By Keith Norbury
Breakbulk volumes at Port of Nanaimo have returned to pre-recession levels thanks to Asian demand for Vancouver Island lumber. Doug Peterson, Manager of Marketing and Sales for Nanaimo Port Authority, said he expects about 140 million board feet of lumber will be exported this year from the port’s Duke Point terminal. That volume, consisting mostly of hemlock destined for Japan, is very close to the 142 million board feet exported in 2008 before the global economic meltdown. “So as we’re moving into 2013, we’re optimistic that we’re going to be back to our 2008 levels,” Mr. Peterson said.
It’s been a remarkable turnaround. In 2009, Nanaimo exported only 10 million board feet. That increased to 38 million board feet in 2010, and in 2011, volumes had rebounded to 115 million board feet. “Lumber has always been our mainstay here and it’s always been breakbulk,” Mr. Peterson said.
Peterson said that 2009 and 2010 were challenging for the Port and for Vancouver Island sawmills. “But they’ve certainly experienced extremely good growth through their diversification efforts, such as looking to the Far East and looking at more specialized lumber products that satisfy international market needs.”
It has been a similar story with log exports, which also leave Nanaimo as breakbulk, but via the port’s Assembly Wharf on the downtown waterfront. Nanaimo exported the equivalent of about 633,000 tonnes of logs in 2011, compared with 336,000 tonnes in 2010, and none at all in 2009.
B.C. lumber volumes on the rebound
Lumber and log volumes also rebounded last year at Port Metro Vancouver. At Canada’s busiest port, outbound lumber volumes reached 494,705 tonnes in 2011, a 105-per-cent increase over the 241,680 tonnes shipped in 2010, which was up 24 per cent from the 194,842 tonnes in 2009.
Vancouver shipped an even greater volume of logs in 2011, namely 5.72 million tonnes, compared with 6.22 million tonnes in 2010 and 4.5 million tonnes in 2009. Inbound logs totalled 1.61 million tonnes in 2011, down from 2.13 million tonnes in 2010 and 1.96 million tonnes in 2009.
Lumber statistics weren’t available for 2012, but breakbulk totalled 8.34 million tonnes for the first six months of 2012, an increase of 5.2 per cent over the 7.93 million tonnes in the first half of 2011.
Not all has been bright for breakbulk in B.C., however. Log volumes at Prince Rupert for the first eight months of 2012 were down 39.8 per cent to 201,639 tonnes from 334,843.6 tonnes in the same period in 2011. Meanwhile, from January 1 to August 31 this year, Prince Rupert reported 862 tonnes of general cargo compared to none in that period in 2011.
Lumber breakbulk still flat in New Brunswick
The picture on the other side of the country looks bleaker for breakbulk, and not just for lumber. At Port of Saint John, N.B., general cargo volumes dropped to 0.087 tonnes, from 0.140 tonnes in 2010, and from 0.43 tonnes in 2006.
That trend has not changed, said Paula Small, Manager of Public Relations for the Port. “For this year, at mid-year, we were on par with last year for breakbulk. So, it is expected that the year-end volumes will be consistent with what was experienced last year,” Ms. Small said in an email message. In addition, some cargoes that used to be shipped by breakbulk are now leaving the port in containers. “Containers have in fact risen, especially this year with the introduction of Mediterranean Shipping Company to our regular callers in the container sector,” Ms. Small said.
Halifax expands its breakbulk capacity
At Port of Halifax, general cargo volumes increased 12.9 per cent to 231,242 tonnes during the first half of 2012 compared with that period in 2011. Meanwhile, total cargo volumes declined by almost exactly the same percentage, 13 per cent, to 9.48 million tonnes. General cargo volumes at Halifax dropped to 391,126 tonnes in 2011, compared with 410,894 tonnes in 2010.
As reported in the September 10 issue of Canadian Sailings, 2012 started off with a bang for breakbulk at Halifax with the volume of 47,444 tonnes representing a 132-per-cent spike over the first quarter of 2011. Included in those volumes were such commodities as steel rails, utility poles and nickel sulphides, as well as project cargoes such as wind turbines, mining equipment and other heavy machinery.
More breakbulk capacity is being added to the port as part of a $73-million expansion at its Richmond Terminals. The federal government is contributing half the funds required through its Atlantic Gateway Improvements initiative, with the Port Authority picking up the rest. The improvements, which include pier reinforcements to enable heavy-lift and roll-on/roll-off capabilities, are now planned for completion in the spring of 2014.
