

“We developed a system to enable the re-use of these crates. Some have been in usage for 20 years.” The company is developing crates made with Kiri wood, which offers a number of advantages, Velte noted – it burns only at over 400°C, it is strong and stable, and it is lightweight, delivering a crate that is only half the weight of a standard unit. “Light weight is good for us – if we don’t have to transport such heavy things, our carbon is reduced, and we need fewer people to lift it.”

ART INTRODUCTION

When Velte joined Hasenkamp, it was his first step from education into the world of work. “I knew nothing about the company; I looked at all sorts of options and when I found Hasenkamp’s home page, I thought it looked interesting and wanted to work there,” he said. Fifteen years later there have been clear advances. “The technical part is better – cranes are so sensitive. But at the same time, we are seeing more sensitive art, other materials, more fragile items.”

Digital twinning has become an important tool, enabling the team to create computerized simulations. “It is closer to the practice, but it is not the practice,” he noted. “The real thing is always different. You can’t simulate everything – when you are onsite, everything can change.” His interest in art has developed too. “When I go to museums, I always look behind the paintings; my question is how did it get in, how was it installed, how everything works. But I also love the art – when you are close to the artist and know the story behind the paintings, that makes it very interesting. I meet a lot of artists – when you can talk with them and they are so close to you, you understand that they want to have the best transport for their artwork.” BB Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors. JULY-AUGUST 2022

Breakbulk Events & Media’s biweekly BreakbulkONE newsletter keeps the industry connected between issues of Breakbulk. Here’s a selection of recent subscriber favorites.

HANSA MAYER, ROLIPROJECTS FORM PARTNERSHIP

Based in Houston, ‘Heart of US Industrial Project Market’ Logistics providers Hansa Meyer Global Transport and RoliProjects have formed a new joint venture based in Houston, Texas. Hansa Meyer RoliProjects will serve the North American project logistics markets and their related cargo owners, EPC operators and suppliers, the companies said in a statement. Germany-based Hansa Meyer Global Transport, with its network of 22 subsidiaries, has been a legal entity in the U.S. since 2010, but sold its shares in its operational and asset-based companies in 2021. RoliProjects is a trademark of international project cargo handler, Rohde & Liesenfeld. “We feel thrilled about our strategy to combine our groups know-how, capacity and contacts and to set up a

Hansa Meyer making hard turns look easy from Texas to New Mexico. CREDIT: HMG

brand-new company in Houston, the heart of the U.S. industrial project market, and to combine our forces,” said Jan-Dirk Schuisdziara, managing shareholder at Hansa Meyer Global.

Business development at the JV will be overseen by Julie Shafer, who has previously worked for GE Transport, Geodis and Rohde & Liesenfeld. BBONE

MAERSK CLINCHES DEAL FOR SENATOR INTERNATIONAL US$644 Million Deal Boosts Firm’s Air Freight Capacity A.P. Moller - Maersk has completed the purchase of freight forwarder Senator International, as the Danish shipping firm seeks to strengthen its air transport capacity. The value of the purchase on a post-IFRS 16 basis was about US$644 million, Maersk said. The carrier had announced its intention to buy the forwarder in November. Senator, founded almost 40 years ago in Hamburg, focuses on air and sea freight as well as on logistics, packaging and customs handling. Its services include project forwarding and heavy and special haulage. The forwarder’s air freight operations accounted for about 65 percent of its revenue in 2020. “As a global provider of integrated logistics, we are improving our ability

to provide end-to-end solutions to our customers,” said Vincent Clerc, CEO of ocean and logistics at Maersk. “With Senator on board, we are ramping up our air freight capacity, network, and know-how significantly to cater even better for our customers.” Maersk in April launched an air freight division, Maersk Air Cargo. The carrier aims to have one-third of

the annual air tonnage carried within its own controlled freight network, which it will do through a combination of owned and leased aircraft. The remaining capacity will be provided by strategic commercial carriers and charter flight operators, it said. Maersk will use Denmark’s secondlargest airport, Billund, as its European air freight hub. BBONE Air freight represented about 65 percent of Senator International’s revenue in 2020. CREDIT: SENATOR

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BREAKBULK MAGAZINE 55

UTC EXPANDS OPERATIONS IN GUYANA

Teams Up with Guyana Shore Base to Support Offshore Buildout UTC Overseas has expanded its logistics operations in Guyana after teaming up with the South American country’s largest shore-based contractor. The new joint venture with Guyana Shore Base Inc. provides operators project forwarding, warehousing, distribution and shore-based services, along with air, ocean and land transportation and customs clearance, Houston-based UTC said. GYSBI’s 130-acre supply base on the Demerara River, close to capital city Georgetown, provides shorebased management and logistics services for energy major ExxonMobil and other oil and gas operators in the region. UTC said the venture will give customers “boots-on-the-ground” local knowledge alongside a strong global network with expertise in turnkey, greenfield and large-scale energy projects.

