The development of container shipping with the tendency towards increasingly large vessels plays a decisive role in global trade. New container terminals and deep water ports have been and will continue to be built, existing mooring areas are expanded and handling facilities are being modernised and increasing in numbers. The capability and capacities of ports are continuing to increase, while loading and unloading times of vessels are reduced. Ports worldwide face the challenge of continuous development, constantly requiring new, less expensive but more efficient and more reliable transport solutions and handling facilities. This is exactly the point where the competency of consulting engineering companies such as INROS LACKNER is needed: national and international clients are advised in all areas ranging from port logistics to port development planning, precise port design including any associated infrastructure and supra-structure, and eventually, construction supervision during execution. Since the company’s foundation nearly 75 years ago, various large international port construction projects are linked with the name of INROS LACKNER.  Port around the globe pose very different challenges for planners and designers – the differences between planning for Africa, Asia and Europe are significant and cannot only be based on the specific needs of calling vessels, the available handling and transport facilities, the usual construction processes and materials or climatic conditions. Port authorities and terminal operators too favour different standards in different regions. There can be no such thing as a port ‘off the rack’; each port is unique, with optimum adaptation to local conditions and requirements if thoroughly planned: the result of good engineering performance.  The following examples of recent projects illustrate this point and highlight the importance of good design to maximise performance and achieve ‘fit for purpose’ design.

New container terminal in Lomé, Togo
Ideas for Africa’s first deep water port at Lomé (Togo) were initiated in 1960. The country’s difficult financial situation necessitated a development to be planned in stages. In the first construction stage, a 1,720-meter long wave breaker was built, as well as a 400m-long jetty in the east (in the area of the subsequently built counter-jetty). Furthermore, a 340m-long and 70m-wide general cargo pier on pile foundation was also included. Open air storage facilities and large transit sheds were also established. An 8km-long connection feeder track to the railroad network in the interior, access roads to the existing road network as well as facilities for electric power and water supply, and navigation lights for the port completed the first stage of development. Planning and implementation were completed speedily at that time, however not under the same pressure experienced in comparable projects nowadays. The deep water port was commissioned in 1968, after a four-year construction period. By 1976, cargo handling had risen from 100,000t to 587,000t. The foreign trade balance of Togo, too, continued its positive development, and an appropriate expansion of the port facilities was projected in cooperation with INROS LACKNER, who operated a branch office at Lomé. The expansion of the quay facilities implemented between 1972 and 1980 comprised the construction of six large warehouses for the export of cotton, coffee and cocoa, as well as a silo for approximately 70,000t cement clinker including the related conveyor systems. Due to the large growth rates in general cargo and container handling, planning for a second mole, a finger pier with a length of approximately 200m and a width of 140m as well as two mooring areas with water depths of 11m and 12m, respectively, was initiated in 1980. Each year, around 300,000 containers are handled. The port of Lomé has hence developed into an important transit port for the countries of the Sahelian zone – Burkina Faso, Niger and Mali. The (natural) water depth of 15m in the feeder canal and 12m to 14m in the port basin as well as the very low sand sediment rates which keep dredging costs to a minimum are of great benefit. The master plan drawn up in 2006 shows that the Port of Lomé still has huge potential for expansion.  Small wonder therefore that terminal operators meanwhile have picked up the idea of expanding the port as a container hub. Expansion plans are almost always preceded by hydraulic investigations such as analyses of sedimentation in the port basin and the access canal or of the impact of waves. In addition, the traffic flows in the port and the seaport area are examined and micro and macro-economic analyses are carried out. Studies on environmental impact assessment (mostly based on World Bank standards) as are also common in Germany have been part of such projects as a matter of course for several years.

