Ship detentions are particularly expensive. “Laycan” is a chartering term that stands for laydays—agreed dates within which vessels can arrive to load cargo—commencement, and cancelling. It specifies the earliest date on which laytime, or time allowed for loading or discharging, can commence, and the latest date after which the charterer can cancel the charterparty.

Natural forces also play a spoiler role, when winds are over a certain Beaufort and the project is on hold because nothing can operate. Each supply chain gap demands extra effort, resulting in additional costs. Although you can’t control natural forces, you can maximize control of the transportation interfaces. You want to do more than just plug the gaps in your supply chain. Instead you want a longer-term, standardized solution that puts you in control so that events don’t control you. It should be routine. That is where an experienced logistics service provider can help. Accurate planning enables you to fill gaps and avoid unnecessary costs affecting your schedule and bottom line.

There are many gaps that can go unnoticed, including lack of timely information, poor data input and output, and inaccurate cost estimates. We recommend you select a logistics provider that has reliable, state-of-the-art business intelligence tools so you can proactively handle potential detention issues, preferably via an online customer service portal that provides tracking information. One click and you should have access to the movement of information and material and be able to check the delivery of your cargo.

Look for a system that provides alerts, track and trace, documentation, reports, and metrics. The system should be scalable to individual KPIs, duties, and tasks.

Improved data exchange puts you in control of the visibility of information so you can respond immediately to the issues that drive your projects: end-to-end, real-time information that translates into reduced risk, improved savings, and bottom-line value to your company. Remember that visibility = value, and value = $.

The system should be proactive so that you and your logistics provider can automatically receive information based on an event taking place: when an event should take place, or if it did not take place. Details such as estimated vs. actual departures, or the transit time of a particular vessel. Alerts should be set up by carrier, people, origin, and destination. This way exceptions drive the reports and their non conformances, giving you a visual timeline. You can measure not only if an event does or does not take place, but also the time difference between what is promised and what actually happens.

Another potential information gap is pre-bid calculations. Your logistics provider could be estimating costs for projects that may be years down the road. The estimate must be thorough and accurate, not only for current planning but also for the longer term, when the project is implemented. Your provider should consider inflation, and support their calculation. Many elements have to be considered, including annual transportation cost increases by country such as railway tariffs. Like any information system, data input is as important as data output. A reliable logistics provider will obtain details on every component that has to be quoted.

By allowing your project logistics provider to help you standardize the steps in your supply chain you will eliminate many, if not all of the gaps and performance losses that can prove costly to your wind power project. Remember there is no substitute for industry expertise.

About the author: Hüseyin Kizilagac is director of business development for BDP Project Logistics. Call + 49 911 965223-19, e-mail hueseyin.kizilagac@bdpprojects.com.

To read the article in the magazine, click here.

Case in Point

Case Study: Termocandelaria

• Seamless cooperation between partners wins high praise from client

Transportation

Air

• IATA says air traffic jumped by almost a quarter in December
• Asia airlines freight traffic soars
• Air freight continues to grow out of Hong Kong

Sea

• Economic indicators, forward bookings suggest optimism for 2010
• Cosco says bulk shipping costs will increase 54% over 2009
• Outlook for North European container ports calls for gradual recovery
• Containerized exports in Southern California increased in December
• While rates “improve,” recovery remains uncertain
• Container imports in the US increase after 30-month decline
• HK 2009 volume off 14.6%, Singapore down 13.5%

Surface

• IANA sees one area of solid growth in tough intermodal year
• US truckload demand rising
• ATA annual report

Supply Chains and Logistics

• How to keep wind power logistics costs from blowing you away
• BDP Project Logistics opens Aberdeen office
• India and China top over-performers for trade logistics
• Supply chain visibility drives excellence
• 3PL opportunities expected to gain momentum in UAE

Global Trade Management

• Updated BIS guidelines for freight forwarders. What does this mean for you as
  a shipper?
• Belgium certifies BDP International NV as Authorized Economic Operator

