By Janet Plume
As globalization seeps into the most remote corners of the planet, industrial and energy projects have ballooned in size and complexity, pressuring logistics providers to expand the pre-planning process and reduce transportation variables.
The growing number of capital projects has captured the attention of container carriers slammed by unstable cargo flows in the wake of the 2008 financial recession. Thanks to a new generation of specialized containers built to accommodate over-dimensional cargo (ODC) and out-of-gauge (OOG) cargo, box carriers are presenting serious competition to multipurpose carriers for this often high-value cargo.
To meet today’s more stringent needs and specifications of breakbulk cargo, most major multipurpose vessel (MPV) carriers have created liner services with scheduled port calls. But overall, the MPV fleet lacks the market penetration and regularity of port calls enjoyed by the worldwide 6,000-plus containership fleet. Box carriers traditionally offer lower rates and operate on set schedules.
Multipurpose carrier rates are competitive when container demand rises and rates follow. MPV operators are historically better trained to handle sensitive project cargo, and MPVs can call more remote outposts in emerging markets than box carriers on a set schedule.
So the question might pose itself; if MPVs are so much better qualified to handle project cargo and the rates fluctuate between being competitive and non-competitive, why consider shipping project cargo on box carriers? The answer goes beyond the growing availability of flatracks, high cubes, open and hard tops, and super racks.
Container Carriers Warm to Flatracks
When Malcolm McLean pioneered a new mode of ocean transportation with his Sea-Land container service in 1956, the shipping industry took a quantum leap in cost reduction and efficiency that sparked the widespread globalization of trade.
While historians credit McLean as the father of the container industry, earlier pioneers existed. The White Pass & Yukon Railway carried small containers on Canadian Pacific coastal steamers between Vancouver, B.C., and Skagway, Alaska, for several years before Sea-Land was formed. A year before Sea-Land’s Ideal X set sail, the railroad launched its own vessel, the Clifford J. Rogers, which carried 25-foot-long containers until the company ceased operation in the early 1980s.
A similar trend is evident in the use of flatracks and other specialized containers. “Flatracks have been around since 4 to 5 years after the advent of containers, but they were never used for project cargo because the box carriers did not want them,” said Ashish Sheth, Managing Director of Mumbai-based non-vessel operating common carrier (NVOCC) Sarjak Container Lines. “The turnaround time for ships was more important than using flatracks, which back then tied up the ship at berth for a longer time.”
In the nearly six decades since the maiden voyage of Sea-Land’s Ideal X, much of what was historically breakbulk cargo – coffee beans, cocoa, rubber, lumber and even some types of steel – has joined consumer and refrigerated goods shipped inside 20- and 40-foot-long boxes on container carriers. In the past half-dozen years, flatracks have emerged as the key to moving project cargo on box carriers.
Sheth has handled a sizeable volume of project cargo during his 25-year career in shipping before forming Sarjak in 2004. He had worked closely with shippers and realized the importance of most project cargoes’ time constraints. “Back then, shippers were used to paying heavy penalties when shipments were not on time,” he said. “We realized using flatracks on containerships could solve many problems associated with time constraints.”
Sheth said many shippers and box carriers were initially reluctant to handle project cargo. But flatracks and other specialized containers also could reduce cargo damage because the cargo stayed on the flatrack or open top and did not require transloading.
“When we started in 2004, there was a lot of reluctance to carry this (project) cargo” on container ships, Sheth said. “Then (in 2008) the recession hit and ships started going dry.”
Container carriers realized flatracks offered their cargo mix a diversity that could insulate them against future recessions. Because of the extensive lead time required for large capital projects, the project cargo sector did not suffer from the 2008 recession until late 2009 and early 2010. Since the 2008 recession, nearly every major container carrier has formed a project cargo division to chase ODC and OOG cargo.
“Gradually, we convinced them (shippers) we could find solutions to problems with cargo damage and being late to the destination,” Sheth said. “These kinds of problems had been considered unavoidable.”
