There is a “service deficiency” when it comes to breakbulk ports. The shift to containerization has cut into the number of breakbulk facilities – and with breakbulk freight growing, finding the right port is a challenge as forwarder Tuscor-Lloyds explains.
Two years back, the specialist freight forwarder Tuscor Lloyds was charged with transporting six 90-tons steel cable reels from Liverpool to Saskatoon, Canada. To reduce land transport costs, the project settled on shipping five of the six reels to the Port of Montreal via a container ship. (The other was shipped via Halifax.) There was only one problem: While Montreal is a first-class container port, breakbulk facilities are wholly lacking.
“They were not geared up at all to take that kind of cargo,” said Neel Ratti, Tuscor Lloyd’s general manager. “I think they had one mafi trailer, the normal way you would unload. So, we had to source the rest from somewhere.”
Ratti described the shipment to illustrate two interconnected points:
As container lines continue to encroach on breakbulk in more and more corners of shipping, the infrastructure necessary to handle some of that cargo is lacking. The knowledge and expertise needed to plan and execute such a move is hard to come by as well.
“There’s a service deficiency in the way container terminals can handle breakbulk cargo,” said Ratti. “As the industry becomes unitized, more and more containerized, those skills are leaving that part of the industry. The people that handle containers are people that handle containers, they don’t really know breakbulk cargo very well and if things don’t work out exactly as planned, they’re not geared up to putting things right.”
That creates a heightened demand for freight forwarders such as Tuscor Lloyds, based in Manchester, UK, with a total of just short of 100 employees worldwide. The onus is on the specialists to come up with solutions to knotty breakbulk issues, including ports where containerized freight rules. “I don’t hold it against Montreal because Montreal never, ever handles breakbulk cargo,” said Ratti. “I can’t expect as an operator for someone to hold a stock of mafi trailers, however much they cost, just having them sit there, gathering dust for years, waiting for someone like me to come along.”
Planning how and where to move especially the larger breakbulk items is in many ways becoming a harder task in the world of containerized shipping. Ratti cited Shanghai, a state-of-the art container port that lacks 100-tons gantry cranes necessary to load and unload the heaviest items. An Australian study a few years back went further, calling breakbulk, the “forgotten corner of the global shipping industry.”
“That part of the industry may not be significant in percentage terms, but it’s still something that needs to be addressed. People still need mines to be built, they need infrastructure, and that requires large machinery. Big cargo will still move and it won’t conveniently be the size of a container,” said Ratti. “That still needs logisticians to analyze and understand supply chains and say it’s better to do it this way or that way.”
According to Ratti, Tuscor Lloyds itself doesn’t favor either containers or breakbulk. “We’re fairly agnostic,” he said, adding that he understands why container lines, with frequent and regular schedules, hold an appeal even to breakbulk shippers.
“Predictability is very attractive,” he said. “You can see quite often now, breakbulk cargo being carried on container ships, loaded loose, not pre-lashed, lashed on board, it’s an interesting development and it seems to becoming more and more prevalent.”
Container rates are beginning to recover, a trend that is expected to continue through this year and next. Breakbulk, on the other hand, could see depressed rates for the next five years, bedeviled by overcapacity and much slower moves toward laying up ships or consolidating. With this in mind, whether containerized freight will continue to eat into breakbulk business is an open question. Ratti, for one, believes breakbulk carriers may gain a bit on the margins, particularly low-value goods such as waste materials and recycled materials, or some commodities such as iron and coal, which containers have attempted to capture.
That, however, won’t reverse the skills gap, Ratti believes. “The wider shipping industry becoming de-skilled,” he said. “That’s a trend we’ll continue to see.”