Business Factors

• BDP joins the UN Global Compact
• Factory orders, shipments gained in December
• US Freight Index grows 5.6%
• Companies begin moving production back to the UK
• China’s exports turn upward in December and end more than a year of declines
• Experts see another global dip ahead
• Panama Canal expansion will slash cost of shipping

Sectors

• Chemicals
• Pharmaceuticals
• Energy
• Mining

Region Watch / Country Profiles

• China
• India
• Brasil

Green

Events

“We are delighted to be formally extending our Aberdeen presence into BDP’s European footprint,” said Luc Van Heygen, BDP Project Logistics managing director for the Americas and Europe. “The ‘Oil Capital of Europe and Gateway to the North Sea’, as it’s sometimes referred to, has been under our due diligence for some time.  The most compelling data from our research has revealed logistics / transportation decision-makers in the oil and gas sector here are looking above and beyond one-size-fits-all service solutions. The very nature of the industry necessitates a much more intensive customer service business model; a more high-touch, high-speed premium service experience for front line decision-makers who need and expect more.”

Crawford Hendy, branch manager, and Marc Clarke, sales manager, bring to BDP more than 45 years of experience in the North Sea sector. Hendy has been involved in freight forwarding in the region for more than 30 years. Clarke has more than 15 years of both operational and sales experience in the North Sea, Middle East and African markets. Significantly both men have worked for major oil and gas companies.

With the support of BDP’s global network of more than 140 offices in over 120 countries, the Aberdeen office will offer a full range of ocean, air, charter and road freight services. In addition to traditional freight forwarding activities, it will provide third-party warehousing, domestic and international distribution, on- and off-site packing and crating, customs consulting, and assistance with legal documentation. The newly established office complements and completes the global BDP Oil and Gas organization, which has a strategic presence with competency centers in all major deployment hubs, including Houston, Aberdeen, Dubai and Singapore.

The Aberdeen office will play a key role in developing the hub and region, while offering a unique hub-and-spoke solution for its U.K. oil and gas clients, exporting to and importing from the Gulf of Mexico, South America, the Caspian Sea, the North Sea, CIS, Middle East, West Africa and Asia. By channeling cargoes through regional hubs, it will coordinate deliveries to mainline ports and airports, as well as inland destinations.

For more information, contact:

Elizabeth Parke, BDP Project Logistics, 1646 Rankin Road, Suite 100, Houston, TX 77073, USA, phone: 1-281-233-4777, elizabeth.parke@bdpprojects.com.

Crawford Hendy, BDP Project Logistics, Caledonian House, Lawson Drive, Dyce, Aberdeen, United Kingdom AB21 0DR. Tel: +44 1224 796650; Fax: +44 1224 796651; Mobile: +44 7771 860285; Email: crawford.hendy@bdpprojects.com.

About BDP Project Logistics
BDP Project Logistics is a leading privately held project logistics and transportation management services company, operating global logistics centers throughout Asia, Europe, Africa, the Middle East and the U.S., with a network of owned offices, strategic partnerships and agencies in more than 120 countries. The company provides customized logistics solutions that support engineering, procurement and construction (EPC) companies, mining, oil and gas, power generation and other infrastructure projects. It utilizes a variety of transport modes, including barge, rail, truck, aircraft and vessels to deliver over-dimensional cargoes to their often remote destinations. Also offered are end-to-end materials management and tracking, freight negotiation and carrier cost maintenance, in-house project engineering services, logistics process analysis and optimization, complete documentation, online tracking and reporting tools, coordination of cargo inspections, supervision of heavy lifts, oversized and hazardous cargo, port operations, and job-site unloading and checking. For more information, visit www.bdpprojects.com.

“BDP is committed to good corporate citizenship in the global community,” said BDP President and CEO Richard J. Bolte, Jr. “The Global Compact offers a unique strategic platform for reinforcing that commitment by supporting and advancing these principles within our own organization and sphere of influence.