Sarjak has grown from one office and a few dozen flatracks and open tops – each capable of handling 20 tonnes – that first year to offices today in some 80 countries and more than 8,500 flatracks, open and hard tops, high cubes and super racks with carrying capacity ranging from 27 to 44 tonnes.
Sarjak is not the biggest player in the flatrack field. U.K.-based Amphibious Container Leasing Ltd., for example, claims about half its 150,000-TEU fleet is comprised of specialized containers including flatracks and open tops.
As an NVOCC, Sarjak charters slots on most major container carriers, which also have built up their own fleets of flatracks and other specialized containers. Maersk uses flatracks to bring pipe from Asia to Vancouver, and machinery from Europe to Montreal, according to Todd Creange, Sales Director for Maersk Canada.
“We have also seen collapsible flatracks used to make an artificial tweendeck, a false floor (in the cargo hold) to which cargo can be lashed,” Creange said.
Other container carriers with their own flatrack fleets include: Hapag Lloyd, Zim Integrated Shipping Services, Mediterranean Shipping Co., CMA-CGM, OOCL, Evergreen, NYK Line, CCNI and Hanjin Shipping, to name a few.
Terminal Operators Streamline Flatrack Use
Several major container terminal operators in Canada estimate flatracks account for approximately one per cent of the number of TEUs on a container ship in port, compared to negligible volumes just two to three years ago. Flatracks and specialized containers are a fixture on these vessels today largely due to the efforts of terminal operators to make flatracks a seamless part of the loading and unloading of box ships.
“High cubes are not a problem to load or unload,” said Migo Kanondjian, Vice-President of operations at Montreal Gateway Terminals Partnership. “If the cargo is higher than the container in an open top, we have special spreaders we use. Our supplier built them.”
Just a few years ago, some European ports required container ships to unload project cargo at breakbulk terminals before unloading TEUs at the container terminal. Today, most terminal operators have taken a proactive approach to handling project cargo by adding custom cranes and loaders that can handle the specialized containers.
“Flatracks don’t slow down the loading or unloading of ships,” said Ashley Dinning, Chief Executive for Halterm Container Terminal Ltd. at the Port of Halifax. “ODC and OOG require specialized equipment; we use special-purpose, lifting frames that go under the spreader. “There are no cons for us.”
Brady Erno, Manager of Sales and Customer Service for Fraser Surrey Docks at Port Metro Vancouver, said his multipurpose terminal ordered a special head built for its gantry crane to accommodate over-height cargo in open tops. “We have put effort into the streamlining process,” Erno said. “Weight is seldom an issue with flatracks because the crane’s lift capacity generally far exceeds the weight limits of the flatrack.”
Because ships must file load and discharge plans prior to docking, terminal operators have time to create plans for handling flatracks and specialized containers. “Flatracks have headboards with corner castings compatible with all cranes, which can handle cargo up to one foot over height,” said Scott Anderson, Operations Director for the Cerescorp Co. container terminal at the Port of Halifax. “For flatracks higher than one foot over height, most terminals have equipment like a speedloader or chains or Kevlar straps with hooks that can lock into the corner castings.
“Flatracks that are over height or over width are generally loaded on the top deck or on top below deck,” Anderson said. “When a big piece of machinery can move on a container ship, it can save a lot of headaches. “Flatracks do generally slow down a discharge somewhat, but if you only have five flatracks out of 500 containers, it’s not a big deal,” he said. “But if you had 50 of them, that’s a different story.”
Anderson said flatracks also work well with in-gauge cargo because they can be taken to a warehouse and stripped from the side with a forklift.
Flatracks can be problematic when incoming cargo needs to move onshore where bridge clearance issues exist. Take, for example, the tires for an off-road mining truck that can tower more than a dozen feet off the ground. Flatracks sit at least two feet higher than low-boys or low-bed trailers, which are typically used to transport such tires.