Breakbulk Magazine September/October 2015 by Breakbulk Events & Media

Loss of Confidence n Serious About Infrastructure n Iran: A Re-emerging Power n Crossroads of Asia, Europe

SEPTEMBER/ OCTOBER 2015

Harnessing Wind Industryâ&#x20AC;&#x2122;s Repowering Drive

SECOND

WIND

contents

26 TRADE NOTES

LOSS OF CONFIDENCE

Pros, Cons and Evolution of China’s Economy

32 MARKET SPOTLIGHT

GETTING SERIOUS ABOUT INFRASTRUCTURE

Promise – And Perils – of Mexico’s Bold New Program

46 REGIONAL REVIEW

CROSSROADS OF ASIA, EUROPE Turkey’s Location Should Bolster Economic Growth

10 SECOND WIND

Harnessing Wind Industry’s Repowering Drive

cover story

56 ECONOMICS

CHECK AND BALANCE

Brazil’s Potential Needs to be Weighed Against Risk

62 REGIONAL TRENDS

A RE-EMERGING POWER Iran Stands to Regain Oil, Gas Prominence

72 LOGISTICS PROFILE

MAKING (AND BREAKING) RECORDS Almajdouie Logistics Enters New Era with Restructuring

8 Editorial n 106 Port Focus: Pacific Project Gateway n 109 Insurance: Value in Knowledge n 110 Opinion: Solutions For Any Cargo 138 Breakbulk Index n 146 Iran And The New Slow 4 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

contents

90 CASE STUDY

TAKING THE HEAT Arid Climates, Fluid Laws Vex Middle East Haulage

96 LOGISTICS PERSPECTIVE

BEYOND THE BUY The Procurement-Project Cargo Interface

118 TECHNOLOGY

MAKING A POSITIVE I.D.

Auto-ID Technology Gains Traction in Breakbulk Sector

126 THE RE-ADJUSTMENT BUREAU

oil & gas

China Survives Weak World for Offshore Oil

132 INFRASTRUCTURE

CLIMBING THE MOUNTAIN

Rebuilding Nepal Will Take Brawn and Stamina

ADVERTORIAL SPECIAL

AMERICAS LOGISTICS

SPECIAL INSERT

PORT PROFILES

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SEPTEMBER-OCTOBER 2015

Understanding customer needs

1 2

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Preparing cargo transport

Planning the voyage

Executing the voyage

Continuous improvement 6

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editorial

SEARCHING FOR ANSWERS

O Gary Burrows

ur Breakbulk events, which bring together thousands of professionals from all aspects of the breakbulk, heavy-lift and overdimensional industry, serve as an opportunity to benchmark. Certainly, industry leaders attending Breakbulk Americas Oct. 5-8 in Houston, Breakbulk Middle East, Oct. 25-28 in Abu Dhabi, as well as our other events, connect in the here-andnow, explore issues and conduct business among shippers, EPCs, transportation and logistics executives. These industry events are also a chance to look back, and to peer forward, measure success against shortfalls and forecast growth and potential constraints. Between the buzz of activity and blush of revelry, there may be the slight burn of uncertainty. While volatility has been the norm ever since the Great Recession, issues on the horizon in key industry markets raise challenges for the coming year. At the forefront is the world’s second-largest economy, China, as the tremendous volatility on the Shanghai Stock Exchange, its slowing economic growth and uneven export demand wreak havoc with the global dynamo. In this issue, writer Eric Johnson explores the implications for the world’s breakbulk industry (“Loss of Confidence,” page 26). With the pending approval of Iran’s re-entry into the world economy, the most prominent question is whether Iran can make a meaningful impact on the global oil and gas markets. As V.L. Srinivasan explains

8 BREAKBULK MAGAZINE www.breakbulk.com

(“A Re-emerging Power,” page 62), Iran’s nuclear agreement merely clears the first obstacle it faces. Most glaring for our industry is the estimated US$200 billion in investment needed for Iran’s oil and gas industry, including US$70 billion for its petrochemicals, to upgrade technology and repair oil fields crippled as far back as the 1980s during the eight-year war with Iraq. Separately, Janet Nodar spoke about Iran’s re-emergence with Eduard Gracia, principal with A.T. Kearney’s energy practice and keynote speaker at Breakbulk Middle East on Oct. 27 (“Iran and The New Slow,” page 146). On the positive side, Mexico has seen its manufacturing output steadily improve over the past decade. As Alan Field reports, the Mexican government, in an effort toward becoming a truly modern industrial economy, has embarked upon an ambitious infrastructure development program (“Getting Serious About Infrastructure,” page 32). In addition, Mike Willis details Turkey’s continued rise in economic stature and how that has translated into growth in infrastructure, including port development (“Crossroads of Asia, Europe,” page 46). However, its momentum is projected to slow, raising the question of whether Turkey is facing the “middle income trap.” Food for thought during Breakbulk Americas and Breakbulk Middle East, two events where insights may be gleaned on these and other emerging issues shaping the industry.

EDITORIAL DIRECTOR Gary G. Burrows / +1 904 535 5460 gburrows@breakbulk.com NEWS EDITOR Carly Fields carly@breakbulk.com DESIGNER Catherine Dorrough REPORTERS Alan M. Field Mary Shacklett Eric Johnson V L Srinivasan Michael King Herman K. Trabish Lori Musser Mark Willis Criselda Diala-McBride BREAKBULK EDITORIAL BOARD John Amos Amos Logistics

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cover story

SECOND

WIND

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SEPTEMBER-OCTOBER 2015

Harnessing Wind Industry’s Repowering Drive BY HERMAN TRABISH

Credit: Shutterstock

small but steadily growing opportunity is emerging in the wind industry that could open a new stream of breakbulk activity for carriers, ports, and transport hubs around the world. The first utility-scale wind turbines were installed in the early and mid-1980s in California and Europe. They were, by today’s standards, small. Many have shown, by any standards, impressive durability. But they are getting old. Replacing them, and in some cases renovating and reselling them, is a niche business, but there’s potential for those who can make the numbers work. “By 2020, there will be a huge demand in repowering,” explained Feng Zhao, director of FTI Consulting, who has studied what is happening in this area. www.breakbulk.com BREAKBULK MAGAZINE 11

cover story

“The actual rate in 2014 for the 10 European countries that made up the bulk of decommissioning was 428 megawatts (MW). Assuming a 20-year turbine life span, the decommissioning rate for 2015 will be 764 MW. It is expected to reach 2,511 MW in 2020 and 5,928 MW in 2030.” Those decommissioned turbines will either stand in silent tribute to early wind development, be repowered, or be sold. If they are sold, they will either be scrapped or refurbished. There are two types of repowering, according to Wind Power Project Repowering by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL): • “Full repowering” means complete replacement of a turbine at the project site. • “Partial repowering” means modernizing existing turbines at existing sites on their towers and foundations with new hardware such as drivetrains or rotors to increase their energy production and reliability. These operations mean moving new bulk in, while some also require moving old bulk out.

Repowering Origins

The first repowering was in California and Denmark in the 1990s. Activity followed in the Netherlands and German markets in the 1990s and 2000s. Those places remained the principal markets until very recently, when other European countries started seeing repowering and refurbishing investment. The 10 European countries where the current action is, according to Zhao, are Germany, Denmark, Netherlands, Italy, Sweden, Spain, UK, Ireland, Finland and Norway. Germany, Denmark and the Netherlands are where most of the decommissioning, replacement of foundations, and installation of newer, bigger turbines is taking place, he added. In 2014, according to Steve Sawyer, Global Wind Energy Council executive director, Germany decommissioned 364.4 MW and repowered 1,148 MW. Denmark decommissioned 29 MW and repowered 75 MW, while the U.S. decommissioned 88 MW. Germany’s incentive for repowering expired at the end of 2014, but it is 12 BREAKBULK MAGAZINE www.breakbulk.com

WIND ENERGY PENETRATION AMONG COUNTRIES WITH MOST INSTALLED CAPACITY Europe offers the greatest potential for wind turbine repowering. DENMARK IRELAND PORTUGAL SPAIN ROMANIA GERMANY U.K. GREECE SWEDEN AUSTRIA NETHERLANDS POLAND CANADA ITALY U.S. AUSTRALIA TURKEY FRANCE CHINA INDIA BRAZIL MEXICO JAPAN

10%

20%

30%

40%

Source: U.S. Department of Energy

nevertheless expected to decommission 500 MW in 2015, “presumably with most or all of it being repowering,” Sawyer reported. The total volume of the repowering opportunity at present is not impressive in comparison with the gigawatt (GW) standards of today’s wind industry: the world built 51,230 MW (51.2 GW) of new wind in 2014. But there is more breakbulk volume represented by the significantly smaller repowering numbers than might be immediately apparent. “Most of the older turbines are smaller than 800 kilowatts (kW), Zhao explained. “Many are as small as 100 kW or 120 kW.” Those were common sizes for early

utility-scale machines 20 years to 30 years ago when the wind industry emerged. Among the most commonly decommissioned and repowered turbines today are the very successfully marketed 225 kW Vestas V27 and the 660 kW Vestas V47. “They are not widely available from OEMs as new turbines but are still quite useful in places like Africa and Poland,” Zhao said. Private investors in Eastern Europe and Latin America are also beginning to see such turbines as bargains, according to Zhao. Windbrokers, a Dutch secondhand turbine dealer, reported its €30 million business over the past 10 years had taken €5 million in orders in the first four months of 2013. Today’s wind projects use turbines averaging almost 2 MW in the U.S. and averaging as much as 2.7 MW in some European markets. A single GE, Siemens or Vestas machine might replace a dense array of smaller turbines. While handling the very large modern turbines is more challenging, the volume of bulk they replace might be quite significant. In Germany, for instance, 2014 saw 544 wind turbines with a combined capacity of 364 MW decommissioned and replaced by newer but far fewer turbines with a capacity of 1,000 MW, according to GWEC’s Global Wind Report 2014. Opportunity in the U.S. is also becoming more evident. There are some 10,000-plus turbines with a 250 kW or less capacity still operating after 20 years or more of service, according to Turbine Technology Partners. They represent an estimated 1.2 GW of cumulative capacity. There is likely another 2.5 GW in turbines with 250 kW to 750 kW capacities that are 10 years to 15 years old. The economics of repowering has limited most of the activity to countries with well-established wind markets and local manufacturing facilities so that delivery and removal can typically be handled by rail and trucking, Zhao said. “Poland was one of the most popular countries in Eastern Europe for the sale of second-hand turbines, especially the V27.” After 2005, Poland emerged as an important Eastern European wind SEPTEMBER-OCTOBER 2015

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Other refurbished turbines are going to budding African wind markets like Kenya and Ethiopia where, after being thoroughly renovated with new components, they likely can serve “at least another 10 years,” Zhao said.

Transporting, Refurbishing

Movements of decommissioned parts can be challenging. / Credit: Windmatic

market and the leading original equipment manufacturers began installing 1.5 MW, 2 MW and larger turbines, Zhao said. Before that, there was no policy support for wind development in the wind-rich country, he explained. “Second-hand turbines were being actively marketed.” Western European countries, especially Germany and Denmark, were

beginning to decommission turbines from the late 1980s and early 1990s and welcomed the market, especially because transport to Poland was relatively easy. With Poland emerging as an important wind growth market, the volume of second-hand turbine sales has dropped off to “perhaps one or two per year,” Zhao said. “Previously, some communities bought two to five at a time.”

“In many countries in Africa, the road transport is bad and the transmission system is weak, so the larger turbines are not as useful as the older, smaller, second-hand turbines, like the Vestas V27 and V47,” Zhao said. The smaller machines require less transmission capacity and can be moved over less-developed rail and road infrastructure, he explained. An African wind project developed “with newer, larger-scale turbines recently was delayed over 18 months while waiting, first, for roads to be built and, later, for the grid to be upgraded and the project to be interconnected. “Transport to African markets is through ports but the relatively small volume has little impact on port activity,” Zhao added. Germany’s Brake is a key port for wind industry imports and exports, while Esbjerg is Denmark’s biggest for wind transshipment as well as the port with the most offshore wind activity in the world. Since Poland’s emergence, its Gdynia port has acquired the equipment

WIND FOR PROSPERITY POTENTIAL Denmark’s Vestas, the world’s leading turbine supplier in 2014, partnered with Abu Dhabi’s emirate-funded Masdar Initiative in Wind for Prosperity. Launched in late 2013, it set out to bring decommissioned and refurbished turbines to rural populations in Africa, the Middle East and throughout those regions of the developing world where grids still do not reach. Wind for Prosperity is aimed at marketing a hybrid wind-diesel product. Vestas oversees the decommissioning and refurbishment of the V27 and V47 machines that have so many advantages. Vestas also selects wind-rich sites and sees to the installa14 BREAKBULK MAGAZINE www.breakbulk.com

tion, along with advanced diesel power generation, in a mini-grid configuration at remote and off-grid locations. By supplementing the flexible diesel power with wind, the companies believe they can eventually reduce the cost of electricity by 30 percent. Initial projects focused on Kenyan communities, in coordination with the Kenyan Ministry of Energy, Kenya Power and Light Co., and other government agencies. The announced Wind for Prosperity target is to bring the hybrid solution to 100 communities and 1 million people by the end of 2016. To that end, leaders are looking for opportunities in Ethiopia, Tanzania, Yemen,

Pakistan, Vietnam and Nicaragua. Vestas and Masdar see the undertaking as a commercial venture and expect a return on their investments, though adjusted to the circumstances. Both private investors and public or charitable funders have been approached. Investors and suppliers should expect a reasonable return along with the goodwill the installations will generate. Vestas has also acknowledged the potential for significant revenue from after-market sales as well as the less quantifiable value of Wind for Prosperity as an opening to emerging new project markets. SEPTEMBER-OCTOBER 2015

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Old wind turbines operating at Tehachapi, in California. Many old wind farms are coming to the end of their lives. / Credit: Windmatic

to handle the complex transshipment of wind project components. In the Netherlands, wind is trafficked through the port of Harlingen. “Arranging the transport of your used wind turbine to the new location can be a time-consuming task,” explains Dutchwind, which specializes in handling second-hand turbines. It promises to take care of hardware preparation, necessary paperwork and permissions, and to find a shipper “that will be able to organize the transport of used wind turbines by land or by sea.” Danish Used Windturbines Ltd. has specialized in buying, refurbishing and selling new and used wind turbines and wind-diesel systems worldwide since 1994. WindBrokers, which specializes in turbines that are less than 12 years old, offers a similar complete pack16 BREAKBULK MAGAZINE www.breakbulk.com

age of services. Because the turbines it handles still have half their expected productivity, its package can include a thorough inspection by an international standards expert, careful dismantling for transport, full service repair and refurbishment, storage if necessary, and full service transport, including trucking, loading, shipping, and full reerection, recommissioning, and ongoing maintenance. Despite these brokers’ competences, they face some significant obstacles. First, there is no obvious market. Every buyer is unique and none are necessarily easy to find. Second, while buyers in Africa, Eastern Europe and Latin America can count on a reasonably accommodating 50Hz frequency grid like the grids in Europe, buyers for the 60Hz U.S. grid need not

apply. Conversions are too costly. Third, grid operators, even those with compatible frequencies, can be reluctant to take power from used machines for fear of disruptive malfunctions. Finally, even a certified turbine’s need for maintenance in the harsh outdoor environment and intense winds it is subjected to means the investment comes with risk. Banks are not likely to value or finance second-hand machines. Certifiers may be helpful with function but not financing or valuation.

Californian Pioneers

California developers pioneered utility-scale wind in the early to mid-1980s. In response to the oil crises of 1973 and 1979, state and federal incentives and the powerful winds and open landscapes of the Tehachapi, San Gorgonio, and SEPTEMBER-OCTOBER 2015

cover story

Old wind turbines operating at Tehachapi, in California. / Credit: Windmatic

Altamont Passes drove a new gold rush for wind. Repowering of those first small machines began in the 1990s and has been ongoing in Tehachapi and San Gorgonio, tracking the historical progress of technology. It has slowed somewhat in recent years, but may be picking up again because the most durable of the early generations of machines are increasingly in need of replacement. Many see that as an opportunity, said Ed Duggan, president of Alton Energy, who has been in wind development for 35 years. “An already secured site can increase its capacity dramatically by replacing a dense array of the oldest turbines.” Hundreds of small machines, with capacities as low as 100 kW, can be replaced by a few dozen of today’s highly efficient 2 MW or 3 MW turbines, with a huge gain in output. “Permitting should be favorable, too,” Duggan explained. Because the site is already zoned for wind, there will likely be no rigorous California Environmental Quality Act process. 18 BREAKBULK MAGAZINE www.breakbulk.com

Refurbishing is one way of updating the units. / Credit: Windmatic SEPTEMBER-OCTOBER 2015

cover story

ORIGINS OF U.S. WIND TURBINE EQUIPMENT IMPORTS U.S. components imports split geographically

WIND POWERED GENERATING SETS Asia

Europe

Other

2005 2006 2007 2008 2009 2010 2011 2012 2013

TOWERS Asia

Europe

North America

Other

2011 2012 2013 2014 S. Korea Indonesia Asia Other

Environmentalists have opposed wind turbines because of the threat they pose to birds. Newer turbines have features that mitigate this threat. / Credit: Shutterstock

Spain Mexico Canada Other

WIND BLADES AND HUBS South America

Asia

Europe

Other

2012 2013 2014 Brazil China

Asia Other Denmark Spain Germany Europe Other

WIND GENERATORS AND PARTS Asia

Europe

North America

Other

2012 2013 2014 Vietnam Japan Asia Other Spain

Serbia Denmark Eu. Other N. America

Source: U.S. Department of Energy 20 BREAKBULK MAGAZINE www.breakbulk.com

Because the repowering brings in new turbines, the project would have to show it meets standards set for avian protections. “If you don’t show you can mitigate takes (bird kills), you will have a hard time financing a repower,” Duggan said. But environmentalists tend to be receptive to the newest generation of turbines because they have multiple design features that significantly reduce threats to avian life and habitat. Repowering an existing site also means there is transmission in place. It may require upgrading but that is an order of magnitude simpler, faster and cheaper than getting regulatory approvals, finding rights of way, and building infrastructure from the ground up. Early on in California’s repowering, developers like Duggan would often resell refurbished turbines to the rural landowners. “I’ve sent turbines to farms in the Midwest and Canada,” Duggan said. “When turbines are resold, they are usually transported by truck but I have shipped by sea to

Korea. When you do that, you break the turbines down and ship them in containers.” The resale market has diminished in recent years because many of the turbines now being replaced have not had the best care and there is a concern that buyers may be dissatisfied. The big repowering action is in California’s Altamont Pass. It is driven by emerging solutions to the longstanding complaint against utilityscale wind of avian impacts. A 2004 study initiated by the California Energy Commission concluded the 5,400-plus turbines then operating in the Altamont Pass were responsible for an estimated 1,766 to 4,271 bird takes every year. That included between 881 and 1330 raptors such as eagles, hawks, falcons and owls, which are protected by federal law. Tehachapi and San Gorgonio presented little threat to avian life. But the Altamont Pass is a raptor breeding area in a more important avian migratory route than any other U.S. wind development area. When local authoriSEPTEMBER-OCTOBER 2015

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Old turbine components are much smaller than modern day parts. / Credit: Windmatic

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ties renewed the Altamont Pass wind projects’ permits, environmentalists challenged the decision. Initial compromises between stakeholders did not satisfy either side or significantly reduce avian takes. Then a historic 2010 agreement was brokered between the state and NextEra Energy by then-Attorney General and now Gov. Jerry Brown. The developer agreed to replace 2,400 of the more than 30-year-old turbines that were committing the most egregious offenses with 100 newer, taller turbines with slower blade rotation speeds by 2015. The new turbines are also being sited more benignly and have other scientifically validated high-tech bird protections. Each of the new turbines will produce as much as 23 times the wind-generated electricity, according to local news reports.

SEPTEMBER-OCTOBER 2015

NextEra’s repowering has not included finding new uses for most of the replaced first- and second-generation machines. But some entrepreneurs seized the opportunity. Massachusetts’ Aeronautica Windpower and Southern California’s Windmatic have been leaders though, as Turbine Technology Partners pointed out, it is increasingly difficult to make the economics work. “What I am trying to do,” explained Alfredo Yttesen, Windmatic founder and owner, “is keep them from being scrapped.” Yttesen has done some 100 refurbishments and brokered deals for many more since the mid-1980s. He has sold secondhand turbines for as much as $80,000 and for as little as $50,000. He used to pay $25,000 for units but now pays closer to $4,000. A complete refurbishment includes generator, gearbox, yaw system, blades and the control system. The biggest cost is the blades but what stops most second-hand dealers, Yttesen said, is the complexity of the control system, which is his specialty. Refurbished machines most often go to customers in the wind-rich Midwest via flatbed trucks. Second-hand turbines may also be containerized and shipped without refurbishment to Europe and Latin America.

available,” the consulting group concluded. But that is possible only if “there are no obstacles to obtaining the necessary site permits to operate larger and taller wind turbines at the historical smaller turbine sites.”

The group’s careful financial analysis finds repowering is not always the smartest way for developers to go. The actual calculation is complicated and variable dependent. But the conclusion is simple: “While it may seem obvious

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“The conservative rule of thumb is twice the power and three times the electricity yield,” GWEC’s Sawyer said of the gains developers expect from a repowering investment. “But there is hardly the numerical basis for good statistics at this stage,” he added. “Project costs for repowering are essentially the same as new projects. The turnkey project capex is $1,725 per kW in Europe,” according to Zhao. Turbine Technology Partners compared the power curves and annual energy productions for the very widely used Siemens 2.3 MW and the GE 1.6 MW turbines with those of the 65 kW Vestas V15 and the 225 kW V27. “It is possible to increase the historical site energy production by 22 percent to 51 percent by repowering the site at the same maximum-rated capacity by installing the higher-capacity factor turbines currently

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U.S. WIND POWER CAPACITY GROWTH The decommissioning market is expected to increase over the next decade. 70

annual capacity cumulative capacity

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 in gigawatts Source: U.S. Department of Energy

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that repowering older wind sites with modern, more-efficient wind turbines with higher capacity factors would result in a financial benefit to the owner/operator, this is not always the case.” NREL researchers performed two rigorous parallel financial analyses. One involved four hypothetical wind projects commissioned in 1999, 2003, 2008 and 2012. For each, the hypothetical decision to repower or build a new project in 2015, 2020, 2025 and 2030 was evaluated. The other analysis involved three actual projects, a 15-to-20-year-old Northeastern installation, a 10-to15-year-old Midwestern installation, and a 20-to-25-year-old West Coast installation. Both analyses found repowering to become financially competitive with building a new project after the original

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installation had been in service 20-25 years. The researchers’ financial analysis of partial repowering found replacement of the turbine drivetrain and rotor would only cut the cost of full repowering by about 10 percent. But it would lower the energy production gain obtainable with full repowering by 50 percent. The obvious conclusion is that partial repowering at the site is not the way to go, though it doesn’t rule out refurbishment and resale. The researchers concluded the 20-to25-year plant life of projects built from the late 1990s would keep demand for repowering low through 2020. It might reach a few hundred megawatts per year in the early 2020s and then 1 GW to 3 GW per year by the late 2020s. Through 2030, the market was estimated at US$25 billion. But there is one big stipulation: The

researchers noted certain variables to watch that could change the market. Three of the predictors of increased attractiveness for repowering are clearly in motion in today’s wind industry. Technology advances, they concluded, would encourage repowering. Today, new turbine technologies being brought to market by all the leading OEMs that are quickly making the harvest of lower-speed winds more economic. Also, OEMs are finding ways to upgrade the productivity of existing fleets with technology adaptations. GE’s PowerUp package, based on advances in its “brilliant” technologies package, is a market leader. The NREL researchers also stipulated that improved wind resources would encourage repowering. That is happening in two ways today. First, the more advanced technology

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is turning wind regimes once thought non-viable into productive resources. Second, the opening of offshore wind, especially in Europe, China, and along the U.S. Atlantic coast, will by 2020 bring enormous new resources into the marketplace. Finally, the researchers concluded that a rapid escalation in the cost of operations and maintenance, or O&M, of aging installations would make repowering attractive earlier than the 20-to-25-year point. The just-released 2014 Wind Technologies Market Report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory reported that while O&M for projects built after 2010 is at US$9 per megawatt-hour, that cost for projects built in the 1990s is US$24 per megawatt-hour and for projects built in the 1980s it is US$34 per megawatt-hour. BB

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trade notes

LOSS OF CONFIDENCE Pros, Cons and Evolution of China’s Economy

hinese government officials are working hard these days to protect the nation’s wellearned reputation as a global dynamo. But it’s not an easy job, given slowing economic growth, uneven export demand and tremendous volatility on the Shanghai Stock Exchange. Beijing frequently issues upbeat forecasts about the future of the Chinese economy. The government put a positive spin on a stock market collapse that began in June and was continuing in late August. And the People’s Bank of China, the nation’s central bank, responded in mid-August to a sudden devaluation of the nation’s currency by calling the yuan’s 3.5 percent decline against the U.S. dollar “normal market behavior.” Should the world’s breakbulk industry share Beijing’s rosy outlook, or start

to plan for the worst? It’s a critical question since China’s growth has had a tremendous and positive impact on the project cargo business for many years. The argument in support of a positive tone says demand for infrastructure, manufacturing, energy and miningrelated project cargo is still finding plenty of support in China’s ongoing economic expansion. Contributing to that expansion, which the government says should hit 7 percent GDP growth for all of 2015, is a growing middle class, a nationwide urbanization campaign, transportation and energy spending, and state-run bank financing for state-run companies. Big Chinese companies including engineering, procurement and construction companies, oil drillers and mining concerns have also kept the ball rolling

By Eric Johnson

by securing more contracts overseas. Many of these jobs require moving project cargo from China to all corners of the planet. The Chinese government has backed these companies via financial support from state-run and policy banks, and by deepening diplomatic ties with developing countries in Africa, South America and Central Asia. Most analysts agree China’s GDP will never again grow at the double-digit rates seen during most years between 2003 and 2010. But it’s still expanding to meet the needs of the country’s 1.4 billion people and big companies with billions of customers worldwide. Premier Li Keqiang has dubbed the economy’s slower pace “the new normal,” while insisting that China will remain on an upward trajectory for years to come. The counter-argument, which BeiJUNE 12: 5166.35

5000

SHANGHAI STOCK EXCHANGE COMPOSITE INDEX 2015 The index has fallen sharply since June.

4500

4000

3500

Graph spans Jan. 5 - Aug. 24. Source: Yahoo Finance, accessed Aug. 25, 2015

3000

26 BREAKBULK MAGAZINE www.breakbulk.com

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YUAN VS. U.S. DOLLAR China’s currency devaluation has strengthened it against the U.S. dollar. .164 .162 .160 .158 .156

Aug 17 - 23

Aug 3 - 9

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.154

Source: OANDA, accessed Aug. 25, 2015

jing officials have acknowledged but don’t like to talk about, is based on a slew of gloomy data from government and market sources. The nation’s exports, for example, declined 8.9 percent in July from the same month in 2014. Local governments around the country this year started issuing bonds to help cover trillions of yuan’s worth of old debt that they had been unable to repay. And the composite index of the Shanghai Stock Exchange has fallen more than 30 percent since mid-June, underscoring withering investor confidence. These kinds of conflicting statistics and interpretations of China’s economic health are presenting special challenges for breakbulk professionals trying to plot a strategy for 2016 and beyond. It’s increasingly risky to plan for future China business without looking at both sides of the coin. And flipping a coin may be the only option Jun Ma left when it seems no one really knows where the Chinese dynamo is heading. A standout voice among the government’s upbeat analysts is Jun Ma, the central bank’s chief economist and a former Greater China economist at Deutsche Bank. In a recent interview with state media, Ma predicted a rebound for the Chinese economy and 28 BREAKBULK MAGAZINE www.breakbulk.com

starts in the second half of 2015 that will likely continue into 2016. Growth is almost certain to trend higher, Ma said, once the economy starts feeling the effects of a government cut of benchmark interest rates and other monetary policy adjustments made since early this year. These kinds of major policy moves, Ma argued, generally impact the economy six to nine months after implementation. One adjustment that could reduce global prices for Chinese-made goods – and make the nation’s exports more competitive – was an Aug. 11 tweaking of China’s foreign exchange rate system by the central bank. As a result, the yuan’s value rose to more than 6.30 from around 6.10 to the U.S. dollar. After the adjustment, the government and the International Monetary Fund agreed that China’s foreign exchange system had improved and was in a better position than ever to reflect true market conditions. Some analysts in countries that do a lot of two-way trade with China, such as the U.S., claimed the devaluation was designed to help struggling Chinese exporters at the expense of overseas competitors. Chinese EPCs were likely to benefit from a cheaper yuan by having more room to bid low and win contracts for overseas projects, according to an August report by Shenwan Hongyuan Securities. The report said state-run

cement-mining conglomerate Sinoma was one of many Chinese EPCs for whom devaluation was a major plus. Yet Yukon Huang, a senior associate at the Carnegie Endowment and former director of the World Bank’s China office, noted that through such policy moves the Chinese government is pursuing a course of less economic stability by reducing government control and moving closer to a market-based system. “China’s economy is becoming more normal in the sense that market forces now have a greater impact in shaping trends and its financial system is increasingly linked with global markets,” Huang said in a recent op-ed article for the Chinese business magazine Caixin. “But while market-driven economic systems have the potential to generate more efficiencies than centrally controlled systems, they are inherently more Yukon Huang unstable.” Ma’s other reasons for whistling a positive tune should be of special interest to breakbulk professionals: an apparent turnaround recently for the real estate industry, which has for years in China been a key driver for the construction and commodities sectors, as well as serving as a core GDP component; and a government commitment to accelerate SEPTEMBER-OCTOBER 2015

trade notes

China wants to expand its subway system from 22 to 39 cities by 2020. / Credit: Tim Adams

infrastructure spending. While the residential and commercial real estate markets are still depressed in areas such as east-central Zhejiang

30 BREAKBULK MAGAZINE www.breakbulk.com

Province, where prices in several cities collapsed in early 2014, Ma said nationwide sales and prices for new housing have risen at a healthy pace since May.

Likely to follow soon, he said, will be a pickup for new property investment and construction. China Vanke Co, the country’s largest residential property developer, reported a 22 percent increase in first-half revenues year-on-year to more than 50 billion yuan. Vanke’s profits and construction starts also climbed. The hopeful forecast for infrastructure spending is linked to Beijing’s recent decision to let local governments issue up to 2.6 trillion yuan worth of municipal bonds. Ma said these new funds will help cities, counties and provinces cut debt as well as steer resources into new or unfinished road, bridge, rail, power, waterworks and low-income housing projects. Railroad construction spending, for example, was expected to top 500 billion yuan in the second half of 2015, twice the amount spent during the first half of the

SEPTEMBER-OCTOBER 2015

year, according to the state-run China Railway Group. Between January and June, the group invested 265 billion yuan in track and other fixed assets, up 12.7 percent from the same period 2014. Nationwide spending on new urban transit railway construction projects was slated to rise this year to 300 billion yuan from 285 billion yuan in 2014, according the National Development and Reform Commission, the government’s chief economic planner. Subways now operate in 22 cities nationwide, but by 2020 that number is expected to reach 39. Despite these and other positive indicators, the summer of 2015 was a dismal season for the stock market, suggesting investors were not impressed by positive reports about real estate sales and railroad spending. In fact, investors started running for the exits after what had been a seven-month rally on the Shanghai and Shenzhen stock exchanges turned sour.

Stock values plummeted and might have fallen further if not for a government-led stock-buying program and the fact that hundreds of hard-hit companies suspended all trading of their own shares. In an apparent sign of cooling investor confidence in China’s government-controlled businesses, a mid-August sell-off saw share prices plunge for some of the country’s biggest state-owned enterprises. Financial website JRJ reported that share prices fell sharply in mid-August for a group of state companies that the government wants to break up by selling non-core assets, including power producer Huadian Energy and the agricultural conglomerate COFCO. At the same time, securities firms have been recommending investors buy stocks in companies that are playing a role in government spending on infrastructure and urbanization. Shanghai’s

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airports and the Port of Qingdao were recently called good targets by UBS Warburg, while Changjiang Securities said it likes companies that build subways and install underground pipes. And some stocks dumped by investors over the summer have actually found new friends in Beijing. Government agencies that also function as state-company shareholders snapped up big blocks of stock in early July in order to stem the tide of the Shanghai sell-off. The government’s state-owned Assets Supervision and Administration Commission said Beijing backed these share purchases as a way to stabilize stock prices. The stock purchases also reflected the government’s unwavering confidence in the Chinese economy, even if stock investors disagreed. Breakbulk professionals will have to weigh these opposing views carefully in the ongoing quest to understand China’s evolving economy. BB

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exico’s manufacturing output has steadily increased over the past decade in automotives, auto parts and electronics, sparking a construction boom in those sectors. According to the Association of Mexican Automotive Producers, Mexico has become the world’s seventh-largest automotive manufacturer, and fourth-largest vehicle exporter. From January through June 2015, the number of vehicles assembled in Mexico grew 21.9 percent from the same period in 2014. The good news for project cargo and breakbulk handlers is that Mexico will continue to expand as manufacturers from around the world – including Daimler, BMW, Hyundai/ Kia and Nissan – flock to build new vehicle plants in the country. But that’s only the tip of the iceberg. Economists agree that Mexico’s prospects for becoming a truly modern industrial economy will remain limited unless the country drastically expands its physical infrastructure of roads, railroads, ports, and energyrelated infrastructure. Mexico ranks 64th of 148 countries in terms of infrastructure, according to the Global Competitiveness Index of the World Economic Forum. “Latin America is woefully underfunded in terms of its infrastructure, and its infrastructure weakness is a major reason for its underdevelopment,” said Barbara Kotschwar, research fellow at Peterson Institute for Economics in Washington. “Now is the moment for Mexico to get serious about its infrastructure.” With that goal in mind, the Mexican government has been enacting its National Infrastructure Program for 2014-2018, a comprehensive array of projects that is expected to cost the public and private sectors a combined US$600 billion. Under its far-reaching umbrella, Mexico plans to upgrade and expand its infrastructure for transportation; communications; electricity production and transmission; and oil and gas production, transmis-

sion and distribution. The breadth of new engineering projects would provide unprecedented opportunities for providers of breakbulk and project cargo services and equipment. In a series of investments critical for improving Mexico’s global competitiveness, the federal government recently announced that it would spend US$5 billion to upgrade its nationwide network of 117 ports. Guillermo Ruiz de Teresa, coordinator of Mexico’s agency for ports and merchant marine, said the new investments reflect “our conviction that a system of total distribution, with each logistical chain of a high level, both within the country and beyond our borders, is the best way of functioning.” The potential impact of upgrading its transportation and logistics infrastructure – including for breakbulk, project cargo and roll-on, roll-off – is huge, said Walter Kemmsies, chief economist at Moffatt & Nichol, the international port infrastructure consultancy. Mexico has entered a crucial stage in its development, in which the country is now at the center of several, Walter Kemmsies long-term positive trends, he noted. “On the one hand, Mexico’s workforce has become relatively skilled, and its labor costs are now lower than those in many locations in China. Mexican exports benefit not only Barbara from the country’s Kotschwar participation in NAFTA, but from its bilateral and multilateral free trade pacts” with more than 20 other countries; more such pacts than any other country,” he said. Just as crucial, Mexico’s geographical position now gives the country what Kemmsies calls “optionality,” which means that from a Mexican location, shippers “can send goods to anywhere

MEXICO’S MOST AMBITIOUS INFRASTRUCTURE PROJECTS COMMUNICATIONS AND TRANSPORTATION

tizapan-Atlacomulco Highway (central A Mexico), estimated investment 5,860 million Mexican pesos (US$369 million)

Tuxpan-Tampico (Gulf of Mexico); 8.07 billion Mexican pesos (US$494 million)

Extension of Altamira Port, 10.7 billion Mexican pesos (US$655.6 million)

xtension of the northern part of E Veracruz port; 60 billion Mexican pesos ($US3.67 billion)

Aguascalientes-Guadalajara railway; 11.6 billion Mexican pesos (US$710 million)

Overhaul of Mazatlán port; 10.67 billion Mexican pesos (US$653 million)

ENERGY (POWER, OIL AND GAS)

Combined cycle plant Noreste, 1,006 MW, 18.63 billion Mexican pesos (US$1.14 billion)

Combined cycle plant Norte IV, 957 MW, 11 billion Mexican pesos (US$671 million)

Hydro plant Nuevo Guerrero, 455 MW, 14.23 billion Mexican pesos US$828 million)

our wind power plants Sureste II, III, IV and F V, total capacity of 1,169 MW, 25.96 billion Mexican pesos (US$1.58 billion)

14 solar power plants of 30 MW each, 12.38 billion Mexican pesos (US$755 million)

8 natural gas transportation pipelines includ1 ing Ojinaga-El Encino pipeline, 254 kilometers, 5.16 billion Mexican pesos (US$314 million); El Encino-La Laguna pipeline, 423 km, 8.39 billion Mexican pesos (US$511 million); WahaNorte III pipeline, 300 km, 7.1 billion Mexican pesos (US$433 million); Waha-Ojinaga pipeline, 230 km, 5.16 billion Mexican pesos (US$314 million); Ehrenberg-Los AlgodonesSan Luis Río Colorado pipeline, 160 kms, 3.23 billion Mexican pesos (US$196 million); and Jáltipan-Salina Cruz pipeline, 247 km, 8.33 billion Mexican pesos (US$508 million).

www.breakbulk.com BREAKBULK MAGAZINE 33

market spotlight

MEXICO’S FREE TRADE PACTS Mexico benefits from free trade agreements with more than 20 countries.

