Industry expert opens Breakbulk event noting ‘uncertainty’ for project market

The project cargo market continues to face uncertainty, according to an expert keynoting a major industry forum. “The real watchword right now is uncertainty,” Phyllis Kulkarni, director of North America for Independent Project Analysis Inc., said today [Sept. 28] in the opening business session of the 27th annual Breakbulk Americas conference and exhibition, which has drawn nearly 5,000 registrants to the George R. Brown Convention Center in Houston. While Kulkarni said most industries in the vast majority of parts of the world are continuing to slump, she said the chemicals sector is showing particular promise. “Chemicals have been a bright spot,” she said, with the U.S. Gulf Coast at the fore. As a general rule, though, capital investments in projects are seen declining, with “slow recovery anticipated” for oil and gas exploration and production, Kulkarni said, with per-barrel oil prices remaining below $55 in 2017. Noting that numerous projects that were initiated prior to the precipitous drop in oil and gas prices remain active but are in final phases, Kulkarni said, “The steep drop-off is really going to happen in the next couple of years.

“There’s still a lot of pain to come,” she added. For example, she said, recovery in floating rig demand should not be anticipated until 2020. Kulkarni said that, aside from weather concerns, the primary risk factors now being cited by owners of projects relate to procurement and logistics. “The risk we still keep hearing about is procurement – the logistics portion,” she said. “Expect more pressure on the supply chain.” As project schedules continue to slip in early stages of definition and detailed engineering, Kulkarni said she believes it has become increasingly important for logistics efforts to be engaged from the beginning of an undertaking. “Projects benefit from early involvement of procurement and logistics,” she said. “It’s very important to have a seat at the table early on.” Comprehensive coverage of Breakbulk Americas is slated to appear in the Oct. 10 edition of the American Journal of Transportation.