Energy sector boom stimulates breakbulk surge at Gulf ports

Led by increasing steel volumes and a dynamic project cargo sector, breakbulk activity is surging at docks throughout the U.S. Gulf region. The same shale energy boom that is driving record outbound flows of liquid bulk through Gulf ports is a key contributor to this burgeoning breakbulk trend, as much of the steel imports head to oil and gas fields while oversize components arrive for expanding petrochemical plants. And, from forest products to frozen goods to wind power components, other breakbulk commodities are part of the vibrant Gulf port action, too. Port of Houston

Steel volume at the Port of Houston through the first six months of 2014 was up 24 percent over that for the first half of 2013, according to Stan Swigart, market development manager at the Port of Houston Authority, who noted that demand for tubular goods at shale play sites in West Texas is behind most of this growth. “We expect this trend to continue into 2015,” Swigart said, adding that about 85 percent of the Port of Houston’s steel volume is pipe, with the remainder predominantly sheets and coils. Another kind of energy also is playing a role at Houston, as imported wind power equipment shipments are running 150 percent ahead of a year ago, due in large part to federal tax incentives for wind energy development, Swigart said. The Port of Houston Authority is moving to accommodate greater breakbulk cargo activity with investments in Turning Basin facilities that already offer 20,000 feet of dock space with direct discharge to truck or rail. “Upper Turning Basin capital improvement projects for the next four years include an investment of more than $66 million to better serve the needs of roll-on/roll-off ships and carriers, as well as breakbulk cargos such as steel pipe and project cargo,” Swigart said. “These projects are primarily intended to increase laydown and marshaling areas by removing unused transit sheds. “We hope to attract more heavy cargos following deployment of a new heavy-lift crane,” he added, noting that an additional 800-ton-capacity crawler crane at Wharf 32 should significantly boost the Port of Houston’s heavy-lift capabilities. At a cost of $17 million, 18 acres of laydown area are being added adjacent to Wharf 32, at the lower end of the Turning Basin area. The wharf is specially designed for handling project and heavy-lift cargos, with a 1,000-pounds-per-square-foot load capacity, 806 linear feet of berthing space and 20 acres of paved marshaling area. Port of New Orleans The breakbulk growth pattern is even more evident at the Port of New Orleans, with steel again at the forefront. “Overall breakbulk volumes are up 40 percent at the Port of New Orleans through the first eight months of 2014,” said Gary LaGrange, the port’s president and chief executive officer. “Growth is led by strong imported steel tonnages, up 84.4 percent compared to a year ago, indicating growing confidence in the national economy. “We anticipate strong breakbulk cargo figures to continue, led by steel volumes and also project cargo for industrial expansion and new-build manufacturing and refining facilities on the Lower Mississippi River,” LaGrange continued. “There is an announced $80 billion in projects in Louisiana – tied to the maritime sector – including a new steel mill, LNG [liquefied natural gas] facilities and chemical and refinery expansions. “Business is bustling at the port,” he went on to say, citing that, in addition to the near-doubling of steel activity, the Port of New Orleans has seen forest products volume up 17.6 percent, natural rubber up 6.2 percent and frozen poultry for export up nearly 6 percent through the first eight months of this year compared with the analogous 2013 period. The Port of New Orleans has 13,511 feet of berthing space available at six facilities for breakbulk cargo and 1.6 million square feet of transit shed area for temporary storage, according to LaGrange, who added, “An advantage is the ability to discharge directly to or from barge or rail.” In addition to traditional breakbulk facilities, the Port of New Orleans features two modern dockside refrigerated warehouses with blast freezers capable of freezing 1.2 million pounds of meat to 0 degrees Fahrenheit in 24 hours. Warehouses at Henry Clay Avenue and Jourdan Road terminals are capable of storing a total of 90 million pounds of product. The port has recently completed transit shed improvements at each of its breakbulk facilities and has finished a $7 million upgrade to the laydown area at the Louisiana Avenue Terminal complex, operated by Coastal Cargo, which is joined by Ports America, Empire Stevedoring and Seaonus as Port of New Orleans breakbulk operators.

Port of Port Arthur In Southeast Texas, the Port of Port Arthur continues its decades-long prominence as a niche port for breakbulk forest products while also capitalizing upon its proximity to new and expanding refinery and LNG facilities by handling project cargo, according to Orlando Ciramella, the port’s senior director of trade development. “The Port of Port Arthur has established itself as a niche forest products port dating back to 1990, when exporting plywood to Europe was the norm,” Ciramella said. “Since then, the port has diversified into imported baled wood pulp from Brazil and exported kraft linerboard. “Imported baled wood pulp tonnage should increase based on the U.S. demand and the increase in production from Brazilian manufacturers,” he said, adding that the Port of Port Arthur also is receiving military equipment returning from overseas conflicts.

Port Freeport On the Texas Gulf about 60 miles due south of Houston, Port Freeport also is benefiting from regional industrial activity tied to oil and gas. “Industrywide in the Gulf region – and Port Freeport is no exception – we all have seen an uptick of inbound project cargos which has been sparked by the major expansions by the petrochemical industry,” said Glenn Carlson, Port Freeport’s executive port director and chief executive officer. “Port Freeport’s breakbulk volumes are up, and we anticipate the trend to continue with project cargo and steel products leading the way with the continued expansions in the petrochemical arena, with announced projects by our surrounding neighbors,” Carlson said, noting The Dow Chemical Co., BASF SE, Chevron Phillips Chemical, Freeport LNG Development LP and Tenaris among firms with such endeavors. In the handling of projects, Port Freeport has partnered with heavy-lift stevedoring firm Mammoet, which operates a 600-ton-capacity crane at Berth 7 and has the ability to augment lifting capacity as needed. “Port Freeport is also being utilized as a transshipment and storage point for projects outside of the United States, with our customers utilizing our FTZ [Foreign-Trade Zone] No. 149,” Carlson said. Port of Brownsville Down near the U.S.-Mexico border, the Port of Brownsville is yet another Texas port enjoying more moves of steel. “The Port of Brownsville continues to be a leader in importation of steel products and other metals.” said Antonio “Tony” Rodriguez, the port’s director of cargo services. “So far, our steel products have had an increase of 500,000 metric tons from last year, and our minerals and ores are up, too.” Steel is a key factor in the Port of Brownsville’s FTZ No. 62 maintaining the top ranking in export activity nationwide, as, among other moves, steel slab and coil that comes in from Russia and Europe is shipped out to such markets as Mexico, Brazil and Venezuela. Rodriguez said the Port of Brownsville is involved in a number of projects to enhance its already-impressive breakbulk-handling capabilities and inland connectivity, including with building of a new Cargo Dock 16, partnering with OmniTRAX Inc. on a 1,200-acre industrial park and improving highways links.