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Breakbulk September 2019

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September 2019 | The Journal of Commerce 11 www.joc.com Breakbulk & Project Cargo through a digital platform, those nuances wouldn't be captured." Ruediger agreed, however, that there are plenty of sub-areas and processes where digitization can prove useful, including GPS tracking, Internet-of-Things (IoT) systems, cloud-based communications, and document sharing. Other industry experts noted that not all cargo that moves under a given project is oversized, but that doesn't make it any less complex. "People in project logistics all love to see the pho - tos of big cargo. But ultimately, on any project, most of the hours worked are on smaller, less 'sexy' cargoes — steel cargoes, parts and components — often the stuff that goes in containers," said one long-time Houston-based project forwarder. Some of this work can be digitized, if proper processes are in place. The individual components of a itemize bids in an offer letter that can be anywhere from eight to 20-plus pages, depending on the scope of work and customer preference. "We feel this is still a relationship business," Ruediger said. "It comes from building trust with the cus - tomer. These systems are even par- tially designed to take the emotion out of the process. Through dialogue, a customer can gauge our expertise, and we can still build that necessary relationship. "In other cargoes, maybe it's just a number and that's all that matters, but if you are moving something that weighs 300 tons, you have to under- stand what that takes," he added. "We could be bidding on projects with very tight schedules, and when we put the offer together, we are stressing time and have factored in certain services to expedite the project. If that went phase between installation and commercial operations — 736 megawatts of wind power during the second quarter of 2019, the highest three months since 2015. Twelve installations totaling 1,577 MW went into operation during the first half of the year, a 53 percent jump over the first six months of 2018, according to the Washington, D.C.-based AWEA's second quarter report. Onshore wind accounts for virtu - ally all of the current US action, but momentum is growing for new off- shore wind development, particularly in the Northeast. In July, New York Governor Andrew Cuomo announced two wind projects totaling 1,700 MW to be built off Long Island. The projects, Norway-based Equinor's 816 MW Empire Wind farm and 880 MW Sunrise Wind facility — jointly owned by Ørsted and New England power company Eversource Energy — will supply enough electricity to power more than 1 million New York homes. Offshore construction is scheduled to begin in late 2022, Cuomo said. He pledged $287 million to build new manufac- turing, services, and port facilities to help make the state an offshore hub, but did not give specifics on how the dollars would be spent. York state made the largest com- mitment to offshore wind power in United States history, while Califor- nia, which pioneered wind energy 35 years ago, is forecasting a resurgence in its heavily regulated and long constrained wind power utility sector. However, the drumbeat of tariff fears and increasing business uncertainty threaten this energy segment. The ongoing US–China trade battle has affected wind industry costs, John Hensley, vice president of research and analytics with the American Wind Energy Association (AWEA), told The Journal of Com- merce, although specific impacts are hard to pinpoint yet. All of the major wind components, mainstays of project cargo shipping, are included in the various tariff lists of Chinese goods and services, including blades, internal generators, and gearboxes, while wind towers are subject to an already-existing Chinese tariff and an ongoing trade case involving several countries. Additionally, the steel and aluminum tariffs affect materials imported by domestic wind manufac - turers, a growing sector. "So, there is a kind of onslaught of wind industry tariffs," Hensley said. "There's a cost-benefit analysis that goes into sourcing, but a majority of large components tend to be sourced here in the US," he said. "Hav- ing said that, a lot of basic materials and smaller components are often imported and are impacted by and sub- ject to tariffs. For example, generators are targeted in Chinese tariffs, and we are seeing impacted prices." The same is true for blades. Ves- tas, Siemens Gamesa, GE, and Nordex all manufacture in the US but import globally as well, so they are subject to tariffs and are trying to mitigate them or look for new sources and strategies. Developers either take a margin hit on equipment costs or raise delivered prices, and more risk is introduced into a booming market. The US wind industry commis- sioned — i.e., reached the testing distribution control system (DCS) for running a plant, for example, would "look a bit like the bridge on Star Trek or part of Mission Control at NASA — lots of keyboards, cables, computers and monitors, and other IT stuff. Usually the P/O [purchase order] will show just one line item: DCS system," but behind that P/O is a 50-page specifi- cation list for each and every piece of the DCS, the forwarder said. For those kinds of projects, "what's needed is a bill of materials, and eventually packing lists, which show in which box which item is, and a way of ensuring that ultimately all items were shipped. This is where the time is spent. This is where IT tools can help...if and only if there are proper processes to capture everything." l email: janet.nodar@ihsmarkit.com twitter: @janet_nodar Norway's Equinor, contracted to install two wind farms off the coast of New York, also built the UK's Dudgeon Offshore Wind Farm. Byron Price, courtesy Equinor

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