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Power Surge

Breakbulk ports feast on energy-related projects.

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By Tom Peters 12-26-2019 03:35:00

(Article originally published in July/Aug 2019 edition.)

Major energy projects are firing up business at U.S. ports and terminals in the special project, heavy lift and breakbulk categories with several states giving the green light recently for offshore wind energy projects. According to many experts, the potential is enormous.

Steve Kelly, Vice President of Sales & Operations at the port of Coeymans, New York, sees long-term opportunities. Massachusetts, Rhode Island, Connecticut, New Jersey and New York have all announced ambitious plans for utility-scale offshore wind farms, and Kelly anticipates “15 to 20 years” of potential development in this sector.

He says the port, with its strategic location on the Hudson River just south of Albany and a satellite terminal at the port of Charleston, South Carolina, is well-positioned to benefit from the influx of wind energy components. Investment in new infrastructure to cater to these projects could be in the tens of millions of dollars.

The port of Virginia is also jumping on the energy bandwagon. “The offshore wind market continues to draw interest,” says Joe Harris, spokesman for the Virginia Port Authority, “and as a result many Mid-Atlantic states are showing a commitment to help the industry develop.”

Virginia, for example, passed the Grid Transformation Act of 2018, declaring that 5,000 megawatts of solar and wind-generated electricity are in the public’s interest. The infrastructure needed for this development could be installed within the next decade, and the port is determined to serve as the focal point and staging area for wind-related cargo.

At the port of Houston, the unofficial energy capital of the U.S., most project and heavy lift cargo is petroleum and petrochemical-related. That is slowly changing. “In 2019, we’re seeing increases in project and heavy lift cargoes for the traditional energy sector and now also in the wind energy sector,” notes Dominic Sun, Director of Trade Development at the port. “This means increased volumes of machinery, capacitors and other equipment for plant construction along with windmill towers and blades to support further development of wind energy.”

At the nearby port of Galveston, wind power is driving a cargo upswing. “The cargo business is alive and well in Galveston,” notes Port Director & CEO Rodger Rees. “We anticipate a substantial increase, especially in wind energy, due to two project agreements in effect until the end of 2019.”

On the West Coast, energy projects have benefited the port of San Diego. The Danish wind energy company Vestas carried out two major projects in 2018 that saw windmill parts move through the port, and this summer will bring another project with more towers and blades. Greg Borossay, Business Development Principal at the port, says General Electric, new to the port, is also scheduled to move some project cargo.

More Than Energy

But for these ports and others, it’s not just about energy.

San Diego is also a military port, so there are big projects that are military-driven such as bulky military hardware coming back from Korea on its way to Texas with a deployment back out in late summer. San Diego recently handled some massive boring equipment destined for a major experimental tunnel drilling project in Los Angeles. “They were the biggest drill bits I’ve ever seen,” Borossay exclaims.

At Port Everglades in Fort Lauderdale, steel and yachts are two examples of the cargo mix found in its special project and breakbulk sectors. “We have two primary importers of steel,” notes Glenn Wiltshire, the port’s Acting Chief Executive. Most of it is related to the construction industry, consisting of either rebar or coils.

However, the steel is imported from Turkey, and it took a hit when the U.S. imposed a 25 percent tariff on Turkey’s steel in 2018. “The net result for us is we have seen a reduction in steel imported through the port,” Wiltshire says. The reduction by importer Concrete Reinforcing Products was 32 percent between 2017-18. In 2018 the port handled 177,000 tons of steel compared with 262,000 tons the year before.

It’s a much brighter picture on the yacht side, where there’s a lot of wind in Port Everglades’ sails. “We probably do the most robust yacht business of any port in the U.S.,” Wiltshire notes. Fort Lauderdale has “the world’s largest boat show” late in the year with a major focus on high-end yachts, many of which are shipped in on specialized yacht carriers. “We did 70,000 tons of yachts in fiscal year 2018. Five years ago we did 40,000 tons. So we do a heavy business,” he says.