Agreement/Partner(s)

Date of Signature

WTO members

January 1, 1995 (Contracting Party to GATT 1947 since 24 August 1986)

FREE TRADE AGREEMENTS

Agreement/Partner(s)

Date of Signature

Date of Entry into Force

Panama April 3, 2014 Pacific Alliance February 10, 2014 Central America (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua ) November 22, 2011 Peru (ACE 67) April 6, 2011 Bolivia (ACE 66) May 17, 2010 Japan September 17, 2004 Uruguay (ACE 60) November 15, 2003 European Free Trade Association (EFTA) November 27, 2000 Israel April 10, 2000 Chile (ACE 41) April 17, 1998 European Union (EU) December 8, 1997 Colombia NAFTA (Canada - Mexico - United States) December 17, 1992

July 1, 2015 July 20, 2015

February 1, 2012 June 7, 2010 April 1, 2005 July 15, 2004 July 1, 2001 July 1, 2001 August 1, 1999 October 1, 2000 June 13, 1994 January 1, 1994

FRAMEWORK AGREEMENTS

Agreement/Partner(s)

Date of Signature

Date of Entry into Force

MERCOSUR (ACE N° 54) - framework agreement

July 5, 2002

January 5, 2006

PREFERENTIAL TRADE AGREEMENTS

Agreement/Partner(s)

Date of Signature

Date of Entry into Force

Argentina (ACE N° 6) MERCOSUR (ACE N° 55) - auto sector agreement Brazil (AAP.CE N° 53) Paraguay (AAP.R 38) Ecuador (ACE 29) Panama (AAP.A25TM N°14)

August 24, 2006 September 27, 2002 July 3, 2002 May 31, 1993 May 31, 1993 May 22, 1985

January 1, 2007 May 2, 2003 July 1, 1994 August 6, 1987 April 24, 1986

Source: SICE, US Foreign Trade Information System

in the world,” from either the country’s Gulf coast – positioned close to the Panama Canal – or via the Pacific Ocean, to a growing list of markets in Asia. Kotschwar noted that unlike Brazil, “which relied on China’s commodity boom, and is now suffering the consequences of being unable to diversify” from its reliance on the Chinese market, “Mexico really suffered from the rise of China,” initially, yet rebounded to produce higher value-added goods for its export markets. “Five years ago, Brazil seemed like the winner,” in the race for ascendance among emerging nations in Latin America, “but now, it is not clear” whether Brazil or Mexico will be the long-term stars of the 36 BREAKBULK MAGAZINE www.breakbulk.com

region. The success of its port infrastructure modernization will play a significant role in answering that question. Nowhere are Mexico’s plans for infrastructure development more crucial than in its energy sector, which is undergoing a historic reform under the government of Enrique Pena Nieto. In 1938, Pemex was created to replace the U.S. and British oil companies then dominant in Mexico. Explains Diana Villiers, a nonresident senior fellow at the Brookings Institution, in the intervening 77 years state-owned Pemex “has faced constitutional constraints from working with international oil companies and taking

advantage of the technology and finance available to owners of significant proven oil and gas reserves.” Mexico’s new legal regime gives Pemex, the governmentowned oil company, “a legal framework enabling it to become a competitive and productive national oil company.” Although the energy reforms are intended to boost domestic oil and gas production, the main focus has been on petroleum, with the understanding that Mexico’s proximity to the U.S. offers the country a unique opportunity. The argument runs that cheap natural gas imports will not only lower the price of electricity for Mexican consumers, but also for Mexico-based SEPTEMBER-OCTOBER 2015

market spotlight

Construction work on the Zapotitlán station, on the 12 line of Mexico City’s metro network. / Credit: Yavidaxiu, Wikimedia Commons

manufacturers, thus boosting their global competitiveness. For outsiders impatient with Mexico’s dragging energy reforms, a “seminal, critical issue” has been that Mexican planners are “thinking longer term,” said Kirk Sherr, president of Clearview Strategy Group, a Washington, DC-based energy consultancy. Americans “think on a quarterly basis, we want things to happen right away. And we are used to a nearly completely privatized energy market. Versus Mexico, where they are

thinking longer term, quarterly issues are not relevant to them because they are just at the beginning of the process. Their effort is to do it right; not to get it fast. For that, they are to be congratulated. It is a unique undertaking. It is a wholesale change in the way they do business in the energy sector, taking place in a collapsed time frame.” What will this wholesale change mean for companies bidding on major construction projects to build out new infrastructure? Sherr said Mexican

MEXICO, BRAZIL GDP GROWTH Mexico has taken the lead from Brazil in terms of GDP growth (as an annual percentage). 10 8 6 4 2 0 -2

Brazil

-4

Mexico

-6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: World Bank

38 BREAKBULK MAGAZINE www.breakbulk.com

authorities “are doing a spectacular job from the intellectual point of view” at the highest levels. Mexican authorities are following best practices in terms of bidding; for developing the criteria for projects; and outlining the scope of work for qualified companies. “Where the future problems will lie,” Sherr said, “is the interrelationships between all of these new entities.” In Mexico, many of the new agencies that will be tasked with regulating the country’s new energy markets are being created at the same time, some of them Kirk Sherr from whole cloth. Several are either brand-new or are being significantly enlarged in terms of their responsibilities or mandates. For example, the Environmental Security and Energy Agency handles some of the issues that would be included within the U.S. Environmental Protection Agency, but focuses mainly on oil and gas. Private sector firms that come to Mexico to own and/or operate various new infrastructure development projects will need to get various kinds of permits from SEPTEMBER-OCTOBER 2015

market spotlight

MEXICAN ENERGY’S NEW LANDSCAPE Major players in Mexico’s energy sector, post-reform:

Construction of the 12 line on the Mexico City metro. Credit: Eneas De Troya, Wikimedia Commons

REGULATORY AGENCIES

ASEA: National Agency for Industrial Safety and Environmental Protection CNH: National Hydrocarbons Commission CRE: Energy Regulatory Commission

SYSTEM OPERATORS

CENAS: the gas grid CENACE: the electricity grid

PUBLIC SECTORS

ENERGY PRODUCERS

Pemex: oil company CFE: Federal Electricity Commission

OTHER AGENCIES

CENACE: National Center for Energy Control CENEGAS: National Center for Natural Gas Control FMP: Mexican Petroleum Fund IMP: The Mexican Petroleum Institute SE: The Secretary of Energy SENER: The Department of Energy SHCP: Department of Housing and Public Credit SIE: Energy Information System

these new agencies, so they will have to quickly get up to speed. Will these new agencies work smoothly together? What are all the procedures for handling myriad issues that will arise as infrastructure development takes place? No one knows the answers to those questions. “It is about how all of these agencies will actually work when it comes to companies spending money. When you introduce into that uncertain environment some of the cultural and organizational predispositions to corruption, then you are getting into a lot of even greater uncertainty,” Sherr cautioned. “The issue is not so much corruption on the bidding, the issue is more what happens now that we’ve won this? What happens now that our proposal has been accepted and now that we have a local partner and are ready to proceed?” Michelle Karavias, global head of 40 BREAKBULK MAGAZINE www.breakbulk.com

infrastructure at BMI Research, notes that Mexico’s performance in the first months of the mammoth port infrastructure program has revealed the country’s shortage of “institutional capacity” when it comes to the process of tendering and planning infrastructure projects. In short, there aren’t enough people in the right places who have the right sort of knowledge about regulatory procedures and permits. “It is an ambitious plan, and they need to build a lot more capacity in order to realize the plan,” Karavias said. In a recent BMI report, Karavias wrote: “Mexico presents significant potential for railway development,” but “we continue to hold reservations related to the tendering environment. The Mexico City-Queretaro high speed rail line is one of a number of projects supporting our positive outlook,” but “the lack of a competitive bidding process and subse-

quent contract cancellation reinforces our concerns over the tendering environment for major infrastructure projects.” With a significant pipeline of attractive transportation projects on the way, BMI Research forecasts average real growth rates of 11.3 percent between 2015 and 2019 in the value of the sector, “but our key concern remains delays and challenges at the tendering phase.” Nowhere has this been more apparent than in the tendering process for Mexico’s first high-speed inter-city railway. In November 2014, the contract was awarded to the only bidder: a consortium of Chinese and Mexican firms that included China Railway Construction Corp., Constructor y Edificadora GIA+A [Mexico], and Promotora y Desarrolladora Mexicana. Less than a week after that announcement, Mexico’s Ministry of Transport and Communications SEPTEMBER-OCTOBER 2015

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Offshore drilling platforms under construction at the Daewoo shipyard in Kojedo Korea, bound for Mexico. / Credit: KJRSeattle, POSD_BreakbulkAd:Layout 1 9/14/15 11:35Wikimedia AM PageCommons 1

annulled the contract award. Although the Mexican government initially announced that it would re-tender the project, in January 2015 the Secretary of Finance announced the “indefinite suspension” of work in response to federal budget cutbacks resulting from the rapidly falling price of crude oil. In May 2015, after threatening a lawsuit, the Chinese company that headed the winning consortium was awarded US$1.31 million in compensation. A few days later, in a further embarrassment, it was revealed that the wife of President Enrique Pena Nieto was in the process of acquiring a house from one of the Mexican firms in the railway consortium. Several key transportation projects have yet to be tendered. Upcoming on the agenda is the extension of Mexico City’s Public Transport System (STC), the largest metro in Latin America. This would include adding about eight miles

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of track and eight new stations serving an estimated 314,000 passengers a day. An institutional tender for 34 new train cars would likely cost about US$700 million, and be awarded only after an extensive market study. Likely bidders for that contract include Alstom, Bombardier and CAF, according to STC. In Mexico’s vital energy sector, its largest source of export earnings, there is also “a serious lack of capacity,” Sherr said. “In a sector that has been run so long by bureaucrats or by personnel of Pemex, how do you find simultaneously all the people you need for the private sector while also staffing all the new government jobs? You have all these private companies coming in and saying we want to do pipelines or do gas processing, upstream development, or seismic work, and the government is trying to staff these new offices.” Unfortunately, “the best employees from Pemex will probably leave,” Sherr predicts. “They can always find a new job, so as salaries are bid up for the private sector, who is going to be left to work for the government?” And with so many new projects going on, “that leads into all kinds of questions about the types of graduates that Mexico is putting out. Right now, they need all kinds of positions they historically didn’t need, from drilling engineers and software engineers with oil and gas experience to instrumentation engineers and process engineers – the list goes on.” Before the energy reform process began, those kinds of engineers were not needed in such large numbers. “Pemex was doing everything and they were dramatically overstaffed. They weren’t making new kinds of investment in new kinds of plant.” As more private sector firms bid on new construction projects, “most companies will have to have most of these positions staffed [internally] in order to make a serious bid. Each private bidder has to show they are prepared to do the project, if they win [the bidding].” There are very good engineering schools in Mexico, but very few of them focus on the specialties that Mexico requires. When it comes to constructing electric power generation plants, the rules are clear, and do not involve multiple approvals from agencies in multiple locations. “It is easy to put up a power plant;

the rules are simple,” which is not the case with pipelines, which may extend across multiple states, and require the approval of local communities known as ‘ejidos,’ he added. In one major power project, a con-

sortium comprising OHL Industrial and SENER, both headquartered in Spain, signed an engineering, procurement and construction contract last spring with Mexico’s Federal Electricity Commission to build a US$477 million combined

www.breakbulk.com BREAKBULK MAGAZINE 43

market spotlight

ROADRUNNER GAS TRANSMISSION PIPELINE PROJECT Oneok Partners’ Roadrunner pipeline project will transport natural gas from the Permian shale basin in Texas to an international connection at the Mexican border.

N e w M e x ic o

2 1

MEXICO

Te xas

New Roadrunner/OWT Interconnect

ONEOK WesTex Transmission

New Roadrunner/OWT Interconnect

Roadrunner Gas Transmission

New San Elizario Border Crossing

Tarahumara Pipeline

Source: Oneok Partners

44 BREAKBULK MAGAZINE www.breakbulk.com

cycle power plant in Empalme in Sonora State in northern Mexico. OHL Industrial and SENER will provide basic and detailed engineering, procure all equipment, materials, spare parts and special tools, and construct, test and commission the plant. Construction is expected to be completed by late 2017. OHL Industrial and SENER are also working on two cogeneration plants for the Cydsa group and the TG-8 Madero refinery project for Pemex. When it comes to major pipeline projects, Oklahoma-based Oneok Partners has formed a joint venture with Fermaca Infrastructure, a Mexican firm, to build the 200-mile long Roadrunner pipeline that will transport natural gas from the Permian shale basin in Texas to an international connection at the Mexican border. “We see Roadrunner as a gateway asset that will connect Mexico’s rapidly

SEPTEMBER-OCTOBER 2015

growing natural gas markets with U.S. producers in the developing Permian basin,” Terry Spencer, Oneok’s president and CEO, said in a statement. The project will be built in three phases at a total cost of US$450 million to US$500 million. ONEOK Partners will manage construction of the project and will be the operator of the pipeline upon its completion. In June, Mexico’s Federal Electricity Commission said it would tender a new round of 24 energy infrastructure projects worth a total of US$10 billion, including a US$3 billion underwater pipeline that will bring U.S. natural gas from Texas to Tuxpan in Veracruz state. If all goes according to plan, the pipeline will begin transporting 2.6 billion cubic feet of natural gas per day by 2018. Apart from such U.S. firms as Sempra’s IEnova division, which owns and operates more than 300 miles of pipelines in Mexico, other newcomers to Mexico’s energy sector include billionaire Carlos Slim’s Grupo Carso, which recently won a pipeline contract as a participant in a consortium with U.S.-based Energy Transfer Partners and MasTec Inc. Downstream, the new rules of Mexico’s energy sector will also mean all sorts of new opportunities for builders of oil storage tanks and retail gasoline stations. In the past, small groups of officials within Pemex decided who was awarded franchises for operating gas stations, in a process that was notorious opaque and open to corruption. From Jan. 1, 2018, interested parties who possess a permit may conduct retail sales of regular gasoline, premium gasoline and diesel fuel in Mexico without necessarily having a franchising or supply agreement with Pemex, and they may supply their stations from any source, either domestic or imported. Although there is potential for a group of bureaucrats to “completely control that process,” Sherr is hopeful that this won’t occur. Retail gas station margins are small, and gasoline “is the loss leader” in the U.S., where all of the profits are in the mini-marts that sell soft drinks and snacks to drivers who fill up their tanks. Aware that new gas stations will mean new opportunities, convenience chains such as Circle K and 7-Eleven are already studying where to locate in Mexico. Sherr predicts they

will compete with their equivalents from Mexico, Chile and Brazil “to meet a growth window of 15 percent to 20 percent a year.” The real issue for such retailers will be to discover how much of their own

infrastructure they will need to build, and how much of it they can safely outsource to others. “They must be sure that their infrastructure is solid, so they are sure that don’t get held hostage by their wholesalers,” Sherr said. BB

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regional review

CROSSROADS

OF ASIA, EUROPE Turkey’s Location Should Bolster Economic Growth By Mark Willis

Credit: Shutterstock

46 BREAKBULK MAGAZINE www.breakbulk.com

onforming to a trend witnessed in many of the world’s large emerging economies during the 2000s, Turkey enjoyed a period of impressive economic growth in the decade leading up to the global financial crisis in 2008, with a correspondingly robust expansion in living standards and household wealth. Aided by its strategic geographical location on the bridgehead between Europe and Asia, Turkey recorded aggregate annual economic real terms expansion of about 5 percent during 1998-2008. By 2014, it had risen to become the 17th-largest global and sixth-largest European economy. According to data from the International Monetary Fund, or IMF, this robust economic growth also translated into a wholesale increase in living standards. From 20002008, aggregate Turkish per capita GDP more than doubled from about US$4,000 to more than US$10,000, placing the country ahead of other large, fast-growing emerging market economies such as China, India, Indonesia and Brazil. Turkey’s economic performance has been arguably all the more impres-

sive given that it lacks the abundance in commodity reserves that drove growth in countries such as Brazil, Indonesia and Russia. With the Turkish lira floating freely on financial markets since 2001, economic growth has also been achieved without the controversial currency manipulation that has helped stimulate the exportdriven Chinese economy. Rather, economic success has been achieved through a combination of economic reforms passed by the government in Ankara and auspicious demographics, while a Customs Union Agreement signed with the European Union in 1995 cemented vital trade links with key European markets, and increased foreign investment. With its history of regular military interference in domestic administrative affairs, including five post World War II coups, a period of relative political stability during the 2000s was also a precursor to a more benign economic environment. Sounder fiscal and monetary management has also been evident, with the Ankara government resisting the temptation to use buoyant tax revenues to open the floodgates on expenditure. Gross public debt SEPTEMBER-OCTOBER 2015

regional review

GDP, CONSTANT PRICES AS PERCENTAGE OF ANNUAL GROWTH RATE Turkey is categorized by steady growth going forward. 10 8 6 4 2 0 -2 -4 -6

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2014 onward are forecasts. / Source: International Monetary Fund, World Economic Outlook Database, April 2015

declined from almost 80 percent of GDP in 2001 to less than 35 percent in 2014. While its economic outlook took a turn for the worse during the 2008-2009 global financial crisis following a profound deceleration of international trade and inward foreign capital flows, Turkey witnessed an impressive recovery during the subsequent period, with the economy expanding by almost 9 percent in 2010 and 2011. Befitting an economy that has grown exponentially over more than 10 years, Turkey has also witnessed a robust level of infrastructure development, though at about 20 percent of GDP the proportion of investment has been somewhat lower than in some of the large emerging economies. According to a December 2014 World

Bank Report, Turkey’s Transitions, Turkish infrastructure development totaled about US$252 billion in 1991-2010, placing it among the top spending countries of the world’s emerging market economies. “Infrastructure to connect and fuel the economy has been a key factor behind Turkey’s successful integration experience. It has also been a key factor in facilitating the spread of economic dynamism from Turkey’s coastal areas inland,” said the World Bank report’s authors. In identifying the extent of development that has taken place, the report highlighted the progress within domestic port infrastructure, which has helped to cement Turkey’s position as a vital trade link between Asia and Europe.

TURKEY PER CAPITA GDP Gross domestic product has been on an upward trend since the start of the millennium. 12,000

10,000

8,000

6,000

4,000

2,000

‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 In U.S. dollars Source: International Monetary Fund, World Economic Outlook Database, April 2015 48 BREAKBULK MAGAZINE www.breakbulk.com

Port Development

“Turkey is expanding port capacity at a rapid clip in a bid to utilize its strategic location to become a major transshipment hub between Europe and Asia,” the World Bank paper stated. This positive trend in the development of Turkish port infrastructure was also confirmed by Olaf Merk, administrator ports and shipping at the International Transport Forum of the Organization for Economic Co-operation and Development, or OECD. “There are a lot of global port operators that have acquired facilities in Turkey and who have made large investments in modern equipment. This has had a positive impact on the performance of these terminals,” Merk said. “When you look at the performance of Turkish ports, they are actually doing quite well. Also, they have been helped by an economy that has also done well, and grown at a fairly fast Olaf Merk pace,” he added. A process of liberalization by a more reform-minded government in Ankara has driven the overall improvement in the performance and development of domestic port facilities, including a wave of privatizations and allowing foreign firms to enter the market as port operators. Correspondingly, turnaround times SEPTEMBER-OCTOBER 2015

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Yilport is one of a handful of private operators that has invested in Turkish infrastructure. / Credit: Yilport

in many ports are now in line with the European average. The process of liberalizing Turkish ports and constructing further new infrastructure over the last decade, however, has been far from an unbridled success story, with government policy considered at times confusing, and lacking a discernable overall strategy. “The principal future challenges relate to the coordination of port investment, the risk of overcapacity, and poor port planning,” Merk said. While in the past the Turkish state dominated port management through the Ministry of Railways and Ports, a period of liberalization has seen many facilities and their management now

controlled by the private sector. However, with the state still seeking to play a role through the development of strategic projects, there has been a lack of coherent linkages between public and private sector investment. According to Merk, the Mediterranean port of Mersin provides an example of how a privatized facility situated close to a newer state-developed port has led to confusion and overcapacity. He also expressed concerns over the lack of competition at some major Turkish ports, with privatized facilities frequently controlled by one managing firm. “Our recommendation is that there should be a public port authority function in Turkey at a national level to

TURKEY PUBLIC, PRIVATE INVESTMENT Only modest growth in investment, as a percentage of GDP, is expected after the peak of 2011. 24

‘01

‘02

‘03

‘04

‘05

‘06

‘07

‘08

‘09

‘10

‘11

‘12

‘13

‘14

‘15

2014 onward are forecasts. Source: International Monetary Fund, World Economic Outlook Database, April 2015 50 BREAKBULK MAGAZINE www.breakbulk.com

‘16

‘17

‘18

facilitate a better coordination of investment,” he said.

‘Middle Income Trap’

Over the last several years, however, there have been clear signals of a fundamental deceleration within the Turkish economy, with growth slowing to an aggregate rate of less than 3 percent in 2012-14, stagnation in living standards, and rising unemployment. Consensus forecasts suggest that Turkey’s economic slowdown is likely to persist over the coming years, driven by a combination of internal and external considerations, and settle in a much lower 2 percent to 3 percent range. Following a period of rapid growth, there appears an elevated risk that Turkey may find itself in what is known to economists as a “middle income trap,” where failure to implement politically controversial reforms results in economic stagnation. According to WilWilliam Jackson liam Jackson, senior emerging markets economist at Londonbased independent economic research firm, Capital Economics, the buildup of macroeconomic imbalances will be a key driver of a less-certain economic climate. With a low rate of savings and an economy dominated by household consumption rather than foreign trade, the SEPTEMBER-OCTOBER 2015

regional review

The first high-speed train connecting Ankara and Istanbul arrives at the station in Istanbul on July 25, 2014. / Credit: Lu Zhe Xinhua News Agency/Newscom

Turkish private sector has also become structurally dependent on overseas capital flows – so-called “hot money” – that can be quickly unwound during times of financial market risk aversion and economic or political stress. “In the immediate term, one of the main concerns for growth is that Turkey is running a large current account deficit, which means that it needs to borrow money from abroad to finance its imports and consumer and capital goods. This makes it very vulnerable to any external shocks which causes inward capital flows to slow,” Jackson said. A hint of the extent of the exposure was seen at the turn of 2014-15, when anticipation of tighter monetary policy from the U.S. Federal Reserve saw the lira’s value slide against leading global currencies, forcing the Turkish Central Bank to hike interest rates. Jackson, who expects Turkish GDP will expand at about 2.5 percent over the next five years, outlined how international investors have become more risk adverse over the last 12-18 months, and 52 BREAKBULK MAGAZINE www.breakbulk.com

are therefore likely to demand higher interest rates than has been the case during the last decade to continue financing the economy’s substantial current account deficit. “The economy is likely to be stuck in a rut where you have high interest rates, high inflation, and fairly weak growth,” he said.

Political Risks

There are also concerns surrounding the possibility that Turkey could find itself engulfed by the escalation in geopolitical tensions within several of its neighboring countries. “To compound matters, the country’s new role in the conflict in Syria presents another key risk,” Jackson confirmed. With Turkey having already spent several months without a government following an inconclusive election result in June 2015, domestic political risk has also been on the ascendancy in recent months. There are also lingering doubts over the willingness of the country’s largest parliamentary political group, the

Justice and Development Party (AKP), to continue with the type of reforms that have driven growth since it came to power in 2002. Many analysts expect that another election is likely over the coming months, and that political volatility, in conjunction with other economic frailties, will continue to pose a short- and medium-term threat to international investor sentiment towards Turkey. While investment and infrastructure development will continue to expand in Turkey, the pace of growth will likely decelerate somewhat relative to the previous decade of more benign economic conditions. “For the past few years, we have seen direct investment into Turkey decline substantially and is now in U.S. dollar terms at its lowest in about a decade,” Jackson said. However, while the economic outlook has clearly deteriorated over the last several years due to internal and external factors, with Turkey still likely to grow at a faster rate than many struggling SEPTEMBER-OCTOBER 2015

regional review

TURKEY’S SOUTHERN GAS CORRIDOR Gas reserves and pipeline projects provide plenty of potential for gas movements from the region.

TURKMENISTAN: 17.5 tcm

AZERBAIJAN: 0.9 tcm

TUR KE Y

KURDISTAN REGION IN IRAQ (KRG): 3-6 tcm

IRAN: 33.8 tcm

Trans-Adriatic Pipeline (planned)

South-Caucasus Pipeline (existing)

Trans-Anatolian Pipeline (under construction)

Trans-Caspian Pipeline (conceptualized)

national reserves

In trillion cubic meters Source: Bruegel based on BP Statistical Review of World Energy, June 2015

54 BREAKBULK MAGAZINE www.breakbulk.com

Western economies, and a need for further infrastructure development, it is likely that private and public sector investment will nevertheless continue to expand. “Clearly investment projects will still happen, but the growth just won’t be as fast as it has been in the past or enough to satisfy the Turkish economy’s investment requirements,” Jackson said. Regarding the direction of future investment, the Turkish government has already laid out plans for further development of the country’s transport infrastructure, including the construction of a 9,725-kilometer high-speed rail track and 5,663-kilometer conventional track by 2035. As with other key infrastructure projects, this will be largely funded through public and private partnership investment. According to PricewaterhouseCoopers, the Turkish government has also

SEPTEMBER-OCTOBER 2015

announced plans for at least one port facility to become a top 10 global port by 2023, while it is also targeting production of at least 30 percent of electricity by renewable energy sources within the same ambitious timeframe. With its strategic location between the oil and gas producing countries of the Middle East, Central Asia and Russia, and commodity deficient Europe, the highest volumes of infrastructure investment may also center on government plans for the development of Turkey into a regional energy hub. The country is also well placed to benefit from increased tensions between Moscow and the European Union, with the former seeking to develop alternative channels for energy exports to its principal European market, and the latter aiming to reduce its excessive dependence on Russian gas. As part of a new strategic energy

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blueprint, the European Commission reaffirmed its commitment to developing closer ties with Turkey in March 2015. According to a statement released by the EU’s executive body in Brussels: “Turkey is a natural energy bridge and an energy hub between energy sources in the Middle Eastern and Caspian Regions and European Union energy markets. Turkey’s development as an energy hub will be to the benefit of both Turkey and the EU.” In a July 2015 research paper, Designing a New EU-Turkey Strategic Gas Partnership, Bruegel, the influential Brussels think-tank, also recommended that the European Investment Bank, or EIB, should be utilized to attract increased private sector investment in gas infrastructure in Turkey. The financing tools available to the EIB for investment include guarantees for private investors, as well as project loans.

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Central to developing closer energy ties include the construction of a new Southern Gas Corridor linking Europe to Central Asian gas exporting countries, such as Azerbaijan and Kazakhstan, which will include the Trans-Anatolian Natural Gas Pipeline, or TANAP, through Turkey. With an estimated budget of US$10 billion, construction of TANAP commenced in March 2015, and will eventually link up with the TransAdriatic Pipeline crossing Greece and Albania to Italy. The project, which is 30 percent owned by the Turkish government through the state-owned BOTAŞ Petroleum Pipeline Corp., is scheduled for completion by 2018. While the economic outlook is less benign than during the 2000s, Turkey will clearly remain an economy with considerable opportunities for the international shipping and project cargo industries during the coming years. BB

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CHECK By Carly Fields

Brazil’s Potential Needs to be Weighed Against Risk

ome to 202 million people and with a gross domestic product of US$2.35 trillion, that Brazil offers a mass of infrastructure potential is undisputed. But with inflation at a 12-year high of 9.56 percent in July 2015 and a corruption scandal that goes to the heart of the current political administration, it’s a country with a high exposure to risk. Breakbulk spoke with political and foreign policy-focused economist Joao Augusto de Castro Neves about the competing currents that project involvement in Brazil now brings. 56 BREAKBULK MAGAZINE www.breakbulk.com

AND BALANCE

BREAKBULK: Do you agree with the

Organization for Economic Co-operation and Development’s most recent outlook for Brazil that there will be a slow recovery in economic growth from the end of 2015, “driven initially by strengthening exports, which will be boosted by the depreciation of the real”? CASTRO NEVES: The weakening of the

currency is certainly an important feature of Brazil’s economic recovery, as it will increase competitiveness and help boost exports. But a more sustainable path for growth will also demand more investments, particularly in the infrastructure and energy sectors. More exports could help, but Brazil is still a relatively closed economy, so the overall importance of trade for the economy is relatively small. BREAKBULK: How optimistic are you

about Brazil’s economic outlook in the short to medium term? CASTRO NEVES: There is little doubt that

Brazil is enduring one of its most acute crises since the return of democracy in the 1980s. Against the backdrop of a sharp economic downturn, the combination of growing popular discontent and a massive corruption scandal involving statecontrolled oil giant Petrobras and major construction companies has undermined

the administration’s ability to govern effectively. Even though the government’s commitment to pursue a course correction on economic management has remained firm this year, stronger political and economic headwinds have rendered the task more difficult. BREAKBULK: Can you expand on how

the Petrobras corruption scandal has affected the outlook? CASTRO NEVES: Many of the current

challenges that Brazil is facing predate the Petrobras corruption scandal. Looking at the economy, part of the problem today stems from an exhaustion of Brazil’s more state-centric and consumption-led growth model – that worked quite well in the last decade or so – coupled with a more unfavorable global Joao de Castro economic environNeves ment, marked by the slowdown of Chinese growth and lower commodity prices. The Petrobras scandal, to a great extent, exacerbated some of those problems by exposing major companies in key sectors of the economy – energy and infrastructure – to the SEPTEMBER-OCTOBER 2015

Credit: Shutterstock

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biggest corruption scheme in Brazil’s history. Moreover, the scandal also diminished the government’s ability to respond to these challenges more effectively. At best, this will dampen investor confidence and make an economic recovery more difficult in the near term. At worst, it may lead to a more severe crisis, potentially leading to Rousseff’s impeachment.

GDP GROWTH VS TRADE

BREAKBULK: Is President Dilma Rous-

seff’s impeachment a real possibility?

CASTRO NEVES: While the crisis is likely

to deepen in the near term, it is unlikely to lead to President Dilma Rousseff’s impeachment. Several preconditions need to coexist in order for an impeachment process to happen: low approval ratings, loss of support from social movements, main parties in congress aligning towards impeachment, concrete evidence of Rousseff’s wrongdoing. We certainly have the first one, but the other factors aren’t there yet. To be sure, protests will gain the streets and calls for Rousseff to step down will continue, but the bar for an impeachment process to prosper in Brazil is quite high. That said, Eurasia Group’s base case (a 55 percent probability) forecasts heightened political and economic volatility in the near term – possibly even the loss of investment-grade status from credit rating agencies – but a gradual stabilization in the medium term. In other words, as the political and economic crises begin to ebb, the government’s ability to implement constructive policy changes would slowly increase over time. Two alternative – and more negative – scenarios (with a combined 45 percent probability) point to a greater degree of political and economic instability, resulting in President Dilma Rousseff’s impeachment (a 30 percent probability) or in a paralyzed government (a 15 percent probability). BREAKBULK: So Rousseff could make it

through unscathed?

CASTRO NEVES: Despite a deepening

crisis, President Dilma Rousseff is likely to finish her term and implement a course correction on policymaking. Over the next six to eight months, though, a deepening of the political and economic crisis will lead to less effective policy outcomes and an overall deterioration of economic outlook 58 BREAKBULK MAGAZINE www.breakbulk.com

Brazil’s GDP growth as a percentage has slowed against GDP growth. 30 25 20

(local content requirements, Petrobras’ dominant role etc.), a protracted impeachment process would probably lead to a deepening of the political and economic crises and likely constrain the maneuvering room for the next government. BREAKBULK: Looking at investment

Trade (% of GDP)

GDP Growth (annual %)

5 0

2010

2011

2012

2013

2014

Source: World Bank, World Development Indicators, accessed Aug. 25, 2015

POPULATION GROWTH Brazil’s population has been steadily rising. 204* 202 200 198 196 194

2010

2011

2012

2013

2014

*in millions Source: World Bank, World Development Indicators, accessed Aug. 25, 2015

as the corruption scandal continues to gain steam. Beyond that, the situation tends to slowly stabilize, allowing for a gradual economic recovery. It will be, however, a long and painful process for much of the remainder of Rousseff’s second term in office, which ends in 2018. BREAKBULK: If an impeachment did

take place, what would be the impact on the economy and the oil/gas industry? CASTRO NEVES: Even though the main

viable alternatives to Rousseff and her Workers’ Party would probably seek to improve policies towards the oil/gas industry by scaling back some of the more state-centric measures of the recent past

opportunities, planned concessions, especially in transportation, are being promoted as a ‘magic bullet’ that will bring in funds and stimulate growth; do you agree with this? CASTRO NEVES: Revamping the infra-

structure and energy sectors will remain a top priority for the Rousseff government as Brazil attempts to transition from a consumption- to an investment-led growth model. There is little doubt that the new package of infrastructure concessions announced in June was a step in the direction of improving the relationship with the private sector through greater transparency and more favorable terms to attract investment. A similar logic is also likely to play out in the oil sector, with authorities expected to open the pre-salt E&P (exploration and production) framework to investors and offer more attractive terms to develop the industry. Moreover, an ambitious US$15 billion divestiture program by Petrobras will transfer a number of assets in upstream, downstream and midstream to the private sector. But this process tends to take time. The ongoing corruption scandal coupled with regulatory uncertainties will continue to dampen investor sentiment in the near term. Unfortunately, there is no magic bullet to solve Brazil’s problems. Just hard work for a prolonged period of time. BREAKBULK: And how is the plan to

open state-owned oil and gas fields to foreign investment progressing? CASTRO NEVES: Changes to local content

policies and to the pre-salt E&P framework will follow a gradual process. The lingering pressures on Petrobras, coupled with the company’s downward revision in oil output – and its impact on public coffers – will lead the Rousseff administration to implement a constructive shift in oil policies, despite the mixed messages from authorities in recent months. The challenge for the government will

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be to present these changes more as “tweaks” to the existing rules rather than an overhaul. Without these constructive overtures, Petrobras’ restructuring and the development of Brazil’s oil province will be hampered by uncertainties. BREAKBULK: If approved, what will this

development mean for other related sectors, such as logistics? CASTRO NEVES: With respect to the

A special commission has been tasked with assessing Petrobras’ involvement in pre-salt oil exploitation. / Credit: Ana Volpe/Agência Senado

pre-salt framework, a proposal presented by Sen. Jose Serra will eventually force the administration to implement changes. Even though the Rousseff government will publicly oppose Serra’s proposal, which lifts the requirement that Petrobras be sole operatorship with a 30 percent minimum in the pre-salt, its ability to block the bill in congress is very limited. Even if Rousseff vetoes the proposal, we would expect the government

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to announce a compromised solution to avoid an outright defeat (that is to say, having the veto overruled). While no decision has been made, we believe that there is a growing acceptance within the administration that changes to both local content as well as to Petrobras’ role in the pre-salt are inevitable and will have a positive spillover effect into other sectors of the economy.

trade deals on their own are also in the cards. Yet a deal between the bloc and the EU is unlikely before presidential elections in Argentina later this year. BB Joao Augusto de Castro Neves is director, Latin America for Eurasia Group, a

political risk research and consulting firm. Castro Neves focuses primarily on Brazil, with an emphasis on political economy, politics, and foreign policy. His sectoral expertise includes energy and natural resources (power, oil and gas, and mining) as well as regional trade policies.

