Unlike the global container market, which experienced across the-
board drops in throughput in 2009, the dry bulk sector has
proved somewhat more resilient. However, in the Baltic, while
some have been massively affected by the economic downturn,
others have hardly noticed anything at all.
Unsurprisingly, the dry bulk shipping sector in the region has
suffered.
Take the case of ESL Shipping, which is the Baltic’s largest
dedicated dry bulk shipping line, operating a fleet of six vessels,
ranging in size from 21,000dwt to 13,000dwt.
Executive VP, Tom Blomberg, who is in charge of vessel
operations, notes that 2009 was a very difficult year, but that
things have seemingly returned to normal in 2010. The
company’s main customers are linked to the Baltic steel industry,
which effectively closed down during the Spring of 2009 and
only re-opened in the autumn.
“All three main producers we serve closed down, as demand
fell away. This impacted negatively on our transport of iron ore
pellets, coal, coke and limestone,” he observes.
SSAV closed completely over the summer, leaving ESL
transporting just half a million tonnes instead of the projected
1.5mt (million tonnes). Rautaruukki, for its part, cut its needs by
a half.
“Although we have long-term contracts with the steel
industry, we don’t work exclusively for this sector. We also
work with the energy industry and carry a lot of coal.
Fortunately, when the worst of the crisis hit, we were somewhat
behind in our deliveries of coal to power stations, so were able
to use our spare capacity to catch up,” says Blomberg, noting
that other ships had to be laid up, while the company also
sought traffic from the open market, although this proved to be
poorly priced.
Iron ore pellets, the largest single bulk commodity handled by
ESL, are loaded at Lulea, in Sweden. The most important
discharge port is Oxelosund in Sweden, followed by Raahe in
Finland.
Coal comes from Russia, specifically via ports in the eastern
part of the Gulf of Finland, namely Vysotsk, Ust Luga and St
Petersburg.
Limestone, for its part, comes from Sweden.
Many of the discharge ports served by ESL lack basic
shoreside handling equipment, which means that all six vessels in
the ESL fleet are geared. Many of the coal ports only have
hoppers into which on board cranes discharge the cargo. ESL’s
own crew and cranes are therefore deployed on these
operations.
“Currently, we aren’t operating any of our own terminals and
have no ambition, at least for the moment, to go into this area,”
notes Blomberg.
He says that port infrastructure in the Baltic region is
continually improving, although in those ports lacking handling
equipment there is clearly room for improvement. The Russian
ports have make considerable progress in recent years, with
Ust-Luga being one of the most modern of its type in the world,
in terms of coal handling. ESL used to work exclusively for the
biggest coal handling facility there, but has recently also started
using others in the port, too.
Draught remains a problem at many ports in the Baltic,
especially in respect of coal discharge. Helsinki, for example,
which takes delivery of around 1mt of coal annually, has
clearance of just nine metres, which involves many small ships
having to be used to bring in consignments. The port authority
would prefer not to handle such products and therefore does
not plan to deepen the access channel, although Blomberg does
not believe this will realistically happen in the short term.
While things were tough for ESL, the Bega Stevedoring
Company, which operates in the Lithuanian port of Klaipeda,
registered growth of 15% in 2009, although the port overall saw
traffic decline by just 7%. In all, 3.5mt was handled by Bega,
compared with 3mt in the previous year.
Its ability to buck the trend was down to the fact that Bega’s
main clients have plants in Lithuania and the CIS countries from
whence exports of high quality fertilizer continue to grow. A lot
of raw material were also handled by Bega as well.
The company introduced new warehousing facilities in
2007/09, so growth was expected and did arrive in 2009, when
volumes handled rose by 0.5mt. Nevertheless, we were not
immune to the economic downturn, but are anticipating 2010
being a good year,” says Karolis Kuzmarskis, of Bega’s sales
department.
Bega has become a specialist in handling fertilizer of all types,
from liquid fertilizer through to traditional solid bulk. The
majority of the consignments it handles are sent to the Middle
East, Far East, US and Latin America, while smaller consignments
go to destinations in Europe.
“We have become so successful that most of our warehouse
space is permanently booked. We could handle more fertilizer, if
existing space could be used more efficiently by boosting
turnover from the current 7–8 times a year to 9–10 times.
Theoretically, we could handle 4–5mt tonnes annually of all kinds
of fertilizer, along with other materials,” suggests Kuzmarskis.
Vessels sizes vary considerably. Those deployed on the
European trade are no larger than 10,000dwt, although Panamax
bulk carriers are typical on longer routes, thanks to draught
alongside the berths of 12.5 metres. Furthermore, for 2011,
draught of 13.5 metres is to be achieved through dredging.
Two shiploaders are available. That supplied by the former
BMH Marine (now MacGREGOR, part of Cargotec), can achieve
loading rates of 1,500tph (tonnes per hour), while the second is
limited to 700-800tph.
Asked why Bega’s clients use their services, as opposed to
those offered by other stevedores either in the port itself or at
other Baltic terminals, Kuzmarskis says it is a combination of
good price and good productivity; price itself is not necessarily
the only factor a fertilizer exporter takes into consideration
when choosing a terminal, he stresses. The relationship with its
main client, for example, has now lasted for more than ten years
and usually comes in the form of a series of one-year contracts.
