{"id":727,"date":"2018-10-04T11:34:58","date_gmt":"2018-10-04T11:34:58","guid":{"rendered":"https:\/\/phoenixglobalgroup.com\/mi-katigoriopoiimeno\/breakbulk-comeback-with-more-vessels-scrapped-and-new-ships-launched\/"},"modified":"2024-02-27T09:52:06","modified_gmt":"2024-02-27T09:52:06","slug":"breakbulk-comeback-with-more-vessels-scrapped-and-new-ships-launched","status":"publish","type":"post","link":"https:\/\/phoenixglobalgroup.com\/el\/nea\/breakbulk-comeback-with-more-vessels-scrapped-and-new-ships-launched\/","title":{"rendered":"Breakbulk Comeback? with more vessels scrapped and new ships launched"},"content":{"rendered":"
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By Patrick Burnson, Executive Editor \u00b7 October 3, 2018<\/p>\n

As rates for container and handy-size bulk carriers have escalated, these operators have been discouraged from competing for breakbulk cargo. This is good news for breakbulk shippers and the network of domestic ports reliant on their business.<\/p>\n

Industry analysts have long noted that the constellation of breakbulk shipping is complex, comprising many distinctive industrial segments reliant on capital expenditure\u2014both public and private.<\/p>\n

Consequently, breakbulk does well when the global economy remains strong. However, breakbulk cargo transport requires that a number of uncertainties be well managed to mitigate risk of damages, missed key connections and accrued delay penalties.<\/p>\n

\u201cThe breakbulk sector has on a few occasions in recent years become prey to other segments,\u201d observes\u00a0Panos P. Patsadas, chartering and operations manager for Ds-Multibulk GMBHDS in Hamburg, Germany<\/a>.<\/p>\n

\u201cIn the years during the recession of the bulk market, it was not uncommon for bulk carriers\u2014suffering lousy freight rates\u2014to resort to strategies previously alien to the segment.\u201d<\/p>\n

Although parceling has always been the niche trade of multipurpose vessels (MPVs) in \u201cthe bad days,\u201d many bulkers tried to adopt this strategy in a futile attempt to maximize revenue and keep their heads above water, added Patsadas.<\/p>\n

This problem was exacerbated in recent years when a newer version of general cargo ship with holds designed for container stowage was introduced. The holds in these MPVs generally have \u201ctween decks\u201d and containers can be stacked and lashed on to the hatch covers.<\/p>\n

Of course, the MPV is still capable of carrying breakbulk cargoes as well as bulk cargoes, while some are also equipped with tanks for liquid cargoes. It generally also has its own cranes and derricks, sometimes with heavy lift capability.<\/p>\n

\u201cAs soon as The Baltic Dry Index picked up, these small parcels were no longer of interest to the bulk market\u00a0who went back to their regular single cargo trade,\u201d says Patsadas, referencing the shipping and trade index created by the London-based Baltic Exchange that measures change in the cost of transporting various raw materials.<\/p>\n

NEW CHALLENGE<\/p>\n

According to Patsadas, a similar phenomenon, which is ongoing, can be observed in the container trade. At a time when the \u201cBig Three\u201d (MSC, CMA-CGM, Maersk) are battling it out for market share and profit margins are shrinking to unprecedented lows, the lines are trying to extract additional value out of the comparatively lucrative breakbulk and project cargo market.<\/p>\n

\u201cAnd they are successfully doing so, particularly in the Far East-to-Europe and Europe-to-Far East trade lanes,\u201d says Patsadas. \u201cAs long as heavy cargo can be loaded on a flat rack, container lines will happily take it. It can be moved at a fraction of the rate an MPV shipping company would charge\u2014and will arrive at its destination sooner.\u201d<\/p>\n