Baltic Sea transport plans
Baltic Sea transport represents an enormous growth market in quite a different region and on quite a different level. Russia and Germany have had continuous and in-depth relationships in the transport and logistics sector for many years. The percentage of cargo for Russia handled through the ports in the Eastern Baltic Sea region amounts to between 80 and 90%. Additional potential within the region may result from transit from and to Belarus, in particular since the country has opened itself to market economy. Apart from the traditional seaports of St Petersburg, Vybog/ Vysotsk, Lomonossow and Kaliningrad, new ports and port facilities have been established along the Russian Baltic Sea coast. Plans which were well criticised in the early 1990’s have become reality – and expansion is still going on. At present, INROS LACKNER acts as consultant for large projects at St.Petersburg and Lomonossow. The decisive factor for the company to be included in a Russian consortium for establishing a railway and RoRo ferry service from Ust-Luga and Baltiysk to Sassnitz/ Mukran and other German Baltic Sea ports was the experience from numerous projects in ferry terminal planning (Baltic Sea) and the company’s special knowledge in the field of mobile ramps. Apart from RoRo goods, two different types of ferries, Mukran-103 and Rider, also handle railway services at the same ferry bridge system, which represents a novelty in ferry bridge construction. The ferry bridges both at Ust-Luga and at Baltiysk have been designed as 45m long steel structure types with tracks, with their operating and structural principles having been optimised on the basis of the railway ferry bridge facilities built at Mukran (Germany) and Klaipeda (Lithuania) in the early 1980’s. Each ferry bridge system consists of a hoist gantry with rope-guided counter-weight system and electro-hydraulic drive mechanism (hoisting capacity of main cylinder: 3,200 kN), welded steel bridge with steel runway and mastic asphalt pavement. A two-track railway service and multi-lane RoRo service was established. The facility is supplemented by a track switch system on the ferry bridge for possible loading and unloading from eight ship-side tracks. In order to ensure an adjustment between ship and bridge accurate to the millimeter, three hydraulic displacement fenders for transverse positioning and two hydraulic displacement units for longitudinal positioning have been provided.

Goods traffic centre at Port of Karachi
In late 2006, INROS LACKNER, together with a local company, was commissioned with the design for a new, tri-modal goods traffic centre, called “Cargo Village”, at the port of Karachi. This represented the response by Karachi Port Trust (KPT) to the increasing handling volume at the port, which is still to rise in course of the construction of a deep water port for container vessels of the latest generation. Apart from this, urgently required industrial and commercial areas will be provided for the rapidly growing economy in Pakistan and the metropolis of Karachi. The 600ha site is located in the tide-affected area of the Western Backwaters within the port laguna of Karac
hi and will completely be filled up. For this purpose, around 24 million m³ of soil will have to be moved, 10km of shoreline stabilisation as well as a 360m long multi-purpose quay for deep-draught vessels must be established, and the feeder sea must be dredged. Apart from the infrastructure development including roads, water and power supply, waste water and surface water drainage, planning comprises the connection of the access roads with up to six lanes to the general road network and a multi-track railway system. In order to prevent the imminent traffic breakdown, a contract (this time in joint venture) for a new bypass road was launched at the same time. In the future, the city will be bypassed on the seaside via a high bridge across the port access canal (main span 470m, clear passage height 65m) and several kilometers of foreshore bridges. The award of the planning contracts for rehabilitation and modernisation of a shipyard in the port of Karachi in the second half of 2007 reflects the economy’s short response time to improved framework conditions. Nowadays Pakistan is heavily affected by the economic crisis and part of the projects have been cancelled or postponed.

New terminal in Vietnam
In South-East Asian states, too, port economy is booming, even during the financial crisis; existing ports are being expanded, and new terminals are springing up like mushrooms. While INROS LACKNER has previously focused on building construction in Vietnam – for instance with the new construction of the National Convention Centre at Hanoi (structural framework planning, technical equipment, landscaping) and the new assembly hall in Hanoi, the company was recently commissioned with the design for a large container terminal in the Cai Mep area south of Ho Chi Minh city. It is planned that a large area of reclaimed land will be used to handle 1 million TEU from 2011. Three access bridges lead to the berths where water depth of more than 14m allows the loading and unloading of the latest generation of container vessels.

 As you forward that request to your IT vendor who is based in a different continent, you notice another memo from your ship planners who also need two amendments to their section of the software due a new requirement from a shipping line. You are already running out of your IT budget for the year and you know that the rest of the budget has to be used to purchase a financial solution that the port really needs. Due to a high need for hardware infrastructure, the finance software has entirely wiped out the IT budget for the whole port for the year. You also recently visited a neighbouring port and were impressed with their semi-automated gate system that reduced waiting time at the gate by 50%. You called a few vendors but none of their gate systems could link to the yard and ship planning solutions except one that cost too much because it was an overseas solution. Your yard solution vendor replies to your request with the quotation. You can’t even afford the consultancy days let alone the fact that the response also indicates that most of the changes requested couldn’t be catered for. As you ponder this dilemma, a bill arrives for the annual maintenance for some of your hardware infrastructure from yet another IT vendor.