“These principles will become part of the strategy, culture and day-to-day operations of our company, as well as our engagement  in collaborative projects which advance the broader development goals of the United Nations, particularly the Millennium Development Goals.”

Established in 2000, the Global Compact is now the largest corporate citizenship and sustainability initiative in the world with more than 7,700 corporate signatories and stakeholders from over 130 countries.

About BDP
BDP International is one of the leading privately held freight logistics / transportation management firms based in the U.S. It operates freight logistics centers in more than 20 cities throughout North America and a network of subsidiaries, joint ventures and strategic partnerships in 121 countries. The company serves more than 4,000 customers worldwide. Clients include Bayer, Cargill, Conoco Phillips, Heineken USA, Honeywell, Johnson & Johnson, Revlon, Rohm & Haas, Trek Bicycle, Wacker, and others. BDP provides a range of services, including ocean, air and ground transportation; lead logistics process analysis, design and management; export freight forwarding; import customs brokerage and regulatory compliance; project logistics; warehousing/consolidation/ distribution; and Internet shipping transaction/tracking management systems. For more information visit: www.bdpinternational.com.

Not surprisingly, the devil is always in the details. You need resources that are proactive. Be sure to demand a tailor-made solution—combining project logistics and project engineering. That is why you must look for experience from your project logistics resources in all facets of civil engineering services: bridge inspection, surveying, site supervision, consulting, structural analysis, civil, and road design.

You want bridge and road and construction engineers who are infrastructure experts, not just machine engineers and transport engineers. Specialized engineers who have structural, geotechnical, and road design expertise, and preferably an engineering division that can handle the drafting, planning, approval, and execution of temporary and permanent traffic infrastructure measures for special transportation. This should include an experienced team of road and bridge planners with the corresponding technical equipment on hand. Specific services you should look for include:

• Ground investigations;
• Geotechnical reports, including subsurface assessments;
• Planning of ground improvement for site roads;
• Crane studies, including the geotechnical proofs of supports;
• Planning and geotechnical proofs for temporary construction of road systems;
• Drawings of transport configurations and the review of configuration-dependent turning radii for vehicles and loads;
• Complete and extensive route reviews;
• Surveying services at geometrically critical passages;
• Support in negotiations with authorities;
• Visualization and animation of operations.

Even though the distance between each wind turbines may be small, the location of each can provide different challenges. Surface surveys and geotechnical surveys can help to identify infrastructural and topographical problems. Your project logistics engineering provider should have a highly specialized network of resources around the world, as well as solid, reliable references. Due to advances in equipment, wind power production will become more effective, pushing boundaries and challenging producers and their resources.

Blades are now moving to places where greater amounts of wind are available. In such areas infrastructure is either very weak or almost nonexistent, often with high ascents and descents. In some countries there is no wind power transportation system, and blades and towers require special transportation. When equipment is not available in those locations, it has to be brought in from outside.

At complicated job-site areas geotechnical surveys will be needed, as well as additional infrastructure activities. Look for a combination of transportation competency and infrastructure competency in your project logistics provider. In some cases, wind power companies may not realize they are paying for services and equipment they do not need. Some project companies and suppliers tell their clients they must bring in “x” number of cranes or build additional roads. This unnecessarily increases the infrastructure costs. With the right planning you can adjust and/or level the descent and ascent from one windmill location to another, so that the crane can move without being disassembled.

Look for a provider that wants to provide a solution and has the right equipment in place with the right infrastructure services for the project. Be sure your project logistics provider measures everything that matters. You want a reliable resource that gives you control of your project—one that considers cost, time, and always meets your deadline.

About the authors: Hüseyin Kizilagac is director of business development, and Hendrik Wagner is director of project engineering, for BDP Project Logistics. E-mail hueseyin.kizilagac@bdpprojects.com or hendrik.wagner@bdpprojects.com.

To read the article in the magazine, please click here.

