Pacific Maritime Magazine - Marine Business for the Operations Sector

Bulk and Breakbulk


Bulk and breakbulk shippers are choosing Vancouver USA to import wind energy products because of the port's specialized equipment, highly trained labor force and assets. Photo courtesy of the Port of Vancouver, USA.

North America's west coast may be the focal point of containerized cargo imported and exported to and from Asia, but when it comes to bulk and breakbulk cargo, the ports on the US Gulf and East Coasts have captured a substantial portion of the market.

The Port of Houston is ranked first in the US when it comes to breakbulk cargo imports, while the ports in New Orleans (breakbulk), Baltimore (vehicles), Mobile, Alabama (steel, forest products) and elsewhere all have their niches. And the opening of the Panama Canal expansion in mid-2016 is expected to help ports east of the Mississippi River gain even more market share.

Even before the Canal's expansion, some west coast ports saw their share of the bulk and breakbulk cargo pie shrink in recent years. Despite that however, some west coast ports have not only held steady, but even gained market share when it comes to certain commodities.

Port of Vancouver

Among the west coast ports with considerable bulk and breakbulk activities is Canada's Port of Vancouver, where dry and liquid bulk cargoes account for about two-thirds of the port's annual tonnage.

The good news for Vancouver's bulk sector over the past several months is that more grain is being exported overseas to new markets, according to port data regarding its volumes for the first half of 2016.

The increased grain exports have resulted in an increase of 4.8 percent over record 2015 volumes, according to the port. Canadian bulk grain exports through Vancouver, BC had back-to-back record years in 2014 and 2015, supported by a bumper harvest and strong overseas demand.

The bad news however, is that reduced investment due to a slowdown of industrial activity in western Canada, along with the weakened Canadian dollar, led to an 11.7 percent decrease in volumes of machinery, vehicles and construction materials moved through the port, according to data.

Other resource-based decreases include a 38.7 percent drop in exports of power-generating thermal coal to key Asian markets. However, metallurgical coal, which made up about three-quarters of total coal volumes, saw a much smaller decrease, only 4.1 percent.

The port's cargo for the half-year ending June 30, 2016 was 66.0 million metric tons, an overall decrease of 5.9 percent over the same period in 2015.

The results represent a softening of volumes in all major commodities except grain, where increases in barley and canola (41.8 percent and 40.1 percent, respectively) contributed to overall growth in that sector.

Vancouver USA

Meanwhile, about 300 miles to the south, the other Port of Vancouver – the one in Washington State – has had its own issues with bulk and breakbulk cargo volumes in the recent past. The majority of bulk/breakbulk cargoes have been flat or declining over the past year, port spokeswoman Abbi Russell told Pacific Maritime Magazine.

"The exception to this is the wind energy project market," she said. "Renewal of the (Renewable Electricity) Production Tax Credit has reinvigorated the wind energy industry, resulting in an increased volume of wind energy components being imported."

The tax credit is an inflation-adjusted per-kilowatt-hour financial incentive for electricity generated by energy resources and sold during the taxable year. The credit is slated to last another five years, but drops by 20 percent each year.

"Our expectation is for wind volumes to remain strong through the life of the credit," Russell said.

Among the reasons bulk and breakbulk shippers are choosing Vancouver USA to import wind energy products over other ports, Russell said, are the port's equipment, highly trained labor force and assets.

"We have two Liebherr mobile Harbor cranes and a labor force that's specially trained to handle wind components using the most productive and safe practices available," she explained. "We have more than 100 acres of laydown space on the terminal, which provides plenty of room to load wind energy components to rail or truck."

During the first six months of the year, Vancouver USA saw a total of 203 vessel calls and moved a reported total of 3.4 million tons of cargo, 2.8 million of which was inbound.

Of the total tonnage, the two highest amounts were steel and steel slabs, at more than 224 million and 66.4 million metric tons, respectively. The third-highest portion, 66.5 million metric tons, was automobiles, followed by windmills at about 11 million.

Port of Longview

At another of Washington's seaports, the Port of Longview, metric tonnage was up during the first half of the year compared to 2015, according to port data.

The port, located in southwest Washington, has eight marine terminals and waterfront industrial property spanning 835 acres on the deep-draft Columbia River. The breakbulk commodities it sees include steel, pulp and paper products, construction materials and mill assembly parts and equipment. Bulk commodities include project cargo, petroleum coke, potash, soda ash, dried grains, salt, oats and talc.

Internal data show that Longview saw 3.4 million metric tons of cargo during the first half of this year, up from 3.1 million during the same six months last year. The increase was despite fewer vessel calls – 112 – compared 114 in the first half of 2015.

Chief among the port's tonnage was outbound bulk agri-products, which accounted for 2.6 million metric tons – up from 2.2 million last year. The next highest amount was in the category of outbound bulk chemicals, of which the port saw nearly 351,500 tons, up from 350,400 in 2015.

Port of Portland

Down the coast in Oregon, the Port of Portland saw 3.95 million metric tons of cargo during the first six months of this year, compared to 4.66 million metric tons during the same period in 2015. This was despite a rise in vessel calls; the port saw 196 vessel calls the first half of 2016, compared to 190 during the first six months of last year.