Another major interloper in the breakbulk market are carriers that specialize in roll-on\/roll-off (Ro\/Ro) cargo, which can be easily reconfigured to compete with MPVs.\u00a0Grimaldi<\/a>,\u00a0NYK<\/a>,\u00a0MOL<\/a>\u00a0are among the leading examples of this kind of \u201ccannibalism\u201d say industry analysts.<\/p>\n

Furthermore, this ongoing trend will continue in the most saturated markets. \u201cLittle differentiation can be achieved in the container market to boost revenues, and all efforts are now focused on digitization and disruption of the supply chain,\u201d concludes Patsadas. \u201cThe need to penetrate new markets in order to gain an advantage over the competition is almost a reflex reaction of the oligopolistic mega-container carriers.\u201d<\/p>\n

BRIGHT SPOTS<\/p>\n

Meanwhile the general cargo trade has suffered an ongoing decline, falling from 20% in 2007 to 12% last year. The older general cargo vessels often have their own cranes and derricks for cargo loading and discharging, but these models are being scrapped in large numbers as a new generation of MPVs surface.<\/p>\n

According to \u201cDrewry<\/a>\u2019s Multipurpose Shipping Market Annual Review and Forecast 2017\u201d report, these new vessels will grow the breakbulk market at an average annual rate of 3.4% to 2021.<\/p>\n

Susan Oatway, lead analyst for multipurpose shipping at the Londonbased consultancy<\/a>, predicts that there will be a decline of nearly 4% in the current older MPV fleet this year. \u201cDespite a return to demand growth, the vessel supply market is expected to lag with average annual contraction of 0.1% per year until 2021,\u201d she says. \u201cStill, certain segments are forecast to rebound much more rapidly, with a stark difference between project carrier vessels and simple MPVs.\u201d<\/p>\n

While she has witnessed many changes in her past 38 years of experience in the breakbulk industry,\u00a0Lynn Birner, chief administrative officer of RTM Lines<\/a>, an ocean project cargo company, says that certain truths still hold.<\/p>\n

\u201cWith breakbulk, each shipment is unique in terms of size and shape,\u201d she says. \u201cThe need for special equipment, the availability and rotation of adequate conveyance are all variables that must be included in the equation.\u201d<\/p>\n

For that reason, Birner believes that while there\u2019s much talk about innovation in her business, digital platforms and apps have yet to be perfected\u2014or even proved to be\u00a0practical. \u201cCreating, implementing, and especially integrating something like blockchain in our industry worldwide is a long way off,\u201d she says.<\/p>\n

For the time being, more urgent concerns for U.S. breakbulk exports is the strong dollar and the uncertainty of pending trade agreements with China and elsewhere in the world. Birner is also telling shippers that regardless of breakbulk vessel type, there are still general rate increases (GRIs) to consider.<\/p>\n

\u201cThe GRIs come after an intense analysis of shifts in costs over the previous year,\u201d Birner explains. \u201cThe steamship lines know that every trade lane tariff has its own cost, and, with that, its own set of costimpact factors to take into account when determining a responsible GRI rate level. Every measure of a carrier\u2019s cost structure is reviewed and capital and expense projections are assembled for the coming year.\u201d<\/p>\n

This means the GRI is a history lesson while, at the same time, is predictive of the future. It provides a forecast for the future of labor, consumer behavior and government fees and taxes. She advises shippers to know exactly what they\u2019re producing and run scenarios for price increases to see how they will affect their margin.<\/p>\n

\u201cEvaluate the burn rate of additional expenditures, and determine viability toward the bottom line,\u201d Birner adds. \u201cA more accurate classification of your freight may mitigate excessive spend.\u201d<\/p>\n

DELOYMENT OPTIONS<\/p>\n

Coinciding with how shippers negotiate rates with carriers comes the challenge of selecting the ideal port for saving on total landed costs.<\/p>\n