“UTC’s reputation in the oil and gas market will open doors with existing and prospective customers,” said Steve Ross-Munro, UTC’s regional director in charge of business development. “Working with our extensive office network and partnering with GYSBI, we will collaborate to expand opportunities with customers worldwide, relying on the trusted experience and knowledge base that has driven both companies’ success,” he added. In less than a decade, Guyana has emerged as one of the world’s most exciting hot spots for offshore crude oil exploration, with estimated recoverable resources of more than 10 billion barrels of oil equivalent. A string of major offshore discoveries led by ExxonMobil could see the former British colony, with its population of just 790,000, becoming the world’s top per capita oil producer by the end of the decade.

CREDIT: UTC OVERSEAS

BREAKBULKONE

ExxonMobil, alongside partners Hess and CNOOC, expects to be producing more than 800,000 barrels of oil and gas per day from the 6.6-million-acre Stabroek block by 2025. Stirred by ExxonMobil’s success and the prospect of lower production costs as local infrastructure and expertise develops, other operators are entering the market, including Spain’s Repsol, UK-based Tullow Oil and Canada’s CGX Energy. “Guyana is a rapidly growing market, and joining with UTC is a natural progression for GYSBI to expand our service offering to our large existing client base,” said Sean Hill, general manager at GYSBI. “Our clients can now leave the full international and domestic transport headaches to us, allowing them to focus on delivering service quality to their clients offshore.” BBONE

UNITED HEAVY LIFT BEEFS UP ECO-LIFTER SERIES Newbuild Orders Raise F900 Fleet to 19 Vessels Germany-based project cargo specialist United Heavy Lift has ordered two more F900 Eco-Lifter vessels, raising the total number in its fleet to 19. The vessels, which have a lifting capacity of 900 tonnes each, will be built at the CSSC Hudong shipyard in Shanghai, and delivered in 2023 and 2024. The newbuilds feature high and low-pressure selective catalytic

56 BREAKBULK MAGAZINE www.breakbulk.com

reduction catalysts to meet IMO Tier III requirements, and claim a carbon footprint 30-50 percent less compared to the existing heavy-lift fleet in the market. “One of our goals is to reduce emissions from our own operations and help our clients achieve their decarbonization goals,” said Andreas Rolner, managing director of UHL. “We are phasing out all UHL 800 P-type vessels and replacing them

with fuel-efficient modern tonnage. Our vision is to become a sustainability leader in the heavy-lift industry.” The carrier took delivery of its first F900 vessel in 2019. Vessel number 17 in the series, UHL Felicity, was delivered in May. The UHL Felicity is set to make its maiden voyage from South Korea to Indonesia via Japan and Vietnam, the carrier said. Headquartered in Hamburg, UHL is part of United Shipping Group. BBONE JULY-AUGUST 2022

BREAKBULK EUROPE

Standardization Sought for Wind Turbine Blades Transporters See Disconnect Between Capacity, Affordability BY MICHAEL KING

Standardization of wind turbine blade sizes and more collaboration between OEMs and logistics stakeholders will be critical if the current disconnect between transport capacity and affordability and the shipping needs of manufacturers is to be bridged, delegates at Breakbulk Europe heard. In a session which focused on wind power, delegates heard that war in Ukraine and soaring energy costs were expected to drive renewable energy demand for the next decade, with wind power assuming vital importance for many countries. However, escalating logistics costs and the short shelf-life of customized transport solutions are inflating the delivered cost of wind turbines, as well as making it difficult for equipment providers to finance investments. Antonio Lázaro, director, global outbound logistic & transport solution CoE, LM Wind Power, said wind turbine sizes had increased exponentially in recent years and this “rate race” among OEMs was now sucking in transport companies “who need to match these investments even though their investment will be obsolete a few years later.” He added: “Every seven years our blades grow by 10 meters on average. This means factories need to get bigger, factory equipment needs to get bigger and transportation equipment needs to be changed every 5-6 years. This is an outrageous investment effort that our industry has to make, and the transport industry has to make.” Asked by moderator Thomas Sender Mehl, director, global sales & operations planning and supply chain excellence, KK Wind Solutions, how crane providers were affected by the upsizing race in the wind power supply chain, Andreas Ritschel, deputy sales director mobile harbor cranes, Liebherr-MCCtec Rostock GmbH, said it was not just about the weight that needed to be lifted.

Panelists from left: Antonio Lázaro, LM Wind Power; Rainer Sasse, Luxtrailers SARL; Peter Jacobs, Mammoet; Morten Nielsen, Vestas; Andreas Ritschel, Liebherr-MCCtec Rostock Gmbh; and Thomas Sender Mehl, KK Wind Solutions, moderator.