“We are pleased to be expanding our presence in South America at a time when regional infrastructure and industrial development projects are so abundant,” said Luc Van Heygen, BDP Project Logistics Managing Director for the Americas and Europe. “Recognizing the increasing role of project logistics there, much of which remains unaffected by the economic crisis, we appointed an experienced professional to spearhead BDP’s direct support of our clients operating in South America, in conjunction with our network of offices and exclusive partners.”

Arndt Droegemueller brings to his new position more than 15 years of experience handling projects throughout South America and elsewhere, working for leading project logistics companies in Colombia and Peru. He began his career in 1990 with Rohde & Liesenfeld (R&L), Hamburg, Germany. He subsequently moved to South America, where he has worked in project and general management as well as business development for R&L, Kuehne & Nagel and TBS.

For more information, contact:

Elizabeth Parke, BDP Project Logistics, 1646 Rankin Road, Suite 100, Houston, TX 77073, USA, phone: 1-281-233-4777, elizabeth.parke@bdpprojects.com.

Arndt Droegemueller, BDP Project Logistics, Cra. 106 # 15-25, M.9-Bldg. 5, Bogota, Colombia .Tel: +57-1-439-6582, Mobile: +57-310-635-3037, U.S. Mobile: +1-267-231-2982, Email: arndt.droegemueller@bdpprojects.com.

About BDP Project Logistics

BDP Project Logistics is a leading privately held project logistics and transportation management services company, operating global logistics centers throughout Asia, Europe, Africa, the Middle East and the U.S., with a network of owned offices, strategic partnerships and agencies in more than 120 countries. The company provides customized logistics solutions that support engineering, procurement and construction (EPC) companies, mining, oil and gas, power generation and other infrastructure projects. It utilizes a variety of transport modes, including barge, rail, truck, aircraft and vessels to deliver over-dimensional cargoes to their often remote destinations. Also offered are end-to-end materials management and tracking, freight negotiation and carrier cost maintenance, in-house project engineering services, logistics process analysis and optimization, complete documentation, online tracking and reporting tools, coordination of cargo inspections, supervision of heavy lifts, oversized and hazardous cargo, port operations, and job-site unloading and checking. For more information, visit www.bdpprojects.com.

Asian markets that depend on the U.S. and the EU to buy their exports — China, Singapore, Vietnam, Thailand and Malaysia — were hit much harder. “Indonesia’s market is driven by its own domestic consumption. As a result, it was able to weather the recessionary storm,” he said.

In addition, Chen said, Indonesians learned a hard lesson from the Asian recession of the late ’90s, when a highly leveraged economy came crashing down. “Since then, Indonesian businesses and people have steered clear of leverage . . . They learned their lesson,” Chen said.

In fact, economists estimate Indonesia grew 4 percent during 2009, and it is expected to grow even faster during 2010, said Simona Mocuta, a senior economist with IHS Global Insight.

After many years of less than transparent regulations, Indonesia has approved new mining laws that are expected to clarify the industry playing field and pique investor interest, Mocuta said. Last September, the World Bank said that Indonesia is the most aggressive reformer in Asia. “It’s a big positive,” she said, and key since Indonesia has suffered from a lack of capital for development. For example, although traditionally one of Asia’s largest energy exporters, the country’s refinery capacity has actually diminished due to a lack of investment, she said. Once the leader of OPEC, Indonesia has pulled out of the organization and is no longer a net oil exporter.  “Natural gas has overtaken petroleum,” Mocuta said.

Like Australia and some African nations, Indonesia is a large exporter of natural resources such as natural gas, coal, silver, gold, copper and iron ore, as well as agricultural and soft commodities such as coffee, cocoa, pepper and spices. Developers are chiefly interested in natural gas, but development of coal projects is also strong, dominated by Australian and mainland Chinese interests. “The Chinese are the most aggressive; they are the biggest importers of coal from Indonesia,” Chen said.

