Grieg Star builds project cargo business as G2 Ocean joint venture taking shape

By: | Issue #641 | at 02:47 PM | Channel(s): Projects  Maritime  

Hatch covers are lifted off the Star Livorno at the Port of Pascagoula, Mississippi, representative of Grieg Star’s extensive project cargo activity along the Gulf Coast.
Hatch covers are lifted off the Star Livorno at the Port of Pascagoula, Mississippi, representative of Grieg Star’s extensive project cargo activity along the Gulf Coast.

Having already quadrupled the share of its project cargo business over the past five years, Grieg Star is looking to further its presence in the project sector as it combines forces with Gearbulk in a joint venture dubbed G2 Ocean. Grieg Star, which operates 31 vessels capable of carrying project cargo, now sees 20 percent of its overall volume coming from projects, up from 5 percent just half a decade ago, according to Randy Hillsman, manager of project cargo based in the Atlanta branch office of Grieg Star.

With the G2 Ocean joint venture taking shape toward becoming fully operational by mid-2017, the level of project activity is likely to continue its ascendance.

“Over the years, Grieg Star and our customers have found that our ships are perfect for various types of project cargo,” said Rune Birkeland, currently chief executive officer of Grieg Logistics, who is to assume the CEO role at Grieg Star effective Feb. 1 and become G2 Ocean’s CEO upon the joint venture coming to be. “We have had great success within that segment, and project cargo shipping is now a considerable part of our services.

“We still await clearance from various antitrust authorities when it comes to our joint venture with Gearbulk,” Birkeland continued. “Still, for me, it is obvious that we continue the project cargo business within G2 Ocean, and our customers can expect G2 Ocean to continue to offer shipping of project cargo from Day One.

“After antitrust clearances have been obtained and we are ready to establish G2 Ocean, we can say more about these things,” he added in comments to the American Journal of Transportation.

The joint venture, plans for which were initially disclosed in October, is to be a new “highly versatile” independent shipping company, headquartered in Bergen, Norway, combining global resources and expertise of Norway-based Grieg Star, which traces its roots back to 1884, with those of Gearbulk, which was founded in Norway in 1968.

With Gearbulk holding 65 percent ownership and Grieg Star the remaining 35 percent, G2 Ocean is to offer a combined fleet of more than 130 open-hatch, semi-open-hatch and conventional bulk vessels.

“We really look forward to this joint venture and what this means to our customers in terms of additional service offerings,” said Andy Powell, vice president and general in Grieg Star’s Atlanta office.

Among those counting on Grieg Star for many years is global freight forwarding and project logistics leader Fracht Group, and Houston-based Reinder Schilsky, vice president of project development for Fracht FWO Inc. Projects, said he sees potential for benefiting from the G2 Ocean joint venture.

Schilsky told the American Journal of Transportation that Fracht has a long history of relying upon Grieg Star to get transformers from Northern Europe to Houston and other rail-served North American ports.

At the Port of Brunswick, Grieg Star’s Star Lygra discharges components for a biomass energy plant. (Photo courtesy Stephen B. Morton/Georgia Ports Authority)
At the Port of Brunswick, Grieg Star’s Star Lygra discharges components for a biomass energy plant. (Photo courtesy Stephen B. Morton/Georgia Ports Authority)

He said Grieg Star’s reliable liner services provide predictable sailings and transit times, allowing Fracht to most productively employ its fleet of 11 highly specialized eight-, 12- and 16-axle rail cars in moving the transformers – each weighing as many as 400 tons – to inland destinations for use by utility companies.

“Grieg Star certainly helps us meet our deadlines,” Schilsky said, noting that Fracht also looks to Grieg Star for ocean moves of various non-power project cargos to the U.S. Gulf and West coasts as well.

“It’s a good relationship because the communications channel is open,” Schilsky added, noting possibilities for Gearbulk vessels carrying parcels of steel pipe. “Because we have an existing good communications channel, it would be easier to talk to them about strengthening our relationship as far as the additional vessels that G2 Ocean can offer.”

Grieg Star’s Hillsman noted that much of the project business is centered around Houston and that Fracht is joined in using Grieg Star by such other familiar forwarder names as Agility, DB Schenker and Kuehne + Nagel.

“A lot of these forwarders use us because of the reliable, consistent, predictable service we give,” Hillsman said. “Whenever we can fit project cargo on our liner services, that’s what we strive for, but we’re not limited to that as we can also use a vessel dedicated to a specific project.”

Powell interjected, “The project cargo and our more traditional cargos, such as steel and forestry, are an excellent complement to each other in and out of North America because they trade in similar routes.”

Much of Grieg Star’s project activity is in Asia-Gulf of Mexico and Northern Europe-Gulf lanes and includes Gulf-bound shipments of transformers, generators, wind energy components, steel structures and components for liquefied natural gas plants, according to Hillsman.

A significant uptick in wind energy cargos, including blades from China and towers from Korea, has been realized in recent years, he said, with such cargos coming into such Texas ports as Houston, Corpus Christi, Brownsville and Galveston, as well as the Mexican port of Altamira.

Port Corpus Christi, with its on-dock rail capabilities and connectivity to three Class I railroads, has emerged as the predominant destination, with between 40 and 50 calls a year by ships carrying wind energy components.

Hillsman said Grieg Star vessels are particularly well-suited for this project cargo due to their offerings of a flat surface atop deck, hatch cover strength and their open-hatch concept.

Powell said another plus is Grieg Star’s dedicated personnel with expertise in conquering stowage challenges and other concerns related to transport of wind energy components and other project cargos.

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For more than a quarter of a century, Paul Scott Abbott has been writing and shooting images for the American Journal of Transportation, applying four decades of experience as an award-winning journalist. A graduate of Northwestern University’s Medill School of Journalism, with a master’s magna cum laude from Trinity Evangelical Divinity School, Abbott has served as president of chapters of the Propeller Club of the United States, Florida Public Relations Association and Society of Professional Journalists. Abbott honed his skills on several daily newspapers, including [em]The Cincinnati Enquirer, The Richmond (Va.) News Leader, Albuquerque Journal and (South Florida) Sun-Sentinel, and was editor and publisher of The County Line, a weekly newspaper he founded in suburban Richmond, Va.[/em] A native Chicagoan, he is a member of American Mensa and an ever-optimistic fan of the Chicago Cubs.