Kid-Glove Transport Debating African Cabotage Independent MPV Piece By Piece

MARCHAPRIL 2013

MELTDOWN?
Falling prices, new laws threaten mining boom

CONTENTS

14 ENVIRONMENT

KID GLOVE TRANSPORT

Working with rural communities in Peru, Brazil.

22 SHIPPING TRENDS

SOUTH AFRICA PUSHES CABOTAGE

SAMSA wants all-African flags.

28 PORT FOCUS

FORECAST CLOUDY, BUT CLEARING

Uncertain times for Tianjin Port.

37 EXECUTIVE PROFILE

INDEPENDENT MPV
Knuttel leads new Safmarine unit.

8 MONGOLIA MELTDOWN?
New laws threaten mining boom.

COVER STORY

42 CARRIER PROFILE

CAR CARRIER GOES HYBRID

72 CARGO LENS

Hegh Autoliners diversifies.

THYSSENKRUPP MIRED IN THE AMERICAS

Alabama, Brazil plants closer to sale.

76 MARKET SPOTLIGHT

AUSTRALIAN GATEWAY

Darwin Port swells with breakbulk cargo.

6 Editorial 34 Shipping Trends 46 Security 56 Best Practices: Ship Agency 58 Commodities 61 Breakbulk Index
4 BREAKBULK MAGAZINE www.breakbulk.com MARCH-APRIL 2013

market spotlight

AUSTRALIAN GATEWAY
Darwin swells with Southeast Asia cargo
By Fran Molloy

A power station component moves out of the Port of Darwin bound for Alice Springs, a 1,500-kilometer trip.
Darwin Port Corp.

he Port of Darwin has grown in recent years from a pioneer outpost into an important gateway to Southeast Asia. It is also a strategic defense port. Closer to Dili in Timor-Leste, East Java in Indonesia and Port Moresby in Papua New Guinea than it is to Sydney, the port has undergone major changes in the last decade. The change in this port in the last five years has been dramatic, said Melissa Reiter, general manager for corporate services at Darwin Port Corp. Over 90 percent of our trade is for the Asian market. Weve definitely become Australias gateway to Asia.

The most significant project to impact Darwin in recent years is the Ichthys liquefied natural gas processing plant. The joint venture between Japanese-owned Inpex and Frenchowned Total is estimated to cost about AUD$34.3 billion (US$35 billion) during its 40-year life. The plant will pipe gas and condensate from the Browse Basin offshore from Western Australias Kimberley region. Some of the gas will be processed offshore and exported, while the remainder will be piped to the onshore processing facility under construction in Darwin. The project is causing a substantial

Ichthys LNG Plant

increase in cargo volumes across East Arm Wharf, including shipments of prefabricated units for worker accommodations. Port officials are expecting shipments all year of building materials for the construction of the LNG plant, along with large pipes for laying the underwater pipeline. Darwin Port is strategically positioned to service northern Australias increasing trade with Southeast Asia, said Adam Giles, transport and infrastructure minister for the Northern Territory government in Australia. The Darwin area also includes the ports of Gove and Alyangula, which both handle commodities exports. t
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Darwins strategic location has also attracted a military presence. Australias defense forces regularly hold military exercises in the region. Since 2007, the Northern Territory government has spent approximately AUD$195.7 million (US$200 million) expanding Darwin Port. With imports expected to rise 7 percent this year, Adam Giles further expansion is planned on vacant land bordering the port. Of the 3.5 million cargo tonnes that moved through Darwin Port during fiscal year 2011-2012, approximately 15 percent was breakbulk cargo. The ports big expansion followed the 2004 opening of the AUD$1.9 billion (US$2 billion) Adelaide-Darwin rail link. The 3,000-kilometer railway has changed how project cargo moves across Australias vast dry interior, offering cheaper freight rates and reducing most

truck moves to short hauls. Darwin Port is unrecognizable from the old days, said Cornelis Van Engelen, owner of Casey Haulage, a heavy-lift transportation provider for nearly 30 years. The safety measures built into the new wharf facilities are significant and make a difference to the cargo handling. Van Engelen said he recently picked up several alloy silos shipped from New Zealand and headed for a farm in far northern Australia. The cranes are all automated and precise; the whole operation was pretty smooth and fast, he said. I cant even tell you how we did that sort of thing 20 years ago; your hair would stand on end. Darwin is also the countrys largest live cattle export port, with about 270,000 head of cattle shipped out last year. Rapidly growing traffic at the port has meant competition for berthing spots, which has resulted in intermittent delays for cattle exports and high demurrage costs. The port has responded by building a new marine

Cattle Controversies

supply base to serve offshore oil and gas projects. Scheduled for completion in October, the base will free up more space for cattle operations. Live animals exports attracted controversy in 2011 with the airing of video footage of cattle abused at an Indonesian abattoir. A month-long ban was imposed on live exports to Indonesia, but other scandals have since emerged involving livestock exports to Pakistan and Israel. Australias mining slowdown hurt Darwins bulk volumes last year, as did floods during the wet season (typically December to March), which disrupted manganese exports. Part of the rail line between Adelaide and Darwin washed away near the outback town of Katherine, and ore wagons derailed. The manganese was eventually diverted to South Australia for export, affecting cargo volumes for Darwin. Port officials are not deterred by the bulk downturns. With its natural deepwater harbour, new modern cargohandling facilities, and proximity to Southeast Asia and Australias mineralrich interior, they expect Darwin to continue to play a significant role on the global cargo stage. BB

A biodiesel plant module weighing about 600 tonnes moves from Darwin Port to the Natural Fuel Darwin plant site near the wharf.

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Darwin Port Corp.