While Everglades is busy with steel and yachts, the port of Coeymans is heavily involved in New York’s Pier 55 project, which will revitalize a part of Hudson River Park with almost three acres of new public park space. The port is building and then moving by barge large, pre-cast concrete pieces and other bulky items downriver to New York City. At its Charleston, South Carolina terminal, Coeymans is expanding through increased aluminum imports from Russia and sweet potato pallets from China in addition to growing exports of lumber, scrap metal and other products.

In Virginia, products driving the heavy lift, special projects and breakbulk business include large transformers for the power generation industry, oversized equipment for the brewing industry and construction materials for regional infrastructure projects. “In the near term, we see an opportunity to handle material to be used in the construction of a second tube for the Chesapeake Bay Bridge Tunnel,” notes Harris.

Port Canaveral is seeing increases on a number of fronts. To date in fiscal 2019, lumber imports are up 70 percent and slag is up 13 percent. The increases are attributable to the Central Florida construction boom that includes housing and the I-4 improvement project. Port Canaveral recently spent $6.2 million for a new Liebherr LHM 600 mobile harbor crane, the largest mobile harbor crane in the U.S., to accommodate the port’s diverse cargo mix, adding flexibility and extended lift capability. The multi-wheeled, 1.19-million-pound crane has an 18-container reach and heavy cargo capability, including oversized components for the space industry at nearby Cape Canaveral.

We’re excited to bring ashore this versatile, state-of-the-art crane,” says CEO Captain John Murray. “This kind of equipment adds value to our capabilities with wide-ranging deployment options to service current and future demands.”

Laydown Areas

Special project, breakbulk and heavy lift cargoes often require large laydown areas, a growing challenge for some ports. In response to increasing demand for bulkhead space, Port Canaveral is developing North Cargo Berth 8 as a multimodal berth to handle heavier, more diverse cargo including space industry equipment. The $18.5 million berth project is scheduled for completion in September 2020.

In Houston, “We’re constantly looking for opportunities to add acreage and densify our facilities to support increased volumes in breakbulk, project and heavy lift cargo,” says spokesman Dominic Sun. “In 2017 we added an additional 18 acres of paved laydown area at City Dock #32 to increase our footprint to a total of 36 acres. Port Houston is currently making improvements to City Dock #9 and densifying the existing footprint, which accepts 500 to 700 pounds per square foot.”

At the Colonel’s Island Terminal in Brunswick, Georgia, the Georgia Ports Authority (GPA) is adding approximately six acres of new paving behind Berth 2 that can be used for a first or last point of rest for tracked machinery or heavy lift cargo discharged from self-unloading ships. The new area will be operational this October, says Bill Jakubsen, General Manager of RoRo, Bulk & General Cargo.

At Ocean Terminal in Savannah,” he adds, “we’re paving 7.5 acres for additional ro-ro cargoes. This will free up 7.5 acres adjacent to Berths 12 & 13 for tracked machinery, breakbulk cargo or project cargo that can be stored outside a warehouse.” The terminal needs the space for its growing business. which is up six percent over 2018 with machinery and wood pulp imports leading the way. Business is up 12 percent at Colonel’s Island.

San Diego is midway through the first phase of a three-phase redevelopment project at its 10th Avenue Marine Terminal, which handles the port’s breakbulk cargo. It will give more space for project cargo arriving monthly on the G2 Ocean service from Europe.

The port will raze one of its old sheds, and “That will give us another 40 acres that will put us in position to recruit another major breakbulk carrier,” says Greg Borossay. The $24 million first phase is expected to be completed by mid-2020.The port is also targeting a monthly trans-Pacific service to complement its G2 service.

Virginia is more than halfway through a $700 million investment to expand capacity at its two primary container terminals. An additional benefit of this investment is increased breakbulk, CFS (Container Freight Station) and project cargo capabilities at its two mixed-use facilities, Newport News Marine Terminal and Portsmouth Marine Terminal.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.