Biofuels may also become part of the Indonesian energy picture. Palm oil is used as a biofuel as well as in consumer products, and developed countries earn carbon credits by burning a by-product, palm kernel expeller, that was simply thrown away 15 years ago, Chen said.

Sugar is another potential source of biofuel. However, investment in biofuels production is small compared to traditional energy sources.

Because China has moved its focus to coal-fired power generation plants, Chen said, they are getting rid of older power plants running on less efficient liquid fuels. Thus, one recent shipment of power equipment out of China became an add-on to an existing power generation plant in Sulawesi, Indonesia.

The Chinese are building on a huge scale, driven by their population of well over a billion people and what amounts to “blue sky,” government-backed funding that countries such as Indonesia don’t have, Chen said. However, while Indonesia’s population of roughly 250 million people is dwarfed by China’s, it is still larger than its immediate neighbors’, one reason for its growing economy and healthy domestic consumption.

By: Janet Nodar

To read the January/February 2010 issue of Breakbulk Magazine, please click here.

For example, for two years the country’s constitution has required new projects to undergo environmental impact assessments. However, said Rainer Roessler, BDP Project Logistics’ Thailand-based general manager, no rules were laid out about how to go about getting these assessments done, so the permitting process bogged down.

This meant many projects stalled, including expansion and construction projects planned for a large petrochemical complex near the village of Map Ta Phut. “It’s huge,” Roessler said. “Dow Chemical, DuPont — all of the major players of the world are there.”

Although about a dozen of the Map Ta Phut projects now have permits to go ahead, some 65 Thailand projects there and elsewhere were on hold in late 2009 because of the confusing new EIA requirements.

Export-driven Thailand also suffered more during the economic crisis than more self-sufficient neighbors such as Indonesia and Vietnam. Although expected to bounce back in 2010, Thailand’s economy is estimated to have contracted almost three percent during the downturn, said Simona Mocuta, a senior economist with IHS Global Insight.

Thailand’s political crisis exacerbated its problems, Mocuta said, “and domestic demand was very weak, so the Thais had nothing to offset the decline in exports.” Echoing Roessler, she said legal issues related to the economic zones Thailand is establishing are also a problem. “Some projects supposed to be online in 2010 might be delayed,” she said.

Still, the Thai government is encouraging green power development with many wind and solar power projects in the works, Roessler said. Components are being imported from India and China and some trial projects are underway, with larger projects planned for late 2010.

According to Power Engineering, Thailand plans to increase its renewable energy capacity, including wind and solar, from 1750 mw to 5500 mw by 2020. Thailand is also reportedly conducting site preparation for two 1,000 mw nuclear power stations, but how these would be regulated and whether they will be supported by the public are unanswered questions.

By: Janet Nodar

To read the January/February 2010 issue of Breakbulk Magazine, please click here.

Before the recession hit, rigs and other components were being built from Dubai to Goeje, Korea, where the Daewoo and Samsung shipyards are located, Runshaug said. Fabrication yards were jammed. Everyone was working against time. Although many components were built on contract, as the boom grew, so did speculation. Optimistic developers would find yard space, build a floating production, storage and offloading facility, and bet they would be able to get a contract for it after it was built.

However, Runshaug said, this meant they were building generic FPSOs, rather than FPSOs tailored to specific fields, and this made it harder to find contracts for them. In other cases, oil and gas fields were waiting for a given FPSO, but the developers didn’t have the resources to complete the project, because of the recession. Projects were often delayed or canceled.

Now may be a good time go shopping, with positive movement over the last three months in the oil and gas industry, Runshaug said. “Oil has increased to about $80 a barrel, a more sustainable price . . . More and more of these companies will find it more economical and timely to proceed with their projects,” he said.

BDP is looking toward the third and fourth quarter of 2010, when they expect the project cargo trade to pick up, he said. “We transport mooring systems, power generation equipment, living quarters, process and separation modules, and cranes — all the big stuff. These are all quite long-lead items, and projects are just now getting kicked off, so most will only start moving toward the third quarter of 2010.”