Other factors, he explained, were also the unit’s outreach and, increasingly, whether ports could even safely operate the largest cranes, or use them for other cargoes. “I remember a time when we thought a crane size of 120 tons or 140 tons would be the biggest crane that would be needed out in the market,” he added. “Then we had the next crane that could lift 200 tons. Then it was 300 tons; then 600 tons. If we now develop cranes for lifting 700 tons or 800 tons, we are not sure customers will even be able to use them for other cargoes.” Rainer Sasse, CEO, Luxtrailers SARL, said for companies using a transport equipment leasing model, it was untenable to invest in equipment which did not have a long shelf-life. “We need to know what’s going to be needed in 5 or 7 or 10 years,” he added. Morten Nielsen, product functional lead transport, Vestas, said more collaboration was “how we mature this industry.” Pieter Jacobs, head of onshore wind at Mammoet, also said more collaboration between OEMs and logistics providers on design was required to enable transport providers to more effectively plan ahead. “Innovation costs money,” he added. He called for more standardization across the wind turbine sector. “If we can standardize, that leaves more room for innovation to bring the industry together,” he added.

“Financing a standardized transport system is much easier,” agreed Sasse. “The more specialized the system, the more specialized and complicated the financing gets.” For his part, Lázaro said the wind turbine industry and its transport providers needed to reach agreement on how to move forwards. The current model, whereby every new OEM design required transport providers to “reinvent the wheel” and invest in a new generation of equipment every few years was simply driving up the landed costs of wind turbines. “There’s lots of potential in standardizing design, and then defining standard transportation systems,” he added. BB

Breakbulk Studios

See video interviews with session panelists: Thomas Sender Mehl, KK Wind Solutions https://youtu.be/qiyvrkN8Pbw Antonio Lázaro, LM Wind Power https://youtu.be/498vNcxS7Tg Andrea Ritschel, Lieberr-MMCtec Rostock GmbH https://youtu.be/80hIq6Uorzc

www.breakbulk.com

BREAKBULK MAGAZINE 57

BREAKBULK EUROPE Carsten Wendt, of Wallenius Wilhelmsen, considered a panelist’s comment.

‘Little Fires’ Burn the MPV World

Commercial, Contracting Terms and Conditions Need ‘Game Changer’ BY CARLY FIELDS

“Little fires everywhere” are making the multipurpose world burn – that was the assessment of the current chaotic shipping market for breakbulk and project cargoes by a panel speaking at Breakbulk Europe. Carsten Wendt, head of sales, high & heavy and breakbulk at Wallenius Willhelmsen, highlighted some of those “little fires” as lockdowns and Covid in China, physical disruption of vessels, labor shortages and the war in Ukraine. Taking note of the anticipated direction of travel for the container sector, panelist Frank Mueller, general manager at AAL Shipping, said that there can be no talk of “normal” yet. “We have not seen a ‘normal’ in capacity or rates and we will not for a long time. Looking at container carriers, they are ordering new vessels and fixing at extremely high charter rates for 48 months out. That’s my indicator for when we can expect rates to come down.” The audience heard that attempting to draw parallels with the peak of 2007 and the subsequent crash was 58 BREAKBULK MAGAZINE www.breakbulk.com

a futile exercise. “There are many differences between now and 2008,” Ulrich Ulrichs, CEO of BBC Chartering, said. “In 2008, the fleet was young; today, the fleet is relatively old. There were a lot of ships on order in 2008; and now the orderbook is very small. Ship finance was not a problem in 2008; today ship finance is very difficult.” There is also a major difference on the cargo side with the arrival of a major new commodity in the segment: renewables. “You have to appreciate these differences to set yourself in a new mental state going forward,” Ulrichs said. He added that in previous years the logistics service provided by the industry in this market has been underappreciated. “It is a sophisticated service with engineering involved and expensive assets, yet it is cheap and readily available. Now, people are learning the lesson that it is not so cheap anymore and it is also not available anymore.” AAL’s Mueller highlighted a “game-changer” that is set to rebalance the carrier/shipper dynamic, saying that the new normal will

require a completely new set of commercial and contracting terms and conditions. “We need to start changing T&Cs in a carrier market,” he said. “Over the past 10-15 years [carriers] have become very accommodating with requests simply to get cargoes. All this is going to change again - it makes more sense to streamline and be fair to everyone. We need to see a change in T&Cs in long term projects to bring partnerships back again.” BB

Breakbulk Studios

See video interviews with session panelists: Jason Williams, McDermott International Inc. https://youtu.be/YHEA2unI29w Cartsten Wendt, Wallenius Wilhelmsen https://youtu.be/XAROEIJJntA Frank Mueller, AAL Shipping https://youtu.be/5KE7ie_7B-w

