“Any slowdown, planned or otherwise, in the Chinese economy will be a short-term influence compared with the longer term influence of growing middle classes around the globe — and the big mining companies will be looking at longer term market prospects when deciding new projects.”

Excerpt: Assessing prospects in South America, Arndt Droegemueller, director, business development, South America, for BDP Project Logistics, was even more bullish. “Prospects for mining in this region look amazing. I have lived in South America for 16 years and I have not seen this level of mining industry activity here before. There are projects on every corner and investment is rocketing. Over the next ten years we could easily see USD 50 billion of mining industry investment just in Peru and Chile.”

Mining industry activity associated project forwarding business is also picking up in less publicized parts of the world such as Indochina. Claus Dittmer, BDP Project Logistics’ regional director for that area, explained there is two-way business available — imported equipment for mining operations in Laos (copper, gold and coal) and Cambodia (coal) and exports of fabricated mining industry units out of Thailand, notably to Australia.

“In terms of mining industry projects in the Indochina region, Laos is by far the most interesting country as there are a lot of different commodities there. But we are not talking about anything on the scale of South America or Africa. We are only looking at a handful of mines over the next couple of years,” commented Dittmer.

Excerpt: Other sources suggested there are in fact already capacity issues on some trade routes. BDP’s Droegemueller said this is certainly the case when it comes to breakbulk and heavy lift space out of Asia, especially China and Japan, to key mining locations in South America. “The situation in relation to Brazil is a little better than it was, but for the west coast of South America capacity is still limited — and when some of the huge mining sector investment planned in those countries really starts to increase inbound equipment shipments, then in my opinion, there will definitely be a shortage of shipping capacity,” he said.

Excerpt: “Points of origination for the mining equipment we are handling have definitely changed,” confirmed BDP’s Chen. “Equipment which might once been ordered from Korea or Japan can now be ordered from China. There are also big fabrication businesses in places like Malaysia, Indonesia and Thailand that are closer to the mining industry end-users in Asia Pacific region countries like Australia.”

To read the full article, click here.

Source: Breakbulk Magazine, January/February 2011 Issue – Excerpt: BDP/Project Logistics, Aaron Randolph Chen, Managing Director, Asia-Pacific, www.bdpprojects.com

Throughout this region, the winds of change are blowing. Virtually every country has announced at least one wind energy project. Even Indonesia, which can rely on its massive coal reserves, has embraced “greener” power generation with its project in Aceh, Sumatra.

China is no doubt the leader as authorities hold tenders for massive wind power concessions throughout the vast country. Besides well-known players such as Siemens, GE, Vestas and Suzlon, China boasts more than 90 companies manufacturing wind energy equipment. We will see an increase in tower and blades of more than 40 meters in length being transported across the Asia-Pacific region during 2011.

In addition, smaller hydro and coal-fired power plates are slated to break ground in 2011 across the region, including in Indochina and Indonesia. There is also strong demand for enhanced power transmission and distribution; hence, transformer manufacturers such as ABB (with plants in China, Thailand and Vietnam) are working hard to satisfy this seemingly insatiable demand.

At the other end of the scale, Korean giants such as Samsung and Hyundai will be moving material from the Far East to the Middle East for four massive nuclear power plant projects, in addition to several new petrochemical complexes.

In addition, China’s rising costs along with its coastline are driving manufacturers to relocate their plants westward, promising an increase in domestic project cargo movement.

To read the full article, please click here.

“Over the last two or three years we have seen growing demand for new non-renewable sector power plants in Russia, mainly gas-fired, and have been involved with the movement of transformers,” reported Luc Van Heygen, the company’s managing director, Americas and Europe. “Just in the last couple of months, we have become involved with some new power plant projects in that country.”

Opportunities

On the plant refurbishment front, he suggested that central/eastern Europe looked set to become a significant market for future project logistics business. “Two years ago there was a lot of talk about the need to refurbish non-renewable resource fuelled power plants in that region, but the actual execution of those plans seems to have been put on a low burn, probably because of the global economic crisis. The plans are still on the books, though, and those developments are going to happen over the next few years.”

Virendra Sehgal, BDP Project Logistics’ regional director, Middle East, singled out Iraq as another particularly strong market for non-renewable sector power plant refurbishment projects. “A lot of plants in that country are being refurbished with new transformers and transmission lines,” he pointed out.