While many of the nation\u2019s largest container\u00a0ports can accommodate breakbulk, a handful of smaller ocean cargo gateways are becoming competitive specialists in this niche. In the Pacific Northwest, for example, the\u00a0Port of Portland<\/a>\u00a0is marketing its Terminal 6 as a premier breakbulk option, although it can also handle containerized cargo.<\/p>\n

Portland\u2019s Terminal 2 is a pure-play breakbulk terminal capable of handling steel rail imports from Asia. The\u00a0Port of Everett<\/a>\u00a0in Washington is also making a play to capture more \u201cover-dimensional\u201d freight with recent investments in its infrastructure.<\/p>\n

The Boeing Company<\/a>, which ships aerospace parts for the new 777X is one particular beneficiary. \u201cCompleting critical infrastructure upgrades like this will better position the port and its facilities to handle the larger vessels and heavier cargoes now calling Everett,\u201d says\u00a0Glen Bachman, Port of Everett commission president<\/a>.<\/p>\n

Many breakbulk shippers in the Gulf seem to favor the Port Corpus Christi as it features Dock 8\u2014the strongest open wharf in the region with more than 23 acres of dockside storage and rail transfer.<\/p>\n

Rail service for breakbulk cargo is provided by three Class 1 railroads: Burlington Northern Santa Fe; Kansas City Southern Railway; and Union Pacific Railroad. In addition, on dock rail tracks allow direct vessel-torail transfer.<\/p>\n

\u201cThe port continues to break records in tonnage and revenue growth,\u201d says\u00a0Charles Zahn, Jr., Port of Corpus Christi commission chairman<\/a>. \u201cWe expect this trend to continue as we see more energy production from the Permian Basin and Eagle Ford Shale formations coming to\u00a0Corpus Christi<\/a>\u00a0and ultimately exported to our international trading partners.\u201d<\/p>\n

In the Southeast, the\u00a0Georgia Ports Authority (GPA)<\/a>\u00a0is working to attract more breakbulk business to its gateway at Brunswick. Total GPA tonnage last July grew by 10.5%, or nearly 300,000 tons, for a total of 3.15 million tons. Breakbulk tonnage crossing all docks increased by 14.4% (33,494 tons) in July for a total of 265,891 tons of cargo.<\/p>\n

\u201cThis was an incredible start to our fiscal year, with double-digit growth across breakbulk operations,\u201d says\u00a0GPA executive director Griff Lynch<\/a>. Finally, shippers utilizing the Great Lakes-St. Lawrence Seaway System are giving the\u00a0Port of Cleveland<\/a>\u00a0more attention\u2014and a lot more business.<\/p>\n

Cleveland\u2019s international tonnage increased 10% in August when compared to August 2017. \u201cOur project cargo sector remains very strong as we continue to handle large generators and transformers,\u201d says David Gutheil, chief commercial officer of the Port of Cleveland.<\/p>\n

As the fall harvest approaches for many farmers in the Midwest, grain shipments continue to be strong, says\u00a0Julia Fields, communications director for The Chamber of Marine Commerce<\/a>\u2014a bi-national association representing more than 130 marine industry stakeholders in the U.S. and Canada. \u201cBreakbulk logistics is a key part of our inland operations,\u201d she adds.<\/p>\n

Source:
\nhttps:\/\/www.logisticsmgmt.com\/article\/breakbulk_call_it_a_comeback<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By Patrick Burnson, Executive Editor \u00b7 October 3, 2018 As rates for container and handy-size bulk [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[31],"class_list":["post-727","post","type-post","status-publish","format-standard","hentry","category-nea","tag-2018-el"],"yoast_head":"\nBreakbulk Comeback? with more vessels scrapped and new ships launched - PHOENIX GLOBAL FREIGHT GROUP S.A. - Since 1991<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/phoenixglobalgroup.com\/el\/nea\/breakbulk-comeback-with-more-vessels-scrapped-and-new-ships-launched\/\" \/>\n<meta property=\"og:locale\" content=\"el_GR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Breakbulk Comeback? 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