The Port of Portland's breakbulk tonnage total completely fell off the map early this year; after seeing 13,439 metric tons in January, there was no reported tonnage the following five months. Last year, Portland saw 14,782 metric tons in January, followed by zero in February through April, with things picking up in May with 7,101 tons, followed by just under 41,600 in June.

The good news for Portland is that it saw significant increases in its two biggest commodities, grain tonnage and auto units, the first half of the year. The port moved 135,509 vehicles during that time period, compared with 99,618 during the corresponding period last year.

Regarding grain tonnage, Portland moved 1.95 million metric tons during the first half of 2016, compared with 1.03 million metric tons in the first six months of 2015.

The auto and grains gains offset what was a bad six month period for mineral bulk tonnage. Portland saw 2.0 million tons of bulk minerals during the first half of this year, compared with 2.72 million during the corresponding period in 2015.

Bay Area

Further down the coast at the Port of San Francisco, data shows that the port's total breakbulk cargo volume has dropped precipitously over the past four years, while it's total bulk cargo – dry and liquid -- has been up and down during the same time period.

San Francisco, which frequently handles rolling stock, project cargo and breakbulk, saw it's total bulk volume fall from 1.21 million tons during calendar year 2012 to 1.20 the next year, then rise to 1.61 million in 2014, only to fall to 1.49 million in 2015.

A big part of the reason was the loss of bulk liquid exports. There were no bulk liquids moved through the port in either the 2014 and 2015 calendar years, as opposed to nearly 4,000 in 2013 and almost 8,400 in 2012.

Regarding breakbulk cargo, San Francisco saw a huge decline in volume a few years ago, when its tonnage fell from 25.5 million in calendar year 2012 to 7.7 million in 2013. It fell again in CY 2014 – to 3.9 million tons before rebounding last year to 4.26 million.

Over the past four years, the port's number of cargo vessel calls rose from 30 in 2012 to 39 the next year, and was 36 in both the 2014 and 2015 calendar years.

Across the San Francisco Bay at the Port of Oakland, there's a thriving container import/export business, but no bulk or breakbulk operations. There had been plans to open a coal export terminal, but in June, Oakland city officials blocked a proposal that would have made the port a gateway for Utah coal to be shipped overseas.

The possibility of a coal terminal ever being built in Oakland became remote in August when Gov. Jerry Brown signing into law SB 1279, which bars the California Transportation Commission from allocating state funds for new coal-related projects.

Coal is currently shipped through ports in Richmond, Stockton, Long Beach and elsewhere in the state, but the measure, which goes into effect Jan. 1, 2017, applies only to future projects.

Port of San Diego

Tucked away at the southern end of the American west coast is the Port of San Diego, which has made specialty cargo it's focus, including engines, turbines, propellers, steel, windmill components, yachts, roll-on/roll-off including vehicles and wheeled equipment, lumber, bagged commodities and even brewery equipment.

Port spokeswoman Tanya Castaneda told Pacific Maritime Magazine that the types of cargo trending in the positive direction include fertilizer volumes, which have remained steady due to a healthy demand from California's agricultural sectors. Also trending are:

• Automobiles. "Due to a strong customer demand and a healthy US job market, the Port District has seen a positive volume trend in this cargo segment in the last few years," she said. "Our numbers are back to where they were prior to the Great Recession (of 2008)." In calendar year 2015, the port handled 425,000 automobile units.

• Shipbuilding materials. San Diego is home to General Dynamics NASSCO, the largest Shipyard on the west coast, and because of NASSCO's new contracts with the US Navy and other commercial carriers, port terminals have benefitted by receiving a variety of cargos needed to complete and construct the vessels, such as ship engines, steel components, propellers, machinery, ladders, LNG tanks, etc. This trend is expected to continue due to new contracts recently secured by NASSCO.

• Electronics. "Steel coils have shown an increase in volumes versus past years due to a higher regional demand," Castaneda said. "A local coil provider has secured a large contract with a major TV manufacturer and has been using the Tenth Avenue Marine Terminal for the importation of this raw material. Our proximity to the US-Mexico border is a big advantage as major manufacturing plants reside within this area."

• Wind components. Due to California's heavy demand on green energy sources, the port's expecting to participate in the importation of blades and tower components from overseas in the near future, Castaneda said.

NASSCO's contracts with the US Navy and other commercial carriers bring a variety of cargos needed to complete and construct the ships, such as ship engines, steel components and propellers. Photo courtesy of the Port of San Diego.

On the other hand, types of cargo the port has seen decrease over time include: newsprint, which is no longer imported by local newspapers from the Pacific Northwest due to a lack of need; construction materials, which aren't as in demand due to the housing crisis that occurred during the 2008 recession; and fresh fruit in break bulk, because of a shift from conventional reefer ships to containerized vessels.

Regarding fresh fruit imports, Dole Fresh Fruit, an anchor tenant at the port since 2002, recently replaced its entire containerized vessel fleet in San Diego, raising its containerized capacity from 491 forty-foot equivalent units to 770 FEUs.

Dole provides a weekly service to San Diego from Central and South America, and distributes bananas, pineapples and other perishable cargos from San Diego to the western US

And despite the construction materials sector being down for a number of years now, the port said a rebound is expected.

"New prospects are interested in using San Diego for the importation of construction materials in the near future," Castaneda hinted.


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