By Keith Norbury
Something as straightforward as a well-positioned mobile crane can have a profound impact on the future of project cargo in this country. Consider the Liebherr EHM 320 mobile harbour crane that was delivered to Port of Thunder Bay this June and passed its first major test in August. It is expected to position Thunder Bay as a hub for project cargo destined for Western Canada’s resource-boom regions such as the Alberta oil sands, says a trio of industry experts.
“That crane offers a lot of flexibility to be able to bring modules from Asia into Thunder Bay and reload them onto either truck or railcars,” said Jan Beringer, President and CEO of Calgary-based project freight forwarders Rohde & Liesenfeld Canada Inc. “Reloading was previously not cost-effective in Thunder Bay because you would have to mobilize cranes from outside of the port. Now that there’s a mobile crane set up inside the port, that kind of reloading can be done cost-effectively. So I see a bright future for Thunder Bay in respect to the energy sector in Western Canada.” It so happens that Mr. Beringer’s company actually shipped that crane to Thunder Bay as a piece of project cargo. The MV BBC Delaware picked up the 104-tonne-capacity crane in Stockton, Calif., carried it South along the Pacific Coast, through the Panama Canal, and up the Eastern Seaboard to the St. Lawrence Seaway, where it was unloaded by ship’s crane at Thunder Bay’s Keefer Terminal. “Crane components were too large to move by land from Stockton to Thunder Bay,” Mr. Beringer said.
New crane expected to increase competitiveness
He isn’t the only one bullish on the potential for that one crane to alter the dynamics of the project cargo trade. Independently and without prompting, Andrew Chodos, President of Empire Stevedoring Ltd., also noted the crane acquisition, “which we’re happy about because that will make handling project cargo there a lot more effective.”
Frank Vannelli, Senior Vice-President of Sales and Marketing for Montreal-based Logistec Stevedoring Inc., called the arrival of the new crane “exciting news.” His company has already used it on one heavy-lift project to handle six wind-turbine tower sections destined for Montana for Wagenborg Shipping. Logistec also has an agreement with the Port to help maintain the crane. “Obviously it’s going to pick up momentum,” Mr. Vanelli said. “Even in the tower projects, we were bringing in mobile cranes that you have to mobilize and demobilize. But now you have a permanent crane at the port. So obviously productivity and costs are improved because you don’t have the start-up costs for bringing cranes in and out.” The crane will also help Thunder Bay compete with Port of Duluth on the U.S. side of Lake Superior. Duluth already has mobile cranes, “which has always been an issue” for Thunder Bay, Mr. Vannelli noted.
Thunder Bay has handled a lot of windmill components in 2012, Mr. Vannelli pointed out. He counted about 10 vessel loads this year alone of windmills destined for Alberta and Ontario.
Halifax provides hub for project rail link
However, Thunder Bay won’t take all the project business. A lot of project cargo bound for Western Canada arrives at Halifax and then is shipped by rail. That includes transformers, heavy-lift equipment, earth-moving equipment and rolling stock. “That’s interesting work for us because we receive it off the ship and then we have to secure it on-board a railcar going to its destination,” Mr. Vannelli said. “That business has been on an uptick.” He doesn’t expect that business to diminish, or for more ships to begin carrying those cargoes all the way through the Seaway to Thunder Bay. Many carriers, such as Wilhelmsen, operate liner services that use Halifax as a base port. “They don’t want to mess up their schedules by having those ships travel all the way through the Seaway to deliver just a small parcel,” Mr. Vannelli said, adding later, “It’s different from a windmill project, where the farm and the individual contractor – or the fabricator or the manufacturer – will charter a vessel to take its product from point A to point B.”
Vancouver Island’s first wind turbines arrive at Nanaimo
Port of Nanaimo was the terminus for wind turbines destined for the first wind farm on Vancouver Island on B.C.’s Pacific Coast. “It was certainly new cargo for us,” said Doug Peterson, Manager of Marketing and Sales for Nanaimo Port Authority. “We had never done anything quite this size in the past.” So far, most of the components for the 55 Vestas wind turbines have arrived at Nanaimo’s Duke Point deep-sea terminal, where they are being stored in preparation for eventual assembly at Cape Scott on the Island’s Northern tip. To date, 55 nacelles or hubs, 165 tower sections, and 120 blades have arrived on six vessels from Vietnam and China, with 45 of the blades still to come. Most of the components arrived via Grieg Star Shipping, but two shipments arrived by BBC Chartering. “They started coming in June and it was very intense through June and the early part of August,” Mr. Peterson said. “It seemed like we were getting a ship every seven to ten days.”
DP World, which handles stevedoring at the terminal, took care of the unloading with assistance from Advantage Crane, which provided the shore cranes. Also involved in the project was Amix Heavylift, which brought in its Arctic Tuk crane barge with its Manitowoc 4600 Series 3 – Ringer Series 2 crane to do the heavy-lifting from the marine side. “It was brought in specifically to discharge the nacelles, which were roughly 72 tonnes each,” Mr. Peterson said. “And the nacelles were all in the holds of the ships.” The components were unloaded onto a gravel lay down area that was reinforced to support the massive weights. “The nice thing is that it’s really proven that Nanaimo has the capability of handling components of this size,” Mr. Peterson said. “In the past, we’ve always been primarily an exporter of lumber products but we certainly have the flexibility and the ability to handle inbound or outbound project cargoes.”