To read the full article, please click here.

After China, the U.S. is the second-fastest growing wind market, and despite the recession it continued to expand in 2009. According to the American Wind Energy Association (AWEA), although Germany is the world leader in terms of installed wind power with over 22,000 MW, it has only a fraction of the wind energy potential of North Dakota. AWEA reports that the top states for wind energy potential—as measured by annual energy potential in the billions of kWhs and factoring in environmental and land use exclusions for wind class of 3 and higher—are: North Dakota (1,210); Texas (1,190); Kansas (1,070); South Dakota (1,030); and Montana (1,020). Nebraska, Wyoming, Oklahoma, Minnesota, and Iowa round out the top 10.

As the U.S. wind power market prepares for increased production, it is also the time for developers to adjust to evolving market requirements. Meeting even a fraction of the potential wind power goals will not only require increased turbine volume production, but also a deep pool of transportation and logistics equipment, and the expertise to match.

In particular, there are a number of hurdles to consider as you coordinate delivery of those components to wind farm installations in the United States. Regardless of whether rail or barges are used, at some point trucks are going to become a key factor.

While equipment shortages for 2010 have not occurred at the levels predicted earlier this year, it is just a postponement of the inevitable. The recession dampened project investment and increased postponements. Now wind farm projects are coming back. Thanks to demand, trucking companies are looking at large increases in project opportunities; perhaps as much as double or triple pre-recession volume. But the numbers of trucks and experienced drivers required are not available. Many trucking companies, especially smaller firms, were unable to weather the recession—over 4,000 went out of business, in fact—and larger companies needed fewer drivers. A number of those drivers looked for alternative employment, resulting in a smaller pool, which is now creating a shortage. Plus, compliance with the new Comprehensive Safety Analysis 2010 will undoubtedly force a number of trucks and even more drivers off the roads. Less capacity usually means higher freight rates.

One of the major challenges for the intermodal transportation of larger wind equipment components is the wind itself. Components are bigger, heavier, and therefore more challenging for the truck industry. Wind pressure on heavy loads requires experienced drivers who are specially trained to transport wind power components. As the average age of truck drivers increases, younger recruits must be found to fill the gap. Will they have sufficient experience?

Equipment supply is also outstripping demand. Trucking companies that survived the recession and want to buy trailers to meet the increasing demand often cannot because many trucks and trailers that were used in transporting wind equipment are not available since they are still tied up in bankruptcy proceedings. Access to equipment that fits your specific needs is important. The right trailers, especially for blades, must be available. Some companies have designed self-load and self-unload trailers that help cut costs associated with crane rentals.

Then there is the whole logistics process required for road transportation. “Uncomplicating” a complicated process of moving oversize heavy wind components is another challenge. Two of the primary issues that came out of a recent survey by AWEA’s Transportation & Logistics Working Group for road transportation of wind components were planning and permits.

There is no substitute for detailed advance planning as early in the transportation development process as possible. This is especially important when you consider the range of issues to manage: route and access surveys; coordination with other transportation modes; ancillary equipment; traffic conditions; height and weight limits; permits; and constant communications with local government staff, not to mention weather. Planning also means working around physical obstacles such as access roads to be constructed and bridges to be built, etc. Each state often has its own regulations that govern weight, maximum load, and superload permits. It is important to know the details of every state’s requirements at the outset of your transportation plans. Last but by no means least, as with any successful project picking the right partner resources is not only critical but probably the most important decision of all.

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.

The panel agreed that the industry will remain flat in 2011. Projects that were cancelled and delayed since the crisis in 2008, may return, but their impact will not be felt for several years.

The real pick-up will happen in 2013 through 2015.

Several trends will shape 2011, including an increase in megaprojects and an associated increase in modularization; a continuing shift to offshore fabrication; and Asian dominance. Recovery will be inconsistent, while engineering and procurement contracts are expected to grow at 10 percent per year.

“It’s not going to happen without government financing, which will be very important over the next three years,” said the Hon. Captain Will Schubert, president of International Trade and Transportation. “Unlimited funding” is available through the Export-Import Bank of the United States for U.S. projects and similar government funding is available in Korea and Japan, he said.