Sound familiar?
If it does, this article aims to provide you with a different view of the requirements of a TOS in this modern day as compared to what was expected in previous times. A one-off ERP type solution covering all areas of the port (not just basic operations) from a single vendor at a monthly price (no capex investment) which includes hardware, software, maintenance, upgrades and services -sound good? A traditional look at terminal operating system software will yield a ‘feature by feature’ look at what each solution available in the market has to offer for ports of different sizes and the operational areas each solution covers. Such was a result of last month’s feature article in this esteemed publication on TOS’s, and rightly so. Apart from that, one also got to see that there exist, in this fast-growing sector of the transportation industry, multitudes of TOS software solutions to suit any size of terminal and based on any size of ‘financial capability’ a terminal has for such a solution. Benefits of TOS’s are another common denominator of such articles. From increased planning functions, increased overall efficiency for a terminal to speedier clearance of boxes from gate to yard or vice-versa, benefits are usually explained thoroughly and in detail. Benefits of each solution over another (such as better flexibility to suit operations of each terminal, more features to cover more areas of operations etc) is also another topic constantly discussed. A third common denominator of TOS studies and articles is the TCO (total cost of ownership) factor which ranks highly in a port’s decision of which TOS to implement. In this area, TCO has been looked at from multiple points of view and has had extensive debates about what should be included (software, hardware, maintenance, upgrades, downtime for implementation?, etc). If the truth be told, these factors have existed almost as long as ports and terminals have and to date, with the exception of a few enhancements and upgrades in technology, the basic facts remain the same. Although it is true, that TCO for TOS’s have significantly reduced over the years, other basic factors and benefits remain the same. And revisiting these facts merely serves to remind ports of the benefits they are enjoying or can enjoy as a result of the implementation of one of these TOS software solutions. My aim, in this short piece is to provide an alternative look at what ports are looking for today from an IT and TOS software perspective and what requirements these terminals consider would fulfill a TOS implementation from a non-conventional point of view.

Paradigm shift
There has been a paradigm shift in the belief that TOS solutions should solely RUN and PLAN the operations (yard, berth, quay side etc) of the port. Whilst this is still, and will always remain, the main function of the TOS software, requirements of a port or terminal today have skewed more and more towards that of an airport and other factors such as quick check in and self check in (gate operations), online booking of tickets (online processing of documents such as gate passes, slot booking etc) and easy online payment methods (internal management such as e-billing etc) have become a necessity which [sea-]ports all over the world have to accommodate. Hence the shift in expectation of what such a TOS software should encompass.

Diagram – Traditional TOS solution

ERP-style port operations software, covering gate, yard, berth, quay side, internal management, document processing (including EDI, UNEDIFACT container messages) and even customer-liaison and other users of the port (e.g. customs, government agencies) are now the order of the day. Another important feature of the ‘modern-day’ expectation is that any TOS system should be able to provide both container and general cargo management. Port operators are no longer looking for software with features that CAN integrate with their gate system, their finance system and their port community system but are looking for an ERP-style software that has all these functionalities inclusive. Port operators are also no longer willing to deal with multiple IT vendors for each area of software requirements to fulfill the above. Port operators today are looking for a single vendor who can provide a one-stop solution which includes, but is not limited to, a traditional type TOS functionalities. “At the outset, the Terminal Operating Systems in the market are suitable only to operate and not manage pure container terminals. And they are of very limited use for other kinds of sea-port terminals. It is better to rename them as Box Management Systems and Terminal Operating System is a misnomer. In terms of investment on information systems for container terminals too, the returns are less and the functionalities essential for managing a terminals falls far short of the requirements. The returns from huge investments in IT infrastructure could be higher if they are able to perform the role of enterprise resource planning systems comprehensively. Further, these TOS are inadequate to manage a sea-port.” JJJ internet blog, worldportsource.com

Role of IT service companies
This brings to the fore the role of IT services companies as compared to the traditional TOS vendors. Focus has now shifted to IT services companies to ‘put together’ such solutions in order to fulfill more advanced requirements for the ports. Whilst it remains the role of the traditional TOS vendors to continually upgrade and add more functionality to their solutions, only vendor independent service companies are able to piece together the jig-saw that is the overall software architecture that a port of any standard requires today. Such services companies today put forward the option of a TOS system together with multiple ancillary systems that cover all the areas mentioned above. In addition to this, these port operations ERP-type solutions also cover areas such as manpower rostering, port community systems (which include all liaison with external parties for customers including customs), all necessary pre-booking facilities and all e-documentation requirements. IT services and consultancy companies such as these have also resorted to developing some of the smaller components on their own and integrating them with a more established TOS software to provide an end-to-end solution that ports are looking for. It is thus, the onus of both traditional TOS vendors and IT consultancy and services companies to join forces globally to provide this sort of modern software requirements that ports are looking for. Another stringent requirement of ports today is localised support for all their IT software. Gone are the days where ports are willing to tolerate ‘different time-zone’, ‘different country’, ‘one-site’ support that was sufficient 10 years ago! To
day we are talking about 35-moves-per-hour ports that require quick-fix solutions to any problems they may face with their software, especially their TOS related software that operates at the heart of any port. Local or regional IT services or consultancy companies are able to provide this sort of localised and on-site support requirements, at least on a first and second level basis, which, from historical data, would solve 70% of all problems with these kind of software packages. This is another clear indication of the benefits of the current trend of services-based IT companies working together with TOS and other traditional vendors to serve a port’s end-to-end IT needs.

