The key word for project cargo operators is “diversification”. Canada’s project sector is diversifying and new opportunities abound for those who can make the necessary adjustments.
In looking at the evolution of the project cargo players in Canada, arguably the operative word for building the present and future is diversification.
Such a strategic market approach, as applied notably by ports and terminal operators, has been a priority on the heels of a severe downturn in the Alberta and world oil industries that has sparked turbulent times. On the other hand, growing opportunities appear to be occurring in the Great Lakes, Central Canada and Atlantic regions, thanks in part to the mushrooming of wind energy farms. The Canadian Wind Energy Association has calculated that in 2015 Canada added 1,506 MW of new wind power capacity through the commissioning of 36 projects.
Last year, Federal Marine Terminals’ project activity ran a wide range from a transformer imported from Korea to the Port of Hamilton, to 96,000 metric tons of coated pipe handled at the Port of Cleveland, to 20 brewery tanks at the Port of Indiana-Burns Harbor.
Michel Tosini, FMT executive vice-president, says, “the overall picture is quieter this year so far. Among other things, Houston is attracting a lot of pipe cargo.
Project Sector: Promising Outlook
“The outlook, however, looks promising especially in wind energy business in 2017. We are receiving lots of inquiries for rate quotes on wind component movements into the U.S. Great Lakes,” Tosini told the American Journal of Transportation.
“Depending on the terms of contract,” he continued, “we are dealing with receivers, shipping lines or shippers - or several of the above on (general) project business. Though below normal at this time, the volume of inquiries could pick up in the fall. Interested parties shop in the Gulf, the East Coast and the Great Lakes for the best shipping options.”
Logistec Moving Wind Power Components
On the wind energy front, Logistec and its partners recently began moving a substantial volume of Ontario-made wind power components to Sheet Harbour, Nova Scotia, via the Great Lakes and St. Lawrence waterway. The first shipment took place in June. The cargo had departed from Port Weller, ON where Logistec managed operations for loading, lashing and securing the five-to 10 metre long towers aboard the multi-purpose M/V Rosaire A. Desgagnés operated by Quebec-based Groupe Desgagnés.
Logistec’s team in the Maritime provinces will unload and store 78 wind tower sections in Sheet Harbour until local construction sites are ready to install new wind turbines.
Deron O’Reilly, sales and marketing manager (Atlantic Canada), stated: “In this case, reducing the project’s carbon footprint was as important to our customer as it was to our shipping partners. We’ve built strong relationships throughout our network so that Logistec’s maritime solutions can work efficiently with local intermodal services.” Wind energy components such as blades, nacelles, turbines and hubs have been steadily arriving at Sheet Harbour, a sister port to Halifax, since Logistec began operating a facility there in 2012. Anthony Steele, operations manager, stresses that Sheet Harbour “can quickly and efficiently discharge these products to either the 12-acre laydown area adjacent to the wharf or directly to the trucks and trailers.”
For its part, the Port of Halifax has been developing increased project activity. One recent move worth noting involved a 100-ton industrial press for export to India. The large piece was railed to Halifax and two cranes were required for the lift.
Patrick Bohan, director of supply chain solutions at the Halifax Port Authority, indicates that the new Pier 9C at Richmond Terminals has attracted a steady stream of business since the first vessel called in October 2014. He stresses that the new multi-purpose warehouse is providing flexibility for project and heavy lift moves.
On the Great Lakes
At the Port of Oshawa on Lake Ontario, a new rail spur is allowing the port to break into the niche project cargo market by handling cargo of all shapes and sizes, including a mammoth motor compressor, which arrived late in July from a company in Ontario’s Kawartha Lakes.
Too big to move by road, the 100 metric ton compressor was easily accommodated by the rail spur’s oversized dimensional section. The compressor, headed for South Africa was loaded aboard Spliethoff’s MV Marsgracht, a multi-purpose vessel that’s designed for cargo of many weights and dimensions.