JULY-AUGUST 2022

BREAKBULK EUROPE

‘Absolutely Chaotic’, ‘A Nightmare’ MPV Capacity Crunch as Congestion and Regulations Collide BY CARLY FIELDS

Ship congestion caused by China’s zero Covid policy coupled with incoming environmental regulations are playing havoc with multipurpose ship supply, according to a panel at Breakbulk Europe. Speaking as part of the Managing Rates and Capacity: What is ‘Normal’? session, Carsten Wendt, head of sales, high & heavy and breakbulk at Wallenius Willhelmsen, described the current ‘normal’ as “absolutely chaotic” and “a nightmare.” He told the audience that the carrier is facing heavy delays all over the world because of Covid. “This is not going away. The biggest concern is not so much rates, it is how to deliver what you promised and not have vessels waiting in ports.” He added that it is very difficult to perform and maintain schedule certainty, with costs piling up for delivering and picking up from ports. “This is creating friction and concerns.”

Wendt warned that the effects of the regional lockdowns in China will be felt throughout 2022 and probably into 2023. “If you think about the six-day Suez blockage from 2021, that took two to three months to sort. Just imagine what a six-week lockdown in Shanghai will mean.” The Covid shutdowns have collided with the arrival of international environmental regulations addressing emissions from shipping. While the Ballast Water Management Convention is already in force, more regulations will come into force in 2023 and these will impact MPV fleet availability even further. The regulations will require ships to be taken out of service for two to three weeks for retrofitting. Added to which, regulations entering into force in 2023 will require MPVs to slow down to meet emissions key performance indicators which will further impact capacity. Speaking on the panel, Ulrich Ulrichs, CEO of BBC Chartering, said: “You have to meet these regulations so either you go slower, or scrap the vessel.”

He added that BBC had “a lot of” ships that needed to be docked for retrofitting to meet environmental regulations. “As far as we are concerned China is out for drydocking, so the ships all have to come to Europe,” he said. “That means we have a cluster of ships in Europe and we can’t spread around docking schedules.” Ulrichs warned the audience to also keep an eye on brewing union-related labor issues on the U.S. West Coast as well. While they primarily affect containers, they will have an impact on other sectors, he said. “This could be a massive disaster for all trades.” He stressed that this is not a ship supply issue, it is a capacity issue with the MPV fleet stuck in ports waiting out lockdowns. “In the past, the risk of delays was always manageable,” Wendt concluded. “Now it is so volatile and it is not just one port, it is many, all over the world. It is uncontrollable.” BB

Panelists from left: Susan Oatway, Drewry; Ulrich Ulrichs, BBC Chartering, Frank Mueller, AAL Shipping; Carsten Wendt, Wallenius Wilhelmsen; and moderator Jason Williams, McDermott International Inc.

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Roger Strevens of Wallenius Wilhelmsen makes a point to moderator Gina Panayiotou of the World Oceans Council, while Sören Werbeck of Hapag-Lloyd AG listens.

Support for Breakbulk’s Decarbonisation Carriers ‘All in the Same Boat’ in Meeting Environmental Regulations BY CARLY FIELDS

The environmental agenda in breakbulk and project cargo shipping cannot be achieved without productivity, innovation, constant constructive dialogue, carbon pricing, trust and reliability. Those factors combined will support the industry in its decarbonization, according to a Environmentalism and Future Fuels within Breakbulk panel discussion at Breakbulk Europe 2022. Roger Strevens, vice president of sustainability at Wallenius Wilhelmsen, said that no company can be “complacent and successful” in driving change, while Sören Werbeck, director of specials strategy & steering at Hapag-Lloyd AG, noted “we are all in the same boat” when it comes to meeting environmental regulations. The panel discussed a range of fuels, including biofuels and electrofuels, concluding that there is no one-size-fits-all approach. Strevens said it is hard to nail colors to the mast with one fuel in the deep-sea trades. Werbeck reminded the audience that the life cycle of production needs to be included in considerations of which fuel to use and that there are still efficiency gains to be made. Bernard Van Haeringen, commercial manager of marine at GoodFuels, added that life cycle consideration is needed to be sure that a fair assessment can be made. 60 BREAKBULK MAGAZINE www.breakbulk.com

Reducing the number of voyages in ballast would help, added Leif Arne Strømmen, a partner at Peak Group. Strevens noted that Wallenius Wilhelmsen’s target is to have all vessels full all the time. “That makes the most sense economically and also from an environmental perspective.” He added that while regulation is currently only looking at the fuel tank of the ship to the wake of the ship, full life cycle is “definitely coming.” Strevens pointed out that the decision of which future fuel to bunker is not simply a technical one: “It’s operational in that is the fuel in the place you need it; it’s financial; then there’s a regulatory dimension; and finally, the fuel needs to be commercially viable. We need options, we can’t take anything off the table.” Operators need to ask two key questions when considering which fuel to use. Firstly, is the fuel available and is it available where you bunker and secondly, is it more expensive than what you otherwise use. “If so, you need something to close that gap. Regulation is one option, demand is another,” Strevens said. Van Haeringen described biofuels as a “great option” for making an impact right now. GoodFuels develops sustainable, scalable and affordable biofuels. Strømmen said he was an advocate of carbon pricing to help support first movers and a proponent of hybrid solutions to ensure flexibility.