BREAKBULK: Lastly, how important

are successes in trade agreement negotiations with the European Union and Mexico for this future growth? CASTRO NEVES: Brazil’s slow shift

towards more constructive policies will have a positive – albeit gradual – impact on trade policy. The main objective of President Dilma Rousseff’s U.S. tour in June, for example, was to reinvigorate the bilateral dialogue, largely suspended over the past two years, and laid the groundwork for more substantive commercial ties going forward. While in Washington, the announcements largely consisted of the expected platitudes on issues like climate change and education, though progress on some economic issues – such as authorizing Brazilian beef exports – also occurred. More consequentially, Rousseff’s trip signaled a renewed commitment to progress on issues like double taxation, visas, and reducing non-tariff barriers. Moreover, the Brazilian administration is desperately seeking more external investment, and will be aggressively touting the infrastructure concession package announced in early June. Attracting foreign capital will require the government to double down on liberalization, though it will take time. This gradual process will begin with infrastructure auctions and an opening of the oil and gas sector later this year. The administration will eventually address trade issues as well, such as reducing non-tariff barriers and easing restrictions on procurement. Evidence of how a difficult domestic environment is driving a more pragmatic foreign policy include a cooperation agreement with the OECD and a trade and investment package with Mexico, both announced earlier this month. Changes within Mercosur that allow countries greater flexibility to negotiate

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regional trends

A RE-EMERGING

POWER Iran Stands to Regain Oil, Gas Prominence By V L Srinivasan

62 BREAKBULK MAGAZINE www.breakbulk.com

12-year standoff between Iran and world powers over the Islamic Republic’s nuclear activities came to an end with the former agreeing to limit its nuclear program on July 14. But Iran still has a long way to go before it can make a meaningful impact on the global oil and gas markets, not least because the accord has to be

ratified by the U.S. Congress within 60 days, and must also be approved by Iran’s supreme clergy leader, Ayatollah Ali Khamenei. Under the deal, Iran has pledged that it will not produce material to create a nuclear weapon for at least a decade and has agreed to the imposition of new provisions for the inspection of Iranian facilities, including military sites.

SEPTEMBER-OCTOBER 2015

www.breakbulk.com BREAKBULK MAGAZINE 63

regional trends

Ministers meet to thrash out the Iranian nuclear deal. / Credit: U.S. Department of State

Undoubtedly, the deal will go down as one of the most important diplomatic achievements for U.S. President Barack Obama during his presidency; ensuring peace in the volatile Middle East – which provides energy security for America – has been one of his top priorities. The landmark agreement will enable Iran to reclaim its frozen assets of about US$120 billion and attract foreign direct investments, which will result in the recovery of trade, tourism, oil production and exports. It will also, importantly, boost private investment leading to higher GDP growth. Many European countries, which are mostly dependent on gas supplies from Russia to meet their needs, will soon be able to look to Iran as an alternate source of energy once sanctions are lifted. Indeed, some European firms are already looking at Iran to invest in its oil and gas fields. At the regional level, Iran will likely 64 BREAKBULK MAGAZINE www.breakbulk.com

Undoubtedly, the deal will go down as one of the most important diplomatic achievements for U.S. President Barack Obama during his presidency. leave no stone unturned in its drive to re-establish its role in the region. But oil-dominant countries such as Saudi Arabia, the U.A.E., Qatar, Kuwait and Bahrain will want to restrain and counter Iran’s success. The Jewish lobby in the U.S. is also

against the accord and the U.S. Congress voted in May to tie any final agreement to a subsequent Congressional review, which could delay progress. However, President Obama has said that he would exercise his veto power if Congress votes against the deal in the House. There are other hurdles such as the timing and mechanisms for lifting sanctions; how to prevent Iran from continuing its nuclear activities; the creation of an inspection regime to ensure compliance of the agreement; and when an international embargo on selling conventional arms to Iran might be lifted. These measures are expected to take time to resolve, leaving the country without access to the latest oil and gas technology needed to increase production. According to experts, Iran needs at least US$200 billion invested in its oil and gas industry, including US$70 billion for its petrochemicals, to upgrade the technology and also repair its oil SEPTEMBER-OCTOBER 2015

regional trends

Iranians, mostly young men and women, gather for celebrations following a landmark nuclear deal between Iran and the international community led by the U.S. Credit: Nazanin Tabatabaee Yazdi/Polaris/Newscom

fields which were badly damaged during the eight-year war with Iraq in the 1980s. No new wells have been drilled in Iran since 2007.

‘Proven’ Reserves Dispute

Iran, which is the fifth-largest oil producer among the Organization of the Petroleum Exporting Countries, claims it has 157 billion barrels of proven oil reserves. However, this figure is disputed by many experts including two retired National Iranian Oil Co. experts, Ali Samsan Bakhtiari and Ali Muhammed Saidi, who estimate the figure is nearer to 37 billion barrels. Iran also claims to hold the secondlargest natural gas reserves of 29.6 trillion cubic meters or about 15.8 percent of Fatih Birol world’s total reserves. The U.S. Energy Information Administration believes that Iran may be understating here, and puts natural gas reserves at 33.6 trillion cubic meters as of January 2013. Just before the nuclear deal was clinched, Fatih Birol, chief economist 66 BREAKBULK MAGAZINE www.breakbulk.com

and director of global energy economics of the Paris-based International Energy Agency, said there was a pressing need for investment in Iran’s oil and gas sector. He gave a timeline of three to five years before this technology could be brought up to speed. Birol added that investment cuts from oil and gas firms in light of a weaker oil price would also stem Iran’s potential in the near term “In view of falling oil prices, there has been a decline in production and

we estimate investments in oil upstream will go down this year by 20 percent which is more than US$100 billion, in the given market conditions,” he said. However, Iran’s oil minister Bijan Namdar Zanganeh is brimming with confidence. Before the deal was concluded, he said his country would step up oil production within 10 days of sanctions being lifted. “Iran produced 2.78 million barrels per day in April this year, [will] reach 3.8 million bpd by December and 4.8 million bpd by June 2016,” Zanganeh said. At its peak in 1974, Iran’s production stood at 6 million bpd with crude oil exports of 5.7 million bpd; it is struggling to produce 3.15 million bpd with net exports down to 1 million bpd this year. Iran has not managed to achieve its OPEC production quota of 4 million bpd since 2000. The decline in Iran’s oil exports over the last few years was not solely due to tighter sanctions; it was also the result of fast-depleting old oil fields with reservoirs that were damaged from excessive production in the 1970s under its former Shah, Mohammad Reza Pahlavi. Mamdouh G Salameh, international oil economist and consultant to the World Bank, said Iran could add no more than 300,000-500,000 bpd to its production and even if it did, that may not translate into added exports because of steeply rising domestic consumption. He added that Iran used the equivalent of 610,000 bpd of oil and natural gas

IRAN’S CURRENT, PROJECTED ELECTRICITY GENERATION 1600

2.5 LEFT AXIS billion kilowatt hours

1200

800

million ton oil equivalent

RIGHT AXIS million barrels per day

1.5

400

2012

2015

2020

2025

2030

Sources: IEA World Energy Outlook 2012/BP Statistical Review of World Energy, June 2014/U.S. Energy Information Administration. Iran’s Energy Data: www.eia.doe.gov/cabs/background.html/ SEPTEMBER-OCTOBER 2015

regional trends

An Iranian engineer at the South Pars gas field near the southern Iranian port of Assalouyeh, Iran, on Jan. 22, 2014. The South Pars/North Dome field is a natural gas condensate field located in the Arabian Gulf. It is the world’s largest gas field, shared between Iran and Qatar. Credit: Ahmad Halabisaz Xinhua News Agency/Newscom

in 2012 to generate electricity. By end of 2015, Iran will need to use some 770,000 bpd for electricity generation. That said, Salameh believes nuclear power would enable Iran to replace at least 93 percent of the oil and gas used in electricity generation in 2020, thus adding about 1 million bpd to its oil and gas exports and earning it an extra US$36 billion. “Lifting sanctions Mamdouh G will hardly affect Salameh the global oil prices or the global oil market in the long-term,” he said. “Any initial impact could be the result of Iran releasing some of its alleged stored crude oil on tankers 68 BREAKBULK MAGAZINE www.breakbulk.com

or floating containers to the market, but it will be short-lived and limited. However, Iran might benefit from the development of its natural gas fields.” Salameh said that while the lifting of sanctions would facilitate Iran’s efforts to remedy its ailing oil industry, exports would be influenced by factors beyond Iran’s control, such as oversupply in the global oil market, and curtailment of global investments resulting from the low oil prices and geological factors. Iran could demand that OPEC allocates it a bigger production quota, but other members will unlikely accept this in the current climate.

Trade And Investment Opportunity Nasser Saidi, founder and president of Dubai-based Nasser Saidi & Associates, felt that the Iranian agree-

ment would elicit a massive trade and investment opportunity on the global stage. Gulf Cooperation Council countries along with Iraq stand to gain economically in a post-sanctions era, as investors look to them to park their funds, he said. Iran could also utilize the expertise of these countries as it rebuilds its nation. Describing Iran as a “giant” of the oil and gas sector in the MidNasser Saidi dle East, Saidi said that more investment would help Iran to take up new projects and to lay pipelines to link with energy-hungry economies such as India, China and Pakistan. He expects that the oil price will fall by SEPTEMBER-OCTOBER 2015

regional trends

ARABIAN GULF CRUDE OIL PRODUCTION, CONSUMPTION, IMPORTS/EXPORTS 2010-2035 24* 20 16 12 8 4 0 -4

2010

2011

2012

2013

production

2015

2020

consumption

2025

2030

2031

2032

net exports/imports

* million barrels per day Sources: USEIA, Oil Outlook 2013/OPEC annual statistics bulletin 2014/BP Statistical Review of World Energy, June 2014/Mamdouh G. Salameh’s projections

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2035

around US$10 per barrel as soon as Iran starts pumping oil into global markets, and the prices of natural gas are likely to be similarly impacted. The deal has certainly created a storm in the Middle East, particularly in the GCC region, which views Iran as a significant threat to its regional autonomy and political stability. These fears are based in part on unrest in GCC countries. Iran has been accused of stirring up trouble, particularly in Bahrain, where Shias have been demanding more political power, and also in Yemen, which is the backyard of Saudi Arabia. GCC member states are also wary of Iran because of its support of the Syrian government, led by Bashar al-Assad. Qatar, Saudi Arabia and the U.A.E. want to be shed of Assad and have been supporting the rebels for the last four years with limited success.

SEPTEMBER-OCTOBER 2015

However, the U.S. administration has been quick to allay such fears and senior officials including Secretary of State John Kerry have visited the Gulf to cement the U.S. government’s backing of GCC member states. Kerry is eager to put the U.S. at the Gulf States’ disposal should the need arise, with offers of intelligence-sharing and Special Forces training. Salameh said a nuclear Iran, desperate for oil, could try to poach some of its Gulf neighbors’ oil and gas assets such as the Majnoon oil field, which straddles the Iraqi/Iranian border (with estimated proven reserves of 17 billion barrels); the Saudi Safaniya offshore oil field (the world’s biggest offshore field); or Qatar’s offshore gas fields (the world’s third-biggest). “It could also hold its Gulf neighbors ransom by threatening to block their oil exports through the Straits of Hormuz

unless it shares in this wealth. The U.S. would not, for sure, come to the defense of its Arab allies against a nuclear Iran,” he said. The Saudi leadership fears that Iran could seek to mobilize the Shiite minority in their country to create political turmoil and even, in time of great tension between the two countries, sabotage main oil and gas production assets in the eastern region of Saudi Arabia. The U.A.E. claims ownership of three islands in the Gulf that are now under Iran’s control – Abu Musa, Greater Tunb, and Lesser Tunb – which were occupied by Iranian forces in November 1971. The U.A.E. has requested that Iran resolve the dispute over the three islands through direct negotiations or by referring it to the International Court of Justice. Iran has so far rejected direct negotiations and international adjudication.

“In balancing Iran’s power, it is tempting for Saudi Arabia and the U.A.E. to turn to nuclear weapons as part of a larger strategy to counter Iranian influence. However, the GCC countries should try to settle their differences with Iran by negotiations and to build bridges of trust between them before brandishing the nuclear option,” Salameh said. He feels the GCC countries should not overstate the Iran threat. “With a combined GDP of US$1.9 trillion – which is five times Iran’s GDP – 29 percent of the global proven oil resources and 22 percent of the proven gas reserves, they are far more powerful economically and politically than Iran. Together, they can be a force to reckon with if they stand united,” he said. But the question is will they take a unified stand against Iran given their differences on regional developments? BB

www.breakbulk.com BREAKBULK MAGAZINE 71

logistics profile

Almajdouie was the first Saudi private company to be awarded the “Heaviest Item Moved by Road Freight” Guinness World Record. / Credit: Almajdouie

MAKING

Almajdouie Logistics Enters New Era with Restructuring

(AND BREAKING) RECORDS By Criselda Diala-McBride

very business has to start somewhere. For Almajdouie Logistics, it was when Shaikh Ali Ibrahim Almajdouie bought his first truck in 1965 to support his start-up, which involved clearing goods in Dammam port, in the Eastern Province of Saudi Arabia. Although the company’s founding father (now chairman) came from humble beginnings, he seemed to have 72 BREAKBULK MAGAZINE www.breakbulk.com

the Midas touch. Over the years, he and his team steadily enriched the business – eventually building one of Saudi Arabia’s most successful family conglomerates that represents diverse interests from logistics, trade and manufacturing to automotive, real estate and retail, to name a few. Half a century since Almajdouie invested his hard-earned riyals into his first vehicle, Almajdouie Logistics has shown no signs of letting up. It has become the Middle East’s largest assetbased logistics service provider and a

supply chain and project management juggernaut. Aside from logistics and distribution, the company also provides transportation, customs clearance, freight forwarding, heavy-lift and warehousing services to its robust client base across the Middle East and North Africa, Asia and Europe. Headquartered in Dammam, the company also has seven offices throughout the kingdom, as well as corporate presence in Bahrain, Dubai, Abu Dhabi, Kuwait, South Korea and Japan. It boasts 6,000 staff on its payroll, a fleet of 2,200 trucks and 1,800 SEPTEMBER-OCTOBER 2015

logistics profile

trailers, as well as a spacious 2 millionsquare-meter terminal and storage facility in Saudi Arabia. Since its inception, Almajdouie Logistics has served industries that are critical to the economy of Saudi, as well as those engaged in the wider Gulf Cooperation Council, or GCC, region. Those sectors include oil and gas, petrochemicals, power and utilities, fast-moving consumer goods and infrastructure. In 2014, it handled 1.41 million freight tons of cargo for projects throughout the kingdom alone. Two Kim Bjerner years earlier, it made Rathsack headlines when it became the first Saudi private company to receive the Guinness World Record for the “Heaviest Item Moved by Road Freight.” Described as a “sheer feat of engineering,” the project that cemented Almajdouie Logistics’ industry reputation involved the transportation of eight evaporator units, each weighing about 4,891 tons and measuring almost

124 meters long, 34 meters wide and 12 meters high. The evaporator units were transported as a single piece, weighing more than 41,000 tonnes, from the manufacturing facility in South Korea to a desalination plant 4,700 miles away in Ras Al Khair, in eastern Saudi Arabia. To illustrate the scale of this behemoth undertaking, the combined size of the evaporator units was larger than a football field, with a total weight equivalent to 5,000 cars. In addition, it had to be transported along two kilometers of desert road from the Ras Al Khair port to the project site. The desalination plant, a critical facility in an arid region such as the GCC, has the capacity to convert salt water into 728 million liters per day of potable water, enough to fulfill the needs of 3.5 million Saudi residents, according to media reports. Kim Bjerner Rathsack, the company’s recently appointed CEO, said the success of the 50-year-old company can be traced to the original philosophy of its founder. “We do strive to go the extra mile for our clients, to cater for their needs and try to anticipate their future requirements, [while adhering] to the fact that the client always has a choice. We must never underestimate that,” Rathsack said.

Almajdouie is capitalizing on its “strategically located” warehousing facilities. Credit: Almajdouie 74 BREAKBULK MAGAZINE www.breakbulk.com

Restructuring Strategy

In 2012, Almajdouie Logistics marked a new era following a restructuring strategy that saw its independent companies – formerly known as Almajdouie Transport, Almajdouie Heavylift Transport and Engineering, Almajdouie Logistics and Distribution, Continental Freight and International Projects Development – integrated under the flagship Almajdouie Logistics Co. LLC. The articulated strategy resulted in the creation of Almajdouie Group, a holding company with various independent firms including the logistics business. As the company continues its steady expansion, the move was vital in helping streamline the organization’s legal, financial and administrative process, Rathsack said. “Under the flagship of Almajdouie Logistics Co., we are able to move away from a service-provider mindset to a solution-driven business,” he said. The company hopes to achieve this goal through its own resources, comprising four divisions that are working in unison to cater to specific, and oftentimes bespoke, logistics solutions for its clients. Rathsack added that some clients have specific requirements that can be met through the expertise of a particular division. “For example, we have national [Saudi-based] companies that procure distribution services from us on a standalone basis. “But most industries and clients in the oil and gas, petrochemical, retail and infrastructure [sectors] have diversified and ever-changing needs for freight forwarding, customs clearance, transportation, warehousing and the total management of their portfolio. Almajdouie Logistics provides it all in-house and with seamless interaction between our divisions,” he explained. The move to a single company structure was also important as the company’s growth accelerates and as it gains wider experience in the project cargo and heavy-lift industry. “We needed a strategy with a unified purpose that [would encourage each division] to share their collective knowledge,” Rathsack noted. After its restructuring program, Almajdouie Logistics searched for a new chief executive to help bring the organization’s SEPTEMBER-OCTOBER 2015

logistics profile

POWERING UP A SAUDI PROJECT Almajdouie Logistics Co. has been awarded the contract to carry out significant operations for the complete onshore logistics of 500,000 freight tons of cargo for the Shuqaiq Steam Power Plant Project in Jizan Province at the southwestern region of Saudi Arabia. The project involves the delivery of large cargo using intercoastal roll-on, roll-off barge operations. The scope incorporates the complete provision of barge, all ro-ro and load-on, load-off equipment, sea fastening, ballasting and all engineering for a planned 25 voyages. Each voyage begins with the provision of all loading activities at the congested Jizan Port, sailing the barge about 60 nautical miles north to the site jetty, then carrying out all unloading activities and deliveries to the project site. The undertaking is set to become a landmark project for the Gulf Cooperation Council region. It is expected to last for 12 months, including the peak of summer when the temperature can rise to as much as 50 degrees Celsius. In total, the process will involve carrying about 70,000 freight tons by barge. Almajdouie Logistics will also provide customs clearance services at Jizan and Jeddah ports, in addition to the handling of general and containerized cargo, and the transportation of medium and heavy cargoes by road. 76 BREAKBULK MAGAZINE www.breakbulk.com

new goals and objectives into fruition. In November 2014, Rathsack was appointed CEO, spearheading the company’s activities focusing on transportation, heavy-lift, freight forwarding and terminal and warehousing. “My appointment came at a very important time, as 2015 marks the company’s 50-year journey. It is also interesting as it is my first job in Saudi Arabia, with a family-owned business that is rooted in the values and heritage of the Kingdom. These values of trust gave Almajdouie its name in the logistics industry as a reliable partner,” he said. Prior to taking on the Almajdouie post, Rathsack was CEO for Middle East and Africa at Damco, where he held various roles and had a successful career spanning 12 years. A logistics and supply chain management veteran, he started in 1988 with Danish shipping giant A.P. Moller - Maersk, serving several management positions in local and corporate functions. He also worked briefly for French retailer Auchan as supply chain director and for Microsoft Business Solutions as senior lead program manager. Comparing his past experience with his new role at Almajdouie, Rathsack said: “In contract to my experience in A.P. Moller, which focused mainly on international supply chain management, Almajdouie Logistics Co. is focused on land-based transport, where we are offering services across the supply chain.” He added that Almajdouie’s dedicated teams and own equipment give it a lot of bench strength, allowing it to cater for all clients, client owners and the entire freight forwarding community, with the same dedication.

MENA Presence

Strengthening its presence in the Middle East and North Africa region remains a priority for Almajdouie Logistics. As it expands, the company is setting its sights on developing its branches outside of Saudi Arabia. Rathsack said Almajdouie plans to allocate more resources and equipment, if required, at its existing GCC branches and in new markets it has yet to tap into. Its expertise and experience in the

project cargo market should not be undermined, especially considering its proven history in breaking world records and in the timely delivery of projects to satisfy customers. “As far as we know, we are the only company to have broken that [world] record – twice. In the last five years, Almajdouie Logistics has handled the most super-heavy loads, including 30 evaporator units, for clients such as [South Korea’s] Doosan and [Europe’s] Sidem, ranging from 2,500 to 5,000 tons,” Rathsack said. In 2015, the firm will focus on updating its fleet with new units and assigning more resources and equipment to its Gulf offices as a permanent, local solution. As Rathsack relates, further expansion will be market driven. “For sure, in a market as dynamic as [the GCC], opportunities will be rife. We are capitalizing on our strategically located terminal and warehousing facilities near major Saudi ports and investing in more than 70 skilled customs clearance personnel across borders. This will allow us to work closely with the projects market and the global forwarding community.” Ongoing initiatives from regional governments to inject capital into transport infrastructure also bodes well for companies like Almajdouie Logistics. Multibillion-dollar investments will position GCC as a global cargo leader, especially ahead of international events such as the Expo 2020, which will be hosted in Dubai. In Saudi Arabia, about US$30 billion has been allocated by the government for mega-projects related to the expansion of land and seaports. These projects include the Jeddah Islamic Port, where the Red Sea Gateway Terminal will have a 1.8 million TEUs of capacity; a world-class seaport in the King Abdullah Economic City; as well as the expansion of the Dareen Port in Yanbu. Other markets in the GCC region are also upgrading or expanding their transport infrastructure: • Oman is pushing ahead with the 650 percent capacity expansion at its Sohar Port from 800,000 TEUs to 6 million TEUs. SEPTEMBER-OCTOBER 2015

• Qatar’s Hamad Greenfield Port project is also eyeing 6 million TEUs of capacity upon completion, with three container terminals to be operational by 2017. • Jebel Ali Port in Dubai has 15 million TEUs of per annum capacity, but is expected to add 4 million TEUs once Terminal 3 becomes fully operational. So far, Almajdouie Logistics’ outlook for its heavy-lift and project cargo business remains buoyant despite the global shipping industry navigating choppy waters as freight rates plummet. “We invested heavily in our own infrastructure to support the cargo market, so transporting heavy-lift consignments and project cargo is only one of many solutions we offer. We cater to sectors as diverse as water, dairy product, juices, soda drinks, food products, chemical, and petrochemical,” Rathsack said. “Since we offer services across the supply chain, we are quite diversified

Almajdouie Logistics Syed Mustafa (right) and Almajdouie Group President Abdullah Almajdouie (center) accept the Guinness World of Records certificate. / Credit: Almajdouie Group

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logistics profile

and have had the good fortune to be able to maintain a profitable environment across that portfolio. We strive to maintain an entrepreneurial spirit; we target niche and potential segments, such as the growing railway sector in the Gulf, [we were able to successfully] execute a good number of projects” along this line, he said. However, he admitted the Gulf railway project – a US$200 billion, 2,177 kilometer network that will connect all six countries in the GCC region and is expected to be operational by 2018 – will have a profound effect on the logistics industry in the long term. “Clients will have access not only to a brand new mode of transport, but also to competition between a wider range of ports and logistics service providers,” Rathsack said. “We strive to be forward thinking and focus on execution, and the most recent additions to our client services are new partnerships with Swisslog and Interbulk, each providing automation and ISO tanks, respectively.” In a bid to stay ahead of the curve, the company is also streamlining processes in line with global standards. Rathsack said Almajdouie Logistics is set to receive certification for implementing an Integrated Management System, a management tool for measuring health,

78 BREAKBULK MAGAZINE www.breakbulk.com

Almajdouie’s Guinness Record-breaking evaporator move. / Credit: Almajdouie

safety, quality and environmental performance according to ISO 9001, ISO 14001 and OSHAS 18001. As early as 2000, Almajdouie Logistics has been mapping out its expansion plan, leading to the formation of independent joint ventures with international industry players from Japan, China, the Netherlands and Italy. This is also one of the factors that led the company to adopt an integrated approach to its business model, so it can manage its resources more efficiently.

“Our new partnership with [Switzerland’s] Swisslog will help advance our automation and optimization capabilities by designing, developing and delivering best-in-class automation solutions for forward-thinking hospitals, warehouses and distribution centers. Meanwhile, our venture with UK’s Interbulk, will strengthen our ability to provide intermodal logistics solutions to the chemical, polymer, food and mineral industries,” Rathsack said. BB

SEPTEMBER-OCTOBER 2015

AMERICAN LOGISTICS | 2015

AMERICAN LOGISTICS ➥➥ Pictured: The Port of Houston

www.breakbulk.com BREAKBULK MAGAZINE 79

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

NYK BULK & PROJECTS CARRIERS LTD. (NBP) YOUR RELIABLE CARRIER FOR PROJECT CARGO AND BULK PRODUCTS NYK Bulk & Projects Carriers Ltd., a wholly owned subsidiary of Nippon Yusen Kaisha, Japan’s largest shipping company, is one of the world’s leading ocean carriers of project cargo, heavy lift cargo, steel products, and bulk cargo. Established on 1 October 2013 through the merger of NYK-Hinode Line Ltd. and NYK Global Bulk Corporation, the company’s roots extend back over 100 years to November 1912. We serve overseas markets through its global offices, which work in tandem with the worldwide network of the NYK Group and a number of agencies to meet all kinds of ocean transportation needs. We are committed to HSEQ (Health, Safety, Environment, and Quality) management, and key vessels and divisions are all ISO9001/14001 and OHSAS18001 certified.

OUR SERVICES WORLDWIDE

We provide regular semi-liner services worldwide including Europe, the Mediterranean Sea, Africa, South East Asia, India, the Middle East, and the South Pacific. In addition, we offer on-demand services dedicated to big/heavy lot and multi-destination transportation, as well as modularized cargo transportation and dry bulk services. More details about our services can be found on our website at http:// nbpc.co.jp

OUR AMERICA RELATED SERVICES

Our America Service provides a monthly semi-liner service between Asia (Japan, China, Taiwan, and Korea) and the North America/Caribbean/Central & South America.

At present, 20,000 DWT and 30,000 DWT multipurpose geared vessels are deployed along this shipping route. We transport a large variety of cargo such as jumbo tires, steel products, and heavy machinery to the US /Caribbean, and project cargoes and dry bulk on the return trip to Asia. In addition to this regular service to the US/Caribbean, the vessels may call at additional ports in South and Central America to meet the requests of customers. Our experienced staff of cargo professionals supports our transport services with technical expertise in worldwide. And our vessels’ marine officers/crews provide exceptional navigational expertise to our shipping operation. “Flexibility” is our strong suit. Our Houston-based sales team remains ready and willing to provide support to meet the individual needs of our America-based customers. More information can be obtained from our office in Houston.

3 Riverway, suite 1106, Houston TX 77056 Junya Inoue, Representative in Americas Tel: +1 713-961-9027 Fax: +1 713-963-0040 Email: Junya.inoue@nykbulk.com Stephen Garifalos, Regional Director, North America Tel: +1-713-961-9136 Fax:+1-713-961-0040 E-mail:Stephen.Garifalos@nykbulk.com

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90 BREAKBULK MAGAZINE www.breakbulk.com

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Visit us at

October 5-8, 2015 Booth # 301 in Houston

Bringing Value to Life Carrying Dreams for Tomorrow NYK Bulk & Projects, a wholly owned subsidiary of Nippon Yusen Kaisha (NYK), is one of the leading ocean carriers of bulk and heavy/project cargo. All over the world, we operate more than 200 vessels, including fleets of multi-purpose carriers, Handy/Handymax bulkers, and Open Deck Carriers (Non Submersible). Integrity, Innovation and Intensity — the 3 I’s — have been transformed into NYK Group Value and engrained in our DNA. We aim to bring more value to life by being of service to industry, energy supply, and urban infrastructure development globally.

www.nbpc.co.jp

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

GLOBAL PROJECT LOGISTICS NETWORK GPLN PROVIDES TECHNICAL DRAWINGS METHOD STATEMENTS TO MEMBERS

GPLN is already well-known in the project logistics industry. In this article here we therefore want to highlight the member benefits. As brand new product GPLN offers their members now a service that provides technical drawings and method statements. Our industry has ever become more demanding and more often than not the customer is now asking all technical aspects of a move or a lift to be supported by drawings and method statements. This service is now made available to GPLN members by industry professionals who have long-term experience and can assist GPLN members for difficult and complex tasks.

GPLN OFFERS THEIR MEMBERS CONTAINER AND TRUCK OPTIMIZING SOFTWARE

GPLN is also offering their members a web-based software to plan and optimize project cargoes in containers, flat-racks, open tops, trailers and on roll trailers. This service is offered in cooperation with a European company who has recently developed a sophisticated software. With this software one can find out within seconds how many and which type of equipment is needed for a project and get a detailed load plan for every container.

GPLN helps their members to market their companies at industry events around the world and through direct marketing. GPLN has extensively travelled the world to create opportunities for the members and attended up to 15 logistics and industry events (oil & gas, energy, mining, power construction etc.) a year to create brand awareness. GPLN’s newsletter which has now grown from just a few pages to an average of 16 pages is issued bi-monthly and is made for the GPLN members, sponsors and their customers. The majority of the articles covered are the success stories of great moves by GPLN members and sponsors. The newsletter is distributed by mail and at industry events to about 80,000 decision makers globally of companies that are using project logistics services. GPLN has recorded its history through photos on the GPLN Facebook page with over 10,000 pictures probably making it the largest heavy haulage and lifting online photo bank. For GPLN members the GPLN Facebook page (http://www.facebook.com/GPLN.HeavyTransports) simply is as good as any reference book as it gets. For more information about GPLN, please visit www.gpln.net or contact: info@gpln.net.

HEAVY TRANSPORT AND LIFTING SEMINAR FOR MEMBERS

But there is more! GPLN offers their members the wellknown Heavy Transport and Lifting seminar, conducted by an experienced heavy lift specialist. So far over 150 GPLN members have participated in this course.

BIMCO SUPPORTED EXCEPTIONAL TRANSPORT COURSE

Furthermore GPLN also offers their members an Exceptional Transport course and a workshop supported by BIMCO, focusing on their more recent project and break bulk cargo chartering contracts.

82 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

JADE SOFTWARE The logistics landscape is changing across America. Bigger ships, and their ability to carry higher volumes of cargo on a single voyage, have resulted in an increase in productivity and efficiency at the large scale marine ports that service them. However, this also has a flow down effect on the ‘mixed cargo’ ports that handle not only containers, but also vehicles, bulk (coal, fertilizer, etc.), logs and other non-containerized cargo. For over 30 years Jade Software has been developing business applications and technology for companies around the world. Jade delivers comprehensive solutions to the global logistics market, with its flagship Terminal Operating System (TOS) ‘Master Terminal’ continuing to build market share in the competitive mixed cargo space. Master Terminal is a powerful, easily configurable TOS accessible via a web portal, and mobile applications running on vehicle-mounted and handheld devices. It provides a single integrated, real-time view of all operations and data, resulting in faster decision making, improved productivity, and increased business agility. While flexible, Master Terminal is an extremely stable solution that sits at the core of a port’s operation, providing the critical business information to effectively manage terminal operations. Unlike most solutions available today that only handle containers, Master Terminal has been designed to cater for all cargo types, making it the TOS of choice for mixed cargo terminals. With on-site support throughout the project, and an implementation record second to none in the industry, customers can be assured that Master Terminal will be implemented with minimal disruption to operations. The system is backed by Jade’s Master Care support service, a comprehensive managed service that combines continuous live monitoring and active management of customer installations, 24x7 technical support, lifetime product maintenance, change implementation on demand, security monitoring, and resource usage analysis and capacity planning. From steel terminals in Alabama to

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AMERICAN LOGISTICS | 2015 ADVERTISEMENT

PORTS AMERICA Ports America, headquartered in New Jersey, is the largest independent marine terminal operator and stevedore company in the United States with operations in more than 80 locations in 42 ports. The company provides terminal management and stevedoring for all types of cargo, such as container, bulk, breakbulk, automotive, project, military and cruise, as well as offering M&R services. Operating since 1922 through predecessor companies, Ports America possesses dedicated resources that only a company of such scale and scope can deliver, including robust training programs, best-in class technology and experienced management in operating American seaports. With a highly skilled and trained labor force, Ports America has the experience and expertise to manage all types of cargo handling, ranging from pure container terminals to under-the-hook stevedoring. The company handles more than 12.7 million TEU, 2.5 million vehicles, 8.9 million tons of general cargo and 1.6 million cruise ship passengers. Ports America’s operations include containers, bulk, breakbulk, project cargo, world-

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class cruise terminals, intermodal facilities and precision Ro/Ro operations. Ports America also has a vast range of M&R (maintenance and repair) and terminal services in numerous locations. Ports America has received numerous workplace safety and cargo handling awards. The company is committed to providing a safe, productive and environmentally friendly work place for its employees, customers and vendors. All Ports America operations are dedicated to delivering efficient and effective work practices to ensure quality services as it strives to achieve the highest levels of customer satisfaction at all of its diverse locations. Ports America realizes the significance of innovation and the need for continued capital improvement and investment. As one of the largest employers of maritime labor in North America, Ports America employs more than 12,000 people each day at its operations, including full-time equivalent employees. For further information on Ports America, please visit its Web site, www.portsamerica.com.

SEPTEMBER-OCTOBER 2015

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

KOG TRANSPORT

A MEMBER OF THE RHENUS GROUP Big enough to handle. Small enough to care. A true project logistics partner. Providing tailor-made solutions for specialized transport needs. Over 30 years of successfully providing feasible solutions to complex transport challenges. KOG Transport, a member of the Rhenus Group, is presently involved in two Major Oil & Gas projects in Baytown / Mont Belvieu near Houston. Along with KOG offices in Japan, Switzerland and USA arranged for deliveries of over 50 Heavy Lifts ranging from 100MT units to 840MT unit weights. This involved the coordination of various methods such as Ocean Transportation from foreign ports, local barging in Houston, constructing and building jumper bridges as well as temporary bridges over canals, negotiating freeway closures and specialized heavy haul from the port and barge landings to the various job sites. Our teams have worked round the clock to make these projects a success. We organize and supervise projects from feasibility studies to completion, including route surveys and special transport of heavy lift and oversized cargoes. Whether it be projects, cross trade shipments or one-off deliveries – over water, air, land or rail – KOG Transport is equipped to handle them. Regular air freight to onboard couriers, from simple LCL shipments to renting an entire bay on container ships or being the first to manage a project involving barging a 2700MT unit on barges over high seas – twice – we have done them all. We are members of C-TPAT program, FCPA compliant and certified with ISO-9001, ISO-14001 and OSHAS-18001.

KOG Heavy Lift transport via barge

Licensed FIATA and IATA agents, we are equipped to handle DGR and Radioactive goods. We have our own offices in over 17 countries and are represented by an exclusive agency network worldwide. Since the beginning of 2015, KOG Transport is a part of the Rhenus Group and has access to a general logistic network of over 350 branches in over 40 countries.

Please contact your nearest project control center for a personalized service. Cham, Switzerland – for EMEA (Europe, Middle East and Africa) region. New York, USA – for AMERICAS (North and South America) region. Japan, Tokyo – for APAC (Asia Pacific) region.