Banks are open for business in South America, which is good news, according to Greg Gowans, director for global logistics at CB& I. However, mining projects may require more support from the private sector, he said.

While the status of cancelled and delayed projects remain mostly unchanged for the engineering sector, an increase in front end engineering and design tenders, particularly in the Caspian Sea, Australia, and the Middle East, has helped re-energized the business.

The so-called U.S. nuclear renaissance has been absent so far, according to Gowans. However, the international power project market looks “a little better.”

With a surge in megaprojects anticipated for 2014, there is potential for an “equipment crunch” down the road if EPC companies don’t come to landside heavy lift equipment operators early on, said Guus Stigter, Director, Board of Management, Mammoet USA South, Inc.

“I don’t believe the market willl come back in the same form,” Gowans said. He cited the consolidation of ownership in steel and mining industries resulting in resources spread throughout the world.

Another important influence will be the transition of China from engineering importer to exporter. “China EPC companies are getting big contracts,” Dennis Devlin, panel moderator and director of global projects and energy for BDP Project Logistics, said.

For instance, China’s Ex-Im Bank recently handed US$5 billion to Brazil to fund a variety of capital-intensive projects, the expectation being that Brazil will use Chinese EPC firms to build them. Within China, Western logistics providers, EPCs and heavy-lift operators have a difficult time pursuing work. Mammoet, for example, has given up pursuing Chinese business. The Chinese have the domestic capability to handle the work themselves, panelists agreed.

However, opportunities will exist in many other regions including Austro-Asiatic gas projects, Latin American mining and refining, and smaller scale petro-chemical projects in the Middle East, according to Thomas J. Griffin, president and CEO of Agility Project Logistics.

Gowans mentioned Russian energy and power projects and South American infrastructure projects in anticipation of the 2016 Olympic games. Wind projects, specifically those in Western Europe, represented real opportunity, but may stretch the resources for heavy-lift equipment and vessels, he said. “Wind is real. It will continue.”

Turning to an increasing trend to modularization, all megaprojects slated for the period 2014 to 2016 have plans for modularization, according to Stigter.

With modularization comes risks, Gowans said. The vessels required to move super-sized cargoes may not exist, can’t move through the present Panama Canal and may not want to risk the Suez transit, which could result in an interruption to the supply chain, he said.

Thus, route constraints will determine the location of module fabrication. Asia may fabricate units for the West Coast of the U.S. and for Austro-Asiatic projects, while countries such as Turkey and Greece may fabricate units for European plants.

To transport these types of units, self-ballasting modular carriers will be built. These vessels are already under construction in China.

In addition to financing, equipment, vessel and transit challenges, the panel agreed that another obstacle to future projects is the shortage of skilled labor.

The certifications BDP Project Logistics has received are: 9001:2008 (Quality); 18001:2007 (Occupational Health and Safety); and 14001: 2004 (Environmental Management Systems).

BDP Project Logistics is a wholly owned subsidiary of BDP International, one of the world’s leading privately held freight logistics/transportation management firms.

Mr Aaron Chen, Regional Director of BDP Project Logistics Asia Pacific said the certifications came after five months of work and assessment by the BDP Project team.

“The three ISO certifications are particularly important for BDP Project Logistics as the company works on some of the largest and most challenging logistics jobs anywhere in the world,” Mr Chen said.

Mr Virenda Seghal, Regional Director of BDP Project Logistics, Middle East added: “Taken individually, each of these certifications shows the high standards BDP sets for all its operating units.  Together they reflect our values of taking pride in the quality of work we do, caring for the safety of our employees as well minimizing the impact we have on the natural environment.”

The three certifications will apply to all BDP Project Logistics’s office.  The Regional Head Office is located in Singapore, while the other offices are in the UAE (Dubai and Abu Dhabi), Thailand and China.

Media Contacts:

Matthew Shaw
Rubicon Consulting
+65 6465 3029
+65 9851 9340

matthew@rubicon.com.sg

Arnie Bornstein
BDP International
+1 215-629-8493
+1 610-247-2430
abornstein@bdpnet.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.

In Nicaragua, U.N. data estimates its potential at 40,000 megawatts, equivalent to 40 nuclear power plants. Vietnam’s economy has grown rapidly and faces the need for a greater and more reliable power source. Opportunities for wind power in Saharan Africa and in the Middle East—such as Syria and Libya, as well as South Africa—are also great due to favorable investment climate, ideal natural conditions, and increasing energy demand.