“There is a lot of competition from Baltic ports from
companies that are capable of loading fertilizers. However we
do have certain advantages, such as being able to store 185,000
tonnes of export bulk materials and 120,000 tonnes of transit
raw materials, as well as receiving and discharging two full train
loads — consisting of 130 wagons — simultaneously. We can
also load several ships at a time, which gives us the upper hand
compared to others and a good starting point in negotiations
with customers,” he says.
Within Klaipeda, there is a discharge rail facility, which allows
hoppers to unload directly onto a take away conveyor, that then
transports inbound commodities to a storage area, from where
another conveyor system feeds vessels on the quay.
In terms of adding value to outbound consignments, Bega is
now offering to put bulk fertilizer into big bags. Kuzmarskis says
that the company believes that there is a niche for this type of
service in the fertilizer business.
“Demand for soil productivity is making the fertilizer market
grow worldwide and the quality of fertilizer produced by our
clients is higher than average, so it is very much in demand.
Therefore, prospects for this traffic are very encouraging in the
long term,” he observes.
Oy Rauma Stevedoring Ltd, which undertakes handling
operations at the Finnish port of Rauma, reports hardly any
negative impact on the quantity of dry bulk that it handled in
2009, although there was some decline in raw timber traffic.
Overall, tonnage was broadly similar to that in 2008.
Production Manager, Janne Virta, says that current facilities are
more than sufficient for handling existing traffic volume, plus
there is spare capacity to enable steady growth to continue
without the need for significant investment being necessary.
“Our company invested about €4 million in 2009 updating
our bulk cargo handling system from an old ‘open system’ to a
new totally enclosed one equipped with conveyor belts. Finland
is renowned for its environmental policies, which is why we
decided to invest heavily in this new system to handle china clay,
making us wholly compliant with environmental legislation,” he
says.
Typical bulk vessels calling at Rauma are in the region of
8,000 metric tonnes. The main restriction on vessel size is the
access channel, which is just 10 metres deep, he observes.
Quayside efficiency has also increased in recent years
following the above mentioned investment, with Virta claiming a
normal discharge rate of around 600tph using a bucket
unloader.
“Given the current make up of our existing traffic, we don’t
need to acquire any additional handling equipment at the
moment. Of course, if new commodities appear, we are more
than willing to look into our customers’ needs and invest
accordingly,” he states.
Asked to what extent existing bulk traffic is captive to
Rauma, Virta concedes that china clay and paper exports have a
certain linkage. China clay, for example, is used in the overall
paper making process
“For much of the other dry bulks, there is fierce competition
from other Finnish ports. Our coastline is littered with ports of
different sizes, all competing for the same cargo. At Rauma, we
have an advantage in that we are specialists at handling china
clay, so our infrastructure is totally suitable to doing this task,”
says Virta.
In terms of offering value added services at the port, he says
that these are available, although only very few customers ask
for them currently. Nevertheless, discussions with port users is
ongoing, with Rauma Stevedoring prepared to consider each and
every request on its merits.
As for landside transport links, about 60% of all consignments
go by road and the remaining 40% by rail.
The WT Terminal at the Port of Riga did have a difficult 2009,
reports general manager Janis Lapins. He explains that tonnage
handled fell due to a sharp reduction in the amount of split
stone being imported.
“The number of road projects in Latvia backed by the EU and
the Latvian government was reduced, resulting in construction
companies only importing 30% of the amount of split stone they
had original envisaged from countries such as Sweden or
Norway,” he recalls, adding this amounted to just 15,000 tonnes
on the year.
However, he also notes that Riga Freeport as a whole
registered an overall rise in the amount of dry bulk handled,
thanks mostly to increased coal exports.
Wood pellets, which constitute WT Terminal’s main export
dry bulk, did much better. The terminal handled 36,000 tonnes
of these, broadly similar to the quantity registered in 2008. For
2010, expectations are that this could rise by 20–25%, as the
European economy begins to recover, with the majority shipped
out to the EU and Scandinavia. For the longer term, a project is
being examined to allow hopper wagons to discharge pellets
directly onto a conveyor system linked to the terminal’s
warehouses. If implemented, which should take place within the
next 18 months, wood pellet traffic could increase substantially.
Also in 2009, the terminal handled 90,000 cubic metres of
bark chip.
Only a small part of the 75,000m2 terminal is currently paved,
although Lapins suggested that this could be extended should
future traffic increases so warrant it.
Typical vessel size at the moment is limited to
3,000–3,500dwt at the terminal’s two berths, given a draught
limitation of 5.5 metres. However, last year, WT Terminal began
drawing up a project to deepen this to 6.5 metres, which will
allow it to handle vessels up to 5,500dwt.
“There is a lot of competition for dry bulk traffic in the Baltic
area. None of it is particularly captive to our terminal. Being a
smaller terminal does give us an advantage, because we can offer
good quality and personal service. This is important, because
customer service does vary considerably between different
terminals in this region. It’s also very tough being a terminal
operator at the moment because price competition for traffic is
cut throat,” says Lapins, who notes that maximum contract
lengths with customers tend to be in the region of two years.
In terms of land side transport, split stone is shipped out
either by road or rail, although consignments of wood pellets are
almost wholly brought in by truck. On the quay side, a Liebherr
mobile harbour crane is used for project and general cargo,
while a single Multi-docker hydraulic crane undertakes the
loading and discharge of dry bulk, using different grabs depending
on the commodity involved. On wood pellet exports, it can
achieve loading figures of 300tph between the warehouse and
the vessel, which Lapins says is very good when compared with
similar equipment.