Regulators, meanwhile, now have a firm eye on shipping’s decarbonization, and while the International Maritime Organization has been criticized for its slow decisionmaking progress, the European Commission has “really set its sights on shipping,” Strevens said. “There is an impatience in Europe at the pace of developments at the IMO.” With all the change and uncertainty surrounding fuel choices for multipurpose operators, the industry faces a “very disruptive” journey, Van Haeringen said. “The choices that shipowners need to make, and the costs are super impactful.” Added to which, everything that is cheap and easy to fix has been done, Strevens said; “What’s left is difficult, destructive and dear.” BB

Breakbulk Studios

See video interviews with session panelists: Gina Panayiotou, Oceans Arena https://youtu.be/6ioLLqfD7pw Roger Strevens, Wallenius Wilhelmsen https://youtu.be/XAROEIJJntA Sören Werbeck, Hapag-Lloyd https://youtu.be/j39-RZZYexs

JULY-AUGUST 2022

BREAKBULK EUROPE

No Quick Fixes for Supply Chain Disruption Decade-long Trade Tensions Laid Groundwork BY CARLY FIELDS

The disruption plaguing the projects market today did not start with the war in Ukraine or with the pandemic, according to a panellist speaking at Breakbulk Europe. Marie Louise GammelgaardLarsen, senior associate at Kaya Research and Advisory, said that today’s disruption has its roots in the trade tensions that surfaced last decade. That long lead-in means that there are no quick fixes to master today’s disruption. “Right now, we need to do everything at the same time,” she said. “We are coming from 70 years of diversification and globalization and now we are seeing disruption.” Additionally, the market cannot “magically” meet growing renewables demand overnight, she warned. “We have to be realistic. We have to have emergency planning and be ready to use means that are not green in the

short term – and that includes coal and nuclear.” Martyn Lawns, regional vice president European operations – industrial projects at DHL Global Forwarding, described the impact of the current disruption as a “nightmare” for DHL’s customers. “I look at the struggles of our customers – it’s the perfect storm at the moment, coming out of the pandemic, with the high oil price impacting supply chains further.” Moderator Thomas Poulsen, managing partner and facilitator at Panticon, Wind Logistics Group, noted that the current supply chain disruptions have created the paradox of rising emissions in the short term, contrary to the theme of energy transition. Meanwhile, Beata Bac, global category manager – warehousing and inbound logistics, Shell International, asked what a sustainable transition actually means, as the definition is key to the solution. “To me, it means sus-

tainable business practices, reducing waste and boosting efficiencies. It is important to look at this through that perspective.” Lawns encouraged the audience to get in early where there is an opportunity to influence logistics decisions. “There has been a tendency to think that logistics is the last part of the chain,” he said. “We are trying to bring the logistics requirement forward, as early as possible in the process.” Lawns added that the industry as a whole needs to be making fewer journeys, and not only from an economic point of view. In a parting rallying cry, the panelists called on the audience to collaborate, beyond the verticals that they operate in, and to engage in conversations on the energy transition. “It takes everyone to participate in a complex environment – shippers, governments, EPCs and suppliers – to be able to deliver sustainability,” Bac said. BB

Breakbulk Studios

See video interviews with session panelists: Marie Louise Gammelgaard Larsen, Kaya Research and Advisory https://youtu.be/j8IVnpQpK5o Panelists, from left: Moderator Thomas Poulsen Panticon; Wind Logistics Group; Marie Louise Gammelgård-Larsen, Kaya Research and Advisory; Martyn Lawns, DHL Global Forwarding Industrial Projects; and Beata Bac, Shell International.

Martyn Lawns, DHL Global Forwarding https://youtu.be/qYNw4CbmwIU

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BREAKBULK EUROPE

Unwinding What ‘Normal’ Will Look Like Drewry’s Oatway Says Disruptions Continue to Cloud Outlook BY MICHAEL KING

War in Europe, Covid-19 lockdowns and ongoing supply chain disruptions will continue to cloud the outlook for the multipurpose vessel, or MPV, sector in 2022, according to Susan Oatway, senior analyst, multipurpose and breakbulk shipping for Drewry Shipping Consultants. Speaking at Breakbulk Europe 2022, she said Ukraine had “usurped” Covid at the top of the list of issues creating market uncertainty in the short to medium term. “Russia’s invasion of Ukraine might not have a clear impact on MPV trades, except perhaps in the short-sea Northern European market, but the impact on global confidence, rising commodity prices and the competing sectors has definitely caused the rate rises of the past 12-18 months to falter,” she said. Drewry’s Multipurpose Time Charter Index, which tracks one-year period charter rates across a basket of vessels including breakbulk and project cargo ships was steady in April, halting the declines suffered in March. This meant that in the year to April 2022 the Drewry index was up 40 percent, and had surged 88 percent since April 2020. However, Drewry expects the index to soften throughout the year. “We had expected a slight softening [in April], but rates were held up by China’s Covid lockdowns and extended Easter holidays in Europe,” Oatway said.