Extreme temperatures produce extreme winds, giving many African countries some of the highest wind velocities in the world. Morocco and Egypt have taken steps to commercially harness wind power. Ethiopia has commissioned wind energy projects, and Tanzania and South Africa are planning projects. And in Kenya 365 large turbines will be installed near Lake Turkana, which will create the biggest wind farm on that continent.

However, with opportunities come challenges. Compared with wind energy projects in industrialized countries, projects in developing and emerging countries can incur higher costs for transportation, installation, and maintenance, as well as additional factors associated with the demanding climate conditions.

These countries have little or no infrastructure, and limited technology in place. While China may not be considered by most as a developing country, there are still significant transportation hurdles for wind farm developers in many parts of that country. The project in Kenya will require transporting turbines to a very remote location, and roads and bridges must be repaired before trucks can even be brought in. The challenges are even greater when components are coming from many locations and must arrive within a specific time frame.

Transportation obstacles in developing countries can be overcome with the right project management, logistics resources, and freight-forwarding partners who can help ensure successful delivery of the cargo and prevent potential damages during shipping and handling. In other words, resources who can take planning and execution to an even higher level, providing solutions to issues such as authorization of road permits, special equipment importation, and temporary customs clearance. Many ports in developing countries do not have the necessary special equipment, and little to no experience in handling wind components, so look for a logistics provider that offers solutions that go beyond the norm.

Logistics providers must work with a knowledgeable, experienced marine surveyor at the entry port or discharge port, which is particularly important if the port has never handled wind components. Marine surveyors are responsible for making sure the cargo is properly handled—they inspect, survey, and document the physical movement at the port. The surveyor should have knowledge of how wind components should be lifted and handled. An inexperienced surveyor, or no surveyor, could prove costly.

The management of risk is also very important, especially for projects in developing countries. One of the logistics priorities should be the avoidance of damages and loss. But even with the best procedures damage can occur, and when that happens, delays will result. Insurance will help to mitigate the financial impact of damages, but it won’t help the schedule impact. So a risk management program that relies upon having insurance and avoiding damage is very important.

In some developing countries, transporting components can—or must—include armed guards. For example, transporting from the port to the job site for the planned wind farm in Kenya is a long trip. Trucks may have to stop, and suitable locations must be selected to ensure cargo is secure. Personal safety issues cannot be ignored, either. Your logistics provider can help determine what security measures are appropriate. They should thoroughly review and make an assessment of the risks for each step in the project transportation time line to help take the worry out of operating in developing countries.

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.

Source: Canadian Sailings, October 4, 2010 – The energy market has come to dominate much of the project cargo/heavy-lift sector. In Canada, wind farms, power plants and oil and gas sites are sprouting up in New Brunswick, Ontario, Alberta and Newfoundland, while equipment for wind generation is being assembled or produced in Nova Scotia and Quebec.

“Instead of downsizing like some of our competitors, we are giving ourselves a boost in growth by investing in the offshore wind farm sector,” said Niels Stolberg, president and CEO of Beluga Shipping. “It is the perfect time to do so. The offshore market is booming, whereas capacities and adequate tonnage are insufficient.”

Headquartered in Bremen, Germany, the carrier has offices and agents around the world, including in Houston.

Although a number of large-scale projects, especially in the hydrocarbon industry, have been delayed or put on hold indefinitely, “The wind industry has picked up and we saw increased deliveries of wind farm-related equipment,” said Wolfgang Spillner, president of Albacor Shipping.

The logistics company has locations in Toronto, Montreal, New York, Los Angeles, Calgary and Houston.

By 2025, the Canadian Wind Energy Association aims to generate 20 per cent of the country’s energy from wind. And the Canadian government, through its $1.5-billion ecoENERGY for Renewable Power program, is helping to fund these farms. Two projects in New Brunswick, the Caribou Wind Park and the Lamèque Wind Power Project, recently received $28.6 million and $13.79 million over the next 10 years, respectively. The former, operated by GDF Suez Energy North America, consists of 33 wind turbines. This park, which opened in July, is GDF Suez’s first power-generation project in the province.