Project cargo shows dramatic improvement
Windmills are just one sign that prospects for project cargo have rebounded since the economic downturn in 2008. Wolfgang Spillner, President of Toronto-based Albacor Shipping Inc., said that business “has improved dramatically for us, especially in 2011.” This year is shaping up to be almost as strong as last year. “I should qualify that: in Canada it’s a little softer; in the States, it’s stronger,” said Mr. Spillner.
In Canada that means oil field equipment in Alberta, as well as aerospace equipment in Quebec. Examples of recent project cargo in the U.S. include equipment for hydraulic fracturing, also known as fracking, and tunnel boring machines in Manhattan and Florida.
To reach Northern Alberta’s oil sands, Mr. Spillner favours bringing cargo into Houston, Texas, and then moving it North along high-load corridors and interstate highways. It is longer and more expensive than barging up the Columbia River and trying to navigate Highway 12 through Idaho and Montana, “but it’s more doable,” Mr. Spillner said.
Oil companies Imperial Oil and Exxon Mobil learned that the hard way when their efforts to use U.S. Highway 12 were stymied by environmental groups who used protests and lawsuits to stop their oversized megaloads on the scenic highway. In June, the companies withdrew an application to the state of Montana to haul 200 huge of loads of equipment, the Spokane Spokesman-Review newspaper reported. The companies also planned to disassemble a giant test module that had been stuck in Lolo Hot Springs since May 4, 2011. Removal of the unit in small pieces would not need oversized permits, the paper noted.
“I’m not saying that we’re smarter than anybody else because there are lots of smart people out there,” Mr. Spillner said. “But we have done things right and we have also advised our customers on certain restrictions that they should be mindful of, concerning size and weight. Some of the people haven’t listened and I think some of them are stuck with it still.”
Mover finds a way past protest gauntlet
Last year, one Vancouver, B.C.-based company did, however, manage to succeed in moving 23 loads of equipment along Highway 12 and into Northern Alberta, by way of Vancouver, Washington. Nickel Bros Industrial, a division of a company better known for moving houses, delivered the last of those loads in mid-December to Weyerhaeuser’s pulp and paper mill in Grande Prairie, said Nickel Bros President Jeremy Nickel.
The largest of the loads was 233,600 kilograms (515,000 pounds), making it the heaviest load ever to make that journey up the Columbia River to Wilma, Wash., on the Idaho border near Lewiston, and then 2,011 kilometres (1,250 miles) by road to Grande Prairie. “What we accomplished here was probably the most significant project in 20 years of history of moving and shipping from Asia and into North America,” Mr. Nickel said.
Going into the project, he said he knew all about the difficulties the oil companies had encountered in trying to use the route. Nickel Bros had one advantage that the oil companies didn’t: the cargo destined for Grande Prairie would confer environmental benefits. The components would increase the efficiency of the pulp mill’s seven-effect evaporator plant by freeing up enough steam to produce 23 extra megawatts of electricity. That’s enough to power 16,000 houses. “We felt that, based on our project being an environmental project, we still had a good chance,” Mr. Nickel said. Actually, it was also the only chance as “this was the only way to get this size of vessel through into Alberta from China.” Despite attending several town meetings and conferring with the Departments of Transportation of Idaho and Montana, Nickel Bros still ran into opposition. Protesters hired a lawyer and filed a petition to block the shipments. “But where it completely shut down the oil rigs, the Director of Transportation in Idaho ruled in our favour and allowed us to proceed,” Mr. Nickel said. “So we were only shut down for about a week and a half.” Even then, the move wasn’t easy. Idaho’s transportation safety regulations only allowed the company’s double-wide loads to block the road for 12 minutes at a time before pulling over to a “turn off” area every few miles. “So all of our crews had stopwatches,” Mr. Nickel said, noting that Idaho Transportation officials also were on the scene to time the legs of the journey. The company did, however, benefit from the relocation underground of overhead power lines along the route that the oil companies had previously carried out. In total, the cost of the move – including ocean transport of the components from China and Thailand as well as barging, trucking and the permits – totalled about $7 million. Yet, added to the $20 million cost to build the components themselves, the total delivered cost of the equipment was only a fraction of what it would have cost to manufacture the components in Alberta. While that means less work for Canadian manufacturers, it meant more work for those in the project-cargo business.
“Until the economy turns around and until the North American manufacturers figure out how to be more competitive with Asian manufacturers, for the next 10 to 15 years, we see a large market of moving project and over-dimensional loads from China to the West Coast,” Mr. Nickel said.
Rohde & Liesenfeld’s President, on the other hand, has noted a trend toward smaller loads, what he calls modular or “plug and play” components. Such modules are being built in China and transported to the oil sands where they are assembled into machines that use steam to extract crude oil from bitumen.
“Previously I think there was a lack of experience in producing these type of modules. The learning curve is now there,” Mr. Beringer said. “They can produce these in China to the standards that need to be met here in Canada in terms of extreme temperatures, metallurgy, design and safety standards.”
From the perspective of a project cargo specialist, these modular units are small enough that they do not need to be carried across the Highway 12 route. Instead, they can enter through more conventional breakbulk entry ports, such as Houston, Tacoma and even Thunder Bay.