Tariffs cast a breakbulk-sized shadow

Rotterdam's breakbulk cargoes include heavy-lift and project cargoes. Credit: The Port of Rotterdam
Rotterdam's breakbulk cargoes include heavy-lift and project cargoes. Credit: The Port of Rotterdam
There has been a strong increase in breakbulk shipping through Bristol Port this year. Credit: Bristol Port
There has been a strong increase in breakbulk shipping through Bristol Port this year. Credit: Bristol Port
JAXPORT counts its diversified labour as a key selling point for its breakbulk business. Credit: JAXPORT
JAXPORT counts its diversified labour as a key selling point for its breakbulk business. Credit: JAXPORT
Industry Database

Trade spats may disrupt steel and aluminium flows, but there’s still plenty of positivity around other breakbulk cargoes. John Bensalhia reports.

Recent world events have raised port concerns for the breakbulk cargo sector. European ports have expressed worries over possible tariffs, primarily the US steel and aluminium tariffs on transatlantic trade and shipping.

It's a problem that ports fear could accelerate into a trade war, with Europe and the US already locked into some kind of trade stalemate. If Europe doesn't receive exemption from the tariffs, then it will respond in kind with tariffs levelled against American products such as motorbikes or whisky. Such a battle would have a negative impact on shipping and cargo traffic — but there are upsides too.

“The impact of the trade issues with the US has affected breakbulk cargo flows significantly,” says Robert Jan Timmers, business manager of breakbulk at Port of Rotterdam Authority. “The steel market, now being under pressure from quota and additional tariffs as imposed by the Trump administration, has to find alternative ways of finding new markets.”

“In return, the European Union has announced retaliatory measures to prevent US-banned steel from entering its territory. This in itself brings new opportunities as traditional trade flows will be reviewed and possibly altered.”

Optimism still evident

Despite the issues with the American tariffs, many ports remain optimistic about the future of breakbulk, with positive predictions and investments in new facilities.

Saudi Arabia's King Abdullah Port already handles a generous amount of breakbulk, with cargo including steel, cement and timber. King Abdullah Port's chief executive, Rayan Qutub, predicts further growth in this sector, with breakbulk volumes expected to grow by 15%. Steel levels are expected to rise from 8m tonnes to 11m by 2020.

Earlier this year, the Port of Trois-Rivières unveiled its new breakbulk terminal. The new facilities are designed to boost competitiveness for shipping on the St Lawrence river and for regional manufacturing companies, with traffic levels increasingfor their products.

The port's new breakbulk terminal includes piers 9, 10 and 11 with 36,000 square metres of outdoor storage and three warehouses totalling 18,000 square metres.

“In Rotterdam, we recently finished the first phase of the Offshore Center Maasvlakte project, located at Maasvlakte 2,” says Mr Timmers. “Here, we created new land for the development of a new location for offshore and project cargo-related industries.

“We aim to accommodate the upcoming offshore wind projects for the North Sea area, oil and gas platforms and infrastructure scheduled for decommissioning. Next to that, the new area could serve as a mobilisation/demobilisation hub for offshore vessels and a storage facility/consolidation hub for large-scale projects in our area.”

Here, the Port of Rotterdam Authority will invest in the infrastructure of the port and quay side, whereas the stevedoring company will invest in new superstructure and equipment. Scheduled delivery of the infrastructure of the new area (quay walls, nautical infrastructure, landside access to terminal) will be around the second quarter of 2019, with a fully operational breakbulk terminal expected by early 2020.

Elements for success

Successful breakbulk handling needs a number of key ingredients: high quality port facilities and equipment, knowledgeable staff, and good transport connections are essential.

Among JAXPORT's facilities are a million square feet of on-dock warehousing storage and additional space (comprising millions more square feet) close to the port terminals, and extensive intermodal connections.

“Because we have specialised facilities and equipment, as well as skilled and diversified labour at JAXPORT, this makes our port an ideal choice for handling breakbulk cargo,” explains Frank Camp, director of cargo sales at Jacksonville Port Authority (JAXPORT). “Our people and facilities are very capable, and make JAXPORT perfect for the breakbulk portfolio.