The Lamèque project on the Acadian peninsula consists of 30 1.5-megawatt wind turbines located over 3,100 acres. Developed, owned and operated by Acciona Energy North America, this project is the company’s fourth wind farm in Canada. A completion date has been set for early 2011.

“There are a lot of requests for pricing, which is obviously a leading indicator for future activity,” said Guy Tombs, president of Montreal-based Guy Tombs Limited, which specializes in complex freight forwarding projects. “We’re quoting on some bigger projects that are going to happen in the next six to 12 months. It’s an encouraging sign (coming out of the recession).”

Besides the projects in New Brunswick, two other wind farms will be generating electricity by 2011.

Before the end of 2010, 27 1.8-megawatt wind turbines will be delivered to the Pointe Aux Roches project in southwestern Ontario by Vestas, a U.S. wind power system manufacturer. The wind farm, which is being built by International Power Canada, should be operating during the first half of 2011.

In Alberta, Madrid-based Renovalia Energy, a renewable energy company, will invest US$115 million to build a 120-megawatt wind farm, its first in this part of North America, for completion by the end of next year.

Canada and the United States is also where equipment for energy projects is being transported, produced and assembled.

CN recently moved the largest single out-of-gauge load ever handled in the company’s history. After more than a year of planning, a 635-tonne reactor used for gas desulphurization started its journey over an upgraded track from Oakville, Ont., and arrived at Frontier Refinery in Eldorado, Kansas, in mid-September.

Albacor Shipping saw an increase in the number of transformer shipments and related equipment it handled this year as compared to last year, Mr. Spillner said. One project involved transporting a 473,000-pound transformer from the Port of Houston to Scurry, Tex. Another transformer weighing 850,000 pounds left the Port of New Orleans for delivery at the Prairie States Generating Station in Marissa, Ill.

In addition, the company handled the shipment of an entire fertilizer plant from Canada to Poland. Another shipment destined for Poland from the Port of Robinson, Ont., was two 100-tonne cold boxes, which are used in chemical plants to produce nitrogen and/or oxygen.

Great Lakes ports are benefiting

In early August, a ship carrying 24 wind turbine components arrived at the Port of Duluth from Aarhus, Denmark. The parts were destined for Minnesota Power’s Wind Energy Center, which is under construction near New Salem, N.D.

“The Port of Duluth has handled nearly one million freight tons of wind turbine components in the past five years,” said Adolph Ojard, executive director of the Duluth Seaway Port Authority. “We’ve begun to see an uptick in wind shipments this year, signalling that sector is starting to rebound.

“One of the main advantages of the Great Lakes-Seaway system is that we are able to reach 2,340 miles (3,700 kilometres) into the heartland of North America and deliver these wind turbines as close to the wind resource as possible. Wind power operators and manufacturers are recognizing this benefit.”

Another Great Lakes port benefiting from wind energy projects is the Port of Thunder Bay, which so far in 2010 has re­ceived four shipments of wind turbines and wind energy components as well as a shipment of bridge parts destined for Calgary (see story on Page 12). The oversized bridge parts, at 19 feet 6 inches wide, comprised the widest loads to ever leave Thunder Bay’s Keefer Terminal via transport truck. Last year, pieces of oilsands equipment weighing more than one million pounds each were handled at the port.

“The Port of Thunder Bay is Canada’s gateway to the West for large oversized or heavy equipment,” said Tim Heney, CEO of the Thunder Bay Port Authority. “CN up­grades have created a highly competitive routing option for large cargoes destined for Western Canada.

“A second rail advantage exists in CP Rail’s direct route from Thunder Bay to the western provinces. And well-developed highways, including connections to the Trans-Canada Highway, allow trucking companies to deliver the same cargo cross-country by truck.”

Even shipbuilders and carriers are getting into the wind energy business.

South Korea-based Daewoo Shipbuilding & Marine Engineering set up a wind turbine production centre in Nova Scotia after acquiring U.S.-based DeWind for about US$50 million. The company’s new strategy is to build ships for offshore wind turbine installation and operate wind projects to generate 30 per cent of company sales by 2020.

According to company officials, Daewoo projects its wind power sales could reach US$800 million in 2012.