FPSOs have been important to the oil and gas industry for years, Runshaug said. In many cases, manufacturers strip down old single-hull oil tankers and add modules to them to make FPSOs. These are then moved to locations worldwide where they are often used for as long as 15 to 20 years. Since modern tankers must have double hulls, this is a way to recycle older tankers.

By: Janet Nodar

To read the January/February 2010 issue of Breakbulk Magazine, please click here.

“In 2006 alone, the Chinese built the equivalent of the entire U.K. power system,” said Xizhou Zhou, an economist and associate with IHS Cambridge Energy Research Associates’ Global Power Group. And once the Chinese know how to make something, whether it is a shoe, a coal-fired power generation plant or a rotor for a wind turbine, they localize the process, making it their own, resisting imported goods and manufacturing both to meet domestic needs and for export.

Typically, Zhou said, if a technology is not available in China, then the Chinese government will encourage international players to come in, “but there is always some kind of technology transfer clause. In a few years’ time, indigenization will take place and a lot of those technologies will begin to be manufactured domestically.”

With wind turbines, for example, “international players such as Suzlon and Vestas have lost their share of the domestic Chinese market but have built up a manufacturing base there and are now exporting from China to other markets,” Zhou said.

“It’s sort of the same trend we are seeing (in other industrial goods). Chinese wind turbines are roughly one-half to two-thirds of the price of those manufactured in the U.S., so the price is attractive for developers,” Zhou said. However, doubts about Chinese execution, including the ability to meet schedules and standards, are very real, according to Power Engineering. Some developers and EPCs such as Argentina’s IMPSA have established elaborate in-country quality control systems to ward off potential problems.

And, beyond just manufacturing, Chinese developers and engineering, procurement and construction companies also are building power projects outside China. Because they can build for $700 to $800 per kilowatt, while firms from more developed countries tend to price projects at about $1,000 per kilowatt, Chinese EPCs are becoming the low-cost alternative for a variety of Asian projects, according to Power Engineering.

Aaron Chen, managing director of BDP Indonesia and senior adviser for BDP Project Logistics, is seeing this phenomenon play out first-hand. The Chinese are providing equipment and components for coal-fired and other power generation in Indonesia and other parts of Asia. Sometimes these projects are built on a build-operate-transfer basis that in the past would have been instigated by more developed countries.

In build-operate-transfer projects, aid organizations such as the World Bank or Japan Development Fund often provide financing for expensive infrastructure projects undertaken by the likes of ABB, Mitsui, Hyundai, Marubeni, and so on, Chen said. They build and then operate a power plant for some period, keeping the profits from selling electricity and then transferring ownership to the government of the host country. “The Koreans did this in the Philippines, and now the Chinese are doing it in Indonesia. And when they do, they bring in all the primary equipment as well as the ancillary components from China,” Chen said.

In another side-effect of China’s drive to develop and “colossal” need for domestic energy, some reconditioned power-generating equipment is now leaving China for other destinations. For example, power plants that run on liquid fuels, no longer sufficient to meet Chinese demand, can still be useful in countries with much smaller populations such as Indonesia, Chen said.

Although power consumption has fallen off 20 percent in China since the recession hit, China and all of Asia continue to suffer from a severe shortage of power generation capacity, according to Power Engineering. To combat this, the Chinese continue to build from 50 to 100 gigawatts’ worth of power generation in-country every year. Although Beijing appears to be supporting the development of renewable energy sources, China also continues to build coal-fired power generation capacity, Zhou said.

China also is a key market for the rest of Asia’s commodities. “While China is to some extent a final market for exports from the rest of Asia,” said Simona Mocuta, a senior economist with IHS Global Insight, “really, Asian exports to China are a function of China’s own re-exporting. Southeast Asia sends basic materials to China: energy products, metals, iron ore, steel. And China manufactures products out of these basic materials that it then exports around the world.”

By: Janet Nodar

To read the January/February 2010 issue of Breakbulk Magazine, please click here.