Keith Ashfield, Minister for the Atlantic Gateway, toured the Richmond Terminals project and the recently completed $35-million expansion project at Halifax’s South End Container Terminal in mid-September. “These projects will improve the competitiveness of the Port by facilitating the movement of international trade through the Atlantic Gateway and Trade Corridor,” Mr. Ashfield said in a news release following his visit. “Strategic infrastructure investments like these are key to our Gateway’s success.”
Sheet Harbour prospected for breakbulk
Halifax Port Authority signed a 10-year lease recently to manage the Sheet Harbour Marine Terminal, about 115 kilometres Northeast of Halifax. That is also expected to increase the capabilities for breakbulk on the Atlantic Coast.
Frank Vannelli, Senior Vice-President of Sales and Marketing for Montreal-based Logistec Stevedoring Inc., said that his company is prospecting for breakbulk business at Sheet Harbour. However, he added, “I don’t want to accentuate this too much,” noting that Logistec isn’t the only stevedoring company at the port. “Nova Scotia Business Inc. contracted with Halifax Port Authority to operate Sheet Harbour,” Mr. Vannelli said. “So Sheet Harbour is an extension of Halifax.” Strategically, they wanted to get their grips into Sheet Harbour because they have very little room for expansion outside of containers in Halifax. This gives them access to come up with a game plan to develop bulk and breakbulk. So we’re working with them.”
On the downside, Sheet Harbour lacks rail access. However, Mr. Vannelli envisions a local market for breakbulk, as well as bulk. So far, Logistec has shipped woodchips on four vessels to Turkey. “But the idea is also to prospect,” Mr. Vannelli said. “We have hired somebody locally in the Atlantic region and he’s going to help me develop the business in that part of the country.”
Before the trend to containerization, breakbulk and other general cargo accounted for up to 89 per cent of Logistec’s business, Mr. Vannelli had noted in a previous interview. Now that share has dropped to about 40 per cent, although it remains important to Logistec, which has 32 locations in North America. The company has about 400 of its own employees as well as a labour force of 1,000 at any given time.
Steel volumes flat in Central Canada
For Logistec, the biggest breakbulk category remains steel, but only at its operations in the U.S., such as ports on the Gulf of Mexico, and in New London, Conn., where Mr. Vannelli is based. “I’d say we handle about three vessels of steel a month here. And that’s definitely up from where we’ve been in previous years,” he said. He attributes the increase in steel imports to the weaker euro in comparison to the U.S. dollar. But there’s also been an uptick in imports from Japan and Brazil.
“As you can imagine, if the euro were as high as it was a few years ago, of course, there would be less steel coming in,” Mr. Vannelli said. “But now that the euro has come down slightly against the U.S. dollar, it’s a better selling price. So the importers here can purchase European product.”
Logistec, however, has a limited footprint for steel in the Canadian marketplace, although it used to handle “a lot in Montreal and Toronto,” he said.
Andrew Chodos, President of Empire Stevedoring Ltd., has seen a similar pattern at his company’s operations. Breakbulk business is pretty steady and has even recovered to pre-recession levels in the U.S., particularly at Port of Houston, Texas. “In Canada, the ports in which we operate have pretty much recovered, although we’re not seeing as much steel products,” said Mr. Chodos, whose company has operations in Montreal, Quebec City, Toronto, Thunder Bay and Saint John, as well as Houston, New Orleans, and Mobile, Alabama. Even in Canada’s steel town, Hamilton, steel volumes have been flat, primarily because of the city’s U.S. Steel plant is no longer making steel, said Larissa Fenn, Manager of Public Relations and Communications for Hamilton Port Authority.
Iron and steel account for most breakbulk on the St. Lawrence Seaway, Bruce Hodgson, Director of Market Development with The St. Lawrence Seaway Management Corporation, said earlier this year. He couldn’t be reached for an update. However, recent Seaway statistics showed that general cargo volumes for the Welland Canal and Montreal/Lake Ontario parts of the system were up slightly for the first eight months of 2012 compared with that period in 2011. Combined general cargoes were 1.254 million tonnes for January-August 2012 compared with 1.083 million tonnes in January-August 2011, a 15.8-per-cent increase. That suggests a turnaround from 2011 when the combined general cargo volume of 1.493 million tonnes represented a 3.2 per cent decrease from the 1.543 million tonnes in 2010.
Sydney seeking breakbulk opportunities
At Sydney, Nova Scotia, on Cape Breton Island, breakbulk has diminished greatly since the closure of the island’s famed coal mines and steel plant a decade ago, said Don Rowe, who recently retired as General Manager of Sydney Ports Corporation. The port did handle about 1,500 tonnes of project cargo last year, said Mr. Rowe, who is still a member of Sydney Marine Group, which represents various port users. Among those project cargoes were steel piping and floating pipelines for a $38-million dredging project of the Sydney Harbour Access Channel in 2011.