Beluga Shipping is another company that’s getting involved in the offshore wind industry. “In particular, we regard the offshore wind industry as a future-oriented operational field for very special project cargo,” Mr. Stolberg said. “Therefore, we are strategically expanding our involvement in this fast-growing market.”

Its core business is the super heavy-lift segment based mainly around the development of infrastructure and market segments related to the energy sector, oil and gas and offshore industries and construction of production plants and mines.

In April, Beluga Hochtief Offshore was formed, a joint venture between Beluga Shipping and Hochtief Construction AG. Within this joint venture, special erector vessels were designed for loading, transporting and installing giant wind plant equipment offshore. “In August, the steel cutting for the first jack-up vessel took place,” Mr. Stolberg said.

The ships, with a 1,500-ton crane capacity, will enable the installation and maintenance of offshore facilities with overall heights of more than 120 metres and water depths of up to 50 metres. In addition, Beluga Shipping plans to augment its fleet for this sector with two cable-laying vessels and two supply vessels.

At the Port of Cacouna in Quebec, most of the wind equipment destined for Invenergy Wind’s sites in the U.S. Midwest will be assembled at Illinois-based Vectora Transportation’s distribution centre located at the port. One Invenergy farm was recently approved near Breckenridge, Mich.

In August, shipments of 134 turbines, including nacelles, towers, blades, hubs and ancillary parts, began leaving from 12 different origins in Eastern Canada. Components are being transported via the Great Lakes, rail and truck. Vectora said it will be one of the largest wind logistics projects in 2010 due to the distance equipment will travel and the number of components shipped.

Canada Steamship Lines handled the first of several shipments of wind energy components destined for Vectora’s multimodal distribution centre at the Port of Indiana-Burns Harbor.

The arrival in September at the Port of Indiana-Burns Harbor of a 388-ton electrical transformer was one of the largest single cargoes ever handled at the port. The transformer, from Cordoba, Spain, was aboard the Beluga Recognition and destined for the nuclear generating station in Ottawa, Ill.

Off shore from St. John’s in Newfoundland and Labrador is the Hebron Project, a new offshore oil and gas development site. The heavy oil field, first discovered in 1981, is estimated to have 400 million to 700 million barrels of recoverable resources. The front-end engineering and design contract was recently awarded to the Australian engineering firm WorleyParsons by ExxonMobil Canada Properties, the operator of the project. An unsuccessful bidder was Canada’s SNC-Lavalin Group.

Lowest cost strategy

Price seems to be the determining factor for successful bids, said Jan Beringer, president and CEO of Calgary-based project freight forwarders Rohde & Liesenfeld Canada Inc. “Increasingly in today’s global shipping market, price is replacing expertise and experience in the freight decision-making process of manufacturers and buyers in the movement of heavy-lift cargoes,” he said.

Canadian manufacturers, for example in the oil and gas, power generation, tunnel boring and transportation sectors, export heavy and over-dimensional cargo components that are released for shipment after a long manufacturing lead time. “Why would manufacturers take any risk in the shipping of these components for a marginal saving in freight costs?” he asked.

One Canadian manufacturer, recently taken over by U.S.-based Caterpillar, he added, has adopted a “lowest cost” freight contracting strategy. “This manufacturer now only awards shipping based on lowest cost and thereby eliminates all variables, such as ranking shipping methods by risk evaluation, evaluating methodology and reviewing engineered load drawings and the bidder’s past experience,” Mr. Beringer said.

Mr. Tombs said, “The most interesting project work that’s worth pursuing is occurring in remote areas of Canada. If you’re doing shipping in those areas, the geography and the logistics in those regions have to be mastered for the project to be a success.”

In the United States, the movement of project cargo was affected by the BP oil spill. “The availability of barges on the Gulf Coast as a result of the oil spill has been problematic,” said Dennis Devlin, Houston-based director of global projects and energy at BDP Project Logistics. The company, which has ongoing projects in Colombia, principally focuses on chemical and power plant projects and specializes in plant relocations. It also handles large-scale industrial projects such as wind power and other alternative energy projects.

“As a result of the devastation of the earthquake in Chile in late February, we’re involved in some projects there,” he said. “And the market in the Middle East continues to be very strong.”

