A global boom in mega projects and a new swell in oil & gas activity raise prospects for heavy lift operators. The Project Cargo business is busting out all over… and the heavy lift sector is the key to it all. Shortages in heavy lift equipment, particularly in the marine segment, have raised profit levels for operators and attracted the attention of big money.- George Lauriat, AJOT New Project Cargo business is busting out all over. Wherever you look in the world, civil engineering mega-projects are being built or planned and oil & gas E&P (exploration and production) is being spurred on at a frantic pace by record oil prices that have topped $100 per barrel while downstream energy projects are being constructed at a record clip. Add in the mounting need for marine transportation to accommodate oversized and/or overweight freight, ranging from mechanized behemoths to mega-yachts, mixed with a serious shortage of heavy lift equipment, and you have a niche industry that is out and out booming. Many operators are fully booked three or four months and even a year into the future. Profit levels are up for project cargo specialists but there is a tricky balance of risk versus reward intrinsic to the business. The need to invest in new and larger and more complex equipment, deal with the shortage of qualified personnel and address the issue of high risk moves against commensurate insurance costs, has dampened the financial enthusiasm of many who’d like to plunge into this sector. Still, this niche sector, whose business is so difficult to define, has attracted the interest of big money and institutional capital. They are looking for a return on investment (ROI) that they believe project cargo companies, particularly in the heavy lift sector, can deliver. DEFINING THE INDEFINABLEOne of the issues with the project cargo niche market is simply one of definition. In recent years, the marine side of the project cargo business has been lumped in with breakbulk shipping, defining the business more by the fact that it isn’t (for the most part) unitized or containerized moves, but rather oversized or overweight moves requiring specialized self-sustaining ships. In that sense, the recent spate of investment in marine project cargo/heavy lift companies might just be considered an extension of the investment in the breakbulk sector. In truth they are very different creatures, in both the equipment, which includes semi-submersible ships and self-sustaining vessels with lift capabilities of over 1,400 tons, and cargo. For example, the onshore side of the project cargo industry includes LNG & petrochemical plants (Saudi Arabia, plans nearly to double its refining capacity during the next four years), power generating plants and extreme steel manufacturing. Many of these projects have very long lead times, which complicates calculating demand for equipment. There is also the transportation of oversized equipment and vehicles, including mega-yachts. It is estimated that super yachts (65 feet or larger) are being constructed at a double-digit rate and that float-on-float off transport accounts for 20% of the mega-yacht transports. The Oil & Gas industry is the largest segment of the project cargo market. The offshore oil industry in particular is a strong project cargo market (see related article on page 4). In many cases, a virtually completed production rig is transported by semi-submersible ship to the well site and simply dropped into position. The Project cargo business is far different than the ho-hum MacBox business that characterizes most shipping transport. It is the endless variety of the moves that really defines the market. Ports are regular recipients of project cargo services – virtually all the gantry cranes and many of the RTG (Rubber Tired Gantry) cranes are common to the uncommon mix of project cargo freight. For example, last August Beluga Shipping transported seven RTGs from Zhangzhou China to Naples Italy. Each one of the RTGs was 98 feet long, 42 feet wide, 85 feet tall and we