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

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

JAPAN: KOG JAPAN KK WBG Marive West 23rd Floor 2-6 Nakase, Mihama-ku, Chiba-shi Chiba 261-7123, Japan Contact: Masahiro Kosaka Telephone: + 81 43 297 3155 Telefax: + 81 43 297 3166 Email: mkosaka@kog-japan.co.jp www.breakbulk.com BREAKBULK MAGAZINE 85

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

GULF STREAM MARINE

SEE WHAT MAKES US THE MOST DEPENDABLE STEVEDORING COMPANY ON THE GULF COAST Gulf Stream Marine is a leader in cargo handling, stevedoring and terminal operations in the Gulf Coast region. Founded in 1990, Gulf Stream Marine has grown to become one of the largest privately-owned stevedoring companies on the Gulf Coast. This year, we have launched the expansion of our operations from the seven terminals in Texas, to offer our services across the Gulf Coast in Louisiana, Mississippi, and Alabama. With this geographic presence and the depth of our skilled supervision and labor, we can deliver unparalleled management flexibility with safe and efficient operations for our customers. We believe we currently possess an industry leading position in our safety performance as measured by the Total Recordable Incident Rate metric. Safety and quality are among the highest priorities in all of our terminal operations. Our long term success rests with our ability to engage our employees in continually improving the quality of our services while ensuring everyone goes home to their family injury free. Cargo shipments are like stevedoring companies: no two are exactly the same. We believe that a stevedoring company should be driven by the demands of its clients and Gulf Stream Marine has established a reputation as an industry leader. We manage cargo from all over the world. From industrialized Northern Mexico, to the Far East and Europe. We own and maintain one of the largest equipment fleets in our sector, employ a rigorous equipment renewal program and procure advanced equipment to drive productivity. We actively pursue improvement opportunities company-wide, and employ Lean Six Sigma methodology and practices to scope, execute and measure improvement projects. Accurate and timely transfer of information is as important as moving the cargo itself. At Gulf

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Stream Marine, we view technology and systems development as a core business strategy and strength. STMS (Stevedore and Terminal Management System), our proprietary system, manages and tracks your cargo through the planning, receiving, moving and loading process. Our industry leading cargo receiving process utilizes hand held tablets in the yard so real time information for cargo is available. Our customer portal enables our customers to conveniently access visibility to the status of their cargo. We are committed to identifying and developing advanced technological solutions, such as STMS, that will enable us to better serve our customers. Gulf Stream Marine’s desire is to integrate our customer’s data into our process to optimize efficiency. In 2014, Gulf Stream Marine acquired Big John Marine Services. As a result, Gulf Stream Marine has increased our service offerings to include heavy lift capabilities at all of our terminals and throughout the Port of Houston. Big John Marine Services is a marine service company based in Houston, Texas. At the center of the company’s portfolio, is a harbor service derrick barge “Big John”. The Big John has served the Port of Houston and surrounding areas on the Gulf Coast since 1967 and serves a very important role in facilitating the transfer and movement of cargo within the Port. With its 500-ton lift capacity, Big John has executed more than 4,000 lifts without a single incident of cargo damage. Since Gulf Stream Marine began, we have been developing transport solutions and providing a vital link between shippers and receivers of unique goods. Daily safety meetings, customer rigging, heavy lift expertise, on-site engineers and highlytrained staff are what makes Gulf Stream Marine the most dependable stevedoring company on the Gulf Coast.

SEPTEMBER-OCTOBER 2015

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

TAYLOR INTRODUCES NEW XRS-SERIES REACH STACKER U.S. based Taylor Machine Works, Inc. has introduced a new third generation reach stacker into the Global heavy material handling market. The XRS-Series Reach Stackers feature a 388-HP Tier-4 final compliant diesel engine. Maximum power and torque are available at low rpm and as a result, noise and fuel consumption are both reduced. For non-emissions regulated countries, a 335-HP Tier-III diesel engine is available. Taylor has 50 years of containerized cargo handling experience and has leveraged that knowledge into this new XRS-Series of Reach Stackers. This series will boost productivity with lift speeds approaching 30% higher than previous generations of Taylor Reach Stackers while retaining the rugged reliability that Taylor customers demand. The XRS-9972 Reach Stacker is available in a 5-High or 6-High Boom configuration with capacities up to 99,000-lbs(45t) at the 5-High first row position and 90,400-lbs(41t) at the 6-high first row position. The Taylor designed and built heavy duty spreaders that customers have come to appreciate were retained with this new offering. The XRS-Series is also available in breakbulk configurations that

include a fixed single hook model, as well as 3-Hook and 5-Hook models that feature integral side shift and rotation. A multitude of attachments are available for the XRS-Series which make these reach stackers extremely versatile with applications across many Heavy Lift Industries. Operator ergonomics and ease of maintenance are at the forefront of this new design. The standard climate controlled operator base can be accessed from either side of the machine or optionally from the front of the machine when the cab is maneuvered to the full forward position. The industry leading touch-screen electronic operator interface is a powerful tool that allows the end-user control over most operating parameters of the XRS-Series while also allowing them to troubleshoot many codes without the need for a service tech or detached computer. The available Vision Plus™ pedestrian detection system is integrated directly into this system. This robust end-user interface has set Taylor apart across their existing product line and has been improved upon on the new XRS-Series. For more information, contact your Taylor authorized dealer or visit taylorbigred.com.

www.breakbulk.com BREAKBULK MAGAZINE 87

AMERICAN LOGISTICS | 2015 ADVERTISEMENT

BREAKBULK TRANSPORTATION Specializing in Breakbulk, Heavy Lift Cargo, & Project Cargo we have more than 25 years of experience in International logstistics. Whether it be Ocean, Barge, Rail or Trucking we are here to handle you shipping needs 24hrs a day. Our customers, their cargo, and their deadlines and safety standards when handling BreakBulk & Project Cargo are the most important aspects we consider. For every project, no matter the scope, we develop a unique transport plan with turnkey solutions that ensures your cargo is delivered on time, and on budget. Since BreakBulkTransportation Inc. was incorporated in 2004 we have seen a great deal of growth in the past 11 years, and to this day have paved the foundation for continued expansion. This growth was built on the most important aspect of International Logistics: Client Satisfaction. We believe that fostering long term relationships results in clients who return to our services because of the track record we develop with them. Whether it’s meeting their specific deadlines, safety guidelines, or any other aspect associated with the transportation of their projects we are relentless in our pursuit of perfection. We have moved a great deal of commodities in the past but we generally specialize in large project cargo such as oil

rigs, engines, blow out preventers, transformers, generators, oil and gas equipment, turbines, drilling rig components, large quantities of pipes, and off shore drilling equipment. Most anything that involves the components the world relies on to extract the energy we need on a daily basis to keep us moving. As the price of oil declines, as we have seen during the 4th quarter of 2015, we have begun focusing on other projects that are in high demand as the demands for certain commodities changes.

OUR VISION

Our vision is to become a nationally & internationally well-known and respected world class NVOCC with a track record that’s second to none. We want our customers to know that all their needs including LCL/FCL, RO/ RO, Breakbulk, Project Cargo, Pier to Pier & Door to Door Services will be handled with the upmost care and integrity from the time of booking to their cargos final destination and beyond. Over the past year BreakBulkTransportation Inc. has moved 2 Helicopter Rigs to PNG (Over 7000 cbm combined) and will be shipping (6) locomotives to Libreville Gabon come this October.

Left to right: Cleaning of Heli Rig Components as vessel loads. One of 6 Locomotives being shipped to Libreville Gabon. Component of Heli Rig being loaded onto vessel.

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SEPTEMBER-OCTOBER 2015

case study

By Mary Shacklett

or heavy-haul trucking, there are few markets more captivating or complex than the Middle East, with its vast oil deposits and the ever-present need to move resources to exploit those deposits. Estimates place the Middle East’s conventional oil at about 800 billion barrels, or nearly half of the world’s proven recoverable crude. This region’s concentration of giant oil fields produce more than 30 percent of the world’s crude supply from 2 percent of the world’s producing wells. The Middle East also holds more than 40 percent of the world’s conventional gas reserves. What these headline-grabbing figures fail to get across is the concomitant development of electrical utilities and other supporting projects taking place alongside 90 BREAKBULK MAGAZINE www.breakbulk.com

major oil and drilling work. Together, all add up to define the Middle East as a rapidly expanding market for the heavy-haul movement of breakbulk goods over land. But while opportunities abound, entering this market is an exercise in risk management as much as an exercise in the raw logistics of breakbulk heavy hauling. On the one hand, prosperous and project-rich economies beckon in countries like Qatar, Kuwait, Saudi Arabia, Oman, Bahrain and the United Arab Emirates – but these countries are affected by unpredictable political events, social upheavals and governmental reforms from in-country and surrounding countries, and any of these events can disrupt commerce. “We now have to use a lot of ferries to achieve what was once done mostly overland, due to the political situation,” acknowledged Hugh Thompson, owner and director of Astran Cargo Services, which has delivered cargo worldwide for more than 50 years. “As a result

SEPTEMBER-OCTOBER 2015

Credit: Shutterstock

Arid Climates, Fluid Laws Vex Middle East Haulage

case study

we are constrained by height and weight considerations, and ferry availability, which can be fragile at the best of times.” To get around the Middle East’s economic and political unpredictability and its infrastructure limitations, companies have been using air freight with success – but air freight still depends on the ability of either truck, rail or intermodal to transport the breakbulk goods over the “last mile” to the job site of a project. Challenges confronting heavy-haul truckers transporting breakbulk goods to projects in Middle East countries are varied, but most of them boil down to lack of infrastructure, a need to meet stringent customs requirements, the transporter’s need to be aware of local political and social risk factors, and surviving in a climate of intense desert heat. In sand-filled deserts, it can be difficult to transport equipment, pipes and workers to and from the construction sites. Temporary access and service roads often need to be built along pipeline routes, and sourcing harder earth material needed for road building can be a challenge. Safety and health of workers potentially facing heat and sandstorms is another issue, and worker dehydration, fatigue and heat stroke have to constantly be monitored.

No Simple Overland Move

In early 2015 Gulf Haulage Heavy Lift, or GHHL, a leader in heavy transportation and lifting in Saudi Arabia and the Middle East, transported a 360-ton generator-stator to Yanbu, Saudi Arabia. Along with the generator-stator, a generator-rotor, HP turbine, IP turbine, LP outer casing (lower part), LP outer casing (upper part) and LP bladed shaft were also transported from Yanbu Industrial Port to the Yanbu 3 SWCC project. After these units were delivered to the port and passed through customs, they were loaded and positioned on trailers in order to take them to the project site. However, this was not a simple case of transport over land. GHHL found that it first had to perform a route survey to determine which units up to a weight of 102 tons could be transported over the main highway from Yanbu to Jeddah. The dimensions of the generator-stator prevented this unit from being transported over the existing road, which had bridges, culverts and underground facilities that a heavy-haul truck and the cargo could not negotiate. GHHL instead had to construct a bypass road for transport of the component that conformed to the transport specifications of the Goldhofer trailer that GHHL was using, and that factored in road dimensions, turning points, highway crossings and slopes. Transportation and unloading was done in accordance with

MIDDLE EAST SHARE OF OIL AND GAS PROJECT BUSINESS

19.8% Iran 18.4% Iraq REST OF THE WORLD

TOTAL MIDDLE EAST

12.8% Kuwait 11.9% U.A.E.

Source: BP Statistical Review of World Energy, June 2015

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33.4% Saudi Arabia

0.3% Syria 0.4% Yemen 0.6% Oman 2.4% Qatar

local procedures and policies, and GHHL held regular toolbox meetings and safety checks to meet health, safety and environmental standards. Throughout the transportation, equipment was regularly reviewed, including performance and durability of the lashing. As a final touch, escort vehicles with flashing alarms were hired to alert the presence of an oversize/ overweight cargo transportation vehicle – and additional escort services from the Yanbu Traffic Police station were requested to enhance safety awareness. “We think certain countries in the Middle East still have enormous potential for sophisticated growth,” said Astran’s Thompson. To capitalize on this growth, trucks must navigate through high heat, sandstorms and other difficult environmental conditions in the open desert. The lack of critical infrastructure for transporting breakbulk goods, combined with complications in clearing goods through customs, and a host of other socio-economic and cultural issues and sensitivities, must all be addressed in any heavy-haul trucking strategy. Thompson said one way his company avoids transportation delays is to “use British drivers with passports without Israeli stamps to ensure a speedy transit.” He cites “negotiating ferry crossings and border controls as greater challenges today than the older challenges of crossing deserts.” Today, the company sub-contracts all its haulage and each load is taken on an individual basis and equipment sourced appropriately. Using dependable third parties can, said Thompson, ease the heavyhaul transport process because these local parties already understand the in-country language and customs – and crucially how business in the locality operates. Junsoo Kim, sales manager for GHHL, which transports petrochemical, refinery, power plant and civil infrastructure project cargo, describes the Middle East as “a rapidly expanding market for breakbulk hauling.” He confirmed that the company is investing in new equipment to meet future project requirements in the region. He added that most moves in the Middle East are focused on plant project material. “In recent projects, we have transported breakbulk goods to the Shaybah SEPTEMBER-OCTOBER 2015

The Middle East is a rapidly expanding market for breakbulk hauling. / Credit: GHHL

Central Facility Project in Saudi Arabia, where the job site is 1,200 kilometers away from Jubail, the port of origination; and we have transported cargo from Jubail to the Turaif Project job site, which is 1,250 kilometers away from Jubail,” Kim said. GHHL’s strategy for truck maintenance is to use local labor in order to establish a Saudi-based workforce, and to also bring in other specialists from outside of the region to augment the local workforce. “In the course of these activities, we train and educate the local Saudi laborers,” Kim said. For its desert hauling, GHHL uses trucks with hydraulic axle lines and selfpropelled modular axle lines. Kim said: “In Saudi Arabia, we also must comply with the local Ministry of Transport law,” which state that there must be less than 20 tons of weight per axle line. Depending on cargo engineering requirements, GHHL often has to configure each truck axle line combination and the beam and stool locations to cope with differing dimensions and centers of gravity.

To complement its heavy-haul trucking operations, GHHL maintains a local distribution network. “We do our own loading and unloading, and we have our own 1,000-square-meter facility in Dammam,” Kim said. “We also use a 500-square-meter facility in Jeddah and a 500-square-meter facility in Riyard.”

Thermal Loads

In terms of specifications, oversized cooling systems and air conditioned cabins are a must for trucks in the Middle East to help combat the heat, which can reach 120 degrees on the ground and approach 140 degrees in a heavy-haul truck cab without air conditioning. For these reasons heavyhaul truck manufacturers, together with government agencies like the U.S. National Renewable Energy Laboratory, or NREL, have focused on reducing the thermal loads in long-haul trucks. NREL’s work has largely focused on reducing long-haul truck idling, which it says consumes more than 800 million gallons of fuel annually in the U.S. However,

GHHL had to dig out the road to maneuver under a high voltage line. Credit: GHHL www.breakbulk.com BREAKBULK MAGAZINE 93

case study

GHHL sub-contracts all its haulage with each load taken on an individual basis. / Credit: GHHL

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equally important for high-heat desert conditions is the ability to reduce the overall thermal load of the truck, that is the amount of heating and cooling energy required to keep the truck’s occupants comfortable. NREL has partnered with major U.S. truck manufacturers to reduce thermal load through several strategies, including insulating cab windows with foiled bubble insulation on the inside and developing new snap-in window shades and sleeper enclosures. The laboratory found that closing the sleeper curtain and applying the window shades reduced the amount of power needed to change the temperature in the truck (also known as thermal heat transfer) by 16 percent to 21 percent; and that insulating the windows reduced the heat-transfer coefficient by 14 percent to 16 percent in the trucks that they tested. Improvements in tire technology

SEPTEMBER-OCTOBER 2015

have also reduced the incidents of blowouts in hot weather. “Heat is an issue, but fortunately new tire technology has mostly eliminated the problems with blow-outs,” said Astran’s Thompson. Another issue with heat is the effect on the drivers themselves. “In the summertime heat, we conduct operations between the hours of 4:00 to 11:00 and between 16:00 and 19:00,” said GHHL’s Kim. “This is a variation from our normal daily hours of operation, which are from 6:00 to 12:00 and from 13:00 to 17:00. It enables our drivers during the summer months to work when temperatures are lowest.” Other major elements of heavy-haul truck transportation in the region are security and unexpected infrastructure changes. In Saudi Arabia, the underenforcement of traffic regulations led to 485,931 traffic accidents and 6,458 traffic fatalities in 2013 (about one death every

one-and-a-half hours). In comparison, there were 1,754 total traffic fatalities in the UK (Wales, Scotland, England and Northern Ireland) in 2012. Consequently, road traffic safety is a major concern for those transporting breakbulk and other goods in the region and is one reason why companies like Astran and GHHL use escort cars to warn others on the road of oversized cargo loads that are approaching. In other cases, critical infrastructure is lacking or obstructing transportation, and must simply be worked around for safety purposes in order to avoid damage to cargo, and to comply with government regulations. “Government rules and regulations change without prior notification,” Kim said. “Often, these new regulations are for new road bypass requirements, or a new height restriction because of a new bridge or a new high voltage power line.” P A S S E NG E R

F R E I G HT

R E AL E STAT E

In many locales, especially if they are remote, there are also fears of corruption with land owners demanding extra tolls for allowing cargo to pass through land they control. “Everybody wants a piece of your cargo,” said Sallah Ali Addin in an article in the Washington Post. Addin is an Iraqi driver from Fallujah, who has been transporting goods by truck for 25 years in Iraq. To avoid or to mitigate these situations, many heavy-haul trucking companies employ guards and extra security personnel when they are moving through dangerous areas. They also use sensors and tracking technology that enable them to fully track the cargo from the originating port to the final destination. “[A] locational tracking strategy is helpful,” said Kim. “It is why our trailers have a global positioning system on them. It enables us to access the locations of trailers at any time.” BB

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logistics perspective

Galveston worked with partners to adjust infrastructure to accommodate wind units by train. / Credit: Port of Galveston

BEYOND THE BUY

The Procurement-Project Cargo Interface By Lori Musser

hether positioning cranes for a New York City bridge rehabilitation, moving solar photovoltaic cells to a California power plant, or assembling a pipeline transmission system to connect 96 BREAKBULK MAGAZINE www.breakbulk.com

Canadian oil sands to market, seasoned procurement professionals are putting their mark on the supply chains that feed major capital projects. The project cargo supply chain for out-of-gauge, heavy-lift, unitized and other breakbulk cargo, from sourcing to delivery, is increasingly complex. Procurement processes have become

more strategic to keep up with wholesale changes in the nature of projects, the variety and volume of components needed, the structure of supply chains, and shifts in sourcing and demand priorities. In an era of accelerated change, a greater degree of advanced and contingency planning is needed just to keep a project on track. Taken one step further, exceptional and strategic procurement processes initiated at the outset can even reshape the end project to optimize returns. To ensure delivery of the right construction components in the right condition at the right time, procurement executives now provide expertise as a valued member of the strategic project management team. Procurement strategists contribute a wealth of knowledge on the complete procurement mix of best products and services – including management of the intricacies of project cargo supply chain services – to make SEPTEMBER-OCTOBER 2015

logistics perspective

a project flourish. Getting to that end goal requires considerable collaboration within the project cargo supply chain. The art of procurement is evolving hand in hand with the scope and scale of engineering and construction projects, and, although buyers were never exactly limited to searching for suppliers of predetermined products or services and whittling away at prices, the value that best procurement processes now add to major projects is tremendous. A thorough hand, a collaborative mindset, and a penchant for constant communication describe the effective procurement executive on today’s largescale engineering/construction project. Ken Parkinson is vice president of ports and marine group for AECOM, a global provider of professional technical and management support services to large projects in various markets. He said a “tight” procurement, one which considers and clarifies as many variables in advance as possible, will result in more bids that address the end need, will facilitate the timely and seamless and careful movement of project cargo, and will reduce the risk of developing an underperforming facility. The ultimate success of the project depends on procurement excellence.

Procurement Interface

Materials procured for major projects include containerized, liquid and dry bulk goods, but the breakbulk, heavy-lift and outsized components typically present the bigger logistical challenge, and the supply chains for these products can make or break a project. Because the cargoes answer architectural, mechanical, geo-technical, civil, structural, electrical, telecommunications and other needs, the procurement processes must be coordinated and prioritized with engineering, project controls and construction. Doing that well requires a thorough knowledge of the specifications, and systematic parsing, scheduling, bids, awards, inspections, and transportation/warehousing, all in sync with the full project team. Opportunity for error is pervasive, and unless the procurement process began before initial design was completed, opportunities for cost savings and process improvement may be lost. AECOM’s Parkinson said that projects proceed best if calls for proposals address concerns related to, for example, geo-technical findings, rail deficiencies or disposal site availability. It is difficult for an engineering, procurement

and construction, or EPC, bidder to put together a large procurement package within a short designated timeframe without good information. Project performance goals are only achieved with great effort, funds and other resources. It makes sense to give the buying team more information up front, especially regarding performance requirements, and even before the design work. Then, using standardized products and components, and drawing on a carefully selected sub-set of suppliers where possible, efficiency improves. It is evident that supply chain members with strong, established relationships in place with their up and downstream partners, EPCs and cargo owners will have an advantage in growing their project cargo throughput. Manufacturers, buyers, and supply chain members must each address vast changes in the scope and size of capital projects. Driven by the reconfiguration of global finances, emerging markets, the development of megacities and other demographic trends, there is a substantial need for new infrastructure. PricewaterhouseCoopers’ Capital Project and Infrastructure Spending – Outlook to 2025 predicts, worldwide, infrastructure

PEG LEADS BY EXAMPLE Procurement Executives Group, or PEG, is one of a number of organizations that help hone the ever-widening skill set needed for world-class procurement. It provides a forum for procurement-related issues and seeks to improve the effectiveness of the engineering and construction industry through excellence and innovation in procurement practices. Over two decades, PEG has established itself as an authority on procurement, materials management and related issues. It mentors the executive leadership of large U.S.-based firms in the engineering and construction industry, assisting in the commitment to advance the procurement profession as it supports the industry. This is particularly important to the project cargo supply chain, whose cargo is usually 98 BREAKBULK MAGAZINE www.breakbulk.com

owned, marshalled and routed by the large engineering and construction project owners or representatives. PEG members commit to the highest global standards of ethics and integrity in procurement, and to a role as stewards of health and safety, the environment, sustainability, social responsibility, diversity, and continuous quality improvement. The organization encourages a culture of collaboration and openness between supply chain leaders and others, in an effort to share best practices, non-proprietary knowledge, metrics and innovations to enhance procurement and supply chain management. In 2013, PEG and IHS Inc., a leading global provider of information and analytics, introduced the Engineering

and Construction Cost Index, or ECCI. It is an indicator for wage and material inflation which shares member experiences so users can benchmark operational performance and procurement excellence. Essentially, the ECCI enables more effective supply management of critical materials, equipment, and labor throughout the design and construction of capital projects (see www. ihs.com/ecci). Scott Lockhart, IHS vice president, operational excellence and risk management, said: “Trying to manage all of the market drivers and dynamic forces that introduce variability into material, equipment and labor supply is extremely difficult.” The index aims to provide powerful insight on cost trends to facilitate better decisions that drive operational excellence. SEPTEMBER-OCTOBER 2015

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HEADOFFICES Hamburg MACS Maritime Carrier Shipping GmbH & Co. T: +49 40 3 76 73 – 01 hamburg@macship.com Cape Town MACS Maritime Carrier Shipping (Pty) Ltd. T: +27 21 405 3444 shipping@macship.com Houston Galborg USA LLC T: +1 713 895 3296 rates@galborgusa.com

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logistics perspective

spending will reach US$9 trillion per year by 2025, growing by more than 6.5 percent per year in the medium term. The sheer range of equipment and services that need to be bought for the world’s biggest projects make them particularly challenging. Deemed mega-projects, or gigaprojects, with billion- and sometimes trillion-dollar price tags, these initiatives include power or waste water plants, energy extraction or mining facilities, pipelines, tunnels, bridges, dams, space or transportation assets, commercial and entertainment zones, and military investments. Sometimes they are related to disaster recovery, urban renewal, scientific innovation or culture.

Supply Chain Complexity

Projects are not always located in easy-access transportation hubs, making complex supply chains the norm. UniversalPegasus International, for example, undertook the Apex Expansion Project – Wasatch Loop Pipeline for Wyoming’s Kern River Gas Transmission Co. The project developed 28 miles of 36-inch natural gas pipeline over the Wasatch Mountains in Utah. More than half of the project was in steep, rugged country with limited access, requiring the pipeline to be routed along ridgelines and pipe to be delivered by helicopter – not your everyday mode of transport in a project cargo supply chain. Similarly, the Energía Costa Azul project’s LNG terminal on the Baja peninsula, with a project team led by Black & Veatch, was in a remote location with limited infrastructure and a shortage of skilled workers. Project services included blasting rock, filling the marine jetty, installing seawater intakes in 45 feet of water, and marine facility construction under relentless wave action. Marine and land ecosystems were protected, cultural remains were preserved and marine fauna migration paths conserved. According to Black & Veatch, the two, 18-story storage tanks, together, used more steel than the Eiffel Tower. The breadth of challenges that are addressed in some projects require such a vast range of expertise that global alliances are typically assembled to provide solutions and an efficient project. In the case of the Black & Veatch contract, 100 BREAKBULK MAGAZINE www.breakbulk.com

An operations mechanic affixes labels to piping leading to the Munitions Demilitarization Building filter bank area at the Blue Grass Chemical Agent-Destruction Pilot Plant. / Credit: PEO ACWA

the alliance included Mitsubishi Heavy Industries of Japan, Vinci Construction Grands Projects of France and Techint of Mexico. For some projects, domestic alliances may be preferred. For the U.S. Department of Defense Blue Grass Chemical Agent-Destruction Pilot Plant, the project team comprises Bechtel National and Parsons Government Services; they will “design, build, systematize, test, operate and close” a plant for the destruction of 523 tons of nerve and mustard agent in

rockets and artillery projectiles stored in Kentucky. Such EPC alliances compound the importance of procurement strategy and coordination. Not all project cargo transportation movements are one-way or inbound to site. Some project work, such as that in the military, bio-medical or hazardous materials fields, may be related to site closure, cleanup, relocation, demilitarization or repositioning. As technologies advance and priorities change, new SEPTEMBER-OCTOBER 2015

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logistics perspective

types of projects emerge, creating the need for entirely new supply chains, materials management protocols and procurement strategy. The supply chains for project cargo either disconnect after project completion, or reconfigure for future use transporting operating input or output. More and more often environmental and other mandates are leading to the development of projects that can break free of supply chains. The Energía Costa Azul LNG terminal, for example, which can regasify up to 1.3 billion standard cubic feet per day, is fully self-sufficient, generating its own power, utility air, potable water and service water. In another case, the maintenance procurement team working on NASA’s lower orbit laboratory on the International Space Station found that developing and delivering a system that will create water for astronauts made more sense than regularly transporting water. Although supply chain members invest heavily to accommodate project cargo, their successful relationship with the beneficial cargo owner may well be short lived.

Synchronizing Procurement and Project Goals

The rules guiding procurement vary with each project and sometimes change during the course of a project. Often the project is about advancing the owner’s competitive edge, and

the focus is on cost, functionality and delivery timing. Other projects, especially those using taxpayers’ money, may have transparency goals, political and economic mandates, and special or reserved tender initiatives. Strategic procurement is equally important for public, private or combined initiatives. Jim Pyburn, Port Everglades’ director of business development, said that responsible and accountable development is critical to a port’s integrity, which is a large part of what a port has to sell. AECOM’s Parkinson cautioned that a wide variety of concerns can derail a project if not thoroughly addressed. He cited stalled LNG projects in western Canada whose delays might have been averted with attention to the concerns of First Nations people. The Port of New Bedford built its US$100-million South Terminal facility with a wind farm anchor tenant in mind. After two utilities terminated their contracts to buy power from the as-yetunbuilt nearshore facility, the port was able to re-jig its plans. “The terminal has never been just about Cape Wind. While built to support the offshore wind industry for the long term, we have always known that the creation of a new industry would face an uncertain timeline. That’s why we have

Ports need to be able to access expertise not necessarily related to their core business. Credit: Port Everglades 102 BREAKBULK MAGAZINE www.breakbulk.com

consistently planned the facility to be a multi-use operation,” Massachusetts Clean Energy Center spokeswoman Catherine Williams said. “There’s a lot of cargo out there,” said Ed Anthes-Washburn, acting port director for the Harbor Development Commission. “This is going to be the strongest bulkhead on the East Coast, and there’s going to be a market for heavy-lift cargoes that will be ideal for this facility.” Parkinson, who was involved in the South Terminal development, said, “You can’t build a port facility for one thing. Versatility is important. Wherever possible, we are master planning projects with the understanding that demand changes and we have to have the flexibility to handle numerous cargoes across the wharves. That will bring greater return and optimize the use of the facility in the long term.”

Collaboration Within Supply Chain

Supply chain entities are often well versed in important project cargo sectors, from energy and power, to mining, infrastructure and government, however keeping abreast of developments and forecasted spend within these industries is a Herculean task. The industry places great emphasis on relationships. One industry giant, UniversalPegasus, said, “Shake our hand, and trust your project will be delivered.” U.S. seaports develop hundreds of projects each year, from cargo terminals to deeper channels to cruise facilities. Like many modal interests, they can be in the position of project owner, and/ or project cargo supply chain member, serving as a conduit for breakbulk, heavy-lift and other project cargo movements over dedicated or mixed-use facilities. Port Everglades’ Pyburn emphasized the importance of intelligence about the global developments that determine project cargo expenditures and routing. He said that seeking expertise and collaboration up and down the supply chain helps ports determine and develop the most appropriate facilities for future cargo throughput and for port-wide facility SEPTEMBER-OCTOBER 2015

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logistics perspective

Galveston had to make minor changes to infrastructure to handle wind project cargoes. Credit: Port of Galveston

development needs. “Ports must be able to access expertise not necessarily related to their core business, and then they must be prepared to act on the trends,” Pyburn said. Like their road, rail and ocean carrier partners, ports have pockets of industryspecific acumen, but can’t have a depth of understanding in all industries. In Port Everglades, one of the state’s top two energy gateways, the port maintains in-house petroleum expertise to ensure customer service excellence. This type of expertise is tapped to align facilities, services and connectivity with the port’s future needs for traditional energy cargo. It can also be used to develop opportunities for energy sector project cargo movements to be served by port facilities. Florida East Coast Railway, or FECR, is an experienced transportation provider of high, wide, or

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104 BREAKBULK MAGAZINE www.breakbulk.com

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dimensional project cargo such as transformers, generators, turbines, tractors, excavators, cranes and other heavy equipment. “We also deliver consistent movement of dimensional aircraft parts, including wings and fuselages,” said John Lucas, FECR vice president carload sales. “The key to FECR success in this important business segment is our ability to act as a seamless link in the supply chain by coordinating and communicating closely with our Class I rail partners, as well as receivers, be it local consignees, or ports such as the Port of Palm Beach, Port Everglades, and Port of Miami, for export.” At AECOM, Parkinson said: “Collaboration is especially important with DOT and supply chain members, to provide guarantees to a developer and to prevent infrastructure projects from going sideways.”

When the Port of Galveston made its initial foray into handling wind project cargo, it made minor changes to infrastructure, removing some trees and relocating a few light standards. Later it worked with partners to adjust infrastructure to accommodate imported towers and blades by unit train. The 6,000-foot-long trains required horizontal clearances for heavy and wide tower bases, and sufficient spacing between on-dock rail tracks. The business, which waxes and wanes subject to the vagaries of tax credits, among other factors, was secured through a partnership with the BNSF and the port’s short line carrier, Galveston Railroad, for trackage changes and additional investments on the inland line. These relatively small efforts have helped the Port of Galveston become an important wind-energy project-cargo gateway.

Supply chain infrastructure must align with the visions of the project owner and/or beneficial cargo owner.

The Next Frontier

Procurement already plays a lead role in determining the success of a project. Today’s procurement teams are routinely called upon to purchase a wide variety of products and services, and to rework project cargo supply chains. Faced with a world of changing and sometimes hostile environments, the logistical arrangements have to be flexible and innovative. Procurement adds value from the start and increasingly shapes project strategy and end design. Beyond the buy, procurement teams and supply chain members that continue to forge strong relationships will be primed for future opportunities and growth in an increasingly intricate but growing project market. BB

www.breakbulk.com BREAKBULK MAGAZINE 105

port focus

PACIFIC PROJECT GATEWAY Prince Rupert Has Designs on Project Cargo

hen global breakbulk, project cargo and heavylift shipping operator AAL announced it had selected British Columbia’s Port of Prince Rupert for a call on its Pacific Service it undoubtedly raised a few eyebrows; Prince Rupert is not known for its project cargo prowess. But snaring AAL was no quickwin for Prince Rupert. Attracting this international operator was the result of a five-year planning and development journey, which began when Prince Rupert Port Authority set its Gateway 2020 vision back in 2010 and culminated in the completion of Ridley Island Project Cargo Facility this year. Gateway 2020 was developed with a goal to deliver a “well-planned, integrated and diversified port” that would anchor the Prince Rupert gateway as a North American hub for a variety of cargo streams. It identified specific development sites, identified appropriate general terminal uses, and attempted to mitigate the potential for conflicts

between future terminal activities. To kick-start project cargo volumes, Gateway 2020 highlighted the potential of the port’s Ridley Island. But to realize that potential the port authority needed to co-fund a road, rail and utility corridor to facilitate easy access to the hinterland and beyond. Officially completed in May, that intermodal corridor project included an access road, rail loop, utilities, onshore terminal infrastructure and marine components. The first phase consisted of three inbound and two outbound tracks for coal, potash and other bulk terminal developments, two additional tracks that form a loop around the main part of Ridley Island and one new track that extends off the rail loop towards Ridley Terminals. And there’s more to come: by completion the corridor will feature a two-lane access road running parallel to the rail loop, with an underpass and an overpass at opposite ends of the loop. Also planned for a later phase is a 3.4-kilometer 69-kilovolt power line, owned by the

Infrastructure works at Ridley Island will boost project cargo traffic. / Credit: Prince Rupert Port Authority 106 BREAKBULK MAGAZINE www.breakbulk.com

By Carly Fields port authority, to connect Ridley Island and proposed development sites to the existing power transmission system. At full build out, there will be 7,818 meters of rail loop with capacity for 14 inbound tracks and 11 outbound tracks. Under the jurisdiction of the port authority, the Ridley Island industrial site is located some 8.5 kilometers from downtown Prince Rupert. It boasts a rollon, roll-off ramp, a 2.6-hectare laydown area, and commercialonly access to the Canadian National, or CN, rail network and the Trans-Canada Highway 16. Michael J. Gurney, manager for corporate communications at Prince Rupert Port Authority, confirms Michael J. Gurney that the investment in the Ridley Island Project Cargo Facility enabled the AAL service, which the port hopes will be the first of many project cargo services in the future. “The Prince Rupert Port Authority and the terminal operator (CT Terminals) have been working with shippers to provide insight into the attributes and advantages of Prince Rupert as a project cargo gateway,” Gurney said to Breakbulk. Gurney believed that accessible energy, mining and other resource sectors should be a draw for project, breakbulk and heavy-lift operators considering Prince Rupert. “Prince Rupert’s proximity to fabrication centers in Asia and large BC and Alberta energy, mining and resource projects provides a cost, distance and reliability advantage over traditional project cargo gateways in North America. We do expect to attract more project cargo volume due to our strategic location,” he said. While Gurney is reluctant to be tied down to a projection for project cargo, breakbulk and heavy-lift volumes, the SEPTEMBER-OCTOBER 2015

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port focus

AAL has included Prince Rupert in its rotation. / Credit: AAL

port does expect to see growth in the short to medium term. Access to oil assets and reserves throughout the Pacific Northwest will likely prove to be a big draw. AAL is particularly excited by this access to oil and gas fields, citing that as a key selling point in its choice of Prince Rupert. Felix Schoeller, general manager of the company’s Pacific Service, said to Breakbulk: “The Port of Prince Rupert, with its newly established road and rail links, has emerged as an important new gateway for project cargo imports to the oil-rich mining area of Alberta and the wider

PRINCE RUPERT PROJECT CARGO 2015 Ridley Island has shown steady results since opening earlier this year. 600 500 400 300 200 100 0

April

May

June

July

August

in tonnes Source: Port of Prince Rupert 108 BREAKBULK MAGAZINE www.breakbulk.com

Pacific Northwest. There is a lot of container activity in addition to shipments for the oil and gas industry and a burgeoning wind energy sector in the region.” He continued: Felix Schoeller “AAL has extensive experience in serving the oil and gas, mining and energy sectors, for which British Columbia is a key market. Customers in these sectors rely upon us to provide the reliability and cargo security that they require within their supply chains and, at a time when cost pressures are leading some carriers to compromise on safety, we see cargo safety as our first priority.” AAL’s inaugural sailing from Prince Rupert’s Ridley Island ro-ro cargo terminal was made in May by the 31,000-deadweight-ton AAL Brisbane, with a cargo of process units for a major new oil sands project in Alberta. AAL has further scheduled calls to make at Prince Rupert to complete an important ongoing project. While Prince Rupert is not a permanent feature of its monthly Pacific Service, AAL has retained the flexibility to resume calls there based on future customer demand, whether on a scheduled or projectby-project basis and with whatever frequency is required.