“Going forward, we expect the weakening trend to return in May with the Index dropping, albeit by less than 0.5 percent to $11,120 per day.” Aside from the gloomier outlook for the global economy, another negative for MPV operators is the anticipated reduction of container supply chain disruption later this year and in 2023. “Much of the recovery we have seen over 2021 is more to do with the supply chain crunch in the competing sectors than it is with any significant volume increases,” Oatway said. “The MPV sector has benefitted from the desperate search for space, which has resulted in cargoes that were previously containerized moving back onto breakbulk vessels. This effect is expected to weaken over the second half of 2022 and into 2023.” Oatway also said the age of the MPV fleet was “concerning” and new IMO EXII [Energy Efficiency eXisting ship Index] regulations might impact vessel supply due to rising demolitions and slow steaming.

“Newbuildings are thin on the ground and yet there is a demand for a more eco-conscious fleet – but where is the funding for the next generation of multipurpose ships?” she asked. For its part, the heavy-lift-capable fleet is growing, albeit very slowly. Oatway said: “Unlike the container sector, MPV operators rarely invest without purpose these days. So will renewable energy be the catalyst for that new investment?” The upshot of so much uncertainty, according to Oatway, is a future in which defining ‘normal’ might be difficult. For MPV operators, much will depend on the strategies of shippers. “I am often asked when will the market return to normal?” she said. “But I think the question should be what will ‘normal’ look like when the current issues have unwound? “The strategy of shippers will be paramount – breakbulk moving back to containers? Project cargo in project carriers or ro-ro? How will these strategies change as container rates fall? “All of these will have an impact on that ‘normal’,” she said. BB

Breakbulk Studios

See video interviews with session panelists: Susan Oatway, Drewry https://youtu.be/6a_ixELnFqA

62 BREAKBULK MAGAZINE www.breakbulk.com

“The strategy of shippers will be paramount,” Drewry’s Susan Oatway remarked during her Breakbulk Europe presentation.

JULY-AUGUST 2022

BREAKBULK EUROPE

Participants at Philip Bacon’s chartering workshop included brokers, port agents, energy executives, carriers and cargo owners.

The Lowdown on Chartering

Philip Bacon Leads Engaging Workshop at Breakbulk Europe BY SIMON WEST

Breakbulk Europe 2022’s first day kicked off at the Rotterdam Ahoy with a workshop aimed at giving full-time chartering professionals as well as those who work with chartering contracts a clearer understanding of the practice’s principles and applications. The instructor for the all-day session was Capt. Philip H. Bacon, vice president of operations at shipowning group Siem Shipping Inc., and Fellow of the Institute of Chartered Shipbrokers. “For practitioners, the takeaway will hopefully be a panoramic – albeit brief – of the essentials relating to the other parts of the chain which they do not work in daily,” said Bacon, whose four-decade career has included extensive training in the commercial, management, contractual and legal aspects of shipping. “As the term implies, in a chain there are links to other segments

which one often knows little about. Many people dealing with breakbulk transportation are not maritime professionals, as they are on one of the ends of a chain.” The workshop covered a number of key topics including major cargoes and trade routes, chartering terminology, shipping and market sector definitions, bills of lading and the advantages and limitations of shipbroker authority. The session, which included two networking coffee breaks and lunch, also explored the profit and loss levers and rationale of breakbulk cargoes, key stakeholders in a chartering contract and demurrage and despatch across different sectors. “For all, it is an opportunity to step back and rethink the basics of this segment of shipping. As the services are commercial, the contracting is essential,” Bacon said. Among the dozen participants attending the workshop were brokers,

port agents, energy executives, carriers and cargo owners. Renate Verhoeven, purchasing manager at Rowood, a Netherlandsbased importer and wholesaler of timber and wood-based panels, said her company was considering shifting to breakbulk from containers as a way to improve supply. “A lot has been covered in this workshop, right from the basics, so it has been really good. It is really teaching us a lot, giving us all the terms and everything you need to know. As cargo owners it is a great way to learn.” Nima Yedegary, a freelancer working in project shipments, signed up to the session as a way to provide better services for his clients. “Shipping changes on a daily basis, so it is important to understand what is happening in the market, and to have a forward-thinking approach. To provide better services you have to increase your knowledge.” BB www.breakbulk.com