Price factor
And then we have the prime factor of price. From low TCO to cheap and competitive maintenance packages that include enhancements, TOS vendors have championed this to the hilt. And yet today, one of the highest IT spend of any port globally is the purchase and implementation of a TOS system, purchase of all other related or ancillary systems and the additional spend required to integrate all these solutions together. And then, of course, they have to take into account the cost of hardware infrastructure and maintenance for each solution operating independently. Some leading TOS providers believe that whether or not a customer decides to use features contained in the software should be an operational decision, not a financial one. Today, especially in these trying economic times, the flexibility of a TOS software is critical because much consideration is given to price and TCO factor. It IS a financial decision and ports are more likely to choose for a flexible software package that provides a price that will match the features used rather than a one-type pricing for all. Hence, the model that works today, fortunately or unfortunately, is one of an IT services company providing an end-to-end solution for the port at an outsourced monthly ‘rental’ rate that includes purchase price, implementation, support, maintenance and upgrades. What this means for the ports is a no capex or initial large investment, no dealing with multiple vendors and SLA-dictated services that guarantee the ports of a service level that is deemed by themselves adequate and appropriate for the port and its operations. Packages like this also benefit smaller ports who have to, more often than not, allocate their capex for port expansion, equipment spend and other related spend and thus have to settle for in-house half baked solutions that rarely, if ever, fulfill their needs completely. TOS systems and all related solutions also have to be hugely flexible in terms of packages that can be carved out based on needs of each individual port. This is usually based on size, growth potential etc. This will allow the services-based companies to better package solutions for any size ports. Features and functionalities of all port related IT software have to be flexible enough to operate independently of each other and yet be able to co-exist seamlessly, if necessary. However, a point to note in terms of packages, is although some traditional TOS vendors provide SaaS (software as a service) options, this option is not suitable for countries that have a less than stable internet infrastructure. Functionalities of a TOS is mission critical for the operations of a port, and as such connectivity factors should not be a risk.

Traditional ‘TOS’ players (with the traditional limited features) should move forward in one-of-two ways. Either find suitable IT services partners globally that can piece their traditional TOS features together with the other software requirements of the port and market it as an end-to-end solution and service or embark on a massive development programme to fulfill all the areas of software that a port today considers worthy of a complete ‘Terminal Operating System’.

“Our 2010 will have a very busy tail end,” says Sjaus, who is based in Vancouver, BC.  However, there are still bad memories from 2009 for some companies. Another leading maker of shiploaders and chutes saw the first half of 2009 as a “nightmare” with the world gripped in the clutches of an unrelenting recession. “We had no orders in the first half of 2009,” says Petro Bibolini, Commercial Director for Tenova TAKRAF of Italy. “We even had some order cancellations and the first half looked terrible.” But, that experience has just made the first half of 2010 much sweeter. Tenova-TAKRAF’s fortunes changed dramatically and it finished its fiscal June 30, 2010 with “very good” results. “We managed to get our budget and results in only a half year,” says Bibolini.

Worst behind us
The rest of 2010-2011 looks good, too, for the company which acquired Germany’s TAKRAF in early 2008. “We feel the worst is behind us and we have a good perspective for the future,” explains Bibolini. And with orders coming in again, Tenova-TAKRAF is no longer looking at reducing capacity and personnel as it was at one stage in 2009. For Canadian engineering specialists in bulk material handling systems, EMS-Tech Inc, a healthy work backlog kept the company going through the height of the global recession with considerable call for maintenance, refurbishing and installing value added replacement parts for bulk-handling equipment such as shiploaders, according to John Elder, Vice President Marketing, Sales & Product Development. The Belleville, Ontario based company had a “very dry year in terms of new system orders” in 2009, but in 2010 “the level of activity on the new project front has picked up considerably,” says Elder. “Some very nice orders have materialised thus far.” Details are awaiting actual contract signing, but EMS-Tech is looking at projects in China, Australia, India, Brazil and Indonesia, as well as home-grown projects in Canada. While some in the shiploading and chute business were forced to trim costs, curtail production and resort to layoffs, EMS-Tech is now searching for skilled persons in all disciplines to expand its business at home and abroad.