Population growth has in part lifted breakbulk volumes: “Florida is now the third most populous state in the country and JAXPORT offers fast and convenient access to this growing consumer base,” says Mr Camp.

“Geographically, we are in a very good position to capitalise on breakbulk,” adds Mr Camp. “And because there is a lot of construction in the area, the raw materials need to come into this part of the world, which is good news for our breakbulk cargo services.”

One area of the breakbulk sector, in particular, looks to bring good news. Mr Timmers says that developments for the coming 12-18 months for the project cargo market seem positive. “Many shipping lines seem to be optimistic. The oil and gas market seems to be promising, just like the power industry (transformers and generators). Locally, the offshore wind industry will be profiting from the upcoming projects on the Belgian and Dutch side of the North Sea.”

Rotterdam will reap the benefits of the increasing volume of cargo as it is ideally situated for shortsea and deepsea destinations, either functioning as a consolidation point for nearby offshore wind projects in the North Sea, or providing space and flexible maritime services to the heavy-lift industry for the extreme oversized and heavy cargoes.

Hub port potential

On the project side of breakbulk, Bristol Port has also seen good growth with a number of Hinkley Point-related projects (new nuclear reactor development) coming through the port. “This is in recognition of our position as hub port for this project and we expect the number of projects cargoes to grow as the development moves along,” says James Stangroom, commercial manager at the port.

Heavy-lift and project cargoes are an important part of the growth at Rotterdam as well, with monopiles, wind blades, transformers, generators, offshore-related platforms, ships’ engines, and engine parts all passing through the port.

However, Mr Timmers says that forest and paper products have had their ups and downs: “Fluff pulp products have shown increased volumes as a result of increased production of hygiene products and paper products experiencing the pressure of a decreased use of newsprint paper and the like.

“Non ferrous metals have experienced the same treatment as steel products now that the US has shown its 'appreciation' for foreign products,” adds Mr Timmers. “In particular, Rusal's aluminium products have suffered a severe blow which had an immediate effect on the various logistics and manufacturing companies operating in this value chain.”

Mr Timmers explains that consolidation seems to be one of the notable developments in the breakbulk sector. “Among breakbulk shipping lines, this trend is clearly noticeable as take-overs, joint ventures and mergers have been headline news many times in the last 12 months.

“No producer, trader, shipping line or stevedoring company finds itself in the luxury position of taking business as it is. Every player in the logistics chain is doing its utmost to perform at its best and will fight for its trade. Sometimes at all costs, undercutting tariffs when necessary to keep the trade.

“Unless there is a really good reason for either one in the chain to switch to another provider, shipping line or port, everything will remain as is.”



BREAKBULK RENAISSANCE

Bristol Port experienced growth in 2018 led by the return of wood pulp into Royal Portbury Dock in March 2018 with Saga Welco shipments of Brazilian wood pulp, along with regular shipments of deepsea steel as well.

Says James Stangroom, commercial manager at the port: “These new trades have nicely supplemented the current breakbulk calls including G2Ocean's South Africa service and regular Saga Welco shipments of plywood from the Far East.

“From our receiving customers' perspective these complement the three weekly container feeder services we handle into Portbury and the large number of containers that are devanned through our warehouse division each week.” Forest products, pulp and paper have also been winners for JAXPORT.

The Port of Thunder Bay, meanwhile, has seen a considerable rise in breakbulk business, particularly project cargoes. From 2010 to 2017, the port's general cargo levels tripled to 31,000 tons. As well as steel coils and mining equipment, the port handles wind turbine blades, nacelles and towers. These are especially important for nearby wind farm projects at Saskatchewan, Alberta and British Columbia. Growing levels of inbound steel products are also providing rising demand. The products include steel piping which comes in from Germany, with its ultimate destination being the Alberta Oil Industry.

Venice has also seen an increase in breakbulk volumes, handling 35% more in 2017. Among the breakbulk cargoes handled there are imported iron and steel products, and also project cargo.

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