The Logistics Review – Project Cargo

The opportunity

The type of project cargo currently experiencing the most activity is not related to the energy sector, but rather manufacturing.

As manufacturing facilities across Canada have shut down, plant relocation has emerged as something of a niche industry. The equipment found in most plants is far too valuable to demolish, so some companies have decided to sell off the entire facility and move it, piece by piece, to its new home, which is usually offshore. It’s incredibly complicated work—since most of the equipment is old and much of it has been altered from its original form, it’s time-consuming to get the correct dimensions—but it delivers a return to the plant owner and is keeping many project cargo carriers and brokers afloat.

Plant relocation notwithstanding, most service providers anticipate a lull in the coming year. That is good news for shippers with something big to move.

While transporting project cargo will never be cheap, it’s more affordable today than it was a year ago. According to Beringer, the rates charged by ocean carriers for project cargo have dropped from more than $300 per tonne to roughly $100 per tonne. Plus, he says, carriers in all modes are eager to do whatever is needed to attract more business.

“There is vastly improved flexibility on the part of vessel owners to make calls to out-of-the-way ports,” he comments. “Also, the availability of specialized railcars has improved a lot.”

Even though the situation is far from perfect—he cites the high cost of stevedoring labour and terminal handling charges at ports as a major barrier—he says the overall environment is decidedly shipper-friendly right now.

“It’s an excellent time to move project cargo.”