Said Schoeller: “By expanding our Pacific Service and port network across the Pacific Northwest – with both popular and more remote ports – we multiply our customers’ options and choice, ultimately impacting on the efficiency, delivery and overall competitiveness of their projects. In the region of British Columbia and Alberta, there is significant potential to expand our network.” AAL’s melting pot of tramp, projects and liner services on a global basis has allowed it the flexibility to include a Prince Rupert option, which can be offered through its liner services or on a project-by-project basis through its tramp and projects division. Looking ahead, the shipping operator believes that Prince Rupert is well-positioned to snare additional project cargoes in the future, given the increased rate of infrastructure development in the region. AAL goes so far as to describe the port as a convenient port of loading or discharge for any cargo that might need to be transported into Central Canada. “As the shipping time is much shorter than going through Houston, there are significant cost and efficiency savings to be made,” said Schoeller. “The frequency of cargo operations to Prince Rupert will always be dictated by customer demand, and we have the flexibility and the relationships with local partners in Prince Rupert to respond positively to whatever our customers require.” BB SEPTEMBER-OCTOBER 2015

insurance

VALUE IN KNOWLEDGE

Share Information to Create Successful Cargo Insurance Programs By Joe Chillino

M Joe Chillino

“Discussions often reveal exposures to risk that the shipper had not considered.”

Chillino will also conduct a “swim-up session,” a short, informative presentation, at Breakbulk Americas, Oct. 7, at the George R. Brown Convention Center in Houston. The topic of his session will be “Have you had the Insurance TALK yet? Best Practices for Circumventing Liability Claims.”

ost freight forwarders have an insurance policy to facilitate cargo coverage for their clients. However, not all of them effectively utilize it to maximize the benefit to both their company and their clients. Many shippers do not understand the intricacies of cargo insurance and/or the risk associated with uninsured cargo. This lack of awareness provides the forwarder an opportunity to distinguish themselves from their competitors by providing much-needed expertise. A professional transportation specialist can explain the need for cargo insurance and secure coverage for their clients. Providing this value-added service helps to strengthen client relationships and provides opportunities for growth. Conversely, freight forwarders who do not diligently discuss the risk of cargo loss and the need for insurance with their clients are exposed to potential professional liability claims and disgruntled clients. Successful programs require a corporate culture that reinforces the practice of communicating the value of cargo insurance. These companies make this practice a part of their standard operating procedures. In order to accomplish this objective, it is important to ensure that employees have a working knowledge of the basics of cargo insurance and the terms of their policy. This information should be shared with sales representatives as well as the operations team as they are typically in frequent contact with the client. Another shared trait of successful cargo insurance programs includes a support team focused on providing essential training and reference tools to its staff. A Quick Reference Guide can be very helpful as it outlines the policy’s rates, limits, excluded commodities and countries so that the potential for mistakes is reduced greatly. In addition, ongoing training from your insurance broker provides reinforcement for longtime employees and is an essential resource for new hires. They can also provide access to reports

that serve as a tool for managers to analyze activity such as insured shipments, customers and commodities. Once management and employees have aligned to focus on the overall value of an effective cargo insurance program, the next step is discussing it with the client. Open communication regarding risk exposure and insurance is an absolute necessity. These discussions often reveal exposures to risk that the shipper had not considered and should take place before handling any shipments. Shippers not versed on limitations of liability may rely on the carrier or the freight forwarder for reimbursement in full for transit losses. This situation is a prime opportunity for the forwarder to educate the shipper and offer a solution with cargo insurance. In the event a customer advises you that the other party to the shipment insures the cargo, this doesn’t necessarily mean the discussion is over. Often times, Incoterms such as Free on Board, commonly known as FOB, leave the seller exposed even though the buyer is responsible for risk during the majority of the voyage. The inland transit and loading on the vessel can represent some of the riskiest portions of transit, especially for oversized cargo. The shipper is still exposed to loss if the buyer has not paid for the cargo. Finally, it should be a standard procedure to secure the client’s insurance decision in writing. This provides a means of protecting both parties and documents the client’s approach to risk management. A successful cargo insurance program provides a freight forwarder with the opportunity to enhance its professionalism, retain clients, protect the company from potential liability claims and increase revenue. The process begins with a focus on the value and necessity of cargo insurance that is shared by management, sales and front line staff members. Working with a transportation insurance specialist facilitates the effectiveness of achieving your objectives and is essential to the success of your program. Joe Chillino is marine manager of Roanoke Trade. www.breakbulk.com BREAKBULK MAGAZINE 109

ocean services

SOLUTIONS FOR ANY CARGO Credit: BBC Chartering

BBC Chartering introduces ‘apac service’

ransportation specialist BBC Chartering, with a fleet of about 150 multipurpose and heavy-lift vessels, knows a thing or two about project and breakbulk cargoes. So its recent launch of an “any port, any cargo” or “apac service” piqued the interest of many in the sector. Breakbulk took the opportunity to talk to Raymond Fisch, the carrier’s senior vice president and spokesperson, to learn more about this campaign. thinking behind the launch of BBC Chartering’s “apac service?”

unique setup. We are creating awareness about an unmatched combination of performance and flexibility in project shipping to bring our customers the best of both worlds. We are also proud that we can call this the world’s first global high performance inducement service, thus enabling unrestricted trading for any port and any cargo.

FISCH: The main motivation behind

BREAKBULK: How does apac service sup-

BREAKBULK: Please can you explain the

introducing the apac service was to create a trademark that describes what BBC Chartering does in one very simple term. Through our apac service customers can gain a better understanding of how our unique capabilities can help them create value. BREAKBULK: Tramp shipping claims to

carry anything to anywhere, while liner shipping prides itself on its fixed sailing schedules. Can you explain how your apac service fits into this picture? FISCH: If we talk of tramp or liner

shipping we are already limited in our thinking. In the worst case this misguides customers, e.g. when they are not aware of important service options. This can be quite sad and we do not like it when our customers say: ‘We were not aware you could do this.’ With our apac service, we would like to overcome these limiting perceptions of tramp and liner shipping and utilize it as a great tool to communicate our 110 BREAKBULK MAGAZINE www.breakbulk.com

port BBC Chartering’s overall strategy? FISCH: Our customers want shipping

solutions that are competitive, reliable and safe, and that give them many options. We do this with apac service; here we utilize the world’s largest fleet of multipurpose and heavy-lift vessels, we put the world’s leading project chartering network to work, and we have a Raymond Fisch proven track record and approach for the seamless delivery of integrated projects. This combination results in the best economics and the ecoefficiency in project shipping. No matter if this concerns simple cargo transactions or the delivery of sophisticated projects with or without heavy-lift operations. BREAKBULK: Can you elaborate on any

recent projects for BBC Chartering?

FISCH: We are trusted partners of

third-party logistic providers, EPCs, industrial customers, raw material traders and resource customers. We serve small businesses and multinational players, transporting everything from small crates to six-story, high-and-heavy module structures. Lately we have also worked as a strategic supply chain partner for Airbus, delivering aircraft components from Hamburg to its new assembly facility in Mobile, Alabama. This Airbus project is another great example for our apac service, offering other customers the possibility to utilize this high-frequency trading capacity from the European Continent to North America on a part cargo basis. BREAKBULK: What can you tell about the

future of BBC Chartering’s activities?

FISCH: Shipping is a very specific busi-

ness and in our case this concerns the engineering of any transport request, both technically and commercially. This is what we did in the past and what we will continue to do in the future. We are developing on these grounds in line with our fundamental values: quality, reliability, flexibility, professionalism, and integrity. Believing in these, we are following our vision to build the world’s most trusted and highest performing, globally trading shipping company for project, breakbulk, and general cargo. That’s what we’re here for. BB SEPTEMBER-OCTOBER 2015

Experience the progress.

mobile.harbour.crane@liebherr.com facebook.com/LiebherrMaritime www.liebherr.com

technology

ALL SYSTEMS GO Credit: Shutterstock

Technology Key for Port Diversification

By Mary Shacklett

s global logistics expands, shipping ports are being integrated into multifaceted transportation networks and competition between these ports is intensifying. Many larger ports focus on accelerating their ability to handle containerized goods, but for smaller, growing ports, opportunities exists in developing mixed cargo operations flexible enough to handle 112 BREAKBULK MAGAZINE www.breakbulk.com

breakbulk as well as containerized goods. “In an environment of stiff competition, there are a growing number of ports that want to diversify their cargo-handling capabilities,” said Keith McSwain, business manager, Americas, Jade Software Corp. “This enables ports to be competitive and flexible as the market changes.” For many ports, however, transitioning to mixed cargo handling that includes breakbulk goods isn’t easy. Most ports have organized their yards for containers, so yard configurations are not

naturally aligned with what is needed for storing and shipping breakbulk goods. These ports have also been using port systems that were expressly designed for handling containerized goods, and that aren’t equipped to handle breakbulk. Instead ports have had to rely on manual documentation and procedures to process breakbulk shipments. But customers increasingly demand better breakbulk cargo visibility and accountability. “We have seen increased requirements for cargo tracking and tracing from our customers, even down to SEPTEMBER-OCTOBER 2015

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technology

There are a growing number of ports that want to diversify their cargo handling capabilities. Credit: Jade Software Corp.

individual cargo units, and down to details as to what piece came in what package and, if applicable, within which container,” said Ing. Genaro Mendez, director of information of Grupo CICE in Veracruz, Mexico. Mendez said CICE has always handled a relatively large portion of breakbulk goods at the terminals it operates, with specially equipped facilities for breakbulk cargo. “We have handled a large variety of breakbulk shipments for industrial projects as well as for new infrastructure projects,” he said. “Some of them require special handling requirements like the Keith McSwain nacelles and blades of large eolic towers used on wind farms.” As part of a system upgrade, CICE migrated earlier this year from an older in-house port system to a new system that allows it to comply with growing information requirements and have a better level of control of cargoes. “What we needed was a higher level of information detail to meet the demands of the market and our customers,” said Mendez. 114 BREAKBULK MAGAZINE www.breakbulk.com

Setting an Example

Jade Software’s McSwain believes that more ports will follow CICE’s example and see a need for port system evolution – and replacing manual documentation and processes could well be the central focus of port system renovation. “Shipping lines and customs agencies are insisting upon automated, electronic shipping manifest documents because they want seamless flows of electronic documents that are able to track breakbulk and other types of cargo,” he said. “This is what’s forcing ports to move to electronic systems, to improve the efficiency of their operations, and to provide breakbulk (and other) cargo tracking and accountability that offers absolute transparency and visibility to all stakeholders in the supply chain.” Historically, moving to an automated, electronic system in logistics meant individually certifying each business partner’s electronic documents and data items with your own so that the information could match. The IT testing process was painstaking, iterative and frustrating. In some cases, this process could take up to one year to complete for a single business partner. “In this situation, ports cope by handling many different types of cargo in

isolation, but it is much easier to handle a variety of cargo if you can do so under the umbrella of a single system that is flexible enough to accommodate the different scenarios,” McSwain said. “The system should also be able to easily automate a majority of the process by using electronic documents and automated document routings.” In some cases, ports are going to cloud-based technology where they can be in an information and document exchange network with other business partners and exchange e-documents, avoiding most electronic data interchange, or EDI, testing. In other cases, they are using in-house systems and still going through an EDI certification process, only there is much more built-in automation, which both shortens and simplifies the testing process. The process can become more complex when you have many different types of cargo to keep track of with the system, McSwain said. “In many cases, we find that ports are still using old legacy code that they once purchased and then modified over the years as their business models changed. This code might fit current business situations, and employees might be comfortable with it, but after one and even two decades, the systems become obsolete. They begin to break down, and won’t even run on newer hardware and operating systems.” Nevertheless, port managers must still be wary of growing competition and the need to keep costs down. Part of this consciousness is a natural resistance toward investing in a new system, when there are other port infrastructure investments that are perceived to be more immediate. Port managers justifying the status quo would maintain they don’t really need to make the system investment since they already have an old system that everyone knows and that is costing them nothing in terms of software licensing fees. It’s also disruptive to business when employees have to learn new systems. But strategic directions change and ports need to project and prepare for that. They need to be ready to tune up port operations to facilitate improved throughput which could result in greater revenues. “Say, for example, you’re a port and you have to discharge steel coils and SEPTEMBER-OCTOBER 2015

technology

then load these coils out on trucks to be delivered to a nearby manufacturing facility,” McSwain said. “Between the time that the coils are discharged and when they get picked up, you have to store it somewhere in your port’s yard.” As volumes grow, placement and organization becomes increasingly more complex, and ports are dealing with the problem as it comes. This is a process that should be done before the cargo is received, and if the port is thinking about using a system to locationally track breakbulk cargo, they should also perform the physical yard setup that is needed to establish specific locations for breakbulk cargo so the technology can track this cargo.” Once a baseline port system is in place, it becomes relatively straightforward for a port to use sensors, gate operating system, radio frequency identification, optical character recogni-

116 BREAKBULK MAGAZINE www.breakbulk.com

tion, or virtually any other technology to assist the breakbulk cargo tracking process—and to provide visibility to port personnel and other stakeholders such as customers, customs and suppliers.

Weighing Pros and Cons

Ports continue to weigh the pros and cons of investing into a new port system. Handling breakbulk goods requires special equipment and well qualified staff to transfer cargo at all different stages, and there needs to be a constant monitoring and control of the costs. “Having a better system can help us to keep personnel at a minimum, with safe handling and the required activity monitoring that assists us in keeping our operations at competitive rates,” said CICE’s Mendez. “As for infrastructure, larger capacity cranes are now being used, as well as a larger variety of sturdier over-the-road transport platforms – and

more efficient rail connections. Among the principal challenges is the fact that we sometimes have to work within spacerestricted areas and then haul over the goods between the quay and terminals. In the process, we have to closely coordinate with the rail operators that cross several of the yards in between.” Mendez said his new port system enables him to effectively plan for times of anticipated congestion, and to monitor in real time the activities in the port so he can make timely adjustments. “As our ports continue to invest in growing their operational areas, we can already see how our operations are improving,” Mendez said. “We are beginning to convert desktop computers into mobile applications that will give us greater flexibility on controlling and monitoring port processes, and we will gain efficiency and save time and money with this. … With our recent system upgrades,

SEPTEMBER-OCTOBER 2015

we feel confident that we can keep our leading position in the breakbulk segment at the ports where we operate. Certainly we are operating in a very dynamic environment and we will be watching for any service improvement that we can implement in the near future.” However, a prerequisite of any successful new system installation is having staff trained and ready to operate in the new system environment. “Ports and others using new port software must maintain a commitment to staff training in cargo tracking techniques and the proper preparation of physical port infrastructures,” McSwain said. “If they do this, they will place themselves in an advantageous position to fully exploit the technology they have invested in.” At CICE, Mendez said there is a permanent training program on the safe operation of forklifts, tuggers and dolly handling, in addition to the port

system. “Besides hands-on training, our next step is to go into the use of simulators for mobile cranes, because we want to achieve safe handling under more complex operating conditions,” he said. “Many people also seem to feel that a major issue with handling breakbulk goods in the port is visibility and the many different manual processes that must be used. The modernization of port operations, both at the system level and the yard level, is eliminating tasks that formerly were very time-consuming.” McSwain has noted from his own experience that if port staff are fully trained and the physical premises at the port are properly prepared, much of the breakbulk cargo tracking process and the supporting documentation can be automated, leading to the port gaining efficiencies from a mixed cargo system. He also emphasizes the importance of the port selecting a couple of “super

users” who are part of the staff, who understand the operational requirements of the port, and who can more easily show other employees how a new system can help in daily work. Another key to successful system implementation, if the port has multiple terminals, is to implement the system terminal by terminal. “A great example in the U.S. is Diversified Port Holdings,” McSwain said. “When they implemented a new port system at their first terminal that also included the tracking of breakbulk cargo, it took them approximately one year to get everyone at the terminal thoroughly trained on how to use the system. This process also included some reconfigurations of the system to fit the profile of their port operations and requirements. By the time they were implementing their fifth terminal, this end-to-end process was down to 60 days.” BB

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technology

MAKING A POSITIVE I.D. Auto-ID Technology Gains Traction in Breakbulk Sector

Technology is part and parcel of the modern operating environment. Credit: Atlas RFID Solutions

118â&#x20AC;&#x192; BREAKBULK MAGAZINEâ&#x20AC;&#x192; www.breakbulk.com

sk logistics professionals the world over about the impact of technology on improving overall supply chain operations and words like optimization, transparency and real-time monitoring soon enter the conversation. It is all about staying with the times or rather, ahead of the game, without breaking the bank. That technology is ubiquitous cannot be argued: handheld devices, tablets, wireless, mobile applications, radiofrequency identification or RFID, and shared data platforms are all part and parcel of the modern operating environment. The breakbulk sector is no different, although it is noticeably less inclined to jump on every technology bandwagon.

SEPTEMBER-OCTOBER 2015

technology

Cargo owners are increasingly looking for technology that can report in real time. Credit: Atlas RFID Solutions

“Technology to support the breakbulk industry can take on many forms,” said Jeff Braune, Jovix program manager for Atlas RFID Solutions. “For one, we’re definitely seeing an increase in the use of mobile devices to support data collection during field transactions creating a quicker, more efficient and accurate process of creating customs clearance documentation.” Also, the use of auto-ID technology has rapidly come into the supply chain industry, including breakbulk, Braune said. “Utilizing bar codes, active and passive RFID tags, and even GPS tags, companies are able to automate as many work processes as possible – and streamline the ones that can’t be automated,” he said. “For example, the aforementioned process can be streamlined utilizing bar codes to ‘scan’ the items into their parent vessel. Downstream processes can then be automated by utilizing another form of auto-ID, RFID tags. When cargo arrives at the destination, an RFID reader accompanied with software using business logic could automatically record the arrival date and time stamp and location of the cargo – as well as automatically notify interested parties.” Additionally, having all of this technology wrapped into a solution that is 120 BREAKBULK MAGAZINE www.breakbulk.com

accessible from any network connected device across the globe allows for the breakbulk industry to streamline field work processes and provide greater visibility into the supply chain. However, the uptake of RFID to date has not been that high in the breakbulk sector. Various reasons exist for this, according to Jan-Hendrik Höck, head of DHL SmartSensor. “There was a lot of hype around RFID in the early 2000s with expectations of it transforming supply chains completely and replacing existing technology. This never really transpired simply as the costs involved were very high and there were limitations to the technology in certain applications,” Höck said. “And while some of the hype definitely died down the technology has continued to grow and be developed. It speaks well to the logistics sector, which is why we continue to see increased usage, but it has become more realistic in the expectation of what it can achieve and the speed of progression has also slowed down to ensure that its application is correct.” With RFID, Höck said, a company is able to create more visibility in the supply chain by easily detecting a high number of shipments at the same time, in some cases even without having to open the outer packaging.

“With this you can detect lost or incorrectly handled shipments much more easily. Furthermore, you can combine other sensor technologies with an RFID interface for data communication in order to not only identify an item/ package/shipment but to also get more information on the current status of the shipment,” he said. An example of this would be the DHL SmartSensor RFID solution, which is a combination of a temperature logger with an RFID communication interface. “It can be applied to any cargo be it bulk, breakbulk or containerized,” he said. The devices are attached to a shipment, measuring the ambient temperature throughout the transportation process, which are then transmitted by the RFID readers. “The decision to use RFID instead of other technology is simply because it is far more automated. If one were to use a USB device, for example, it would need to be detached from the shipment to be logged into a computer for the information to be accessed,” Höck said. According to Braune, cargo owners are more and more looking towards technology that can perform the transaction and report on it in real time, and not just merely record that the transaction took place. “Knowing who last managed a shipment and at what location is very important,” he said. “From a management perspective the visibility offered makes this a trend that is only going to get more popular and will soon be the norm.” In tandem with these moves, there needs to be increased collaboration in the supply chain. “Open-source, cloud-based solutions that can easily integrate with multiple user systems lessen silos of information. Sharing information, integrating, and using the available technologies to benefit everyone is where I think this sector is ultimately heading,” Braune said. Efficiency has become the name of the game, according to John Kerkhof, manager of the Antwerp Port Community System. APCS has developed a breakbulk application that aims to make copying and re-copying of data a thing of the past. Through increased automation it has created a more transparent and efficient system. Running a pilot project with Arcelor SEPTEMBER-OCTOBER 2015

technology

The breakbulk sector is increasingly realizing the benefits of utilizing 21st century technology. / Credit: Atlas RFID Solutions

Mittal Logistics, FEDNAV and NHS, the port earlier this year launched the application that they say will make freight handling far more efficient than ever before. “The intention is to go into production with several parties over the course of the next few months and by the end of this year we hope to have achieved fairly wide coverage,” Kerkhof said. The application, known as Cubix, greatly simplifies administration while the business model is based on the principle that all parties who participate in the application also share the cost. “We work on the basis of 10 eurocents per tonne, shared between the forwarder, the ship’s agent and the terminal operator,” Kerkhof said. It is a solution that speaks directly to the reason why RFID has not been taken 122 BREAKBULK MAGAZINE www.breakbulk.com

up wholeheartedly by the sector: cost. “The right technology for a specific use case will have a tangible return on investment that makes it worthwhile,” Braune said. “Improvements in hardware and software accuracy, paired with a stronger cellular network that has more people connected at any time in more locations, have increased the availability of real-time information. Real-time, accurate information across a supply chain is crucial as we move forward in more sophisticated solutions.” He said the catalyst for the widespread adoption of RFID will be the arrival of complete solutions that increase efficiencies in more than just one function of a supply chain. “That means collaboration, communication and integration. We must share our best

practices and let the best in breed shape what’s next.” According to Oskar Orstadius, global segment account manager breakbulk and project cargo for Höegh Autoliners, cargo owners need to see the benefits of the system working for them. “They want accurate and continuous reporting so that they know where their cargo is at any given time. It is about control and verification at all times. Along with this there is a definite requirement for shorter waiting times. This means faster turnaround times so that the overall transit time from the factory to the final destination is less.” The move to more automated processes has been ongoing in the breakbulk sector, Orstadius said. “We have not seen major demands from clients for tracking SEPTEMBER-OCTOBER 2015

technology

making and robust solutions that provide reports, dashboards, analytics and other strong functionalities that enable complete visibility. But it is always difficult for an industry to adopt new technologies, he said. “Even if a company has selected and implemented a technology, it can still be a failure because there is no buy-in of the users. For RFID and other auto-ID technologies to be embraced, the selection has to be informed and careful, and adoption needs to be a planned and measured activity.” Challenges in adopting advanced technology across the breakbulk sector certainly exist. But more and more the sector is realizing the benefit of utilizing 21st century technology like mobile devices and auto-ID. Information is available at the fingertips of longshoremen and other crucial members of the Companies are trying to automate as many work processes as possible. breakbulk industry. Credit: Atlas RFID Solutions There are still many people confrom our side, but removing the human and will meet breakbulk needs.” cerned with counterfeit material, theft element as far as possible is trending. It Canada-based asset manageand misallocation of cargo. Reducing allows for more accuracy, less error and ment solution provider PiiComm has these obstacles remains one of the indusfaster turnaround of cargo.” identified several ways that RFID, in try’s main challenges and beyond that Raymond Fisch, senior vice president particular, can help the industry maxisolving the root causes of how and why for BBC Chartering, agrees. He has expe- mize asset utilization, reduce operating these challenges occur. Having access to rienced only a few cases in the breakbulk costs, and improve customer service information is a sure way of overcoming sector where customers have requested to increase production without addthose obstacles. cargo tracking. ing resources. It allows for seamless “Technology and the effective use “In such cases we have worked to tracking of cargo while it can help to thereof has an extremely important provide the requested information identify shipimpact on the using the EDI process standards, but ping bottlenecks, operations of an “The companies who see organization,” this depends on the trade regularity, the adjust delivery cargo volumes and the general role our schedules, access said Höck. “It does the value in automated, service plays for the customer,” he said. historical data, deliver improved digital processes are Fisch, like Orstadius, says customers ensure no process customer service, do, however, require continued updates steps are skipped it lowers operating going to do better in of their cargo progress. and that quality is costs over the long the short term and the “It’s our business to manage very enhanced. run and improves long term.” specific cargo and service requirements, “There are efficiency.” – Jeff Braune which is opposed to the service and informany solutions Ultimately mation requirements relating to integrated available on the technology turns consumer value chains,” Fisch said. market. Competition is fiercer than supply chains into competitive weapons Requests for less manual processes ever,” Braune said. “It is therefore giving the user a leading edge. are a natural progression and reflective important for technology buyers to “Technology is extremely important. of the impact technology has on societies perform careful research to ensure they It’s everywhere and it is the future,” in general, Braune said. “Speeding up the are getting what they really need from a Braune said. “The companies who see transfer process of cargo from one vessel trusted source.” the value in automated, digital processes to another can be time consuming and According to Braune, there are many are going to do better in the short term there is a lot of room for error in manual levels of solutions from simple material and the long term as they pave the way processes. Anything that can be autotrack-and-trace solutions that record to the future. The integration of technolmated is inherently more accurate and data in a spreadsheet to solutions that ogy into these processes is inevitable and faster. As long as processes are strong, integrate with other technologies in proactive companies who adopt early the technology of auto-ID solutions can the supply chain to inform decisioncan shape what the future looks like.” BB 124 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

oil & gas

A worker polishes a part of an oil rig at Offshore Oil Engineering (Qingdao) Co., Ltd. / Credit: YU FANGPING/ FEATURECHINA/Newscom

THE RE-ADJUSTMENT BUREAU By Eric Johnson

ore than a year has passed since global oil prices fell off a cliff, enough time for a sense of resignation to replace shock at companies that equip and service the world’s offshore oil and gas drilling operations. Shipyards across Asia, for example, have adjusted offshore rig-building businesses after accepting the fact that the days of US$100-per-barrel oil appear to be over, at least for now. Project cargo logistics and shipping companies that 126 BREAKBULK MAGAZINE www.breakbulk.com

transport rig equipment from assembly sites on land to oil fields in faraway oceans have also spent the past year adjusting their plans. Simply put, business is down. Offshore oil drillers are scaling back orders for the platform modules built by shipyards for semi-submersible rigs and jack-up rigs, which vary in size and shape according to water depth and other factors. Multinational rig operators such as Transocean, Seadrill and Hercules have reportedly idled and scrapped dozens of offshore rigs and floating drillships around the world since the beginning of the year.

China Survives Weak World for Offshore Oil

The number of offshore drilling rigs actively exploring for or developing oil or natural gas resources around the world declined dramatically to 299 units in July from 395 rigs in July 2014, according to an August report by Houston-based Baker Hughes Inc. In the Asia-Pacific region, the report said, the total rig count fell during that period to 88 units from 113. Indeed, the business environment all along the offshore module supply chain has become a lot more competitive. As a result, companies at every link are under pressure to control costs, boost efficiency and bid as low as possible. China’s offshore rig builders and SEPTEMBER-OCTOBER 2015

oil & gas

NORTH AMERICA RIG COUNTS U.S. rig counts from 2014 to 2015 make uneasy reading, but China believes it can survive the downturn.

UNITED STATES

GULF OF MEXICO

60 in 2014 1913 in 2014

34 in 2015

CANADA

884 in 2015

401 in 2014

211 in 2015

Values calculated on Aug. 14 of each year. / Source: Baker Hughes

logistics providers, however, have an advantage over their competitors in South Korea and other parts of Asia: they have good reason to believe they can survive the downturn. One reason is the Chinese government’s energy independence initiative. On top of that, these mainly state-run companies have diversified globally through partnerships in other countries. China buys about 60 percent of its oil from overseas and recently replaced the U.S. as the world’s largest oil importer. To reduce this dependency, the government’s economic plan for 2016-2020 calls for boosting energy supplies from domestic sources, including offshore oil and gas wells, wind power and solar energy. China has for years operated major oil and gas fields close to home in the Bohai Sea, East China Sea and South China Sea. China’s state-owned oil companies are also active in waters off the coasts of Angola, Brazil, Iran and Myanmar, to name a few. There’s even been talk of Arctic drilling in the future. In Southeast Asia, international controversy over China’s territorial claims in the South China Sea has failed to dampen enthusiasm for offshore oil and gas drilling by Chinese companies. From Jan. 1 to July 1, drilling was completed for 18 of the 28 wells scheduled to produce their first barrels of oil in 2015, according to the Nan Hai West Petroleum Administration. Most of these wells are relatively near the mainland. The administration, an affiliate of state-owned China National Offshore Oil Corp., or CNOOC, oversees oil fields 128 BREAKBULK MAGAZINE www.breakbulk.com

in the South China Sea, which is called “nan hai” in Chinese. The administration said in July that Chinese companies in the region would “emphasize the search for medium-tolarge, high quality oil and gas fields (and) continue raising the intensity level of deepwater, high-temperature and highpressure natural gas exploration.” Chinese rig builders, suppliers and transporters are expected to benefit from this push in the South China Sea, as well as CNOOC’s operations in other domestic and overseas oil fields. Offshore module design, construction and logistics operations can be found at several Chinese seaport cities including Dalian, Tianjin, Qingdao and Nanjing. The Yangtze River ports of Nantong and Changshu are inland hubs. Well-dredged harbors, railways, highways and easy access to the steel factories that proliferate up and down China’s eastern seaboard are factors working in favor of the shipyards that build modules at or near these ports. Module-building yards and their contractors have an added advantage in being relatively near China’s offshore oilfields. Chinese companies building offshore oil and gas rig modules include: • China Offshore International Corp., which makes jack-ups at a Qingdao shipyard. • China State Shipbuilding Corp.’s subsidiary Shanghai Waigaoqiao Shipbuilding and Offshore Co. • China Ocean Shipping (Group) Co., or COSCO, which in August announced the delivery of a platform-drillship to a

Petrobas oil field off the Brazilian coast following a major overhaul of the vessel at its Dalian shipyard. The biggest engine driving the module building and logistics business in China is state-run CNOOC, which manages China’s offshore energy assets and cooperates with state and private partners in dozens of countries worldwide. CNOOC’s module design-builder subsidiary, China Offshore Oil Engineering Co., or COOEC, finished fabricating five modules and installed seven at ocean drilling sites during the first quarter of 2015, according to a company financial report. COOEC said it has been responding to the price decline for global oil by “actively exploring the domestic and overseas markets,” leading to yuan368 million in contracts in the first quarter, including yuan95 million worth of overseas orders. Nevertheless, parent CNOOC reported a nearly 40 percent decline in oil and gas sales revenue for first quarter of 2015 compared to the same period last year, prompting a 14 percent cut in capital expenditures yearon-year to about yuan16 billion. CNOOC Chief Executive Li Fanrong cited “harsh circumstances” in the market requiring “cost control and enhanced efficiency measures. “We will continue to strengthen our internal operations management, exercise strict cost control and enhance efficiency to proactively respond to the impact of low oil prices,” Li said.

CHINA, U.S. CRUDE OIL IMPORTS China imported more crude oil than the U.S. for the first time in April. 34 32

China U.S.

30 28 26 24

January

February

March

April

In million tonnes Source: General Administration of Customs, PRC & US EIA SEPTEMBER-OCTOBER 2015

oil & gas

Tugboats and a submerged barge were used to move a 70-meter-long, 76-meter-wide ZPMC module. / Credit: ZPMC

Li made no mention of how the priceslump has affected the module business and rig installations. But it was oil priced at about US$100 per barrel in recent years that drove the company’s blistering pace of offshore development. A barrel now fetches half that amount or less. These days, projects launched during the days of high-price oil are still coming on line. For example, CNOOC in January completed installation of Asia’s largest offshore oil and gas platform, the Liwan 3-1 Central Platform in the South China Sea, about 300 kilometers southeast of Hong Kong. Several projects were completed in May 2014, just before prices collapsed, including a 33-well complex with seven platforms and an onshore terminal called Kenli 3-2 in the Bohai Sea. The Liwan project made industry headlines two years ago when a 30,000ton “topside” module was positioned on the offshore platform, more than two years after construction began. CNOOC said the platform was fabricated with four times the amount of steel used to build the Eiffel Tower in Paris. Worldwide, oil rig modules are bigger and fitted with more gear than ever. And modern offshore operations require a lot more gear than derricks and drills. For example, major oil fields far from shore are often equipped with so-called 130 BREAKBULK MAGAZINE www.breakbulk.com

accommodation modules, where crews of more than 100 can comfortably sleep, eat, write reports and surf the Internet. Moving an accommodation unit from the shipyard where it’s built to the final destination in a distant ocean is a complicated task. Arguably the trickiest leg of the journey is also the shortest – from the unit’s dockside assembly site at a shipyard to the deck of a barge or ship commissioned to deliver it to an oilfield. One such trick last February set a new weight record for a single, roll on, roll off operation in China. A breakbulk crew from Nanjing-based project cargo specialist CSL-Vastwin gingerly rolled a 5,400-ton accommodation unit from an assembly site to the quayside and ship deck at the Keppel Nantong Shipyard operated by Singapore-based Keppel Corp’s Offshore & Marine division. The yard is in Nantong, 150 kilometers northwest of Shanghai. The Vastwin crew, under the direction of Project Manager Mars Qian and Project Commander Ronghua Lu, spent six hours preparing and moving the 28-meter-high module about 400 meters. At 120 meters long and 63 meters wide, the semi-submersible module was nearly as long as the 152-meter ship. Rolling it on deck required the services of an 858-ton trailer fitted with 204 axle

lines. With so many wheels, the trailer rig-module combination – weighing a combined 8,160 tons – looked, according to onlookers, like a massive, red turtle riding on the back of a giant centipede. Dockside rolling began before dawn and proceeded slowly. It was at quayside, though, that the crew confronted what Mars said was their biggest challenge: the module and trailer had to be moved across a gangplank to the deck without capsizing the barge-like ship. “The challenge was choosing the proper time to ro-ro,” Mars said. “This project required a proper tide. And during all moving processes, ballast water (on the ship) had to be adjusted.” Keeping the ship deck and dock surface levels as even as possible was one goal of ballasting. Another goal was to offset the weight of the module before it was fully positioned on deck while it slowly rolled off the dock and across a gangplank on one side of the docked ship. “One side of the barge could sink because of loading effect,” Mars explained. So to prevent catastrophe, the crew rolled the trailer in short, stop-go spurts while the ship’s crew adjusted the ballast water. As a result, Mars said, the crews maintained a gap between dock and deck heights of less than 50 millimeters until the module was safely aboard. The project’s success had “a positive impact on the long-standing, strategic partnership” between CSL-Vastwin and Keppel, according to a CSL-Vastwin press release, and helped the logistics firm “significantly in terms of exploring the offshore market.” Some Chinese module-movers are also assembling rigs for the world’s major offshore rig operators. Shanghai Zhenhua Heavy Industry, known as ZPMC, for example, signed a license agreement last year to build two, so-called JU-2000E jack-up platforms for harsh, North Sea conditions developed by Houston-based naval architect Friede & Goldman. ZPMC has received seven orders for offshore oil rig modules since 2013, said Chen Di, the company’s media supervisor. The first was delivered in April 2014 and the rest including the JU-2000E rigs were still under construction as of August. ZPMC built and then floated the framework for one JU-2000E module – a 16,149-ton mammoth designed for a SEPTEMBER-OCTOBER 2015

CSL-Vastwin successfully moved a 5,400-ton accommodation unit from the assembly site to the ship deck. / Credit: CSL-Vastwin

staff of 140 – late last year. After completing basic assembly at the ZPMC Oil Rigs & Wind Farm Project Management Department shipyard in Nantong, the module was moved to a Yangtze River anchorage for the rest of the construction work. Tugboats and a submerged barge were used to float the 70-meterlong, 76-meter-wide module to the anchorage. The builder is equipping the module with cranes, hydraulics and drilling control systems. As with this moving project – and any long-distance transportation of a module built on land and installed at an offshore oilfield – the most important step involves firmly securing all underplatform pile support structures, said Xu Qiangqiang and Yu Miaoyuan, ZPMC project engineers. That step includes carefully calculating a structure’s bending limits and plotting the best route for safely hauling the module from assembly area to oilfield, they said. Yet the most challenging factor for an offshore module move, said Xu and Yu,

is something that cannot be controlled – the weather. “No one can control the weather,” they said in an email. But ZPMC does all it can by preparing “a whole package of engineering documents, including the emergency plan and assigning superintendents for loading and discharging operations.” ZPMC is beefing up its offshore services, which cater to the oil and gas sector as well as wind power farm operators. To that end, the company in July announced the formation of a new division called Marine Engineering Service Group. At a press conference to announce the venture, ZPMC Chairman Song Hailiang said the group would focus on specialized project cargo transportation and installation services to support the offshore oil and wind power sectors. For the oil market, the group “should acquire the technology for deep underwater installations as quickly as possible” in part through business mergers, he said without elaborating. That ZPMC would undertake new,

offshore business initiatives in the current, low-oil-price business climate highlights the unique – and arguably positive – status of Chinese rig module builders and project cargo logistics operators. These companies are not only competitive and experienced, they also have a leg up on domestic drilling projects and strong ties to overseas partners. At the same time, though, Chinese companies can hardly avoid the feeling of resignation gripping industry players worldwide in the face of low oil prices. Even CNOOC has had to adjust its business. CNOOC announced in April, for example, that it had suspended tendering for offshore equipment contracts tied to a new, South China Sea oil field slated to start production in 2018. According to the China Offshore Oil international website, industry sources blamed “the current low oil price environment” for the decision. Shipyards that had shown interest in bidding were told CNOOC needed more time to study the project. BB www.breakbulk.com BREAKBULK MAGAZINE 131

infrastructure

An abandoned village on the Araniko Highway near the village of Kobani. / Credit: Guillaume Payen/NurPhoto/Sipa US/Newscom

Rebuilding Nepal will take Brawn and Stamina

CLIMBING THE

MOUNTAIN By Michael King

132 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

t is hard to fully grasp the size of the reconstruction task being faced by Nepal. This Himalayan country was already poor before the first earthquake, a 7.8 magnitude, shook its foundations on April 25. Since then hundreds of aftershocks, including a 7.3 quake on May 12 and more than 250 quakes topping 4 magnitude, have caused further destruction and spread fear across this country of some 28 million people. Almost 9,000 people have died since April 25 due to the earthquakes, many more thousands have been injured, 800,000 homes have been damaged or destroyed and 8 million people have been severely affected. Hundreds of schools, hospitals, factories and clinics need to be rebuilt, while negotiating many roads is an ever-changing obstacle course due to landslides and – now that the monsoon season is in full swing – dangerous mudslides which have already killed dozens, shut off roads to remote villages, destroyed crops and killed livestock. Many brick kilns have been damaged, creating huge shortages just when building materials are needed most. As many as 14 of 23 hydropower projects – equating to 150 megawatts of power and more than a quarter of total distribution capacity – also need repairs, leaving Nepal’s industrial base desperately short of power. Tourism in Nepal’s beautiful Himalayan mountain ranges and to its many heritage sites were a major draw, but many of its temples lie in ruins and hundreds of trails used for hiking are closed due to landslides. As well as preventing access for tourists, the closed trails are also stopping delivery of food, shelter and reconstruction goods to vulnerable communities. “The remote communities in mountainous areas are most in need and yet the last ones to receive enough help due to the crippled transportation network,” said Gagan Mukhia, country manager, DHL Express Nepal. “Poor road networks and the limited number of helicopters and planes have further decelerated construction processes, and using air transport

increases costs tremendously.” Deepak Bhattarai, director of Nepal Shipping & Air Logistics, said at this stage of the recovery process, the country was still mostly in survival mode, with basic materials and prefabricated building materials in desperately poor supply. The economic toll four months on from the first earthquake, according to Nepal’s government and a U.S. Geological Survey, is estimated at up to US$10 billion, nearly half of its gross domestic product in 2014. The percentage of GDP is a rough figure given that one-third of its economic output was wiped out by the quakes, and economic growth is now forecast to slow in the years ahead. Nepal could be given a fiscal boost during the reconstruction drive if this doesn’t fuel inflation too badly. Analysts estimate the economy might take a decade of growth to claw its way back to its pre-April 25 state. Annette Dixon, vice president for the South Asia Region at the World Bank, said recently that the economy of Nepal had taken such a huge hit from the series of earthquakes, and there’s danger that many

of the country’s recent impressive gains in overcoming poverty could be reversed. “The country needs resources to pay for the recovery that can be channeled through credible programs to make itself more resilient to the next natural disaster and ensure that those most in need receive the help they deserve,” Dixon said.

