Bulk and Breakbulk
October 1, 2019
West Coast ports can move more than just boxes. They can handle a diverse and robust amount of bulk and breakbulk cargo ranging from automobiles to wind turbine blades.
Many specialize in handling such goods. Washington's Port of Kalama, for example, was recently considered the third largest bulk exporter on the west coast behind the ports of Los Angeles and Long Beach, handling more than 13 million tons of bulk products, according to the US Census Bureau and USA Trade Online.
In 2018, more than 13 million tons of grain exports were driven by Port of Kalama companies and facilities, according to the port.
Still, any gains in bulk and breakbulk cargo are threatened to be offset by escalating tariffs from China and the US. Some west coast ports are working to limit their exposure by diversifying that line of business.
Here's a snapshot at some of the bulk and breakbulk business on the West Coast:
Port of Vancouver USA
This port's prime location on the US west coast gives Vancouver USA a significant advantage in moving bulk and breakbulk products to growing markets along the Pacific Rim, said the port's Chief Commercial Officer Alex Strogen.
"Ships departing the Gulf of Mexico reach Asian markets in 31 days versus just 14 days from the Port of Vancouver, and we are always working to maximize the benefits of those transportation savings in relation to opportunities across the globe," he said.
The port has been handling more wind blades in recent months. In late June, the port received a record-breaking shipment of 198 wind turbine blades, each measuring 49 meters in length.
"In addition to current business, we are working to get equipment on hand and transportation routes in place to handle the new generation of wind blades, which measure up to 77 meters in length," Strogen said. "Our heavy lift mobile Harbor cranes, acres of laydown space, highly skilled workforce and dedication to renewable energy showcase how uniquely qualified our port is to handle this type of cargo."
The port also handles large transformers that serve the growing number of server farms in the Pacific Northwest, he said.
"We see great potential for growth with this commodity and are working to ensure our region can support the movement of these types of breakbulk products," said Strogen, adding that the port is a member of the Columbia River High, Wide & Heavy Corridor Coalition – a group dedicated to creating a safe and effective transportation corridor for moving oversized cargoes from north Asia to western Canada and the US Midwest.
The route benefits shippers moving products to and from North America through Columbia River ports, he said.
"We are working hard to streamline the entire approach to this effort by coordinating regulatory and infrastructure improvements, as well as facilitating the planning, funding, construction and operation of the corridor," Strogen said. "This is a very effective partnership aimed at improving opportunities for stakeholders and communities here in Washington State and throughout the Pacific Northwest."
The ongoing trade war is one of the big issues the port is following, Strogen said.
"We are most directly impacted by China's retaliatory tariffs, particularly on agricultural products," he said.
Soy exports out of the United Grain facility at Vancouver USA fell 50 percent compared to the 2017-2018 harvest year, and copper exports to China are down, he said.
"While we've been able to make up some ground by shipping copper concentrate to new destinations, we're seeing a limit to our opportunities given the loss of access to the Chinese market," Strogen said. "These impacts are significant to the port, but also ripple throughout the supply chain to our partners shipping and moving grain, and the folks working on our docks."
Meanwhile, the port – currently the second largest steel port on the US west coast – has seen consistent growth in steel slabs despite tariffs.
"As long as our economy remains strong, we expect to continue to see increased volumes," said the port's Chief Commercial Officer Alex Strogen, adding that the steel slabs are also linked to renewable energy production by supporting domestic wind component manufacturing.
"The increased demand for domestic wind energy production has contributed to growing imports here at the port," he said.
To combat the volatility associated with the tariffs, the Port of Vancouver is working to minimize its exposure to risk, Strogen said.
"We pride ourselves on a diverse cargo base and continue to focus on ensuring we have a wide range of commodities moving across our docks and through our facilities," he said.
Also on the port's radar, the IMO 2020 transition to ultra-low sulfur fuels is "the greatest single challenge we see on the horizon," Strogen said.
"This will increase costs to all shippers, either through cleaning and retrofitting engines, installing scrubbers, or for the fuel itself," he said. "Freight rates are expected to fluctuate depending on a number of factors including travel time between ports, cargo density, and fuel costs."
This development, however, could provide a significant advantage in moving bulk products to growing markets along the Pacific Rim, Strogen said.
"Ships departing the Gulf of Mexico reach Asian markets in 31 days versus just 14 days from the Port of Vancouver," he said. "Shorter distances with less transit time reduce the overall fuel consumption and associated costs of moving freight, ultimately increasing the viability of shipping through Northwest ports following implementation of the IMO 2020 regulations."
