The Port Community: Breakbulk Quarterly
Brighter outlook for West Coast breakbulk in 2010

By Richard Knee

Breakbulk traffic forecasts for the West Coast are mixed, but the outlook appears much brighter than it was a year ago, especially for exports, as the dollar’s slide continues.

Perhaps the biggest gain will be in agricultural exports, thanks in large part to the dollar’s slide. Port officials said they expected volumes of inbound project cargoes, especially windmill components, also to remain healthy. Auto shipment traffic is strong in both directions, if experience at Port Hueneme, Calif., and Vancouver, Wash., is any indication.

Windfarm activity has been growing for the past few years, especially in the northern U.S. states and in California, though there have been some stumbling blocks. In Solano County, Calif., economic woes and a dispute between wind-energy interests and officials at Travis Air Force Base combined to halt wind farm components traffic through the nearby Port of Sacramento in mid 2008, port manager Mike Luken said. To that point, those shipments, out of Asia, were generating 11 vessel calls a year there, he said. With the spat recently resolved, he said, the port hopes the business will return in the middle of this year.

San Francisco also expects this year to handle windmill parts moving to northern California and neighboring states, port
spokesman Jim Maloney said.

In the Pacific Northwest, the ports of Everett and Vancouver, Wash., are cashing in on the windmill parts inflow.

“Wind energy is an emerging cargo for (the Pacific Northwest), especially in light of the passage of Initiative 937 in 2006, which requires Washington state’s largest utilities to focus on sources of renewable energy,” Port of Everett spokeswoman Lisa Mandt said. “The port handles dozens of sets of wind energy components,” she said.

Carl Wollebeck, the Port of Everett’s chief of operations, said the port is strategically positioned as entry point for wind energy products moving to northern-tier states from Japan.

At Vancouver, Wash., “we expect to continue seeing successes in wind energy,” port spokesman Nelson Holmberg said.
Ports also expect strong flows of other types of heavy-lift and project cargoes.

Mandt said Everett handles all ocean-borne aerospace parts for Boeing Co.’s 747, 767 and 777 aircraft. While the port projects a decline in aerospace shipments this year, the situation could change considerably if Boeing lands a refueling-tanker contract for the U.S. military, she said.

Holmberg said the Vancouver, Wash., port authority expects continuing growth in project cargo traffic.

Maloney said the volume of project cargoes, such as power generation parts and infrastructure project equipment is expected to increase at San Francisco.

Heavy-lift items, such as transformers and power-generating turbines, are a staple at Portland, port spokesman Josh Thomas said. The port recently offloaded three large transformers and three hydroelectric turbines at Terminal 2, he said.

At Sacramento and Stockton, in central California’s farm belt, port officials expect agricultural export volumes to stay strong. “Agricultural exports will continue to grow, with bagged rice being the leader, showing a growth of over 80 percent in 2009 versus 2008,” port spokesman Bill Lewicki said. Bagged-rice shipments the first 11 months of 2009 totaled 155,206 metric tons, he said.

Rice exports will continue to grow at a “respectable” pace this year and “livestock exports on general cargoes vessels from the port may also add a new dimension to the port’s cargo mix,” he said.

Bagged-rice volume at Sacramento was its best in 15 years in 2009, “with significant shipments to Japan, Papua-New Guinea and South Korea,” Luken said. “The joint efforts of ADM Rice, Farmers Rice, SSA Marine, the International Longshore and Warehouse Union, Transmarine, OMIC, Cal Agri Inspection service, Valley Trucking, port staff and many others make these shipments a successful component of the port’s cargo mix, and expectations are high for another successful rice season in 2010.”

The Port of Port Hueneme, Calif., has maintained a “strong market share” in the fresh produce sector, handling imports of bananas and pineapples from Central America, port spokesman Will Berg said, adding, “We hope to develop a marine transportation
system for avocados from Mexico.”

With the building industry socked by the economic recession, construction materials volumes declined steeply in 2009 and are expected to recover slowly if at all this year.

“Steel (rail and slab) volumes have been particularly hard hit by the economic downturn and related slowdowns in building materials and construction,” Thomas said. “An idled pipe rolling mill in Portland contributed to falling demand and decreased volumes.

“While the port is starting to build back some business, we’re also realistic that recovery will take time and will likely happen gradually. As the economy recovers, and as we see improvement in building materials and construction sectors, we expect to see volumes pick up.

“There is renewed activity at the steel slab facility at Terminal 6 and shipments continue. Customers are projecting volumes to increase in the coming year — not immediately to pre-recession levels — but it should generate more activity than was seen in most of 2009,” he said.

Holmberg said the flow of construction materials such as lumber, steel and aluminum was down and it was difficult in early January, when he spoke with Cargo Business News, to gauge the outlook for this year.

The Port of San Francisco “expects steel cargoes — coils, rebar, pipe, beams, plate, wire/cable — to increase in volume in 2010, though not dramatically,” Maloney said. “Some of this cargo shifted to containers due to low container freight rates, and we are hopeful some of this cargo will resume moving via breakbulk.”

Officials at Vancouver and Port Hueneme expect auto volumes to remain strong, though Berg said the volume at Port Hueneme was nowhere near what it was in 2006. “We hope for a rebound of sorts later this year,” he said.

Port Hueneme handles imports of BMW/Mini-Cooper, Rolls-Royce, Land Rover/Jaguar, Saab, Volvo, Hyundai, Kia, Mitsubishi and Suzuki, and a small volume of Fords from Turkey; the companies maintain finishing facilities near the port, he said.

In addition, exports of Acura, Cadillac, Buick, Chrysler and Jeep autos to China are growing at a strong pace, he said.

In This Issue

Up Front

News, Trends & Analysis
New Items

Trade Tools: How Uncle Sam helps exporters

Capital Watch: Larger issues loom behind federal transport agendas

Supply Chain
Chris Steele: Development opportunities north and south of the border

Compliance Corner: Denied Party Screening – Make sure you comply...
comprehensively and timely

Tech Trends

Product Review: Invoicing and Auditing solutions

Commentary
David Bennett: Early signs of trouble

Gateway Glance
Panama

China

The Port Community
Game Changer: Expansion of the Panama Canal will reshape global trade patterns

All-weather ports are “all-in”

Breakbulk Quarterly: East Coast - Thinking outside the box

Breakbulk Quarterly: Brighter outlook for West Coast breakbulk in 2010

The Shipping Environment

Casualties
Navy tanker breaks loose, container crane topples,
longshoreman dies at Virginia port ... and much more

Final Say
Getting TIGER by the tail