Surprisingly good
At FL Smidth Wadgassen, the German materials handling arm of the Danish parent company, orders are mounting and a 2009 that ended on a positive note has led to a “very good year” so far in 2010 with opportunities in Southeast Asia, India, Australia and South America. And for Cargotec Sweden AB, a 2009 that was slower than 2008 overall because of restricted investment by clients, still had a surprisingly good shiploader business, reports Jan Karlsson, Sales Director, Bulk Terminals.  As 2010 matures into its second half, the Swedish company reports being back on track with numerous orders for bulk handling equipment, including shiploaders. With client confidence building, there have been increasing numbers of product inquiries, says Karlsson, especially in countries where large volumes of dry cargo are handled. Work is underway on a contract signed in 2009 for a 4,000 tonnes per hour shiploader being installed in India for iron ore export. With a 25 meter boom length, the shiploader is due for delivery this year. And, Cargotec has also recently inked a contract for a grain shiploader, but details, location and the client remain confidential at this stage, Karlsson says.

Major contracts
So far this year, FL Smidth Wadgassen has won major material handling work in a Kuwait cement plant, which involved a wide variety of bulk handling equipment from belt conveyor to ship unloaders. Elsewhere in the Middle East, the company reports contract success in a phosphate storage and shiploading terminal including two rail-mounted shiploaders, each with a capacity of 2,200tph. That project also involves a variety of conveyor systems, truck unloading stations, and a marine terminal complete with surge bins and jetty conveyors served by the two new shiploaders. Other recent contracts for biomass handling and storage in Holland and a pneumatic shipunloader in Bangladesh did not involve shiploaders or chutes, however, but added to the company’s growing work book. The Tenova-TAKRAF order book is firming up nicely, thanks to a long and solid relationship in Brazil with Vale, the world’s second-largest mining company. Bibolini says an order for five shiploaders years ago at the Port of Sao Luis – including the largest still operating in the world a 1980 vintage that still offers 20,000 tonne per hour – has led to other materials handling contract successes such as stackers. Sandvik and Tenova-TAKRAF are also both competing for materials handling equipment as part of the expansion of Pier 4 jetty at the port. Other Tenova successes include a 10,000tph shiploader in Mauritania in Africa. The iron ore project also saw the Italian company win the bid for conveyors, transfer towers, silos and a screening station with the work split between the Italian and German plants. The shiploader will be fabricated in Europe and transported to Mauritania for erection in April-May 2012. Also, in Africa, the company is in the running for a shiploader contract at Port Beire in Mozambique. In Geelong, a city not far from Melbourne, Australia, Tenova Sempf, a subsidiary, signed a contract earlier this year for a 1,000tph telescopic shiploader to handle woodchips. Tenova is also supplying conveyors to the shiploader at the Port of Geelong, giving it an annual capacity for wood chips of 2.5 million tonnes. And at home, Tenova-TAKRAF is busy in Italy’s conversion of oil-fired power plants to coal. For one major client Enel, it is supplying a gypsum and ash shiploader at the Torrevaldaliga Power Plant. The new shiploader should be commissioned in September, according to Bibolini. Tenova is also pursuing other projects involving ship unloaders and conveying systems.

Bullish
A small New Orleans-based manufacturer of shiploaders, Agrico Sales, recently signed a contract for three of its standard, stand-alone shiploaders for a “North American west coast feed and grain handling” port. Details of the project remain confidential at this stage, says Agrico Vice President of Sales, Bob Rieck, but the shiploaders will be able to handle 3,000tph without having to move the ship during loading. That brings to 15 the number of Agrico shiploaders around the world as the company gains more and more recognition for its tower shiploaders. “We are very bullish for the rest of 2010 and at least five projects should be decided between now and the end of the year,” says Rieck.  “We at Agrico believe we are in the running for each of them.” Rieck attributes the growing interest in Agrico shiploaders to the fixed tower design, which costs significantly less than mobile shiploaders and their need for support along the entire dock. That alone can save between USD5 – 10 million over other shiploader designs. As well, Rieck says Agrico shiploaders are also more efficient as their multiple towers don’t have to stop loading during a hatch change. “With the flip of a valve we can redirect the bulk material flow to any of the towers.” It takes only one operator using radio remote controls to run the shiploaders. Agrico also boasts lower electrical power usage than most other shiploaders that have to use winch motors – often this can be the difference in power needs of 100 to 125 kilowatts to the 300kw needed by other users. Rieck also believes the shiploader towers are also easier to permit because of their smaller footprint.