BREAKBULK MAGAZINE 63

BREAKBULK EUROPE

Africa Ports Ready to Compete

Government-Private Capital Dialogue Key to Ensure Sustainability BY SIMON WEST

African port development is accelerating at an exponential rate, creating a raft of new business opportunities for breakbulk and project cargo. But more transparency is required between local governments and private capital to ensure project success. That was one of the key takeaways during Breakbulk Europe’s African Port Projects Update session, moderated by Lars Greiner, associate partner for Middle East and Africa at Hamburg Port Consulting. Paul J Gallie, director of business development at AP Moller Capital and a speaker on the panel, told listeners that dialogue between governments and granting authorities on the one hand and the private sector on the other needed to start much earlier. AP Moller Capital has deployed US$1 billion over the last three years into its Africa Infrastructure Fund, which comprises a number of investments in ports in West and East Africa. “Discussion is absolutely key to avoid white elephant investments that unfortunately exist in Africa and around the world. In order for Africa to take full advantage of being able to develop these new green economies, we need to work together in a more sustainable way.”

Breakbulk Studios

See video interviews with session panelists: Lars Greiner, Hamburg Port Consulting https://youtu.be/ErKuWTJDMDk Capt. Paul Gallie, A.P. Moller Capital and AIF Ports & Logistics Management Ltd. https://youtu.be/o52YId-69dQ

64 BREAKBULK MAGAZINE www.breakbulk.com

Michael Wilfried, Port Authority of Kribi, addresses other panelists

The director pointed to the changing role of private capital, with environmental impact and job creation now top priorities. “It is interesting to see how DFIs and lenders have changed their tune over the years. One of the first things they start looking at now is sustainable development goals and compliance. If they do not meet those then they will not even talk about financial returns and debt covenants. “You have to have a sustainable project, it has to be community friendly, and that is the way it should be.” Port projects in Africa are expected to rocket in the coming years, with panelists underlining the region’s massive potential. The Port of Kribi, in southern Cameroon, about 50 kilometers from the border with Equatorial Guinea, is undergoing some major upgrades, including the expansion of its container terminal and work an onshore hydrocarbons facility. Michael Wilfried, director at the Port Authority of Kribi, revealed plans to create Cameroon’s first free trade zone at Kribi, with ongoing discussions with partners to develop the first 500 hectares of the new industrial sector. “We really want to create a hub for industrial and logistical operations in the region,” the director said.

Adding that more work was needed to improve the connectivity between different markets in Africa to capitalize on investments. Developments are also underway at Benin’s Port Cotonou, which has been under the management of the Port of Antwerp-Bruges since 2018. The port’s “makeover,” which calls for improvements to digitalization, transparency, training and infrastructure, is expected to take nine years. The project will also see the construction of a new terminal for bulk and breakbulk operations. Kristof Van Den Branden, the port’s commercial director, said that while the main focus was to create a world-class port facility, the expansion of green initiatives was high on the agenda. “Port development goes handin-hand with solar energy and other renewable energies,” Van Den Branden said. “There are studies ongoing for wind energy, defining the right spot either onshore or offshore.” He added: “Africa has not always had the best image unfortunately, and historically there have been reasons. But I think there is a whole change of mentality ongoing in a lot of African countries, and I think part of that is having companies like Port of Antwerp involved in these investment projects.” BB JULY-AUGUST 2022

BREAKBULK EUROPE

Sustainability: Record, Report and Reduce Session Speakers Discuss Standards for the Industry BY SIMON WEST

How can carriers and shippers work together to record and report their emissions and become more sustainable? That was a key question for panelists in Breakbulk Europe’s Sustainability Across the Supply Chain session, moderated by Stephen Spoljaric, corporate manager of global logistics at Bechtel Corporation. The U.S.-based engineering, construction and procurement company, or EPC, has been advocating this year the three Rs: Record, Report and Reduce. “Our belief is that if we cannot be good at recording, and understand how we are going to report, the reduction part is nice, but you cannot really gather any details from it,” Spoljaric said. The enjoyable session, presented in a gameshow format whereby each participant rang a small bell to respond to a question – or, in the case of speaker Rick Bruinsma, senior project manager at Jumbo-SAL-Alliance, his daughter’s bicycle bell – looked at how breakbulk could learn from

efforts in the container industry to produce standardized reporting guidelines for operators. If containers can do it, why can’t breakbulk? Asma Ouchan, business development manager at Smart Freight Centre, a non-profit organization focused on reducing greenhouse gas emissions from freight transportation, pointed to the challenge of bringing shippers and carriers together to exchange data. “The methodology is there, however the alignment between shippers and carriers – that is the tricky part. Data exchange, that is the biggest issue,” Ouchan said. Tim Killen, chief sales officer at deugro, said his company already uses online tools to understand, measure and report to customers information on emissions for different modes of transport, but admitted that, industrywide, the practice was still in its early stage. “With our partners we have taken a big step forward, and I think it is going to progress in the next few years as well.”

