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Breakbulk April 2017

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4 THE JOURNAL OF COMMERCE EDITORIAL APRIL 2017 EXECUTIVE EDITOR, THE JOURNAL OF COMMERCE AND JOC EVENTS Chris Brooks 609 649 2181 MANAGING EDITOR Barbara Wyker 908 777 3217 EXECUTIVE EDITOR, JOC.COM Mark Szakonyi 202 872 1234 SENIOR EDITORS Joseph Bonney, Breakbulk/Project Cargo, Gulf Coast 973 508 2417 William B. Cassidy, Trucking and Domestic Transportation 202 872 1228 Bill Mongelluzzo, West Coast 562 428 5999 Hugh Morley, Northeast, Mexico 646 679 3475 Greg Knowler, Asia Editor, IHS Maritime & Trade +852 3975 2647 Turloch Mooney, Global Ports, IHS Maritime & Trade +852 9011 9109 ASSOCIATE EDITOR Reynolds Hutchins, Intermodal, Government/Regulation, Southeast Ports 202 572 1487 ASSISTANT WEB EDITOR Dustin Braden 646 679 3450 SENIOR ECONOMIST, IHS MARITIME & TRADE Mario O. Moreno 973 204 7796 SENIOR CONTENT EDITOR Alessandra Gregory Barrett 860 248 5238 SENIOR DESIGNER Sue Abt, 415 312 2691 DESIGNER Bryan Boyd, 908 910 7849 PUBLISHER Tony Stein 770 295 8809, SALES Cindy Cronin, Strategic Account Manager Southeast, Gulf, Canada sales, 954 551 8305 Zachary Gorman, Account Executive Northeast sales, Classifi eds/Reprints/Copyrights 646 679 3466 Misty Belser, Senior Sales Executive 919 869 7404 Ria Van den Bogaert, Sales Representative Europe, Middle East sales, +32 2 569 8905 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 973 776 8660 • 800 952 3839 MANAGING DIRECTOR, MEDIA AND EVENTS, IHS MARITIME & TRADE, Rhiannon James SENIOR DIRECTOR, CONTENT, IHS MARITIME & TRADE, Peter Tirschwell DIRECTOR, JOC AND RAILRESOURCE, IHS MARITIME & TRADE, Amy Middlebrook MANAGER, PRODUCTION, Carmen Verenna MARKETING PROGRAMS MANAGER, PIERS AND JOC, Jesse Case CHANGING MARKET FOR BREAKBULK GOOD LUCK TRYING to make sense of supply and demand in the breakbulk/ project cargo market. The boundaries keep changing. There's always been overlap between the markets of breakbulk/project carriers and those of bulk carriers, container ships, and roll-on, roll-off vessels, but lately those lines have grown more blurry. Battling low rates, bulk carriers are targeting breakbulk and project shipments they normally would spurn. Though rates are up from recent record lows, bulk operators still are struggling, and any cargo looks good right now. Multipurpose carriers are returning the favor by soliciting dry bulk cargoes. Ships arriving with steel or project cargo often leave port accompanied by seagulls feasting on leftover kernels of grain poured into their holds as backhaul cargo. For the carriers, it's better than sailing empty. Even low-paying bulk cargo helps with round-trip costs. Container lines, meanwhile, are breakbulk and project shippers' new best friends. With big ships to fi ll, they're beating the bushes for heavy and oversize shipments that can be stowed on fl atracks or platforms above or below decks. Also competing for breakbulk and project shipments are ro-ro and car carriers. They've invested in modern ships with oversize doors, high-capacity ramps, and adjustable decks that can carry heavy and out- of-gauge loads. Ro-ro carriers appear to be in the market for keeps. Container lines' interest may prove less durable. As Malcom McLean saw more than 60 years ago, the key to contain- erization is standardized cargo handling — and out-of-gauge cargo isn't standard. These shipments pay well, but they're an operational headache at terminals designed for repetitive movements of containers. When and if container rates rise to profi table levels, it seems likely that container ship operators will refocus their attention on the boxes their ships and terminals were designed to handle. Something that will continue, even when container rates recover, is the migration of traditional breakbulk cargo to containers. Since the 1960s, shippers of cotton, coffee, bagged food, and countless other commodities have switched to containers. Most of this change already has occurred, but shipments of forest products and steel continue to migrate toward containers. Low rates are part of the attraction, but the main draw is the ability to ship in smaller, more frequent quantities. This trend is irreversible — or is it? Shipping is nothing if not dynamic, and challenges often turn into opportunities. Some breakbulk carriers sense opportunity in the growing trade in US exports of synthetic resins, and are trying to kindle interest in moving one-ton supersacks of resin as breakbulk cargo. The idea hasn't gained traction — producers and receivers prefer the convenience of containers, and have designed their supply chains accordingly. But could constraints on container availability and ship and rail capacity create a new niche market for breakbulk carriers? Stranger things have happened. ● ● Joseph Bonney

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