Innovations
With the former Kovako technology for pneumatic shiploaders and unloaders transferred from FL Smidth Kovako (Holland) to FL Smidth Wadgassen (Germany), the company says it is now in a better position to offer clients a choice of bulk material loading and unloading systems. In one recent breakthrough, FL Smidth Wadgassen designed a combined shiploader for a coal-fired power plant in Germany, which is able to handle dry and wet ash as well as gypsum, using the latest in technology. For Canada’s EMS-Tech Inc, John Elder says “each new
shiploader brings with it innovations, some small and some large.” The focus stays on optimisation of equipment, reliability, environmental concerns, and strong competition. In one recent Canadian project for Kinder Morgan, EMS-Tech built a new shiploader in Victoria BC, barged it to Port Metro Vancouver and offloaded it successfully in April 2010. The shiploader incorporates the latest in environmental control features – including a Cleveland Cascade discharge trunk, a dust collection system, and dust curtains that run the length of the gallery – as well as electrical control software and hardware, which Elder says allows the use of the shiploader in environmentally sensitive areas with minimal operator expenses. Kinder Morgan bought the former Vancouver Wharves in North Vancouver, which is backed by residential development on the nearby mountains. The new shiploader is a traversing, slewing, luffing, shuttling machine with a telescopic discharge chute and a 2,500tph capacity.

Loading chutes
When it comes to handling extremely dry and dusty abrasive bulk materials such as phosphate, the correct choice of shiploader chute can play a huge role. Dust is the enemy and a United Kingdom firm, Cleveland Cascades Ltd, from the northeast, has become a world leader in providing chutes for dust free loading thanks to a concept it says was “born out of necessity.” The patented, award-winning Cleveland Cascade system is used all over the world handling dry and dusty materials. Instead of free fall 25 meters or so into a ship’s hold, the system uses a series of inclined cones set in a zig-zag path in the chute to limit the bulk material’s flow velocity. The zig-zag flow prevents particulate separation and the entrainment of large quantities of air, which would otherwise lead to dust production. Using the cascade technology, dust is practically eliminated at source without the need for expensive and energy-intensive dust extraction and filter systems. These days it’s not just phosphate as other dry bulk materials such as alumina, coal, grain and fertilizers are also being loaded by the Cascades system providing a dusting solution for 100s of clients worldwide. Most chutes have ceramic linings and provide an anticipated service life of 50 million tonnes. And Cleveland Cascades also provides its clients with a detailed assessment report of dusting levels before and after installation. The UK-company has had recent chute contract successes in Syria, Morocco, Jordan, Tunisia, Algeria, Israel, Australia and Europe and sees itself as the “industry standard best practice whether it be for new or existing shiploaders.

Too heavy
The original Cascade design with inclined cones is available in three basic sizes according to cone diameter and handle flow rates over 4,000 cubic meters an hour depending on bulk material flow characteristics. And according to Greg Andrew, Chief Engineer Mechanical for engineering consultants Worley Parsons of Vancouver, BC, says environmental considerations and the battle against dust are driving shiploader systems to become heavier. This creates another problem for engineers and chute makers that is no longer uncommon – shiploader chutes being so heavy that they can drop into the hold. It’s no wonder that shiploader manufacturers, such as Agrico, largely choose chutes or spouts directly from global suppliers such as Cleveland Cascades or from Mid-West International (Mid-West made its first retractable bulk loading spout 40 years ago) rather than building their own. “It has to be a pretty slow time before we make our own,” admits Agrico’s Rieck.

The greatest port investment opportunities revolve around three events that are happening right now: the development and use of arctic shipping lanes, the exploration and extraction of liquid natural gas from the arctic, and the dramatic growth of agriculture in the North.