According to Wallenius Wilhelmsen Logistics, one of the biggest challenges is longer-term foresight on project needs. WWL, which has an office in Halifax and numerous U.S. locations, among others, has a fleet of more than 60 pure car/truck carriers and roll-on/roll-off vessels and, this year, continued to strengthen its ocean service in all major markets, especially the Middle East, South America and Australia/New Zealand.

Online bidding

Another challenge for the industry is the online bidding process called reverse auctions. “This process has only one objective: to use the reverse auction process through a web-based portal to allow bidders to compete against one another by lowering their bids on heavy-lift cargo movements,” Mr. Beringer said.

JSPL India recently launched this online process to transport heavy-lift cargoes from GE Canada to India. Low-cost operators will benefit from reverse auctions, he said, rather than proven carriers with properly maintained equipment and safety records. “A reverse auction eliminates all factors such as safety standards, methods of transport, certifications and licensing to a factor strictly based on price,” Mr. Beringer said.

Experienced intermediaries, he continued, understand the importance of cargo markings to lift cargoes, identify centres of gravity, specify handling by crane or forklift, protect machined surfaces and plan in advance how to secure heavy-lift cargoes.

“The price of freight is not just what it costs to pay trucking companies, port facilities and ocean carriers,” Mr. Beringer said. “It is the cost of man hours, processes and supervision to ensure heavy-lift cargoes are given the attention required to move them safely. Heavy-lift cargoes cannot be left to move through the supply chain like a courier shipment.

“Manufacturers and buyers of heavy-lift cargoes need to re-evaluate the emerging trends of using lowest bidder and reverse auctions to ensure the end result – the safe delivery of equipment to the end location – is not compromised by these very processes.”

Despite the challenges, one company gearing up for growth is Beluga Shipping, which recently received financing of up to 200 million euros ($269 million) from Los-Angeles-based Oaktree Capital Management, a private equity group. “The super heavy-lift market is a very expansion-oriented, financially at­trac­tive field,” Mr. Stolberg said.

Since the beginning of the year, five newbuilds of its Beluga P-series were launched for a total fleet of 69 vessels. These multipurpose heavy-lift project carriers provide on-board crane capacities of 800 to 1,400 tons in tandem usage, extra large box-shaped holds and a tonnage capacity of about 20,000 tons deadweight.

“Soon we are going even further,” Mr. Stolberg said. The Beluga P3-series, which has been developed over the past 12 months, will go into construction shortly.

These newbuilds will be equipped with two 1,000-ton cranes, which will provide lifting capacities in tandem of up to 2,000 tons. “This underlines our strategic focus on the super heavy-lift market segment,” he said. “As the ice class of our P-series vessels is Finnish-Swedish 1A, we will be able to offer time- and cost-efficient realizations of challenging projects everywhere on the high seas.”

The future

As for future challenges, one of the biggest for the industry will be the growing markets and the increasing influence of countries such as Brazil, Russia, India and China. “They offer enormous potential for all kinds of investments,” Mr. Stolberg said. “Throughout the world, huge energy plants and infrastructure projects are taking place. This will lead to heavier project transports. Shipments involving single weights of 700 tons and more will be the most attractive segment.”

Indeed, cargo is getting bigger, heavier and more complex. “Today, voluminous modules and complete plant sections are transported already pre-mounted instead of several single parts on various vessels,” Mr. Stolberg said. “From the client’s perspective, this procedure saves time assembling at the target location and, in turn, means that the shipped components are able to run once they reach their destination. This requires vessels that can lift and ship such cargo. Our newly built Beluga P-series is our answer to this trend.”

WWL also agrees that the demand has increased to move larger and heavier cargo and, as a result, carriers have to find solutions for their transportation. To meet this challenge, WWL will add several new Mark V ro-ro vessels to its fleet in 2011. These next-generation vessels boast 500-ton ramps that are 12 metres wide with a 7.1-metre in height door opening.

Another factor, along with the growth of market opportunities, is consideration for the environment. “We all have to constantly invest in projects to minimize the utilization of fossil fuel-based energy in transportation as well as in production,” Mr. Stolberg said.

An unknown factor is whether the economy has fully recovered.

“The main challenge will be the global economy and whether the recovery will sputter or move full steam ahead,” Mr. Devlin said. “Will the U.S. and Europe flounder Japan-style for long periods of weak growth or will markets recover quickly? And if markets do rebound, the crumbling infrastructure in the U.S. will remain a challenge unless expensive improvements are made.”