Which entity should have responsibility for defining and drafting the first guidelines? “There needs to be government involvement,” Killen said. “We signed up to the commitments of COP26 last year, and leaving it to industry on their own without government support, intervention and guidance I think would be not the right step.” Henrik Andersson, head of sustainability at Höegh Autoliners, said the sector was on the right track, but it needed better access to carbon-neutral fuels and technology. The moderator also asked if carbon offsetting and carbon credits were a positive development. According to Bruinsma, a thin line exists between carbon offsetting and greenwashing, while Killen said that for it to work, there needs to be strict monitoring. “It needs to be assessed, it needs to be audited and it needs to be qualified by a third party to ensure that the commitments and promises that were made in terms of offsetting and trading are actually delivered.” BB

Breakbulk Studios

See video interviews with session panelists: Stephen Spoljaric, Bechtel Corporation https://youtu.be/1THxq59uCqk Henrik Andersson, Höegh Autoliners AS https://youtu.be/iHtCyxX9vUk Asma Ouchan, Smart Freight Centre https://youtu.be/q2QfYTbCu30

Panelists Rick Bruinsma, Jumbo-SAL-Alliance, and Asma Ouchan, Smart Freight Centre.

Rick Bruinsma, Jumbo-SAL-Alliance https://youtu.be/USDg_HopYWo

www.breakbulk.com

BREAKBULK MAGAZINE 65

BACK PAGE

STEEL PRODUCTION

Annual Crude Steel Production 2014-2021 Annual production million tonnes China

1200

Rest of World

World

China

Annual growth trend (%) Rest of World

15 12

1000

9 800

600

3 0

400

-3 200

-6 2014

2015

2016

2017

2018

2019

2020

2021

-9

Largest Steel Producing Countries

Of the 40 producing countries listed, only two saw declines – China and Iran – while 26 countries recorded double-digit growth in 2021 In million tonnes RANK

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

China India Japan United States Russia (e) South Korea Turkey Germany Brazil Iran (e) Italy Taiwan, China Vietnam Ukraine Mexico Indonesia Spain France Canada Egypt Saudi Arabia

2021

2020

1,032.80 118.2 96.3 85.8 75.6 70.4 40.4 40.1 36.2 28.5 24.4 23.2 23.0 21.4 18.5 14.3 14.2 13.9 13.0 10.3 8.7

1,064.3 100.3 83.2 72.7 71.6 67.1 35.8 35.7 31.0 29.0 20.4 21.0 19.9 20.6 16.8 12.9 11.0 11.6 11.0 8.2 7.8

2019 % Change 1,001.3 111.4 99.3 87.8 71.6 71.4 33.7 39.6 32.6 25.6 23.2 22.0 17.5 20.8 18.4 7.8 13.6 14.4 12.9 7.3 8.2

-3.0 1.8 17.8 18.0 5.6 4.9 12.8 12.3 16.8 -1.7 19.6 10.5 15.6 3.9 10.1 10.9 29.0 19.8 18.2 25.6 11.5

RANK

2021

2020

22 Poland 8.5 23 Austria 7.9 24 United Kingdom 7.2 25 Belgium 6.9 26 Malaysia (e) 6.9 27 Netherlands 6.6 28 Australia 5.8 29 Bangladesh (e) 5.5 30 Thailand 5.5 31 Pakistan 5.3 32 South Africa (e) 5.0 33 Argentina 4.9 34 Slovakia 4.9 35 Czechia 4.8 36 Sweden 4.7 37 Kazakhstan (e) 4.4 38 Finland 4.3 39 Algeria 3.5 40 Romania 3.4 Others 36.3 World 1,951.20

7.9 6.8 7.1 6.1 6.6 6.1 5.5 5.5 4.5 3.8 3.9 3.7 3.4 4.5 4.4 3.8 3.5 3.0 2.8 35.3 1,879.4

2019 % Change 9.0 7.4 7.2 7.8 6.8 6.7 5.5 5.1 4.2 3.3 6.2 4.6 3.9 4.4 4.7 4.1 3.5 2.4 3.4 39.6 880.1

7.6 16.2 1.4 13.1 4.5 8.2 5.5 0.0 22.2 39.5 28.2 32.4 44.1 6.7 6.8 15.8 22.9 16.7 21.4 2.8 3.8

(e) Annual figure estimated using partial data or non-worldsteel resources. * The world total production figure in this table includes estimates of other countries that only report annually. Source: World Steel Association, www.worldsteel.org 66 BREAKBULK MAGAZINE www.breakbulk.com

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