Arctic Trade Routes
For the first time in recorded history, transporters have access to the no-longer-fabled Northwest and Northeast Passages. The Opening of the Northwest Passage and Northeast Passage decreases shipping distances, decreases fuel use, opens new ports and markets, and eliminates canal fees. The Northwest Passage (the 2,000 mile route above North America) and the Northeast Passage (the 1,000 mile route above Russia) are now ice free for several months of the year. Regions of the arctic are warming at a rate five times greater than the rest of the world, an excess of 2.5 degrees Celsius per decade. NASA studies show that perennial Arctic sea ice is melting at a rate of 9 percent per decade, irrevocably extending the ice-free season each year. In August and September of 2009, Beluga Shipping made the first commercial journey through the Northeast Passage. “We can use the Northeast Passage only because of the effects of global warming,”[1] said Niels Stolberg, President and CEO of Beluga Shipping GmbH, headquartered in Bremen, Germany. Two multipurpose heavy lift carriers loaded up in Ulsan, South Korea for a drop-off in Novy Port, Yamburg, Siberia. They then continued on to Archangelsk to load steel pipes destined for the private port of Onne in Nigeria. The seven week route saved approximately USD300,000 per vessel. The typical alternative would have entailed a departure from Rotterdam, Netherlands through the Suez Canal and on to Yangpu, China. Beluga expects to make the journey regularly, starting with six ships in 2010. In 2008 the first commercially viable shipping operation proceeded in the Northwest Passage.  That year, Desgagnes Transarctik sent the MV Camilla Desgagnes, a cargo ship, from Montreal to Gjoa, and plans to do so again on a regular basis. Since 1900, only 100 vessels have successfully traversed the passage. Each successive decade has seen more ships than the last as the passage gradually becomes more navigable. Impenetrable sea ice along the Passages has historically affected both land and sea infrastructure investments.  In 1969, oil companies sent the oil tanker ice breaker SS Manhattan through the Northwest Passage to determine if the route was economically feasible for transportation of oil. Though the vessel completed the voyage, one of the few commercial vessels to do so, it was not deemed an economic success, and the result was the Trans-Alaska Pipeline.  Increasingly, sea transport is becoming the preferred method of moving commodities out of the arctic. Land-based infrastructure such as railroads, highways, and pipelines will become more expensive to maintain as the permafrost melts below them, causing them to sink or sag. Mining operations dependent on annually diminished ice roads will look to the sea for export. Container transport benefits as well. Because there are no canals, ship size becomes irrelevant, allowing ever larger ships short and convenient access. As sea ice retreats and the Northwest Passage becomes more viable each year, the impediments found in the 1969 Manhattan venture have literally melted away.

Liquid Natural Gas
New Liquid Natural Gas (LNG) fields along the Northwest and Northeast passages are natural refueling stations. It is estimated 25% of the world’s natural gas reserves are hidden in the Arctic. Sea ice melt provides a direct transportation route from one of the world’s largest new LNG reserves to the world’s largest consumers of LNG. The two largest economies for liquid natural gas are Japan and Korea respectively. One of the largest new deposits of LNG is located in Novy Port, Russia. Does this sound familiar?  Beluga already established this route. Novy Port is home to less than 2,000 people, located in the far North of Russia where the Ob River meets the Kara Sea. This region’s vast natural gas deposits attract oil and gas companies from all over the globe. Each company faces the question: how do we get it out? Gazprom is planning a 2,500 km gas pipeline and rail lines, part of the Yamal Megaproject, with an expected 2030 completion date. In light of the experience of the Trans-Alaska Pipeline one quickly recognises that shipping is the more appropriate solution. At the other end of the Arctic we find Snohvit in Hammerfest, Norway. Europe’s first LNG export facility, Snohvit produces 4% of the world’s LNG consumption annually. Partially financed by the Japanese Bank of International Commerce at a price tag of USD 5.3 billion, it exports 5.75 billion cubic meters per year, mostly to Europe and America. By combining the abundance of LNG in the Arctic with newly opened shipping lanes, you can begin to form an image of an arctic passage route between Hammerfest and Japan/Korea with readily available fuel resupply stations, such as Novy Port, along the way.  So we have the world’s largest emerging energy market (LNG) coupled with the world’s latest transportation revolution (Passages) coinciding with a global push toward clean energy. It is a perfect storm of economic prosperity made possible by climate change. There is one more factor that will drive this home.