Mr. Spillner said, “The challenge is to understand that markets have shifted and are still shifting. There has to be a healthy mix between inbound and outbound business and that is very difficult to gauge.”

Despite the challenges on this side of the Atlantic, one region of opportunity for project cargo is Russia, which is a “young” economy. “We believe in the developing markets of Russia and the Commonwealth of Independent States in general,” said Mr. Spillner, whose company has worked in that market for more than 20 years. This year, Albacor opened Albacor Russia and Albacor Siberia for a total of nine offices in Russia. Last year, an office was opened in Berlin.

“For mid-size companies like ours, the challenge in the future will be to find and work in niche markets, which require a very personal engagement on behalf of the management and staff in order to offer real value to customers,” Mr. Spillner said.

By KATHLYN HORIBE

The berth is a safe unloading destination with eight meters of water — but nobody bothered to mention the sandbar blocking the entrance to the harbor.

Customs officials of a developing country delay a cargo because the forwarder won’t pay a bribe, and each day of delay costs hundreds of thousands of dollars. But paying the bribe could cost much more, thanks to toughening anti-corruption laws (see related story page 30).

Such risks often have a common denominator; the remote territory where they occur, according to Aaron Chen, regional director Asia Pacific at BDP Project Logistics.

Chen says customs clearances often present legal challenges in developing nations where corruption is commonplace.

“If you are up against the clock and every day is worth money, what do you do?” Chen said. “We make it clear to our customers that when there is Option A — the legal way — or Option B — the not-legal way — we can only help with Option A.”

“If customers insist on Option B, we are not the forwarder for them,” he said. “Even if it means your cargo will incur extra charges and might be delayed, we must agree we will only do business legally. When the situation comes up, there are no questions.

“If you just say ‘I hope this doesn’t happen to us,’ you are behaving like an ostrich,” he said.

European companies are signing similar undertakings as international corporations gear up for the U.K. Bribery Act to go into effect in April 2011.

After corruption, Chen ranks paying for protection or safe passage as a major risk related to territory. Forwarders often pay to ensure the safety of personnel and cargo by hiring armed guards, or to gain permission for cargo to pass through a tiny village that requires a toll for us of its roads.

Many of Chen’s customers build or work in remote regions of Indonesia, where roads often are built to bypass local villages, but the cargo or workers may still need to use some portion of the public road. In such cases, it is considered acceptable for villages to demand payment. “This is also true in Latin America and Africa,” Chen said. “You hire the guards. You pay the toll. These are party of your operating costs.”

Forwarders often also pay the cost of bringing customs officials to a site to clear cargo. Claus Dittmer, senior projects manager Asia at BDP, said customs seldom have facilities at the remote locations where project cargo is unloaded.

“The first task will often be building the infrastructure itself,” Dittmer said. Then, “As the forwarder, we have to find a way to bring customs to that location so they can clear the cargo. We also have to arrange for quarantine, for the vessel to berth legally, and so on.”

When forwarders rely on other parties’ information, expensive mistakes can result.

For example, if a shipper advises the forwarder that a vessel can dock at the berth, the forwarder needs to research the location.

If not, “we, the forwarders, book the vessel and bring it in,” Dittmer said. “And then we find out the vessel could dock — except there is a sandbar in the way and they can’t get past it to berth. So how do we get the cargo off? We chartered and loaded. We are the ones responsible for finding an alternative.”

At this point, alternative transport will be expensive, and so will the delay.

By Janet Nodar

To read this article in the magazine, click here.

Source: Breakbulk Magazine, September/October 2010 Issue – When engineering, procurement and construction firms need to move project cargo, many look outside their gates to specialized project forwarders for help. Historically, project forwarders have operated as agents for their principals. They were responsible for little of the performance risk associated with their scope of work.

Today, project forwarding can range from simply delivering cargo to a port where it is handed over to the client, to factory-to-jobsite projects where the forwarder controls the cargo every step of the way.

The simpler end of the service continuum is “much less risky, but the compensation is less, also,” said Dennis Devlin, director of global projects and energy at BDP Project Logistics, which handles both types of forwarding work, from simple deliveries to turnkey projects.

To read the full article, please click here.

By: Janet Nodar