Limited Financing Options

Where that finance will come from and how it is spent is a vexing and complicated challenge, however. While donors agree that “building back better” is the best way to proceed – so buildings and infrastructure are safe from future landslides and quakes – Nepal’s landscape and sketchy oversight of building procedures makes this a hard task. Raising financing is also an issue. Nepal’s banking and property institutions were both heavily impacted by exposure to the quakes, and developers are reluctant to invest further due to fear of more quakes. Access to loans from international institutions is also difficult due to Nepal’s already high debts.

Getting across the country can be a challenge. / Credit: Pierre Grandidier www.breakbulk.com BREAKBULK MAGAZINE 133

infrastructure

The recovery phase is being hampered by inaccessibility. / Credit: Mike King 134 BREAKBULK MAGAZINE www.breakbulk.com

Nepal’s short- and medium-term fiscal position is poor, according to the latest International Monetary Fund report. It also noted that the country was experiencing slow growth, rising inflationary pressure and increased debt levels. About US$4 billion was pledged from multilateral and bilateral donors at the International Conference on Nepal’s Reconstruction in June. Pledges included grants and loans, which will be disbursed over the next five years to help rebuild the country. China and India have also pledged billions and have said they are willing to work together on projects. Mitsuhiro Furusawa, IMF deputy managing director and acting chair, said strengthening public financial management would be critical to the swift and effective implementation of reconstruction efforts. “Moreover, strong coordination between [Nepal’s] National Reconstruction Authority and the annual budget process will help to promote effective use of earthquake relief funds.” He also said structural reforms would be key to helping Nepal overcome ongoing challenges and reducing the risks highlighted by the earthquakes. “The development of contingency plans would complement this,” he added. However, Nepal’s government wants reconstruction funds to be handled by its reconstruction authority, which has raised donor concerns about corruption and inefficient planning and bureaucracy. Moreover, as of early August, Nepal’s government had still not produced a clear roadmap explaining how it intends to rebuild the country. Nepal had a full disaster plan ready to act on before the first major quake. But observers on the ground said it failed to implement the plan due to regulatory delays, pointless paperwork and national security prioritization. Its subsequent failure to produce an actionable recovery plan some four months after the first quake has raised concerns among donors and international institutions about the government’s ability to manage reconstruction. As Breakbulk went to press, the rebuilding effort was only just beginning, but the logistics difficulties of managing it were already obvious given the extent of the damage, the fact that SEPTEMBER-OCTOBER 2015

RLTransportca RLTCA R&L TRANSPORT

infrastructure

Nepal’s existing procurement options are limited, and that the nearest port is five day’s drive away – but transits usually take much longer due to convoluted customs requirements. “Due to floods and landslides, highways near the China-Nepal border are blocked, and that has resulted in delays in movements of both raw and construction materials,” Mukhia said. “In addition, heavy rainfall has delayed construction at sites. Many roads are impossible to pass due to new flooding and landslides. Those that are serviceable are often too narrow for the necessary large construction equipment to pass by. “What would really help now is a clear and detailed logistics plan to move raw materials from factories/warehouses to construction sites for earthquake, flood and landslide affected areas.” “If the immediate disaster relief was anything to go by, just putting the right institutions in place will be a long haul,” said a logistics analyst who worked in Nepal alongside the U.S. Marines and Air Force during the relief effort. “What was clear to all in April to June was that the initial logistics operation at the only airport in Nepal could have functioned more efficiently in terms of inbound logistics. When the focus moved to road operations via India, it became even more cumbersome with Customs a major obstacle. Instead of five-day transits by truck from Kolkata, paperwork meant this was taking 15 days or longer.”

Demand for Logistics Specialists

But while governments, banks and non-government organizations work with Nepal to organize a viable rebuilding plan, what is clear is that those companies with specialist logistics skills will be much in demand once funding is in place and a clear and transparent plan is ready for action. “Getting equipment and major rebuilding materials into Nepal is an art at the best of times,” said the logistics consultant. “Some people compared the disaster to the perfect storm in terms of logistics and the same will apply to rebuilding. It’s not just the lack of air capacity; trucking in by road means navigating a mountainous, narrow road route from India where breakdowns and acci136 BREAKBULK MAGAZINE www.breakbulk.com

dents are common, and delays inevitable. Shipping in specialist cargo will be an exacting task.” Bhattarai said Nepal Shipping & Air Logistics would be able to help shippers move cargo into the country from India. But of the 10 major third-party logistics services providers contacted for this article with major project and breakbulk experience, not one was willing to comment on how they might be involved in the reconstruction. “It’s too early to comment,” said one 3PL. “At this stage there is a reluctance by donors and construction companies to pursue projects with any great conviction quite simply because the finance and plans for rebuilding are not yet in place. It should be a major market for logistics companies in future, but at this stage it’s a very confusing picture.” Bhattarai said smooth operations of goods transport from India was possible, but paperwork was an issue, not least because meeting the stringent requirements of both India’s and Nepal’s customs services was no easy matter. “Documents should be prepared exactly as per customs requirements and by consulting with Indian suppliers,” he added. One of the first priorities will be building a second international airport in Nepal to alleviate pressure on Tribhuvan Kathmandu International Airport, which has limited capacity. India has assured Nepal a new line of credit for a 76-kilometer expressway to connect Kathmandu to a site in the country’s south at Nijgadh where the new airport is to be located, and has also offered to construct the US$650 million facility that would be able to handle Airbus 380s and some 15 million passengers. But there is no exact time frame for construction. The road alone is now expected to cost more than US$1 billion. “Work on construction of the Nijgadh airport with India’s participation should be expedited,” said Sushma Swaraj, India’s External Affairs Minister, at a June reconstruction meeting. “These projects will create new job opportunities contribute to revenue, and facilitate long-term recovery.” With or without a new airport, rebuilding Nepal’s battered infrastructure will be a long-term challenge. BB

CUSTOMS-MADE OBSTACLES Getting Cargo into Nepal can be a Thankless Task One of the major obstacles that has faced non-government organizations, foreign governments and international agencies involved in the relief effort in Nepal from April 25 onwards, has been negotiating Nepal’s notorious bureaucracy. High levels of corruption and the country’s fractured political system have further complicated matters. This obstacle is likely to be just as daunting for those handling the logistics of rebuilding Nepal’s battered infrastructure. Local charity workers and international bodies are reluctant to be quoted on the issue, but agree that post-disaster reconstruction of Nepal must be more accountable than the disaster relief effort. Nepal is, after all, a country that ranked 126th of 176 nations surveyed in Transparency International’s corruption perception index in 2014, compared with 116th a year earlier. Many aid workers on the ground have spoken of local officials seizing goods, harassing aid convoys and making multiple requests for bribes. Customs regulations have been a common complaint from those involved in the aid effort, with bottlenecks common. For the first month of the humanitarian emergency response to the Nepal earthquake, customs procedures and import duties were largely waived for humanitarian relief items entering the country. However, specialist deliveries by air charter suffered multiple delays resulting in global backlogs of freighters awaiting the correct licenses. And importers trying to clear urgent relief items such as medicine and tents often had to get clearance from multiple ministries before the goods were released. Many donaSEPTEMBER-OCTOBER 2015

tions either spoiled or disappeared on to the black market. As the effort eventually shifted to land connections by mountain road from India, in early June a government directive was issued requesting humanitarian organizations to deposit their cargo at Government Central Warehouses at Kathmandu International Airport in order to receive tax-exempt customs clearances. This system is still in place, requiring major detours for cargo entering the country by road that first has to go to Kathmandu. Moreover, on June 23, pre-earthquake customs procedures were reinstated, as the government moved from emergency to recovery phase. This means humanitarian cargo can only receive tax exemption if the cargo is included in the “Government Approved List of Humanitarian Relief Items for Nepal” and consigned to international or non-international non-governmental organizations, or NGOs, and delivered with a bill of lading, road waybill, airway bill plus a cargo manifest and pro-forma invoice stating the real value of cargo. At a stroke, the extra paperwork turned the five-day journey from Kolkata to Kathmandu into a 15-day transit, at best.

Examine the Details

Here, the devil is in the detail. The government’s policy is to encourage local procurement for construction materials even though the availability of items such as corrugated iron sheets and bricks is scarce and pricing has soared, leaving local Nepalese in competition with governments and NGOs for building materials and goods. To illustrate, corrugated galvanized iron sheets, or CGI, are in much demand. Not only do they offer shelter for the monsoon season when the rains stop and winter looms, they can then be reused to rebuild houses, unlike tarpaulins or tents. However, by July there was a 40-day waiting list for CGI sourced in Nepal and prices were more than 20 times higher than they were in April, or in neighboring countries. Even so, it took until June 5 for import duty for CGI sheets to be reduced from 30 percent to 15 percent, though VAT is still applicable at 13 percent.

Corrugated iron sheets are in huge demand. / Credit: Mike King

“International NGOs and NGOs looking to import CGI can apply for full tax exemption, though it’s not guaranteed,” said a spokesman for the United Nation’s World Food Program, the organization that has been coordinating logistics of the relief effort with NGOs since the first quake hit. “They have to get a letter of recommendation from their concerned line ministry, with whom they should have a MoU (memorandum of understanding) in place. Taking that letter to Finance they may then be issued with a letter from Finance for Customs to authorize a tax waiver. “In Nepal there are producers of CGI and the government has sought to encourage local procurement as much as possible, though the current demand is far greater than the capacity to locally produce the roofing sheets.” Even then, many NGOs have encountered difficulties because imported CGI sheets need to meet prescribed design details. For example, they must contain 120 grams of zinc coating and can only enter Nepal through the Biratnagar, Birgunj or Bhairahawaor dry border Customs offices if imported for commercial purposes. NGOs seeking exemption from duty have to deal with a range of bureaucrats, a paper chase that has

seen many close down supply chains or import less suitable materials. Moreover, Nepal has also not abided by its previous commitments to global customs rules. The World Customs Organization told Breakbulk that in 2007 Nepal had signed up to the International Federation of Red Cross and Red Crescent Societies’ Model Customs Agreement with the UN. This lays out measures to be taken to expedite the import, export and transit of relief consignments and relief personnel in the event of disasters and emergencies. According to the agreement, in an emergency, relief goods may be brought in and exempted of all taxes and duties, so long as they are imported by organizations that are part of the UN relief operations. As part of the agreement, the UN, through nine training programs at nine different Customs points, trained 300 Customs officials in the country about the agreement’s measures. Despite all this, many of the articles that Nepal agreed to were not adhered to post-April 25. For those looking to get involved in the reconstruction of this devastated country, bureaucracy, corruption and rapid regulatory and policy changes will be major risks when it comes to examining supply chain costs. www.breakbulk.com BREAKBULK MAGAZINE 137

INDEX

reakbulk cargo is an eclectic mix, encompassing forest products, steel, pressure vessels, windmill blades, rolling stock and out-of-gauge items.

With this in mind, BREAKBULK INDEX data ranges from steel production to details of planned capital projects. The global nature of today’s breakbulk and heavy-lift sectors requires transportation professionals to be on top of economic trends worldwide, which calls for inclusion of focused macro-economic data on prices and events that affect EPCs, the breakbulk community and the multipurpose fleet.

138 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

FORWARDING INDEX

PIRACY

EUROPEAN FREIGHT FORWARDING INDEX

WEST AFRICA MARITIME SECURITY INCIDENTS

The index, based on European forwarders’ actual and expected freight volumes, is above 50, but the expectation for August is for it to drop to 49. Values above 50 on the zero-to-100 scale indicate expansion.

2015

2014

2013

2012

2011

2010

Actual

Forecast

There have been 61 incidents from Senegal to Angola through August of 2015, with 14 robberies, five thefts, five hijackings and 24 failed attempts. Efforts to combat piracy off the Horn of Africa have been largely successful, although there was a single hijacking in March.

M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A

Total Failed Attacks Hijacking Attempts Theft Robbery

January ‘14 5 February 7 March 10 April 4 May 5 June 6 July 3 August 7 September 5 October 9 November 13 December 9 January ‘15 7 February 6 March 10 April 7 May 12 June 6 July 8 August 5

3 3 5 0 1 5 1 3 1 6 5 2 1 1 0 0 0 1 1 1

2 0 0 3 0 1 4 0 1 3 0 1 1 0 2 1 0 0 2 0 0 3 0 1 1 0 3 3 0 0 7 1 0 5 1 1 2 1 2 1 0 1 4 2 1 4 0 0 5 0 4 3 1 1 2 1 4 3 0 1

Note: “Failed” includes attempted robberies/thefts as well as hijackings. “Hijackings” include kidnappings from vessels.

SOUTHEAST ASIA MARITIME SECURITY INCIDENTS In 2015 to-date there have been 147 maritime security incidents. Ninety-two were successful, led by theft (41) robbery (36) and hijacking (14).

Total Failed Attacks Attempts Hijacking Theft Robbery

January ‘14 1 0 February 7 1 March 9 2 April 12 1 May 18 11 June 15 2 July 14 5 August 14 6 September 8 2 October 26 7 November 20 9 December 16 7 January ‘15 18 6 February 11 3 March 15 6 April 16 9 May 22 7 June 28 8 July 12 4 August 25 12 0

Source: Danske Market Equities, www.danskebank.dk

0 0 1 0 0 6 2 1 4 4 5 2 1 2 4 3 4 6 2 1 6 1 4 3 3 2 1 4 8 7 0 5 6 1 3 5 2 4 6 2 3 3 2 2 5 1 4 2 2 11 1 3 9 8 0 5 3 2 3 8

Note: “Failed” category is for attempted robberies/thefts, not hijackings. Source: Risk Intelligence, www.riskintelligence.eu

www.breakbulk.com BREAKBULK MAGAZINE 139

bb index

INFRASTRUCTURE LEADING NORTH AMERICA INFRASTRUCTURE PROJECTS In CG-LA Infrastructure’s annual ranking of infrastructure projects for North America, total value was projected at US$376.3 billion, with US$293.5 billion in the U.S., $62.9 billion in Canada and US$19.9 billion in Mexico. The 100 projects were selected from nearly 500 projects on the candidate list, and ranked in a two-part approach. This ranks each state and province using latest economic figures, and evaluates their infrastructure needs by sector; then each project is evaluated and ranked with respect to five criteria: competitiveness, productivity, sustainability, business opportunity, and job creation. While CG-LA Infrastructure applied an overall rank, projects here are broken out by sector.

PROJECT NAME (OVERALL RANK)

PROJECT SPONSOR

STAGE

STATE/PROVINCE VALUE*

AIRPORTS Mexico City New International Airport (8) Aeropuertos y Servicios Auxiliares Designing Distrito Federal $9.10 La Guardia Airport Redevelopment Program (43) Port Authority of New York Consortium selected New York $3.60 & New Jersey Atlanta Hartsfield-Jackson International Carter/Majestic Realty/GPM Planning Georgia $0.40 Airport Improvements (46) Investments Sea-Tac Airport Sustainable Airport Master Plan (47) Port of Seattle Planning Washington $1.20 Chicago South Suburban Airport (93) Illinois DOT Permitting Illinois $14.00 New Lazaro Cardenas Airport (99) Aeropuertos y Servicios Auxiliares Planning Michoacan $0.69 ELECTRICITY – GENERATION Site C Clean Energy Project (24) BC Hydro Construction British Columbia $8.80 Tesla Gigafactory (57) Tesla Motors Construction Nevada $5.00 Arkansas River Low Water Dams, Tulsa Corridor (62) Army Corps of Engineers Proposal Oklahoma $0.56 ELECTRICITY – GENERATION, RENEWABLE Chokecherry and Sierra Madre Power Co. of Wyoming Planning Wyoming $5.00 Wind Energy Project (18) 106MW Alamo 7 Solar Farm (35) OCI Solar Power Planning Texas $0.14 California Flats Solar Project (52) First Solar Inc. Planning California $0.85 300-MW Texas Wind Farm (77) SunEdison Announced Texas $0.41 Long Island NYC Offshore Wind Project (88) New York Power Authority, Planning New York $0.42 Long Island Power Authority & Consolidated Edison Newberry Geothermal Plant (94) Davenport Power and Testing phase Oregon $0.40 AltaRock Energy complete ELECTRICITY – GENERATION, FUEL CELL Beacon Falls Energy Park (100) CT Energy & Technology LLC Proposed Connecticut $0.22 ELECTRICITY – TRANSMISSION & DISTRIBUTION Northern Pass Transmission Project (16) Northern Pass Transmission LLC Planning N.H. & Quebec $1.40 Vermont Green Line (37) Anbaric Transmission Planning New York/Vermont $0.40 Susquehanna-Roseland Electric PPL Electric Utilities Construction Pa./N.J. $1.42 Reliability Project (56) HIGHWAYS & BRIDGES Gordie Howe International Bridge (5) Windsor-Detroit Bridge Authority RFQ released July ‘15 Michigan & Ontario $2.10 I-70 Mountain Corridor (7) Colorado DOT Planning Colorado $3.50 Puget Sound Gateway Project (11) Washington DOT Planning Washington $2.80 I-11 & Intermountain West (21) Arizona DOT & Nevada DOT EIS Review Arizona/Nevada $0.63 I-10 Mobile River Bridge (28) Alabama DOT EIS Study Alabama $0.85 San Diego Freeway (I-405) Orange County Transportation Designing California $1.70 Improvement Project (30) Authority I-395 Miami East Reconstruction (38) Florida DOT Planning Florida $0.60 South Mountain Freeway (54) Arizona DOT Planning Arizona $1.90 I-4 Beyond (59) Florida DOT Feasibility Florida $2.00 Virginia I-66 Corridor (61) Virginia DOT Planning Virginia $3.00 Circuito La Raza Elevated Highway (67) Secretaría de Comunicaciones Tendering Federal District $0.44 y Transporte (SCT) In US$ billions 140 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

RE SP GI AC ST E ER IS LIM NO ITE W D

25-28 October 2015

Abu Dhabi National Exhibition Centre (ADNEC) Abu Dhabi, UAE ABU DHABI PORTS - Host Port Sponsor

GLOBAL LOGISTICS EXPERTS, REGIONAL PROJECTS FOCUS Superior Education, Unmatched Networking Join top project cargo logisticians from around the world for the inaugural Breakbulk Middle East Conference and Exhibition. This important industry event provides unmatched networking and superior education workshops, plus an agenda that will focus on the Middle East’s growing investments in major infrastructure projects. Located at the gateway to the Middle East,

Abu Dhabi and the Abu Dhabi National Exhibition Centre, is an international destination that welcomes foreign visitors, businesses, investors and inviting them to learn about its rich cultural history and valuable natural resources. EXHIBITORS/SPONSORS reserve your stand today: Mohammed Ryad mohammed@breakbulk.com Tel: +973 3900 1399

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bb index

PROJECT NAME (OVERALL RANK)

PROJECT SPONSOR

STAGE

STATE/PROVINCE VALUE*

Brent Spence Bridge Project (68)

Ohio DOT & Kentucky Planning Ohio/Kentucky $2.65 Transportation Cabinet I-70 East Reconstruction (71) Colorado DOT Final EIS study Colorado $1.17 I-15 Expansion & Upgrades (75) Utah DOT Planning Utah $0.43 Puerto Vallarta Bypass Highway (86) Secretaría de Comunicaciones Concession due Jalisco $0.27 y Transporte (SCT) in 2016 Barrier Island Bridge Replacement (89) North Carolina Department Design North Carolina $0.22 of Transportation Chesapeake Bay Parallel Tunnel Project (91) Chesapeake Bay Bridge & Shortlist announced Virginia $1.20 Tunnel Commission Southern Gateway Managed Lane Project (95) Texas DOT Feasibility study Texas $0.47 98) 710 Freeway Tunnel (98) California DOT Proposed California $5.65 MINING & DEVELOPMENT Plan du Nord (73) Ministry of Energy and Proposed Quebec $2.80 Natural Resources OIL & GAS Mexico-Guatemala Regional Gas Pipeline (19) CFE, Pemex, IDB Proposed Mexico/Guatemala $2.80 Bear Head LNG (23) Liquefied Natural Gas Ltd. (LNGL) Construction Nova Scotia $8.00 Greensville Natural Gas Power Station Dominion Resources Inc. Proposal Virginia $1.00 (1,600 MW) (31) Coastal GasLink Pipeline (33) TransCanada Pre-Construction British Columbia $3.56 Cove Point LNG Export Project (36) Dominion Resources Inc. Under construction Maryland $3.80 LNG Canada Export Terminal Project (41) Shell, KOGAS, Mitsubishi & Planning British Columbia $25.00 PetroChina Atlantic Coast Natural Gas Pipeline (84) Dominion Energy Planning North Carolina $1.10 Port Arthur Ethane Cracker (85) Total Petrochemicals Conceptual Texas $1.70 PORTS & LOGISTICS Jasper Ocean Terminal (4) Ga. Ports Authority & S.C. Planning Ga. & S.C. $4.50 Ports Authority Port of New Orleans Master Plan 2020 (9) Port of New Orleans Procurement Louisiana $1.20 Port of Veracruz Expansion (13) Secretaría de Comunicaciones Planned Veracruz $4.50 y Transporte (SCT) Port of Tampa Bay Development Project (17) Port of Tampa Bay Proposal Florida $2.00 Fairview Container Terminal Expansion (32) Prince Rupert Port Authority Under construction British Columbia $0.16 Coatzacoalcos Port Expansion Project (51) Secretaría de Comunicaciones Planned Jalisco $0.35 y Transporte (SCT) Craney Island Terminal Expansion (53) Port of Virginia Proposed Virginia $0.39 Wilmington Port Improvements (55) NC Ports Authority Feasibility study North Carolina $0.13 Port of Nome Expansion (65) Army Corps of Engineers Conceptual Alaska $0.21 Port Everglades Expansion Master Plan (78) Port Everglades Ongoing Florida $1.60 Container Terminal at Contrecoeur (79) Montreal Port Authority Permitting Quebec $0.32 Alaska Ferry Terminal Improvements Project (90) Alaska DOT Bidding Alaska $0.15 RAIL – FREIGHT Great Northern Corridor Improvements (40) BNSF Railway Ongoing Ill. to Wash. $1.20 Milton Logistics Hub (66) Canadian National Railway Feasibility study Ontario $0.25 Aguascalientes - Guadalajara Freight Rail Line (80) Secretaría de Comunicaciones Pre-tendering Aguascalientes $1.75 y Transporte (SCT) Virginia Avenue Rail Tunnel Reconstruction (82) CSX Transportation Procurement DC $0.17 RAIL – HIGH SPEED Texas Central Railway (3) Texas Central Conceptual Texas $10.00 California High-Speed Rail (6) California High-Speed Rail Authority Construction California $68.00 All Aboard Florida Rail (27) Florida East Coast Industries LLC Under construction Florida $3.50 XpressWest (45) DesertXpress Enterprises Final design Calif./Nevada $8.20 In US$ billions 142 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

PROJECT NAME (OVERALL RANK)

PROJECT SPONSOR

STAGE

STATE/PROVINCE VALUE*

Northeast Maglev Project (49) Northeast Maglev LLC Seeking franchise DC/Maryland $10.00 & grant funding Southeast High-Speed Rail (83) Amtrak & Virginia DOT Planning DC, N.C., Va. $5.00 RAIL – PASSENGER The Gateway Project (1) Amtrak Planning New York $7.50 Cotton Belt Regional Rail Corridor (39) Dallas Area Rapid Transit & Fort Planning Texas $2.70 Worth Transportation Authority Portal Bridge North (50) Amtrak & New Jersey Transit Planning New Jersey $1.20 Union Station Expansion & Redevelopment (63) Union Station Redevelopment Corp. Designing DC $10.00 SunRail Phase 2 – South (87) Federal Transit Administration, Procurement Florida $0.19 Florida DOT URBAN MASS TRANSIT West Island Light Rail Transit (2) Montreal Airport Authority Conceptual Quebec $5.00 Port Authority Bus Terminal (10) Port Authority of New York Planning New York $8.00 & New Jersey Mid-Coast Corridor Transit Project (14) San Diego Assoc. of Govts. Designing California $1.80 (SANDAG) Finch West Light Rail Project (15) Province of Ontario and Metrolinx Designing Ontario $0.97 PATH Extension to Newark (20) Port Authority of New York Planning, financial New Jersey $1.50 & New Jersey RFP expected Hamilton B-Line Light Rail Transit (22) Metrolinx Conceptual design Ontario $1.00 & EIS East Link Extension Transit Authority (25) Central Puget Sound Regional Planning Washington $4.03 Eglinton Light Rail (29) Metrolinx Consortium Selected Ontario $5.30 Caltrain Downtown San Francisco Rail Tunnel (42) Metropolitan Transportation Conceptual California $4.00 Committee Capitol/I-10 West Light Rail Extension Project (48) Valley Metro EIS Study Arizona $1.00 LA Sepulveda Pass Transit Corridor (58) LA Metro Planning California $3.50 Colorado North Metro Rail (69) Regional Transportation District Pre-Construction Colorado $1.70 of Denver Portland - Tualatin Light Rail Transit (70) Portland Bureau of Transportation Planning Oregon $1.90 (PBOT) Purple Line Light Rail Transit (74) Maryland Transit Administration Concessionaire Maryland $2.30 selection Downtown Dallas Transit Study (76) DART Feasibility study Texas $1.30 Green Line Extension (81) MBTA & FTA Construction Massachusetts $2.50 Virginia Beach Light Rail Transit Extension (92) Hampton Roads Transit Feasibility Virginia $0.31 WATER & WASTEWATER Bay Delta Conservation Plan Tunnels (12) California Department of Planning California $25.00 Water Resources L A Water Infrastructure Long-term Seismic Los Angeles Department of Proposed California $15.00 Retrofit Program (26) Water & Power Transportation Storm Resiliency Plan (34) City of New York Design consultation New York $4.90 Sacramento Levee Improvement Program (44) Army Corps of Engineers Proposal California $1.65 Monterey Peninsula Desalination Facility (60) California American Water Co. Proposed California $0.09 Seattle Wastewater Overflow Project (64) Seattle Public Utilities Planning Washington $0.66 DC Water Northeast Boundary Tunnel (72) District of Columbia Water Planning DC $0.52 & Sewer Authority ALCOSAN Wet Weather CSO Plan Allegheny County Sanitary Authority Planning Pennsylvania $1.80 Capital Improvements (96) Ohio Canal Interceptor CSO Tunnel (97) City of Akron Planning Ohio $0.32 In U.S.$ billions Source: Building Prosperity: Strategic 100, North American Infrastructure 2015 Report, CG-LA Infrastructure, Seventh North America Strategic Infrastructure Leadership Forum, http://www.cg-la.com/

www.breakbulk.com BREAKBULK MAGAZINE 143

bb index

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

100

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJ 2010

2011

2012

2013

2014

2015

NORTH AMERICA Delivered pulp prices were normalized to 100 in January 2000 and are based on average US$ prices of northern and southern bleached softwood kraft, bleached eucalyptus kraft, and northern bleached hardwood kraft pulp weighted by production volume. 175

150

125

100

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJ 2010

2011

2012

2013

2014

2015

ASIA Pulp prices cost, insurance and freight to main East and Southeast Asian ports were normalized to 100 in January 2003 and are based on average US$ prices of northern, southern and Russian bleached softwood, radiata, eucalyptus and mixed tropical hardwood pulp weighted by production volume. 225

200

175

150

125

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJ 2010

2011

2012

2013

2014

2015

Source: RISI, www.risi.com

144 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

ECONOMY, LATIN AMERICA GDP FORECAST Economists report that Latin America’s overall GDP growth slowed to 1.0 percent in 2014 and is expected to dip to -0.2 percent before rebounding in 2016. 16%

2013 2014

12%

2015* 2016*

8% 4% 0% -4%

VE NE ZU EL A

UR UG UA Y

PE RU

PA RA GU AY

PA NA MA

NIC AR AG UA

ME XIC O

EL SA LVA DO R GU AT EM AL A HO ND UR AS

EC UA DO R

CO LO MB IA CO STA RIC A DO M. RE PU B.

CH ILE

BR AZ IL

BO LIV IA

AR GE NT INA

-8%

*Forecast

INFLATION FORECAST While Latin American inflation rates vary widely, Argentina and Venezuela are forecast to continue to head the pack by a significant margin through 2016. $145.5 $118.4

$64.7 $52.7 30% 2013 2014

20%

2015* 2016* 10%

VE NE ZU EL A

UR UG UA Y

PE RU

PA RA GU AY

PA NA MA

NIC AR AG UA

ME XIC O

EL SA LVA DO R GU AT EM AL A HO ND UR AS

EC UA DO R

CO LO MB IA CO STA RIC A DO M. RE PU B.

CH ILE

BR AZ IL

BO LIV IA

AR GE NT INA

*Forecast

CURRENT ACCOUNT FORECAST Current account balances are the difference between a given nation’s imported and exported goods, services and transfers and are an indicator of foreign trade trends. $10 $0 -$10

2013 2014

-$20

2015* 2016*

-$30 -$76.8 -$81.1

-$66.7

VE NE ZU EL A

UR UG UA Y

PE RU

PA RA GU AY

PA NA MA

NIC AR AG UA

ME XIC O

EL SA LVA DO R GU AT EM AL A HO ND UR AS

EC UA DO R

CO LO MB IA CO STA RIC A DO M. RE PU B.

CH ILE

BR AZ IL

BO LIV IA

AR GE NT INA

-$104.7

*Forecast, in US$ billions Source: Consensus Economics, www.consensuseconomics.com www.breakbulk.com BREAKBULK MAGAZINE 145

opinion

IRAN AND THE NEW SLOW By Janet Nodar

I Credit: Keith Necaise Photography

Alongside China’s increasingly painful metamorphosis from emerging to middleincome economy, we may be witnessing another phenonenon, a commodity super-cycle

ran’s post-sanctions re-entry into the world economy appears a near certainty. What are the implications for Breakbulk’s constituency, and how does this fit into our current state of disquiet? I spoke recently with Eduard Gracia, a principal with A.T. Kearney’s energy practice for the Middle East, who will be a keynote speaker at Breakbulk Middle East in Abu Dhabi on Oct. 27. Gracia expects the early impact of Iran’s re-entry, depending on just how much the country’s existing capacity has deteriorated, to be an additional 300,000 to 800,000 barrels per day. Not a gushing torrent, but enough to mildly reinforce an already low global price range of US$45-US$65 per barrel. By 2020, Iran is likely to be developing its reserves and affecting prices: Gracia says economic models suggest that prices will be hovering within US$60 to US$80 a barrel, slightly lower than they would be without Iran. Oversupply coupled with lower oil prices will certainly have implications for project logistics going forward. Alongside the faltering energy demand that goes with a sluggish global recovery, geopolitical stress fracturing much of the globe, and China’s increasingly painful metamorphosis from emerging to middleincome economy, we may be witnessing another phenomenon. It’s too soon to be certain, says Gracia, but we could be in the early, low-price phase of what economists call a commodity super-cycle. If so, that means the high commodity prices of the last decade have fueled overcapacity in upstream investments that could lead to oversupplies of commodities for quite a few years. It could be a long time before global demand grows enough to tighten supply and push up commodity prices, including energy, to interesting levels. For the project cargo trade, this is likely to translate into reduced demand for logistics activity related to upstream capital spending

146 BREAKBULK MAGAZINE www.breakbulk.com

in much of the world – except for the Middle East, where exploration and production costs will remain low. There, low energy prices will intensify the drive to diversify away from economic dependency on hydrocarbons. Gracia notes that GCC governments have plenty of cash, so they will continue to invest in major projects of all types. Elsewhere, assuming global energy demand growth continues at its leisurely pace, Gracia expects Iran’s re-entry oil to compete with U.S. shale. Shale has a steep rate of well decline, and lower prices will mean fewer new investments in relatively expensive shale fields, so incremental Iranian oil is likely to gradually replace it. He also expects oil from Iran and similar low-cost sources to compete with North Sea and other high-extractioncost resources and to quash most interest in alternative energy investment. Low energy costs do, however, benefit the refining and petrochemical segments of the value chain. Iran has implications here, as well. The country contains the largest proven gas reserves in the world, Gracia says. Enormous investments will be required to bring these to market, including pipelines and LNG and petrochemical facilities. This will create substantial related project logistics opportunities, but also, eventually, exert competitive pressure on LNG and petrochemical facilities elsewhere, including million- and billion-dollar projects in the southern U.S. As a new project market and an incremental/returning oil source, Iran’s re-entry will change the game in the short term. In the long run, it could be an important factor in a sustained slower era in the project cargo logistics niche. Eduard Gracia and his colleagues recently published “Oil Supply and the End of Iran’s Sanctions,” available at www.atkearney.com/ oil-gas/ideas-insights/oil-supply-and-the-endof-irans-sanctions.