Agricultural Trade Routes
Scientists expect northern agricultural yields to increase due to global warming.  Global warming will gradually erode agriculture in southern climes as plants max out of their temperature ranges. While this may prove devastating for mid-latitude nations, it is projected to be a boon to developed nations in the north, in particular the farmland in Canada and Russia. Luckily, you don’t need to wait for climate change to warm the fertile regions of Russia. The rush for grain has begun. Russia, already the world’s third largest wheat exporter, is on track to double their agricultural exports in the next 10-15 years to 50 million tons annually. The cost of Russian farmland is extremely low, and much of it remains fallow. Recognising this, agricultural investors are flocking to Russia. Swedish Company Black Earth Farming has bought up 300,000 hectares of Russian farmland since 2006. Saudi Arabia, Korea, Japan, and China are purchasing farmland in order to supplement their own lack of agricultural production. South Korean company Hyundai Heavy Industries obtained 10,000 hectares of Russian farmland in 2009 to grow 60,000 tons of maize and beans by 2014, all of it for export to South Korea. Asian nations are already investing in Russian ports as the two regions pursue a grain corridor. Sojitz Corporation and Itochu Corporation, two Japanese companies, want to buy land in Siberia. To do so, they will have to build ports, and this year they began talks with Russia to do so. They hope to develop a port in the Russian Far East to export 1 million tons of wheat annually, only 1/50th of Russia’s projected 2020 capacity. Mitsui, the largest grain trader in South-East Asia, has shown an interest in developing a grain terminal at the port of Vladivostok for export to Japan. Marubeni Corporation is also increasing its shipments to Japan from Vladivostok as well as Khabarovsk. Only one thing can stop Russia from achieving its agricultural potential – a lack of ports. Russian grain exports are already at capacity through Estonia, Latvia, and the Black Sea. Novorossiysk shipped 2.5 million tons in the first three months of 2009, a fourfold increase from the first quarter of 2008. The Azov Sea ports of Yeisk, Taganrog, Azov, Temryuk, and Kavkazare are also processing at capacity.

New Locations for Port Development
Which ports will service this emerging Arctic market? Existing ports, particularly those located in the Arctic, have a great deal to gain from the coming thaw. Three existing northern ports include Murmansk in Russia, Churchill in Manitoba, Canada, and Hammerfest, Norway. However, all ports have access to these routes, particularly Eur
opean exports going to Asia. The concept of an “Arctic Bridge”, with a hub in Churchill, was proposed by Canadians in the early 1990s. In 1997 this port of 1,000 souls was sold to Denver-based OmniTrax, a major railroad operator. In 2004, OmniTrax entered into talks with the Murmansk Shipping Company to promote the Arctic Bridge concept. The Canadian Wheat Board (CWB) exports nearly 400,000 tons of wheat each year through Churchill. Much of that wheat is exported to China, where the CWB has maintained an office since 1994. In 2007, OmniTrax accepted their first import, a shipment of fertilizer from Murmansk. This concept of connecting heartland agricultural production to Northern ports through rail lines represents major infrastructure needs that have yet to be met. Partnering with hinterland infrastructure suppliers, port developers have the most to gain from the Canadian and Russian agricultural boom. New port developments are the most exciting opportunities resulting from climate change. To date, there is not one grain export terminal in the Far East. Dmitry Rylko, general director of the Moscow-based Institute for Agricultural Market Studies (IKAR), said “the lack of a dedicated grain export terminal in the Russian Far East – whose ports ship mainly steel, coal and oil products – was the main impediment to large-scale, export-oriented farming projects in the region.” Meanwhile, Canada plans to create a deep water port from the existing port at Nanisivik. America is looking at locations in Alaska.  In Russia, Ambarchik is a small port with possibilities on the East Siberian Sea which is now navigable during the ice-free days of August and September. Building a railroad north to this region, similar to the one that feeds Churchill, would be shorter than heading to Novosibirsk or Nakhodka, and shipping is less expensive than rail transport.

Conclusion
Port development opportunities along the Northeast and Northwest Passages are wide open. Sometime within the next two decades, total sea ice melt could leave Passage lanes ice-free year round. Ports that enter the planning stage now will be perfectly positioned to benefit from the transportation boom when it reaches full bloom.

In summary, there are six reasons to pursue arctic port developments:

The accelerated thawing of perennial sea ice creates viable shipping routes along the Northwest and Northeast passages, decreasing distances traveled and eliminating canal fees.

Liquid natural gas deposits found in the newly opened Arctic are increasingly coveted by sea and ground transportation as public concern over energy efficiency mounts. Sea transport is increasingly the most desirable method of extracting this natural resource. Ships can also be converted to use LNG as fuel, creating natural refueling locations along the Passages.

Russia expects to double its grain production in the next ten years, and the only hindrance to that expectation is the limited capacity of existing export ports. Warmer temperatures mean increased agricultural production in the northern hemisphere, particularly in Russia and Canada, increasing agricultural yield.

The economic demands of Asia, in particular China, Japan, Korea, and India, create new markets easily accessed from all developed nations through arctic routes.

Avoiding canals allows unlimited vessel capacity and size.

The culmination of all of these events is taking place in parts of the world where ports are either non-existent or woefully unprepared for the traffic they will soon see, creating the opportunity for the right investor to dominate this emerging market.

The time for financing port development along arctic trade routes is unprecedented, historic, and potentially quite lucrative. Now is the time to start investing in arctic port development.