“It’s great to see that industry recognizes the distinct advantages of Oshawa’s intermodal port,” said Donna Taylor, president and CEO of the Oshawa Port Authority. “This is the first project cargo to be exported using the rail spur, and we’re confident that it’s just the start.”
The C$4 million rail spur, which opened in May of 2015, has helped the Port of Oshawa play a greater role in supporting Canada’s steel industry. So far this year, 87 rail cars of steel have made their way from the port to western Canada. The rail spur not only makes it possible to move more steel through the port, but various cargoes including asphalt and special projects.
“The rail spur is the crucial link that allows us to meet the growing demands of local and regional businesses,” said Gary Valcour, Chair of the Oshawa Port Authority. “It’s the kind of investment that helps the port deliver significant economic benefits for Oshawa, Durham Region and all of Canada.”
Over the past year, the port has assisted several companies in moving project cargo, including generators and plastic tanks destined for Newfoundland. The Port of Hamilton, Canada’s largest on the Great Lakes, has been benefitting from robust activity in project cargo shipments, including power plant components, industrial boilers, construction machinery and vehicles, steel cables and pipes. Port chief executive Bruce Wood notes: “The port is a key transit point for machinery and plant components related to Ontario’s manufacturing and infrastructure sectors.”
On the tip of Lake Superior, Thunder Bay’s Keefer Terminal handled its highest project and general cargo shipments to date in 2015. The total of 15 included five moves of structural steel, three of mine machinery and equipment, and a number of wind turbine components. All moves were destined for receivers in Western Canada.
Port CEO Tim Heney says that opportunities in 2016 remain largely in Western Canada since Thunder Bay is the closest Canadian port to the Prairie provinces in proximity to the St. Lawrence waterway system.
In addition, he suggests that the weaker Canadian dollar offers opportunities for freight forwarders to capitalize on big savings for shipments heading to the western U.S. by moving them through such a Canadian gateway as Thunder Bay.
In the most recent development, Heney singled out the arrival in early September of a 500-ton transformer from the United Kingdom destined for a hydropower project in northern Manitoba, south of Churchill. This is the first of up to 20 transformers slated to be railed in phases to the hydropower complex by Hudson Bay Railroad.
As for the budding wind turbine business, Heney told the AJOT: “We are expecting some wind turbines this year (for wind farms in northern Ontario) but a bigger resurgence in 2017. These things go in waves.”
Support from British Columbia Government
On the West Coast, the B.C. government is supporting the heavy lift/project shipping industry in a concrete way. Late last year, it expanded the pre-approved truck routes that haul heavy high-value cargo, such as oversized construction materials used in the oil and gas industry, through the province. One of the new pre-approved routes for 85 gross vehicle weight (GVW) shipments is an extension of Highway 16 from Terrace to Kitwanga that closes a gap in the 85 metric ton route and now provides a continuous route from Alberta through to Kitimat.
The other pre-approved route is Highway 17 connecting Fraser Surrey Docks to the 85-tonne network. Brady Erno, Manager, Sales and Customer Service, Fraser Surrey Docks, sees this pre-approved route as an opportunity for its terminal.
B.C. Transportation and Infrastructure Minister Todd Stone has declared: “We’re enabling our LNG, mining, energy, forestry, tourism and other industries to thrive. Expanding the pre-approved heavy haul routes in B.C. will be a benefit to businesses and the shipping industry for LNG development in the north and, ultimately, for our provincial economy.” Both of the newly upgraded routes are also being considered for further upgrades to haul 125-tonne loads. Highway 17 is part of a proposed 125-tonne route from Fraser Surrey Docks to Highway 1.
Erno has reported strong growth of project cargo volumes moving through the terminal in the last four to five years and sees the trend continuing. Fraser Surrey Docks’ many project cargoes encompass various sectors, including oil and gas, manufacturing, forestry, mining and hydro/electrical generation.
Meanwhile, the decline in the Alberta oilsands industry and in the overall global commodities market was expected to affect the timing and number of projects moving cargo in 2016.