By Carly Fields
Big, beefy project cargoes often steal the limelight when it comes to breakbulk moves. Scale and sheer quirkiness allow them to win out over the more mundane commodity side of breakbulk. Moving a large transformer might call for months of preparation to arrange a shipment overland and by sea, perhaps closing roads and shifting obstacles to make the move a success.
By comparison, handling and moving breakbulk commodities is a cinch. But despite its more-demure appearance, commodities remain integral to the breakbulk business. Steel rebar, girders, slabs and coils; paper pulp and rolls; timber; bagged cargoes; and perishables – all benefit from the specialized handling and carriage that breakbulk terminals and multipurpose carriers offer.
However, their importance is being eroded. Without the protection of scale that project cargoes enjoy, breakbulk commodities are particularly susceptible to the intrusion of the container sector, and the box invasion dominates discussions on the future of the breakbulk commodity sector.
Port of Antwerp handles what it describes as the “big five” breakbulk cargoes, namely steel and non-ferro, project cargo, forest products, fruit and perishables, and rolling stock. While volumes dipped slightly – 2 percent – in 2016 compared with 2015, its market share in the Hamburg-Le Havre range grew 2 percent to 27 percent. The losses in the range are almost exclusively attributable to the rising dominance of containers.
Those standardized, secure and weatherproof boxes are undeniably an attractive alternative mode for breakbulk cargo shippers. Wim Dillen, Port of Antwerp’s head of business development, sees the attraction as twofold: low freight levels due to the overcapacity in the container sector and improved inventory management.
“There is no denying that containerization continues in certain domains, especially fruit and perishables. In less than two to three years, our conventional volumes of fruit have dropped by more than 50 percent,” Dillen said. However, that cargo has not left the port completely: the cellular container fleet stills discharges bananas, pineapples, apples and more at the fruit terminals in Antwerp. Other traditional breakbulk volumes, such as forest cargoes and steel, use containers when convenient.
The encroachment of containers is “a matter of comparative advantage and opportunity cost,” pointed out Tim Polson, a shipbroker with breakbulk specialist AIS. When the container-shipping market was at an all-time low, it made sense for container-shipping companies to carry breakbulk cargo because the extra space it occupied and extra time it took to load, lash and secure were worth less than the extra revenue the breakbulk cargo brought, he said.
Chris Smith, Ports America vice president breakbulk, admitted being concerned about the containerization trend. “When container rates are low and there is excess capacity we believe [container lines] will continue to be aggressive and target traditional breakbulk cargoes. Breakbulk terminals need to be continually looking for ways to improve productivity and keep costs down to compete.”
For its part, Ports America has been aggressively deploying its process improvement teams throughout its network to keep costs in check.