Sydney would like to attract more breakbulk and to that end the Ports Corporation has staffed booths at breakbulk trade shows in recent years. Sydney Marine Group is also working on restructuring governance of the Corporation to create something akin to a Port Authority without actually being a federally regulated Port Authority.
“When we want our autonomy, we really do want our autonomy. We don’t want an autonomy that’s controlled by Ottawa,” Mr. Rowe said. This new governing body would include a marketing department to promote Sydney as a cargo destination for goods bound from Europe and Brazil, for example, for North America. And that would include breakbulk. “It’s not that we’ve given up. We’re still working on it,” Mr. Rowe said.
Reasons for optimism in breakbulk sector
Mr. Chodos, meanwhile, is optimistic about the future of breakbulk in Canada, noting that Halifax is expanding its facilities, and that large industrial projects in progress require breakbulk capacity to move goods in and out. Among these are Vale’s Voisey Bay $2-billion processing plant in Newfoundland, and Irving Shipyard’s $25-billion contract to build 21 naval combat vessels. “Mind you, we’re a little unsure what’s going to happen in the United States because the economy there seems to really be slowing down,” Mr. Chodos said. On the other hand, demand remains high for breakbulk products in the Alberta oil sands. And the postponed Keystone XL pipeline in the U.S. also presents a potential boon because of the steel pipe it will require. “It’ll probably be approved after the election,” Mr. Chodos said. “It would be an important piece of general cargo business.”
Should incumbent President Barrack Obama win re-election in November, there’s widespread speculation that he will reverse course and approve Keystone, provided it takes a new route around ecologically sensitive lands in the Midwest. The fate of the also controversial Enbridge pipeline through Northern B.C. remains more uncertain, however. About two thirds of B.C. residents oppose the pipeline, although Prime Minister Stephen Harper appears eager to fast-track an environmental review process that he vows will be based strictly on science.
Steel pipe surge clogs B.C. terminal
On B.C.’s lower mainland this summer, Fraser Surrey Docks got a taste of what a surge in demand for steel pipe would look like. “Steel volumes for 2012 did grow slightly more than first anticipated last year and even into the very beginning of this year, which posed its own list of problems,” said Bill Wehnert, Vice-President of Sales and Marketing for Fraser Surrey Docks. He attributed the surge in imports of small diameter steel pipe from Asia to customers buying up stock before threatened anti-dumping tariffs were implemented.
Those worries became a reality in August when a Canadian Border Services Agency ordered provisional duties of 90 to 110 per cent on certain small diameters (3.5 to 16 inches in outside diameter) of carbon and alloy steel pipe, commonly called piling pipe, originating from China. “So we were at a point where we really starting to stretch our abilities to bring more cargo in and move it,” Mr. Wehnert said. “I’m not going to say we were at full capacity but we were very close to it.” That was no small feat given that Fraser Surrey Docks is a “very large terminal” covering 150 acres. That might be its theoretical capacity, but its operational capacity is another matter. As the cargo began to build up at the terminal, it became more difficult to unload new shipments efficiently. A lack of available trucking was one issue. Another was that customers, who were delayed at their end also postponed movement of cargo from the port, which added to the congestion. “There were also some challenges getting railcars for some projects. That’s not the major contributor, but all these things add up,” Mr. Wehnert said. “It’s almost like a domino effect.”
Statistics from Industry Canada’s Trade Data Online confirm a spike in steel pipe to B.C. this July. For instance, imports from China for five main categories of steel pipe totalled $58.35 million in July, nearly double the $28.68-million volume in June. And the value of pipe imported from Japan nearly doubled to $21.56 million in July from $9.99 million in June. One category in particular, oil and gas pipeline pipe, shot up in July with the value imported from Japan spiking to $6.23 million compared with just $155,918 in June and none from February to May. The value of that same pipe from China also spiked in July to $3.10 million from none in June. “It’s certainly gotten better and we’re back to a more normal situation moving into the fall,” Mr. Wehnert said. “That deadline of Aug. 1 has come and gone, which eased the congestion a little.”
While breakbulk is a small part of the terminal’s business, it is an important part, added Mr. Wehnert, who described Fraser Surrey Docks as a “superstore of terminals.” The facility, which recently celebrated its 50th anniversary, also has its own stevedoring subsidiary, Pacific Rim Stevedoring.
“We have multi-generational longshoremen on this terminal who know how to deliver these projects in conjunction with our operations leadership team,” Mr. Wehnert said. “So they really pull it together. I have to say it makes my job really easy when I’ve got a team like that.”