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2015-2016 EVENT DATES

NETWORK WITH BREAKBULK & PROJECT CARGO LOGISTICIANS FROM AROUND THE WORLD. October 5-8, 2015 Port of Houston, TX, USA

25-28 October 2015 Abu Dhabi, UAE

14-17 March 2016 Shanghai, China

4-7 April 2016

23-26 May 2016 Antwerp, Belgium

Johannesburg, South Africa

TO REGISTER OR RESERVE A BOOTH, VISIT

www.breakbulk.com Â»

PORT PROFILES | 2015 ADVERTISEMENT

MANAGING DIRECTOR Alli McEntyre / +353.21.470.9595 amcentyre@breakbulk.com ACCOUNT MANAGER Kathleen Pinson / +1.678.954.0552 kpinson@breakbulk.com EDITORIAL DIRECTOR Gary Burrows NEWS EDITOR Carly Fields DESIGNER Catherine Dorrough HEADQUARTERS Clifton House Lower Fitzwilliam Street Dublin 2 Ireland

contents A4 PORT OF HOUSTON A6 PORT OF AMSTERDAM A8 PORT OF EVERETT A10 PORT OF LAKE CHARLES A12 PORT CANAVERAL A14 PORT OF BALTIMORE A16 JAXPORT A18 PORT OF GALVESTON A20 PORT OF LONGVIEW A22 PORT OF SAN FRANCISCO A24 SOUTH CAROLINA PORTS AUTHORITY A26 PORT FREEPORT A28 PORT OF NEW ORLEANS A30 NORTHWEST SEAPORT ALLIANCE A32 PORT OF VANCOUVER A34 PORT TAMPA BAY A36 PORT OF STOCKTON A38 SOUTH JERSEY PORT CORPORATION A40 PORT OF BROWNSVILLE A42 PORT OF PORT ARTHUR A43 PORT OF BILBAO A44 PORT CORPUS CHRISTI A45 PORT OF WILMINGTON A46 PORT MANATEE A47 STEWART WORLD PORTS

www.breakbulk.com BREAKBULK MAGAZINE A3

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF HOUSTON AUTHORITY BREAKBULK AND PROJECT CARGO FACILITIES HOUSTON IS THE LARGEST BREAKBULK PORT IN THE U.S.

Stretching from the Turning Basin to a few miles downstream, the general cargo terminals of the Port of Houston Authority have been serving the needs of international and domestic customers since the dredging of the Houston Ship Channel in 1914. Each terminal is uniquely designed to handle a wide range of cargo types and customer needs.

TURNING BASIN

The Turning Basin Terminal is a multipurpose complex of 37 wharves located only eight miles from downtown Houston. These docks are equipped to handle just about any type of breakbulk, containerized, project or heavy-lift cargoes. This terminal also is equipped for handling large, odd-shaped cargoes, long-term project cargo and vehicles. Wharf 32 is specially designed for handling project and heavy-lift cargoes. It has a 1,000 pound per square foot load capacity. Its 806 linear feet of berthing space and 20 acres of paved marshaling area offer sufficient space for heavy-lift or project cargo of all types. Every wharf, except Wharves 1 through 4, is served by rail. Direct discharge and loading are possible using either rail cars or trucks.

BULK MATERIALS HANDLING PLANT

The Bulk Materials Handling Plant is a dry bulk export/ import facility. The plant’s ship-loading system can handle just about any kind of dry bulk commodity. The plant is equipped with a high-speed loading system and a sophisticated dust collection system that permits the handling of extremely dusty commodities.

CARE TERMINAL

This 32-acre facility has excellent inland access and onsite rail siding with switching services provided by the Port Terminal Railroad. Approximately $14 million in recent improvements include a new state-of-the-art wharf and dock which was designed for handling project and heavy lift cargo. Care Terminal has over 1,100 feet of berthing space directly adjacent to 15 acres of paved open storage area and over 45,000 square foot of warehouse space.

JACINTOPORT TERMINAL

The 125-acre terminal features three berths providing 1,836 feet of continuous quay, 7.5 acres of paved cargo marshaling area and an 82,500-square-foot transit shed located adjacent to Berth 3. The terminal also features a 437,000-square-foot warehouse with a covered rail area and truck bays to ensure cargo is not exposed to the elements during loading and unloading. The “Spiralveyor” bagged cargo handling system is capable of loading ships A4 BREAKBULK MAGAZINE www.breakbulk.com

at a very high rate of speed. On-site bagging equipment can package corn, oats, rice, soybeans, wheat and other food products.

PUBLIC ELEVATOR NO. 2

The elevator is ideal for shippers who export large volumes of grain and must move their shipments fast. It has a rated storage capacity of 6.2 million bushels and a maximum rated loading capability of 120,000 bushels per hour. Trucks are received on two pits at a maximum rate of 30 trucks per hour while rail receipts from three pits reach 20 cars per hour.

WOODHOUSE

The 100-acre terminal includes approximately 235,000 square foot of warehouse space and three general cargo wharves ranging from 600 feet to 660 feet long. Storage is available for virtually any type of cargo. In addition, the terminal offers approximately 10 acres of open storage.

PORT OF HOUSTON AUTHORITY IS THE FIRST U.S. PORT TO BE ISO CERTIFIED FOR ITS SECURITY AND ENVIRONMENTAL MANAGEMENT SYSTEMS.

PHA’s terminals are ISO certified for its security and environmental management systems. Bayport and Barbours Cut are certified with ISO 28000 – security management system. Bayport, Barbours Cut and Turning Basin are certified with ISO 14001 - environmental management system.

HOUSTON’S FOREIGN-TRADE ZONE 84

Thirty years ago, the Port Authority of Houston spearheaded the establishment of a foreign-trade zone in the Houston area. As its sponsor – or grantee – the Port Authority has maintained and promoted the FTZ 84 since 1983. The zone includes many privately owned and port-owned sites that offer a variety of services such as general purpose warehousing, liquid bulk storage and blending, steel and pipe storage, pipe end finishing and heat treating, and more than 700 acres of zone-authorized land and building space for lease and development. All these benefits are offered to companies who want to conduct their own operations within the FTZ 84. Houston’s FTZ is one of the most successful foreigntrade zones in the nation (2011 data) with exports valued over $5.3 billion. Shipments from FTZ 84 to the U.S. market topped $1.4 billion. FTZ 84 is the largest single subzone in Texas and the 3rd largest in the nation producing $18.2 billion of domestic and foreign value. SEPTEMBER-OCTOBER 2015

Visit us in Booth 925 at Breakbulk Americas in Houston

20,000 feet of docking space HOUSTON CITY DOCKS 8–32 • Best choice for direct discharge or loading of over-dimensional cargo • Strategically located on the U.S. Gulf Coast • Direct rail access and easy interstate highway access • Worldwide coverage via all major carriers • Total of 52 docks in all Port of Houston Authority general cargo facilities

Port of Houston Authority America’s Project Cargo Gateway

Check out our all-water services at

www.portof houston.com/map

713.670.2400

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF AMSTERDAM. PORT OF PARTNERSHIPS. BOOMING PAST. SOLID PRESENT. BRIGHT FUTURE.

A new sea lock. A new terminal. The logistics sector largest intercontinental airports, and the city of Amsterdam, keeps evolving in the port of Amsterdam. a renowned centre of culture, entertainment and history. This metropolitan port is one of the world’s key international logistics hubs. For over 750 years, FAST, EFFICIENT, FLEXIBLE AND RELIABLE millions of tons of various cargo have been handled in the The port of Amsterdam is, among other things, a very port area. “A port with a booming past, a solid present and important hub for breakbulk. Van der Hoest: “With dedicated a bright future”, states Anthony van der Hoest, Cluster Manterminals, the port facilitates various customers with a wide ager Logistics at Port of Amsterdam. range of cargo, resulting in an import and export throughput Around 98 million metric tons of various of 3.3 million tonnes each year.” Deepsea cargo is handled in the port of Amsterdam container vessels and feeders sail from each year, ranking it as West-Europe’s nr. “Partnering with Port Amsterdam to ports across the world. With 4 port. The strategic and central location in of Amsterdam means its excellent facilities and space for growth, Europe makes the port easy to reach and creating business the port of Amsterdam is becoming an ever ensures excellent connections to all the major solutions together for more important player in the container and European markets. It has facilities for handling, us and our custombreakbulk market in Northwest Europe. Van storing and transhipping all types of goods. ers. Premium service der Hoest: “We always strive for progression. From cocoa beans to coal, from paper to oil. is our main focus. We One of the latest additions to our list of expeare able to offer our rienced terminals is Holland Cargo Terminal. GLOBALLY CONNECTED customers top service, Also known as HCT.” HCT is a multipurpose FOR CENTURIES because of our direct terminal specialized in the transhipment and The trade history of Amsterdam started connections to the storage of containers, breakbulk and ro-ro off in the 13th century when fishermen German hinterland by and project cargo. Together with partners placed palisades along the banks of the river train and barge.” TMA Group and HPH, HCT offers a ‘one stop Amstel. Inhabitants of the settlement were shipping’ concept with tailor made solugranted the privilege of free navigation of the – United Stevedores tions. Van der Hoest: “With VCK Logistics, Dutch waters, making trade by waterways Amsterdam (USA) Waterland Terminal, CTVrede-Steinweg, SCS all that more attractive. The city and port Paul Brink, Executive Multiport, Koopman Car Terminal, United quickly grew, international contacts flourVice President Stevedores Amsterdam, Ter Haak Group and ished. Amsterdam developed into the most HCT, the port of Amsterdam offers shipping important port and trade centre in the world. lines the opportunity to serve their customMillions of tons of dry and liquid bulk, ers in a fast, efficient, reliable and sustainable general cargo and containers have been handled in the port manner. Experienced terminals offer tailor-made solutions in a area for centuries”, Van der Hoest adds. “For hundreds of congestion-free environment.” years the port of Amsterdam has been offering the world its experience and know how. New York, Tasmania, St. PetersFUTURE-PROOF ACCESSIBILITY burg, Cape Town, you will find its influence everywhere.” The largest and most important development in the port of Amsterdam at the moment is the construction of a new sea IMPORTANT ECONOMIC PILLAR lock. This lock is of great importance to Port of Amsterdam As Europe’s 4th busiest port, the port of Amsterdam is a hub and its customers. Van der Hoest: “We continuously work for large flows of international transport, but next to this the port on improving our infrastructure. As vessels continue to grow is also a popular destination for cruise ships, making it a veritable in size, this investment is essential to future-proof the port’s hub for shipping. Van der Hoest: “Our port is a dynamic, interaccessibility.” The lock will guarantee the port’s ease of access national environment that also employs many. More than 60,000 for the new generation of medium-sized and large vessels. people have jobs generated by the Amsterdam port area. It is an Amsterdam is future-proof and therefore able to maintain important cornerstone of the regional economy.” its position as one of the most important logistics hubs in The port of Amsterdam is also one leg of the unique Northwest Europe. Van der Hoest: “The preparations for the seaport-airport-city tripod. Just at a 10 minutes driving construction of the new, large sea lock are in full swing. The distance are Amsterdam Airport Schiphol, one of Europe’s lock will be operational by 2019, ensuring a long, bright future.” A6 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF EVERETT:

YOUR CHOICE FOR HIGH VALUE, OVERSIZED CARGOES The Port of Everett, located 25 miles north of Seattle, Wash., is a natural deep-water port that is the closet Puget Sound port to the Pacific Ocean. We are dedicated to providing exceptional service and quick turnaround times for our customers. We are able to meet this promise through the hardwork and dedication of our management staff and the local ILWU. The Port of Everett is the Puget Sound’s premier breakbulk port, and serves a critical function in support of the energy, manufacturing and construction base. The Port of Everett is served by the Burlington Northern Santa Fe (BNSF) railroad and plays a vital role in support of the local aerospace industry. The Port handles 100 percent of the oversized oceangoing parts for the 747, 767, K46 Tanker and 777(X) airplane programs. The Port of Everett’s major trading partners are Japan, South Korea, Russia, China and the South Pacific. Our primary imports are aerospace parts, steel, machinery, energy cargoes and bulk cement. Its major exports, includes machinery, steel, oil and gold mining equipment, aerospace containers, forest products, and other general and containerized cargoes.

WHAT WE OFFER

• Specialized equipment to safely and efficiently handle overdimensional, high value cargoes • Shipping facilities closer than any other U.S. port to the Far East, Alaska and Canada • Located on the BNSF mainline, and Everett is the first port reached by westbound BNSF trains • BNSF Railway serves Canada, the Midwest and Eastern United States • Quick turn-around times and lack of seaport congestion • Known for excellent on-dock rail, with 5,000 lineal feet of rail capacity spanning the length of the shipping terminals • Customer-focused management staff • Highly-skilled ILWU workforce with vast experience handling diverse cargo types • Proximity to U.S. Interstate 5, the major north-south arterial on the coast • 4 miles from an airport with jumbo aircraft cargo capabilities serving the local aerospace industry • Environmental leaders. A committed port. A cleaner port.

WHAT WE ARE ADDING

• The Port of Everett Seaport is gearing up for a $10 million project that will deepen its harbor and allow the Port to accommodate larger vessels. The capital investment includes dredging approximately 1.7 acres at the south end of the Port’s Pacific Terminal berth to remove nearly 40,000 cubic yards of contaminated sediment, creating a depth of -42 MLLW. The Port anticipates work to begin in August 2016.

EXPANDING ON-DOCK RAIL CAPACITY AT THE SEAPORT

• The Port is currently soliciting bids for a rail infrastructure project that will add approximately 650 lineal feet of new rail at the north end of the Seaport and improve an existing rail spur at South Terminal by rehabilitating sections of track and extending the spur 100 lineal feet. The second phase of the project will add a 3,300 lineal foot double rail siding.

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SEPTEMBER-OCTOBER 2015

Port of EVERETT

SEAPORT

G o B i G. G o E v E r E t t.

ExcEllEnt SErvicE, Quick turnaround, HuGE lift capacity, productivE WorkforcE

carGo SpEciality: overdimensional, high value breakbulk and project cargoes induStriES SErvEd: energy, manufacturing, aerospace, construction, forest products, agriculture

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF LAKE CHARLES:

GLOBAL GATEWAY FOR THE GULF COAST Positioned strategically on the Gulf Coast, the Port of Lake Charles in Southwest Louisiana has become a heavyweight in international transportation and a leader in cargo logistics. According to figures from the U.S. Army Corps of Engineers, the Port of Lake Charles is now the 11th-busiest seaport district in the U.S., and it handles approximately 57 million tons of break bulk and bulk cargo annually on the Calcasieu River Ship Channel—a major energy corridor for the nation. Principal cargos moving through the Port’s terminals include forest products, aluminum ingots, grains, rice, petroleum and petroleum products, frac sand and heavy-lift project cargos. A strong versatility in transportation modes and a proactive attitude toward cargo solutions make the Port of Lake Charles a gravitational force for domestic and international business. The many advantages of working with the Port are seen in its growing facilities, diversified workforce and hands-on management team. The Port has developed a global reach as well as a local network of rail, interstate highway systems and barge connections. The Southwest Louisiana economic boom— which accounts for over $80 billion in announced capital investments over the next three to five years—is fueling a surge in maritime activity on the channel. Many of the industry expansions and proposed projects are dependent on waterway access, and the channel has become the ideal environment for industry leaders like Phillips 66, Citgo, Axiall, Sasol, Magnolia LNG, Big Lake Fuels, Lake Charles LNG and Cameron LNG, among others. With nearly a century of experience in shipping,

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the Port continues to expand cargo capabilities by looking ahead to future maritime trends and growing transportation demands. Deep-draft vessel traffic is projected to double on the channel over the next 10 years, and the Port has prepared for this increase by spending over $30 million on capital improvements in the last two years. The Port has invested in a two-loop railroad track system, a new entrance and truck plaza and the replacement of an historic berth and transit shed. These improvements are game changers and designed to increase cargo capacity, handling speed and overall efficiency. The Port’s 13 berths and large lay-down areas facilitate the loading, offloading, staging and storage of project cargo needed by industrial facilities that require over-dimensional pieces as close to their project construction sites as possible. The Port District encompasses 203 square miles, on which the Port owns and operates 5,000 acres throughout the District. Together with the Port’s numerous tenant facilities, Southwest Louisiana’s global ties grow as more international eyes look to the region. Since the 1920s, the Port has played a strong role in handling all types of cargo needs of industries along the Calcasieu Ship Channel and sending heavy-lift cargoes from the U.S. to the rest of the world. The Port of Lake Charles is governed by a seven-member board of commissioners and comprises two marine terminals and over 5,000 acres of property zoned for industrial use, including an industrial park. For more information, call 337-4393661 or visit www.portlc.com.

SEPTEMBER-OCTOBER 2015

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

Visit us at the Breakbulk Conference in Houston October 5-8 at booth 913. Lake Charles, Louisiana, USA • +1 337 439-3661 • portlc.com

PORT PROFILES | 2015 ADVERTISEMENT

PORT CANAVERAL:

WHEN YOU FIND A SAFE SHORTCUT, TAKE IT. In our case, that’s Hwy 528—the Beachline. Take out a few curves and you have a virtual straight line from Point A to Point B, from Port Canaveral right into the heart of Central Florida.

IT’S THE PEOPLE THAT MAKE IT HAPPEN – IT’S THE PLACE THAT MAKES IT SO.

One of the greatest compliments we hear is that our people are easy to get along with. Perhaps it’s because the Space Coast is simply a great place to live, and Port Canaveral is located right between Cocoa Beach and Kennedy Space Center (KSC). In fact, we’re less than 60 minutes from Disney World and virtually every other attraction, business and industrial complex in Central Florida. Another benefit of being so close to KSC is many of the high-tech engineers who used to work for the space center now work with us. The industry has come to expect and enjoy the congeniality and can-do attitude of our people. We take a lot of pride in providing a first-name-basis working relationship.

SEASONED PROS FOR BREAKBULK NEW KID ON THE BLOCK FOR CONTAINERS.

Breakbulk shippers have been capitalizing on our assets for years and understand the unique value of Port Canaveral’s location and expertise. We capitalized on our breakbulk experience and applied it to our brand-new container terminal. As of August 2015, we are up, running and looking forward to thriving in the container market as well.

BREAKBULK FACTS, FIGURES AND ACCESS

Port Canaveral has 220,000 square feet of dockside cold/ chill/freezer space, making it the largest cold storage facility on the East Coast. We also have more than 355,000 square feet of enclosed, dry and secure dockside warehouses for a variety of breakbulk cargo, as well as nearly 95 acres of secure, well-lighted open-air storage, with most of it less than 100 feet from dock to point of rest. Additional assets include state-of-the-art handling equipment, including a 40 metric ton Mobile Harbor Crane. Perhaps our most valuable offering, however, is our highly competent and experienced team of union and non-union stevedores. In fact, all cargo receives the attention of experts who customize their approach to handling varied goods.

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Historically, this includes steel, boats, frozen juice concentrate, lumber, wood pulp, newsprint, perishables, automobiles, heavy equipment and project cargo. We are ready for anything. Access to Central Florida and points beyond is your benefit—and a port-wide commitment to growth is our strength. We are in the center of the state, closer to more major Florida markets than any other seaport in Florida. There are more than 70 million people within three hours of the Port, yet our local highways and north-and-south-bound railroad tracks are uncluttered and easy to access from our offloading facilities. We’re bordered to the north by the KSC complex, which is basically a wildlife refuge in that it has more animals than people, and I-95 is only a couple of miles down the Beachline. It’s easy for trucks to grab “fresh” cargo, hit the road to Orlando, and get there in 45 minutes.

RAIL FOR THE LONG HAUL AND MORE DATA

Annually, we handle more than 4,000,000 tons of dry and liquid cargo, including petroleum, aggregate, cement, salt, sand, scrap metal and slag. All of our facilities fall within Foreign Trade Zone 136 and our Port Canaveral location features direct dray connection with Florida East Coast Railway to feed NS and CSX, and CSX from Orlando. We can be your most effective shipping point to Midwestern locations as well. Just call us and we’ll demonstrate.

UNIQUE PROJECTS AND ODD-SHAPED CARGO

Not everything comes on a pallet or is tucked neatly in a box. In the past we have handled wind turbines, yachts, power plant transformers, payloads destined for outer space and other items that defy packaging and description. Just know that our team has seen it all and is ready to protect your cargo, and move it along to its final destination with efficiency and professional care.

GIVE US A CALL TO CHECK THE FIT! We are looking forward to hearing from you. +001 (321) 783-7831 ext. 253 or Email cpa.cargo@portcanaveral.com

SEPTEMBER-OCTOBER 2015

WE STAND OUT IN A SEA OF MANY.

Get Hooked on The Shortcut to Central Florida. In an industry full of complacency, geographical hurdles, and logistical nightmares, shipping to Central Florida via Port Canaveral is a refreshing, profitable change of pace. Our Central Florida location (45 minutes from Orlando), accommodating people, and lots of room for growth make it easier to get business done.

Ready today. Room for tomorrow.. 321.394.3253 â&#x20AC;˘ portcanaveral.com

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF BALTIMORE

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BALTIM OF

direct jobs, while about 108,000 jobs in Maryland are linked to port activities. The Port is responsible for $3 billion in personal wages and salary and more than $300 million in state and local tax revenues. With a 50-foot deep channel, 50-foot deep berth, and Super Post-Panamax cranes, Baltimore is one of only two U.S. East Coast ports ready today to handle some of the world’s largest ships. Baltimore’s break bulk capabilities are well-renowned and include handling cargos such as wind energy components, metro buses, transformers, locomotives and equipment used in auto plants and refineries. The Port of Baltimore offers new direct rail discharge and load capabilities with 40-ton per axle capacity. Three heavy-lift pads at Dundalk Marine have a capacity of 32.5 tons per axle per pad. Baltimore is also home to Big Red, a Manitowoc truck crane able to handle 300 tons and Big Yellow, a Grove GMK All Terrain Crane able to handle up to 550 tons. The Port of Baltimore’s excellent labor force goes the extra mile to deliver superior handling for all cargos.

RE O

PO R

The Port of Baltimore is one of the busiest and most diverse ports in the U.S. It is ranked number one in the nation for autos, ro/ro, and imported forest products. For four consecutive years, the Port of Baltimore has had more autos cross its piers than any other U.S. port. Recently the Port of Baltimore was named as the top U.S. port for container berth productivity by a leading industry media company. In Fiscal Year 2015, the Port of Baltimore’s public marine terminals handled a record 9.7 million tons of cargo and another record of 808,500 TEU’s. The Port of Baltimore’s public marine terminals had a record year in 2014 and overall the Port saw 29.5 million tons of international cargo cross its docks at a value of nearly $53 billion. Baltimore is ranked as the top port among all U.S. ports for handling autos and light trucks, farm and construction machinery, imported forest products, imported sugar, and imported aluminum. Overall Baltimore is ranked ninth for the total dollar value of cargo and 13th for cargo tonnage for all U.S. ports. Business at the Port of Baltimore generates about 14,630

D elic h B e n

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

JAXPORT.

IT’S JUST SMART BUSINESS. Located in Northeast Florida, in the heart of the South are equipped to load and unload anything onto or off of Atlantic, JAXPORT offers worldwide breakbulk, heavy lift any ship,” said Frank Camp, JAXPORT director of nonand project cargo service from dozens of ocean carriers. containerized sales. “Our diversified cargo base gives us the Situated at the crossroads of the nation’s know-how to cater to the unique needs of rail and highway network, JAXPORT terbreak bulk and heavy-lift customers. Cargo minals are serviced by I-10, I-95 and I-75, gets in and out without delay, saving our and the city has 36 daily train departures JAXPORT customers time and money.” via CSX, Norfolk Southern, and Florida East BY THE NUMBERS Coast Railway. INVESTING IN THE FUTURE 1 Million A wide-ranging effort is underway to BREAKBULK CARGO square feet of enhance infrastructure at Blount Island and JAXPORT has decades of experience on-dock warehouse Talleyrand terminals. Upgrades to wharves, handling fertilizer, metals, forest products, space on-dock rail and terminal pavement areas perishables and other breakbulk. The port are under construction. These capital boasts more than 1 million square feet of 3 improvements – made possible by $100 on-dock warehousing storage and more Interstates as close million in federal and state funds – enable than 3 million cubic feet of on-dock refrigeras one mile JAXPORT to continue to build the port of ated space, with millions of square feet of from the terminals the future. additional space are located within minutes The Florida Department of Transportaof port terminals. JAXPORT’s equal balance 36 tion, nationally recognized for its innovative of imports and exports provides backhaul Daily trains programs, has invested more than $1.2 opportunities for importers saving money via three railroads billion in JAXPORT and the region during and maximizing transportation costs. the past five years, and has pledged an 40 additional $1 billion to local infrastructure HEAVY LIFT AND Ocean carriers that call projects. PROJECT CARGO on JAXPORT The recently rebuilt heavy lift cargo CUSTOMIZED berth at JAXPORT’s Blount Island Marine 100+ Million SHIPPING SOLUTIONS Terminal ranks as one of the nation’s highsquare feet of JAXPORT’s dedicated sales team and est weight-bearing capacity docks, offering industrial space port partners offer customized shipping up to 1,800 pounds per square foot of load in Northeast Florida solutions tailored to the efficient handling capacity and rail capability up to 78 kips of breakbulk, heavy lift and project cargo. per axle. JAXPORT has the highest and Learn more at JAXPORT.com/cargo. widest cargo clearance available for port access by rail on CSX’s national system: 20 feet high and 13 KEY INFORMATION feet wide. Northeast Florida’s skilled workforce offers a vari• Experience handling all types of breakbulk cargo ety of labor options, including highly trained master riggers • Multiple skilled labor options available specializing in heavy lift and project cargo. • Outstanding interstate access and choice of rail Skilled labor has long been the region’s clincher for • Strategically located in the southeastern corner of the U.S. specialized cargo movements. “Experience is key. We • Competitive transit times to/from key markets

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SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF GALVESTON The Port of Galveston is one of Texas’ major seaports. As a self-supporting enterprise not relying on any local tax dollars for operations, the Port generates current annual operating revenues of approximately $24.7 million, and provides an annual estimated economic impact to the State of Texas of over $3.82 billion. The Port of Galveston, a Landlord Port with facilities and property approximating 850 acres on Galveston Island and adjacent Pelican Island, facilitates the movement of a diverse mix of domestic and international cargoes that deliver value to the region and the state. Situated on the Gulf Intracoastal Waterway and the Interstate Highway System (I-45), the Port is also served by the two major western Class 1 railroads, the BNSF Railway Company and the Union Pacific Railroad. The Galveston Ship Channel has an authorized depth of and is currently maintained at 45 feet, with channel widths up to 1,200 feet. The Port serves the cargo, cruise and offshore oil and gas industries simultaneously. One of the top fifty ports in the nation and one the busiest seaports in Texas, the Port moves an

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average of 6.7 million short tons of cargo each year. This includes export grain, fertilizer and other dry and liquid bulk products, wind turbine towers, blades, nacelles and other components, high and heavy cargoes, project cargoes, new, used and personally owned vehicles, agricultural machinery, construction equipment and numerous other types of roll-on/roll-off cargoes, household goods, refrigerated fruit and produce, liner board, military cargo, livestock and some containerized cargo. The Port maintains Roll-On / Roll-Off (Ro-Ro) terminal facilities in both the east and west end areas of the Port, currently serviced by six regular Ro-Ro shipping lines. Nearly all of the Port’s facilities have direct access to the Port’s terminal railway services, Galveston Railroad, LP, which interchanges with the Class 1 railroads. The Port of Galveston is also the Grantee for Foreign-Trade Zone (FTZ) No. 36, an Alternative Site Framework (ASF) Zone with activated sites located on Galveston Island Port facilities, Pelican Island and other locations in Galveston County.

SEPTEMBER-OCTOBER 2015

Looking to add efficiency to your supply chain?

AN EFFICIENT PART OF YOUR SUPPLY CHAIN

Just add Galveston.

SAVE TIME AND MONEY

SAVE TIME AND Competitive Rates and Efﬁcient LaborMONEY.

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

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

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

PORTOFLONGVIEW.COM

T. 360-425-3305 F. 360-425-8650

WASHINGTONâ&#x20AC;&#x2122;S WORKING PORT

WORKING ADVANTAGES

The Port of Longview is the first full-service operating port with strategic transportation connections on the deep draft Columbia River

FASTER

CLOSER

2 Liebherr Mobile Harbor Cranes, 45 MTs Reach Stackers, multiple heavylift forklifts and trailer options all work together to keep your cargo on the move

5,000 miles and 20 days closer to Asia than gulf coast ports; 5 miles to Interstate-5; located at Columbia River Mile 66

SMARTER

BETTER

70 acres of open storage adjacent to berths; 25 acres of Foreign Trade Zone available; long-term storage options and a superior labor force

Served by Union Pacific and BNSF; Industrial Rail Corridor for direct access off mainline and 1,500 contiguous feet of on-dock rail

LEARN MORE AT PORTOFLONGVIEW.COM

PORT PROFILES | 2015 ADVERTISEMENT

THE PORT OF SAN FRANCISCO The Port of San Francisco, situated just inside the Golden Gate, is the breakbulk cargo gateway to the large Northern California market. With its convenient location just seven miles from the Pacific Ocean, the Port of San Francisco provides quick access to landside highway and rail connections for its import and export customers. The Port of San Francisco is the oldest port on the west coast and celebrated its 150th anniversary in 2013. The Port has seen the many evolutions in cargo shipping technologies during that long history. The advent of containerization rendered the Port’s finger piers obsolete for modern cargo shipping, though the port did build and operate container cargo terminals at Piers 80 and 94-96 in its industrial southern waterfront. Limitations on land space and rail connections were contributing factors for container carriers to

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discontinue service to the Port of San Francisco, and since 2005 the Port has focused exclusively on breakbulk, project, roll-on/roll-off and bulk cargoes. The Port’s Pier 80 breakbulk and general cargo facility is a 70-acre terminal that features four deep-water berths and four gantry cranes. The facility has over 60 acres of paved and secure laydown space and 400,000 square feet of on-dock transit sheds offering covered storage for weathersensitive cargoes. The Port of San Francisco’s facilities provide direct rail access to the Union Pacific Railroad network through San Francisco Bay Railroad’s switching services. Interstates 280 and 80 and U.S Highway 101 are each in close proximity to Port terminals, facilitating quick road access to and from inland destinations. Pier 80 handles commodities such as steel products, project cargoes, windmill parts, roll-on/ roll-off, boats and yachts, lumber and newsprint. The Port is looking to take advantage of recently completed rail improvements as well as planned future ones to attract additional rail-served cargo opportunities such as bagged and containerized bulk products and steel product distribution. The Port of San Francisco is continually working to take advantage of new cargo opportunities. Demand for bulk export facilities has grown recently. The Port plans to build a bulk terminal operator to develop a bulk shipping facility at Pier 96. The plans are for improving and expanding the Port rail infrastructure for receiving bulk product, then loading it onto ships from purpose-built covered storage facilities and ship-loading conveyor systems for shipment to destinations in Asia.

SEPTEMBER-OCTOBER 2015

BAY AREA PORT FOR BULK AND BREAKBULK

YOUR

THE PORT OF SAN FRANCISCO has full service ship repair, on-dock rail, four gantry cranes and tug and barge services — all available by schedule and for emergency back up.

• • • • •

Closest port to the Golden Gate Natural deep-water berths 400,000 square feet of covered storage Sixty-nine acres of paved open storage Direct access to freight rail and three major freeways

JIM MALONEY Maritime Marketing Manager (415) 274-0519 jim.maloney@sfport.com sfport.com/cargo

PORT PROFILES | 2015 ADVERTISEMENT

SC PORTS DELIVER ON BREAKBULK With multi-purpose rail-served facilities, experienced staff and on-terminal access to heavy-lift equipment, SC Ports Authority (SCPA) can handle your breakbulk needs. SCPA’s 10-year, $1.3 billion capital plan includes investments to grow its non-containerized cargo segment. The Columbus Street Terminal serves as the Southeast’s premier rollon/roll-off, breakbulk and project cargo terminal, handling growing vehicle volumes as well as large machinery, gas turbines, and specialized heavylift and project moves including power generation equipment. Dual-served, waterside rail allows for heavy-lift ship-to-rail and rail-to-ship transfers, complemented by proximity to interstate highways with impressive clearance capabilities for both truck and rail. SCPA also handles noncontainerized cargo at Union Pier and Veterans Terminals and the Port of Georgetown, and is served by most major project and roll-on/roll-off cargo carriers. Last fiscal year, SCPA handled 1.4 million tons of non-containerized cargo, with rising volumes driven by strong performance of state and regional manufacturers. The expansion of the state’s tire industry and automotive manufactur-

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ing, including recent announcements by GITI, Daimler and Volvo to locate or expand operations in SC, will be significant drivers of future project cargo growth. Currently the BMW manufacturing plant in Spartanburg, SC is a significant user of Columbus Street Terminal to export its X-series models, and SCPA also handles Daimler Sprinter vans and military personal vehicles. Power generation equipment is a strong market for SCPA, with routine weekly handling of 300 ton turbines and generators for customers including Siemens, Westinghouse and GE. SCPA supports heavy-lift customer needs with priority access to the Ocean Ranger, a heavy-lift barge crane with 500-ton lift capacity for heavier cargo, as well as JE Oswalt’s dedicated on-terminal heavy-lift equipment. SCPA’s heaviest move to date was a 1.4 million pound Westinghouse steam generator, off-loaded from the vessel directly onto a Schnabel railcar for transport. For non-containerized cargo customers, SCPA offers complete customization with the people, expertise, equipment and services for reliable handling of project cargo and breakbulk goods. From the smallest shipment to the heaviest load, SCPA keeps breakbulk freight moving.

SEPTEMBER-OCTOBER 2015

Rolling stock, metals, machinery, project cargo, forest products, and more. Weâ&#x20AC;&#x2122;ve expanded capacity with new on-terminal warehousing and rail infrastructure. Couple that with experienced, productive labor and South Carolina is an ideal fit for whatever you send our way.

breakbulk.scspa.com

breakbulk@scspa.com

843-577-8101

PORT PROFILES | 2015 ADVERTISEMENT

Port Freeport, Texas expanded infrastructure and capabilities.

TEXAS GULF COAST’S VIBRANT PORT FREEPORT OFFERS CUSTOMERS WORLD-LEADING ROLL-ON/ ROLL OFF AND PROJECT CARGO OPERATIONS With operations of a world class roll-on/roll-off carrier and the leading global industrial lift expert, Texas’ Port Freeport is indeed one of the Texas Gulf Coast’s most dynamic seaports, promising swift, economic movement of non-containerized and containerized cargos alike. Ro/ro leader Höegh Autoliners is benefitting from Port Freeport’s location directly on the Texas Gulf with activity including exports to Saudi Arabia of SUVs built at a Texas assembly plant. Asia imported cars, with sustained solid growth, is projected for both exports and imports of vehicle and oversized construction equipment. Port Freeport has completed multi-million dollar investment in infrastructure projects- including asphalt storage areas, security fencing and lighting and gate facilities - specifically supporting this activities, for Höegh. Their future expansions will include collaborating with auto-processing, standardbearer AMPORTS, an additional 150 acres, with two berths, one of 1,200 feet in length and the other 750 feet. The facility offers a processing building, a body shop, parts and car wash building and expanded storage slots. The vehicle terminal is within close proximity to vessel operations. The terminal has a dedicated clear-span receiving gate and office buildings. One of its unique features is the use of adjoining secure and unrestricted zones to allow drivers to deliver and receive vehicles without having to process TWIC cards on a 24/7 basis. Meanwhile, Mammoet USA South Inc., a unit of the world’s top industrial lift firm, is busy handling a full spectrum of project

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cargos- some weighing as many as 700 tons- at Port Freeport, in support of the region’s more than $30 billion of new and expanding petrochemical plants. Under construction is the on-port liquefied natural gas and gasification terminal of Freeport LNG Development LP. These facilities also are creating high demand for millions of tons of aggregate that annually move through Port Freeport for building of parking lots and laydown areas. Port Freeport this summer competed a $16 million expansion adding 20 backlands acres at its Berth 7, where two new 100-gauge post-Panamax container cranes, built by No. 1 global crane manufacturer Shanghai Zhenhua Heavy Industries Co. Ltd. (ZPMC), entered service in 2014. The first to use the new ship-to-shore cranes was Mediterranean Shipping Co., carrying Chiquita banana imports. Dole bananas as well come into Port Freeport from Latin America by way of separate long-term agreement. Since Port Freeport is right on the West Gulf Coast in the heart of the expanding Texas petrochemical industry, and has ready access to Interstate 45, shipments expeditiously move to and from inland markets, avoiding congestion and without having to make a protracted inland channel journey. Port Freeport is famous for our flexibility, customer service and competitive rates. Port Freeport is positioning to bring numerous further, critical enhancements to fruition over the next two decades, cementing its enviable status as a vibrant port dedicated to providing its customers with maximum efficiencies and genuine time and cost savings.