Port of Olympia
The Port of Olympia prides itself on being a premier niche port with a loop on-dock rail, 76,000-square-foot open beam warehouse and 140-MT lifting capacity Gottwald crane.
In the past three years, this Washington port has handled log and dairy heifer exports, bulk grain imports and a one-time only cargo shipment of gold ore imports. Olympia anticipates moving more export logs and livestock this year and next year as port officials continue to develop short-term and long-term opportunities.
"The port continues to seek viable cargoes for sustainable growth options in the future, " according to the port. "For now our concentration remains with our log tenants and livestock customers. We expect to load more than 100 million board feet in logs and are hopeful for continued livestock shipments. Opportunities arise at different times and we will be ready as new cargoes become available."
Meanwhile, tariffs continue to affect current trade opportunities and project cargoes entering the Pacific Northwest, and the Port of Olympia has not been immune, though not as severely as other ports.
Tariff hikes have affected Olympia's log export market, particularly a slow decline in Chinese exports. However, Japanese log exports continue to be stable and promising for the future, according to the port.
"It is difficult to see what is forecasted in the next few years during the best of times, and the trade tariffs only complicate matters," the port said. "As one of the leading log export ports in Washington, we anticipate remaining strong with that business, especially the Japanese logs.
"We forecast that we will also continue with livestock shipments in 2019-2020. We continue to engage with our shipping partners to seek out new opportunities and plan to increase our business development exposure in 2020 with an increase in advertising, networking and trade shows."
Ports of Los Angeles and Long Beach
While the nation's two busiest seaports are known for their high volume container business, the ports of Los Angeles and Long Beach also have a solid bulk and breakbulk business.
In Los Angeles, about 10 to 15 percent of its business is in bulk and breakbulk cargo, said Marcel VanDijk, marketing manager at the Port of Los Angeles.
Los Angeles handles a variety of cargo, including steel coil and beams, seasonal produce, beef, vehicles and liquid bulk including bunker fuel, VanDijk said.
In Long Beach, bulk and breakbulk products make up about 21 percent of the port's revenue in its FY 2019 budget, with dry bulk terminals accounting for $31.3 million in revenue, petroleum and liquid bulk terminals for about $17.8 million and vehicle terminals for about $15.2 million, according to Lee Peterson, Media Relations Manager for the Port of Long Beach.
Pier F, which is comprised of Berths 204, 205, 206 and 207 and stretches nearly 2500 linear feet, handles a lot of that business. More than 50,000 automobile units moved through there in 2019, as well as parts for new power plants being built by AES and steel needed to construct the new Rams/Chargers football stadium.
"The key thing for us is that it provides a diversity of customers and products and things so that we're not dependent on any one type of business as much," said Don Snyder, acting Managing Director of Commercial Operations for the Port of Long Beach.
"And so it's important because anytime you have economic cycles that affect one line of business, diversity usually puts you in a better position to maintain your positive outlook. And breakbulk definitely fits into that cargo diversity."
That business diversity is serving Long Beach well in bulk and breakbulk cargo in the face of tariffs.
For instance, the majority of steel coming through Pier F is coming from Australia and Japan.
"Our customers already have established markets in a lot of countries, so if we're in a trade war or an issue with one country, it doesn't affect it as much as it's currently affecting the container business," Synder said.
Port of San Diego
This Southern California port has seen an increase in heavy lift, project cargo and breakbulk activity, including a .42 percent increase in breakbulk cargo at its Tenth Avenue Marine Terminal. More recently, the port handled some massive drill bits, motors and project pieces for the Los Angeles basin's Metro transportation project, a shipment that demonstrated the San Diego port's capability with large project cargo.
Next year, the port anticipates a 1.16 percent tonnage increase in project cargoes such as wind energy components, turbines and transformers.
Last year, the Port of San Diego's Maritime Business Development team netted a three-year deal with G2 Ocean, one of the world's leading breakbulk and bulk shipping firms. G2 Ocean is now calling regularly to the port, bringing steel products such as steel coils, steel pipes, steel plates and slabs for shipbuilding, appliances and construction projects, as well as project cargo such as transformers and yachts and bagged and bulk fertilizer.
"With our recent European service with G2 Ocean, San Diego is able to attract these major CapEx cargos originating in Europe and bound for infrastructure, manufacturing production sites in the southwestern US," the port said.
Also underway is the port's Tenth Avenue Marine Terminal modernization project. The port is nearly done with the second contract package in Phase 1.
"The project has already demolished one transit shed, creating much-needed laydown space for the large project cargo we receive," the port said. "The project will soon demolish a second shed. Other elements of the project include enhanced terminal lighting, rail and underground utilities. Completion of the Modernization project is projected for Summer 2020."