SEPTEMBER-OCTOBER 2015

STRATEGICALLY LOCATED Quick Gulf Access

Freeport

PORT PROFILES | 2015 ADVERTISEMENT

BUILDING UPON SUCCESS

PORT OF NEW ORLEANS BUILDS UPON RECORD BREAKBULK BUSINESS The Port of New Orleans is a deep-draft multipurpose port at the center of the world’s busiest port system, Louisiana’s Lower Mississippi River. Connected to major inland markets and Canada via 14,500 miles (23,335 kilometers) of navigable waterways, six Class I railroads and the Interstate Highway System, the Port of New Orleans is the ideal gateway for containers, chemicals, coffee, steel, project cargo, natural rubber, forest products, manufactured goods and more. “Shippers of such goods as steel, nonferrous metals, forest products and rubber, as well as heavy-lift project cargo, choose the Port of New Orleans because we offer logistical advantages unlike any other port in the world,” said Gary LaGrange, President and CEO of the Port of New Orleans. Due to the historic industrial expansions and new construction both on the Lower Mississippi River and along the Gulf Coast, Port of New Orleans stevedores are experiencing a real boost in project cargo.

RECORD CARGO GROWTH

In 2014, cargo worked at the port totaled 8.37 million tons, the highest total since 2000. Leading the growth, imported steel rose 101.6 percent over the year-earlier period to 3.54 million tons. Overall breakbulk tons totaled 3.76 million tons, up 51.7 percent, while container volume topped 4.61 million tons, up 13.5 percent compared to the prior year. “At the Port of New Orleans, we are built for breakbulk, and our continued drive to provide value-added services will ensure our exceptional abilities to handle breakbulk and project cargo for generations to come,” LaGrange said. Terminal operators Coastal Cargo, Empire Stevedoring, New Orleans Cold Stage, Ports America and Seaonus Stevedoring-New Orleans offer a wealth of experience and decades of commitment to the Port of New Orleans shippers. Gaining recognition for its premium connectivity, worldclass customer service and strategic location, the Port of New Orleans was named Business Facilities’ top Logistics Leader in 2013 and Port Operator of the Year by Lloyd’s List in its 2014 top North American Maritime Companies.

The Port of New Orleans recently completed two of the heaviest project cargo lifts in its history successfully discharging a 718-ton, absorption tower and a 790-ton ammonia converter from ship to barge. On Jan. 20 the Port of New Orleans handled its largest project cargo piece to date at the Louisiana Terminal, operated by Coastal Cargo. Dan-Gulf Shipping was the appointed agent for the record-breaking 790-ton, 128-foot-long project piece that journeyed to New Orleans from Jebel Ali, Dubai, aboard the Palabora. Operated J. Poulsen Shipping, the Palabora became the second vessel in one week to discharge project cargo that weighed more than 700 tons at the Port of New Orleans. Dan-Gulf officials were pleased with the success and efficiency of the operations at the port. “As agents, it was our pleasure to coordinate the discharge operation between the vessel operators in Denmark and local entities such as the Port of New Orleans, Coastal Cargo of Louisiana and the receivers,” said John-Paul Gehrkin, Operations Manager for Dan-Gulf Shipping. “We are honored to be a part of such a historic event and hope to continue that tradition as more large-project cargos come to the Port of New Orleans.” Just eight days prior to the record move, Fracht USA/ Germany, a global freight forwarder, successfully handled the 718-ton, 164-foot-long absorption tower, which was destined for the CF Industries plant project in Donaldsonville, La. The SAL Amoenitas arrived at the port’s Louisiana Avenue Terminal Jan. 10 after a 45-day trip from Shanghai, China. The lift from ship to barge was completed Jan. 12 by SAL Heavy Lift, Fracht, Roll-Lift, McDonough Marine and terminal stevedore Coastal Cargo Co. “This is great business for Coastal as well as for the Port of New Orleans,” said Dan Haeuser, President and CEO of Coastal Cargo Co. “Project cargo of this type and magnitude has not been traditional in the Port of New Orleans. It’s wonderful to have this type of diversity added to the Port’s cargo mix.” Fracht officials said the successful move took more than a year of careful planning.

MEGA PROJECTS ABOUND

Louisiana, the nation’s No. 1 producer of crude oil and the second-highest producer of natural gas, is attracting mega projects. In the past several years, US$80 billion in capital infrastructure investments have been announced in Louisiana, including an estimated US$21 billion investment by South Africa-based Sasol to build an ethane cracker as well as an integrated gas-to-liquid (GTL) facility. Several other projects coming to Louisiana boast a capital investment of more than US$1 billion each, including a US$2.1 billion expansion of CF Industries’ Louisiana nitrogen complex in Donaldsonville and a $1.2 billion methanol manufacturing plant in Plaquemines Parish by Castleton Commodities International. A28 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

OUR

CAPABILITIES RUN DEEP. In New Orleans, we’re known for letting the good times roll. But to our customers, our capabilities are as world-class as our food and music. The Port of New Orleans is America’s most intermodal port. We connect you to major inland markets and Canada via 14,500 miles of waterways, all six Class-I railways, 50 ocean carriers, 16 barge lines and 75 truck lines. The Clarence Henry Truckway, a dedicated two-lane roadway on Port property, makes fast transit times even faster. The Port also offers near-dock rail and ship-to-barge services. Looking forward, the Port of New Orleans is always innovating and expanding, so you can comfortably do business here.

You’ll be glad you came.

portno.com

PORT PROFILES | 2015 ADVERTISEMENT

THE NORTHWEST SEAPORT ALLIANCE GATEWAY TO SOLUTIONS FOR YOUR BREAKBULK AND RO/RO SHIPPING NEEDS

If you ship it, we can handle it. Breakbulk or project; high-wide-and-heavy, ro-ro/lo-lo, or non-wheeled. And we have a proven record of success moving all types of cargo with precision and speed. Northwest Seaport Alliance terminal facilities, carriers and ports of call provide unlimited options and flexibility to suit your unique supply chain needs. And our commitment to working hand-in-hand with breakbulk customers to provide cost-effective, innovative shipping solutions is unparalleled in the industry. At the end of the day, it’s all about helping you, the shipper, get the job done.

MAKE OUR COMPETITIVE ADVANTAGES YOURS: • Better connections: We are the closest U.S. port to China and Northeast Asia. Seven of the world’s leading breakbulk and auto/ro-ro carriers offer regular service between Northwest Seaport Alliance harbors and major ports of call in Asia, Europe and Oceania - and via transshipment to anywhere in the world. Other carriers call on inducement. • Breakbulk handling expertise: Our labor is highlyskilled and experienced, with specialized training for damage-free and secure handling of all types of breakbulk and ro-ro cargo; • Superior intermodal service: Convenient on-dock rail is available at EB-1, our primary breakbulk terminal, with near-dock access at Terminal 7. BNSF Railway and Union Pacific Railroad both provide regularly scheduled

transcontinental rail service to agricultural and industrial markets in the Midwest and via interline connections throughout the U.S. Our facilities are adjacent to the railroad mainline, saving additional time and money on your rail shipments • Convenient location: Our terminals are located within minutes of interstate highways for over-the-road shipments. A heavy-haul corridor in the Tacoma harbor helps expedite movement of overweight freight within the Port Industrial Area. • Strategic hub for Alaska projects: We are the closest U.S. port to the Alaska market. Jones Act carriers Matson, Totem Ocean Trailer Express (TOTE) and Alaska Marine Lines offer regular weekly container service to key Alaska population centers; barge service to remote locations in Alaska and the Arctic from the Seattle harbor. And our available land for project cargo staging and handling, and experience with energy, forestry and mining equipment make us a natural choice for Arctic resource development projects.

FOR MORE INFORMATION:

• Call our breakbulk specialists at 253-592-6792 or go to www.nwseaportalliance.com to learn more about how we can help with your breakbulk shipping needs. • Submit a Request for Quote to https://www.nwseaport alliance.com/operations/breakbulk-quote

ABOUT THE NORTHWEST SEAPORT ALLIANCE The Northwest Seaport Alliance brings together two of the premier harbor facilities in North America to form a single, integrated gateway for marine cargo. The ports of Seattle and Tacoma (Washington State, USA) joined forces in August 2015 to unify management of their marine cargo facilities, thereby strengthening the gateway and attracting more marine cargo and jobs for the Puget Sound region. The alliance is a port development authority governed by the two ports as equal members, with each port acting through its elected commissioners. The Northwest Seaport Alliance PO Box 2985 Tacoma, WA 98401-2985 Phone: 800-657-9808 URL: www.nwseaportalliance.com

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SEPTEMBER-OCTOBER 2015

BOLD STEP The commissioners of the ports of Seattle and Tacoma decided to do something never done before. They decided to combine the strengths and resources of the two ports instead of competing with each other. The Alliance was formed to forward the highest standards of operational excellence, optimize strategic and infrastructural investments, offer better, complete value to the customers, benefit the community and consolidate negotiating power on state and federal levels. The result is the 3rd largest gateway in North America. Ranked #1 for ease of doing business with. Example is set.

Questions? nwseaportalliance.com

The Northwest Seaport Alliance is a marine-cargo operating partnership of the Port of Tacoma and the Port of Seattle

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF VANCOUVER USA – THE ROUTE TO SUCCESS

In 1804, Lewis and Clark formed an expedition to find a viable route across the western half of the continent to the Pacific Ocean and open up possibilities for commercial trade. Through its prime location, logistics expertise and long-term connections with the people and resources that streamline importing and exporting, the Port of Vancouver USA is carrying on this tradition and making it infinitely easier, faster and more cost-effective to ship goods to and from the U.S. Midcontinent and Pacific Rim.

effective rates. The port has nearly completed a $275 million rail expansion that will allow trains carrying millions more tons of cargo annually to move easily through the port and reduce rail mainline congestion by as much as 40 percent. Terminal 5, the port’s newest shipping terminal, offers unit train-loading capability and features a dedicated track specially designed to load cargo to rail for transport to the U.S. Midcontinent and Canada. The Port of Vancouver makes moving products via heavy-haul trucks easy, too. Its location near key freight corThe Advantaged Supply Chain™ - the most direct, ridors, including I-5 and I-84, provides quick access to major uninterrupted route from the Pacific Rim to the U.S. north-south and east-west routes. Transloading goods to Midcontinent and Canada barges on the Columbia River ensures easy access to inland Efficient trade routes to and from the U.S. ports serving the Midcontinent. Midcontinent and Pacific Rim have never Minimize handling times and costs with been more critical as shippers seek to cut Visit our booth #439 the port’s streamlined ship-to-rail transfer costs and save time when importing and at the Breakbulk with state-of-the-art cargo loading assets; exporting goods. That’s why many of them Americas Show in 54 acres of land for on-port storage; specialare partnering with the Port of Vancouver. Houston, TX or call ized equipment, including two 140-metric The Port of Vancouver, located only 106 Heinz Lange, ton Liebherr mobile harbor cranes; and river miles from the Pacific Ocean, is situated on Sales Director, at highly skilled equipment operators. a 43-foot deep-draft shipping channel. It spe360-608-1799. The port also has a staff of logistics experts cializes in handling break bulk, bulk and project who work closely with customers to plan the cargos, with dedicated facilities for shipping best routes that save time and cut costs. wind energy components, automobiles, grains, wood pulp, min“We’ve made numerous strategic moves in the last several eral ores, and agricultural commodities, among others. years to invest in the equipment, people, facilities and infraThe port’s strategic advantage is that it can offer its cusstructure to ensure our customers can get their products to tomers the Advantaged Supply Chain, the most efficient, market stress-free,” said Alastair Smith, chief marketing and direct, uninterrupted route between the Pacific Rim and the sales officer at the Port of Vancouver. “It’s paid off through satU.S. Midcontinent and Canada. Customers save almost half isfied customers who tell us repeatedly that they appreciate our the time – and thousands of dollars – compared to shipping high level of service and logistics expertise.” through Gulf ports. Companies that partner with the Port of Vancouver USA not Two Class 1 railroads – BNSF Railway and Union Pacific only save time, they also cut costs and ship smarter, taking the Railroad - serve the Port of Vancouver and offer costworry out of shipping across the continent or across the ocean.

Loading modules to barge at the Port of Vancouver USA, bound for Canada via The Advantaged Supply Chain™.

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Customers ship smarter and faster via the Advantaged Supply Chain™, the most direct, uninterrupted route from the Pacific Rim to the Port of Vancouver USA and through to Canada or the U.S. Midcontinent. SEPTEMBER-OCTOBER 2015

5,800 MILES

CLOSER. THE MOST DIRECT ROUTE TO A BETTER BOTTOM LINE.

6 210

DAYS U.S. WEST COAST TO MIDCONTINENT

METRIC TONS TANDEM LIFT CAPABILITY

610K SQ. FT. WATERFRONT WAREHOUSING

SEE US AT BREAKBULK AMERICAS 2015, OCT. 5-8, HOUSTON, BOOTH NUMBER 439 OR VISIT PORTVANUSA.COM.

A direct, uninterrupted route from the Pacific Rim to the U.S. Midcontinent and Canada means moving cargo more efficiently. We keep you moving with heavy-lift capabilities, no congestion, and connections that enhance transactions and freight mobility. Itâ&#x20AC;&#x2122;s a direct route to the Midcontinent. And a straight shot to bigger profit margins.

THE PORT OF

Possibility

PORT PROFILES | 2015 ADVERTISEMENT

PORT TAMPA BAY There’s a lot going on at Florida’s largest seaport and one of the most diverse ports in the US. Shippers, freight forwarders, 3PL’s and manufacturers alike are all looking for new, faster, cheaper and better alternatives to get product to market and with our expanded infrastructure and intermodal capabilities they’re now looking at Port Tampa Bay. Port Tampa Bay is excited about the opportunities in store for one of the region’s largest and most important economic engines that generates $8 billion in economic impact and nearly 100,000 jobs throughout the region per year. With a population of 8 million people and 60 million tourist a year, the Tampa/Orlando I-4 corridor region is a huge consumption market (the 10th largest economy in the US with a GDP of over $281 billion), and home to the largest concentration of distribution centers in the State of Florida. Tampa’s strategic location in close proximity to an expanded Panama Canal makes it very well positioned to benefit from expanded trade with Asia and the vibrant markets of Latin America in its backyard. We handle a wide variety of break bulk cargoes including steel, forest products, bagged cement and fertilizers, not to mention our expanding container, Ro-Ro and bulk business. Our capacity to handle general cargo, containers and RORO cargoes includes nearly 8,000 feet of berth, nearly one million square feet of warehouse space, a 100 ton Gottwald mobile harbor crane and three gantry cranes with two new post Panamax cranes due to arrive in 2016. There are projected to be 3.5 million new vehicles produced in Mexico in 2015, and 5 million by 2020*. With this projected increase in volume, auto-manufacturers are looking at new alternatives for a reliable and fast supply chain solution. Port Tampa Bay provides a better, faster, smarter shortsea alternative for this growing trade lane that will service high demand markets in Florida (3rd largest state by population in the U.S.) and the East Coast. Short sea transit through Tampa allows manufacturers an alternative to longer overland routes from Mexico, thereby reducing cycle time and delivery to market. We have created a new supply chain alternative that puts us in the game. Our capability has now increased tremen-

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dously with a 100,000 square foot building for auto processing located on a 100 acre Ro-Ro dedicated terminal, thanks to our new partnership with AMPORTS. Together with CSX and a new dedicated truck ramp connecting Port Tampa Bay to the U.S. interstate system less than one mile from the Ro-Ro dedicated terminal provides for quick and efficient access to markets across Florida and the East Coast. In addition to reducing delivery times and providing the very best short sea alternative from Mexico, auto manufacturers will find that Port Tampa Bay’s proximity to the Caribbean and Latin America creates beneficial routes for export markets too. Being the closest full service U.S. port to the Panama Canal, Port Tampa Bay provides a natural short sea advantage throughout the Caribbean basin. With significant parcels of land available for development adjacent to deep-water with excellent Interstate highway and rail access, Tampa is uniquely positioned in Florida and the Southeastern United States to attract investment in industrial development and manufacturing. Port Tampa Bay’s expanded Foreign Trade Zone (FTZ) opportunities assists companies located in Tampa Bay and along the I-4 Corridor with streamlining the process and minimizing the costs associated with qualified importing, exporting, manufacturing, and warehousing and distribution, coupled with our available real estate, makes for a powerful combination for importers and exporters looking to take advantage of reduced or even eliminated U.S. Customs duties moving through the zone. The jurisdiction of FTZ No. 79 covers a 60-mile radius or a 90-minute drive time from the location of Port Tampa Bay. Mark your calendars for the 27th Annual Tampa Steel Conference, held in Tampa and hosted by Port Tampa Bay and title sponsor Ports America, February 17-18, 2016. The conference is a premier event within the steel industry, consistently featuring the industry’s most dynamic and knowledgeable presenters and attracting a diverse array of professionals representing ports, logistics, supply chain management and various transportation modes. For more information and updates visit www.tampasteelconference.com.

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF STOCKTON ADVANTAGES The 1,403 acres that compose the West Complex (formerly Rough and Ready Island) was transferred from the U.S. Navy to the port in 2001 increasing the size of the port to more than 2,000 acres. Since the transfer of the land, the port has invested more than $80 million in infrastructure upgrades (docks, roads, bridges, and utilities) to expand its industrial capabilities and services, and incent industrial oriented companies to locate their businesses at the port. This upgrade and expansion translates into millions of dollars of savings for new development projects. Deepwater Channel/Dock Access Located 75 nautical miles from the Golden Gate Bridge, the Port of Stockton is serviced by the Stockton Deepwater Ship Channel with a project depth of 35 feet MLLW. With 15 berths covering more than 11,000 lineal feet and more than four miles of on-dock rail, the Port of Stockton is well suited to handle dry bulk, liquid bulk and break-bulk cargoes. PT Zoning Designation The port is uniquely zoned. The PT zoning designation only exists for the port, whereby most industrial uses are byright (no discretionary action required by the city).

Traction Company. The port has been improving and adding rail since 2001 and has more than 90 miles of operating track. Additional advantages include: • Easy access to State Route 4, I-5, and the Crosstown Freeway • Multiple sources of water (Cal Water, riparian, and groundwater) • State and Local political support for industrial development • Levees Certified for 100-year floodwaters • Adequate fill material available at no cost for tenant projects (transport costs only)

PORT INFRASTRUCTURE PROJECTS 700 Classification Yard Rail Infrastructure Project Project Overview: This project will rehabilitate East Complex Rail Yard which consisted of nine tracks and bring the East Complex Rail Yard back to full capacity. This Project will add 4,000 foot long tracks next to the existing 4,000 foot tracks. Schedule: Completion expected December, 2015 Funding Sources: RRIF Loan

Programmatic EIR – $2,000,000 Originally completed in 2004, the port spent more than two million dollars on a Programmatic EIR to address build out of the West Complex. There are large brown field and green field parcels available for development. In most cases, the EIR baseline information can be augmented to address new projects at a minimal cost and reduced time frame. The port’s Board of Port Commissioners is the lead agency for CEQA processing and approval.

BNSF Mainline Underpass Project

New 60KV Substation – $5,000,000 In 2009, the port invested more than five million dollars on the installation of a new 60kV substation. The new substation has a 25MW capacity expandable to 50MW when needed. The port is the Municipal Electric Utility on the West Complex.

Navy Drive Widening Project

Established Security Services – $2,000,000 annual expenditure There is a two million dollar plus annual budget for ongoing security at the port. The majority of the West Complex is limited access only, with 24-hour armed security, perimeter fencing and CCTV.

Schedule: Construction 2016

Foreign Trade Zone #231 The port is grantee of FTZ #231 consisting of more than 4,000 designated acres for FTZ uses. The FTZ can reduce or eliminate the duty on many imported and exported goods and materials. Railroad Service from Both the Union Pacific and BNSF The port is served by both Class 1 railroads (BNSF and UP) with local traffic managed by the Central California A36 BREAKBULK MAGAZINE www.breakbulk.com

Project Overview: The project will construct a new underpass structure to accommodate a future four-lane roadway and provide PUC vertical clearance, and construct an additional mainline for the Burlington Northern Santa Fe (BNSF)/Amtrak share track. Schedule: Completion expected January, 2016 Funding Sources: RTIF local funds, HRCSA Prop 1B State Funds Project Overview: The Navy Drive Widening Project would increase the lanes on the existing road from two lanes to potentially five lanes. Navy Drive is approximately ¾ miles long with a project / construction total length of one (1) mile. Funding Sources: EDA Federal Grant – TCIF Prop 1B state grant. Navy Drive Bridge Replacement Project Overview: The proposed project is located in the alignment of Navy Drive at the crossing of the San Joaquin River connecting the Port of Stockton East and West Complexes. The Navy Drive Bridge will become the primary access bridge (four-lane facility) to the Port of Stockton West Complex pending construction of the SR 4 Crosstown Freeway Project. Schedule: Construction 2016 Funding Sources: BRLS 6349(002) Federal Highway Administration SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

SOUTH JERSEY PORT CORPORATION South Jersey Port Corporation, an agency of the State of New Jersey with a core mission to maximize regional deep-sea maritime assets to foster economic growth and job creation in southern New Jersey, was created by the State to build and operate marine terminals in the southern seven counties of the state. The SJPC currently manages and operates two deepwater marine terminals in the City of Camden on the Delaware River. Twelve miles to the south of Camden, the SJPC is constructing a deepwater omniport with dockside rail, high-speed cranes and 190 acres of land in Pauls-

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boro, NJ. The Paulsboro Marine Terminal, the first general cargo marine terminal to be constructed on the Delaware River in 50 years, is projected to open for operations in 2016. The SJPC the Salem Marine Terminal in the City of Salem City on the Salem River, 18 miles from the ocean. The SJPC also serves as the grantee of Foreign Trade Zone #142 which includes the “general purpose” FTZ “sub-zones” in both Salem and Millville, NJ. With 400 ships and 4 million tons of cargo annually, the SJPC is essential to Northeast U.S.’s economy and it is a vital link in the global supply chain.

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF BROWNSVILLE Opened in 1936, the Port of Brownsville is the only deep-water seaport located at the southernmost tip of Texas at the westernmost terminus of a 17 mile (27 Kilometers) channel that flows into the Gulf of Mexico. The city of Brownsville, Texas, is two miles (3.3 kilometers) to the southwest and lies adjacent to the Rio Grande River, providing a convenient gateway to Mexico. The Port is a major center for intermodal transportation and industrial development facilitating the movement of cargo worldwide by offering vessel, barge, rail, truck, and pipeline transportation. The Port is the largest land-owning public port authority in the nation with 40,000 acres of land. The Port’s infrastructure includes 13 cargo docks, 5 liquid cargo docks, 635,000 square feet of covered storage and approximately 3 million square feet of laydown and/or open storage. Our newest projects include the construction of a new general cargo dock, purchase of a new multi-million dollar mobile harbor crane, expansion of liquid cargo terminal operations, expanded rail services, development and construction of a new liquid cargo dock and progress on deepening the Brownsville Ship Channel to 52 feet. As a bulk commodity port, the Port of Brownsville has developed a versatile marine terminal operation for both liquid and dry bulk cargo. Petroleum products, gasoline, diesel, steel bulk materials, ores, scrap, sand, windmill components, limestone and heavy naphtha are some of the many commodities handled at the Port. The land transportation system of Mexico is linked with the world via ocean going vessels arriving and departing at the Port of Brownsville and via barge to the Gulf Intercoastal Waterway and the Inland Waterway System of the U.S. via the Brownsville Ship Channel. Other Port services include construction and refurbishing of offshore drilling rigs, container service, bulk terminaling for liquids, ship dismantling/recycling, break bulk/heavy lift/project cargo, steel fabrication, grain handling and storage, crane services, and towing and tug services. The Brownsville & Rio Grande International Railway (BRG) has provided Port customers efficient

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and reliable railroad service since 1984. In 2014, OmniTRAX began management of operations of the railroad offering 24/6 operations with qualified personnel and an extensive fleet of locomotives. BRG interconnects with Union Pacific Railroad (UP) and Burlington Northern Santa Fe Railroad (BNSF) for northbound cargo, and with Kansas City Southern De Mexico (KCSM) for southbound cargo. Additionally, OmniTRAX and the Port are collaborating to develop an industrial hub consisting of 1,200 acres. The GEOTRAC Industrial Hub at the Port of Brownsville will offer master-planned industrial park sites with easy access to heavy-haul/overweight highway system, rail services, deep-water seaport and Gulf Intercoastal Waterway access for full-service freight connectivity nationally and internationally. The Port of Brownsville is Grantee and Operator of Foreign Trade Zone (FTZ) No. 62. FTZ No. 62 is one of the leading Foreign Trade Zones in the nation having ranked in the top three FTZs nationwide since 2012 for exports to foreign countries. The Port exported commodities valued over $3 billion. The Port of Brownsville is also home to 5 of 6 Navy-approved ship recyclers for retired aircraft carriers. These Vietnam-era aircraft carriers include the USS Forrester, USS Saratoga, USS Constellation and most recently, the USS Ranger featured in the movie Top Gun. The disposal of these vessels at the Port’s recycling facilities have resulted in hundreds of new jobs and significant capital investment. Lastly, the Port of Brownsville is emerging as a strategic location for U.S LNG export projects. The Port’s proximity to the large natural gas resources of the Texas Eagle Ford Shale, availability of land and access to a deep-water ship channel make the Port an ideal location for this type of development. Currently, 3 projects are seeking federal permitting that would create thousands of temporary construction jobs and hundreds of permanent high-paying jobs once complete. If successful, these project would commence construction in 2017 and begin to export liquid natural gas in 2020. For additional information about the Port of Brownsville, visit: www.portofbrownsville.com

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF PORT ARTHUR The Port of Port Arthur is the most modern port in North America for breakbulk and project cargo. Ship owners and operators have described it as “The Ultimate Direct Discharge Facility”. Having handled ninety percent of the modular units for the recent Motiva plant expansion, the Port is well equipped to handle large dimensional and heavy pieces of equipment. The length of Berth 1 and 2 is 1450 feet with a 100 foot wide working apron. It also has three flush rail tracks capable of holding sixty railcars. The apron has a capacity of 800 pounds per square foot. Berth 3 – 4 – 5 is 1700 feet in length with a 90 foot wide working apron and 1500 pounds per square foot with three sets of flush rail tracks capable of holding 120 railcars. Berth 3 also has a 82 foot RO/RO dock for fix stern. All berths are ideally situated to accommodate ship owners and charters seeking a lay berth. The Port has twenty acres of asphalt surface with halogen lighting and eight foot barbed wire fencing. Protected by over 100CCTV cameras, some with infra ray, with backup DVR enhances security. The Terminal is also equipped with two natural gas gen-

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erators (520KW & 250KW) in addition to a 500 gallon diesel generator. The Port is located 19 miles inland from the Gulf of Mexico (less than 2 hours from pilot boarding to berth). The terminal is served by the Kansas City Southern and Union Pacific Railroads with easy access to major interstate highways. The transit sheds have enclosed rail/truck loading and unloading docks; 24’x 36’ hangar style door with 36’ x 12’ metal grating at each entrance. Stacking height is between 20’ to 32’ with floor capacity from 800 psf. to 1500 psf.

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF BILBAO – As the main northern Spanish port for breakbulk, heavy-lift and project cargoes, Bilbao combines its populous and industrial hinterland with the best variety of state-of-the-art facilities, excellent connections within the hinterland and a wide range of logistics services offered by Port Community operators. The industrial environment of the Port of Bilbao’s hinterland comprises manufacturers of capital goods and special loads such as boilers, transformers, hoppers, presses, turbines, coils, reel and sheet steel, buses, trains and subway wagons, propellers for boats, heavy machinery, wind turbines and many more. The capital goods producers within Basque Country’s immediate hinterland: • Represent 90 percent of Spanish production. • Have annual turnover of about €1.5 billion. • Carry out about 75 percent of production in the Basque Country. • More than 90 percent of the production are exports. • their capital goods production ranks No. 3 in Europe and No. 9 in the world. Of the Basque Country 2014 exports, 61 percent of tonnage was transported by sea, with the Port of Bilbao playing an important role.

Bilbao

BASQUE COUNTRY – SPAIN Port of Bilbao companies search for innovative solutions and work together to respond to the changing needs of the market. Uniport, which represents the cluster of ports within the Port of Bilbao, promotes among other industrial clusters the necessity expertise in logistics while the product is being designed, before it becomes a good. We provide solutions for every aspect of breakbulk cargo logistics, from sea chartering to special packaging, through cargo handling, storage and distribution to value-added services. Furthermore, logistics operators can find many advantages at Bilbao port such as physical capacities (drafts up to 22 meters, available dock surfaces) and all kind of port facilities: • Ship-to-shore cranes up to 65 tons. • Mobile port cranes up to 140 tons. • Five roll-on, roll-off ramps up to 250 tons. • Rail link to/from all docks. • Bonded warehouses for breakbulk, project and bulk cargoes. The port business community is continually developing new solutions and new improved services in order to provide their customers with the opportunity of managing their ships and carry their cargos via PORT OF BILBAO.

... a new port for your projects

worldwide heavy lift & project cargo

Alda. de Urquijo, 9 1º dcha. 48008 Bilbao - SPAIN T +34 94 423 6782 - F +34 94 423 5403 info@uniportbilbao.es www.uniportbilbao.eus www.breakbulk.com BREAKBULK MAGAZINE A43

PORT PROFILES | 2015 ADVERTISEMENT

PORT CORPUS CHRISTI Port Corpus Christi, the fifth largest U.S. port in total tonnage, sits on the mid Gulf Coast of Texas nestled in the beach city of Corpus Christi. Port Corpus Christi has been investing in projects that keep the port in global competition. The Port’s Joe Fulton International Trade Corridor, consisting of 12 miles of roadway and seven miles of rail line, connects the Port to Interstate Highway 37 and Highway 181. The Port recently completed Phase I of the Nueces River Rail Yard, consisting of four parallel ladder tracks for a total yard capacity of 15,400 feet and 223 rail cars. Phase II is currently under construction to increase the rail yard to eight, 8,000-foot-long unit train sidings. The Nueces River Rail Yard utilizes $32 million in TIGER grants and $23.8 million cost-share from Port Corpus Christi, Union Pacific, Kansas City Southern, Burlington Northern Santa Fe, and Genesse Wyoming. General cargo docks at Port Corpus Christi have experienced a rise in activity as several new port industries building multi-million dollar facilities within the area are

receiving oversized components for construction. Having one of the heaviest docks in the Gulf of Mexico, with 1200psf capacity, has made Port Corpus Christi suitable to handle the 300+ metric ton components for the new facilities. In addition, wind energy components continue to steadily flow through the docks, arriving via rail to the port docks for export, and/or via vessel imported from Asia, Europe and South America. The three Class I rail entities servicing the port have played a key role, not only with the energy and machinery cargoes, but also with bulk-aggregate materials required for construction and oil industries. Within Port Corpus Christi’s 2020 Strategic Plan, the port is planning for continuous growth and is preparing additional lay down areas in addition to pursuing the construction of a multi-purpose facility which would allow the port to enter into the container and regular shipping services. Port Corpus Christi’s clean air, clean water, rail, highway connectivity, labor force and strong regional unity make it the ideal location for operations. Join the boom.

Take a load off.

Brea Americ kbulk as Come s Oct. 5-8. ee u Booth 6 s in 15

With a 45' channel authorized and permitted for 52', dockside truck and rail transfer, BNSF, KCS and UP on-site, FTZ #122 and the shortest ship mooring time in the Texas Gulf, we get straight to business. Call on your Texas partner.

businessdevelopmentdpt@pocca.com

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www.portofcorpuschristi.com

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

PORT OF WILMINGTON, DELAWARE Services: 24/7 Marine terminal operations with extensive project handling experience – including wind; 2 independent stevedores; prompt & efficient State permitting & police escort services; logistics coordination; Class 1 rail; local towing co. & ship agencies; onsite CBP & USDA; FTZ Capabilities: 6 open, project “friendly” berths; heavy lift capacity to 100 MT’s; 250,000 sf rail served dry warehouse space; 59 acres outside storage; RoRo service - high ‘n heavy cargo Location: Central mid-Atlantic location & 1st deep water terminal on Delaware River; immediate access to interstate highway – I-495/I-95 History, Impact & Metrics: Established 1923; Economic engine for the State of Delaware – 5.600 family sustaining jobs; warehouse operator & direct employer; 400 vessel calls & 6m tons annually; C-TPAT; AWEA www.PortofWilmington.com

The “project friendly” port in the Mid-Atlantic!

www.breakbulk.com BREAKBULK MAGAZINE A45

PORT PROFILES | 2015 ADVERTISEMENT

PORT MANATEE Port Manatee is one of Florida’s largest and fastest growing deepwater seaports. Located in the eastern Gulf of Mexico at the entrance to Tampa Bay, Port Manatee handles a variety of bulk, break-bulk, containerized and bulk and project cargoes. With its proximity to the Panama Canal, Port Manatee offers superior intermodal connectivity, competitive rates and a prime location with nearly 5,000 acres of surrounding green space ripe for development. The port features approximately 70 acres of lay-down area, one million square feet of public warehouse and office space, and 207,000 square feet of refrigerated space including 30,000 square feet of freezer space. Port Manatee has two mobile harbor cranes with the highest tandem lift capacity of any Florida Port Authority, 10 40-foot-draft berths and its foreign trade zone designation is No. 169. With room to grow, extensive development incentives and a growing consumer base at hand, Port Manatee offers significant benefits to current and potential customers, manufacturers, shippers and ocean carriers.

A46 BREAKBULK MAGAZINE www.breakbulk.com

SEPTEMBER-OCTOBER 2015

PORT PROFILES | 2015 ADVERTISEMENT

STEWART WORLD PORT Stewart World Port offers all-in pricing with no surprise fees. Your cargo – your needs – your unique solution. Stewart World Port is a Canadian company dedicated to responsible port development, management, and operations in Stewart, British Columbia. The multipurpose port facility is located at the end of the Portland Canal two kilometers south of the town of Stewart and is strategically located in one of the most mineral rich areas of North America, within the Golden Triangle. Stewart World Port’s modern facility has been constructed to the highest environmental standards and offers the latest in loading and storage technology to ensure customer cargo is handled efficiently and effectively. The deep sea wharf is capable of berthing handymax and panamax vessels. Customers include mining, forestry, oil and gas, and project cargoes. Outbound cargoes include bulk mineral concentrates, wood chips and pellets, LNG, and coal. Inbound cargoes include mine resupply, pipe, modules, cement powder, project supply and equipment, and fuel. Combined the port has 150 acres of laydown. The first two phases of construction were successfully com-

pleted by Arctic Const. Ltd. Phase III construction is designed including concentrate sheds, conveying systems and a shiploader. The designed shiploader offers a 3,300tph load out rate. Stewart is ideally located at the end of the deep water Portland Canal and within one of the most resource rich areas of North America. As Canada’s most northerly ice free port, Stewart has paved access to British Columbia, Alberta, Saskatchewan and the Yukon. The port provides companies with a viable shipping alternative, up to a day and a half advantage to Asian markets over southern ports, favourable climate, low winds, and excellent anchorage. The facility’s convenient location allows truck traffic from the port to bypass the town. The breakbulk wharf is open and operational, accepting all manner of RORO and break bulk cargo. We are looking forward to solving your unique shipping needs. Contact us today! Brad Pettit – Director, Port Operations Corporate Office: 250-785-8995 Phone: 250-961-0215 Email: bpettit@stewartworldport.com www.stewartworldport.com

Breakbulk Wharf Construc?on Complete – Fully Opera?onal

Building Be*er Since 1953 Shipping Into the Future Contact Us:

Ted Pickell – Owner and CEO Phone: 250-‐262-‐6707 Email: tp@stewartworldport.com Brad PeCt – Director, Port OperaFons Phone: 250-‐961-‐0215 Email: bpeCt@stewartworldport.com

Customer focused logisFcs soluFons from BriFsh Columbia’s most northern mulFpurpose port. www.stewartworldport.com hNps://twiNer.com/StewartPort hNps://www.facebook.com/stewartworldport

www.breakbulk.com BREAKBULK MAGAZINE A47

Proudly Offering QUALITY STEVEDORING SERVICES in the Port of Baltimore STEVEDORING • • • • • •

Projects Non-Ferrous Metals Steel Products Palletized Cargo Forest Products Bulk

WAREHOUSING • Over 400,000 square feet of covered storage • 168,000 square feet on-site warehouse • Online real-time inventory available, including transaction documents via cantonmaritime.com

DEPENDABLE, EXPERIENCED PERSONNEL • Built-to-suit service • Customer service personnel direct operations

FACILITIES & EQUIPMENT • • • • • • •

Pier 11 South – 31 feet MLW – 675 LOA NLP Pier 4 – 39 feet MLW – 738 LOA 14 acres of paved outside storage area 2 x 100,000 lb. reach stacker 1 x 100 ton mobile crane 2 x 55,000 lb. forklifts 30 forklifts of various capacity

THIRD-PARTY FACILITY MANAGEMENT • Marine Terminal Management • Union and Non-Union Labor Hiring and Supervision • Contract Negotiation • Marketing and Commercial Programs