Breakbulk 'rides the wave'

The mood at The Journal of Commerce's Breakbulk Europe conference in Antwerp wasn't giddy -- probably a good sign -- but it didn't have the gloom that surrounds most container shipping gatherings these days.

Volumes of several key breakbulk cargoes, notably steel, have plummeted with the economy. Albert Counet, CEO of Brussels-based Xpedys, said his comapmny's volumes are down 40 percent year-to-year, largely because of reduced steel shipments. Geert Pauwels, group coor4dinaror at BC Cargo Group, the freight division of Belgian railway SNBC, reported a similar drop in breakbulk business.

But some breakbulk cargo segments are holding up well. Northern European ports report increased volumes of aluminum shipments being stored under London Metals Exchange contracts. And project cargoes -- which include high and heavy shipments that don't fit in containers -- have held up relatively well.

Multimillion-dollar construction projects aren't turned on and off like a water spigot, and carriers are still moving many projects from contracts signed several years ago. Many at the conference said various projects are being slowed or in a few cases canceled. But generally the business is carrying on. Arjan Prooij, logistics manager at Fluor bv in the Netherlands, said Fluor has a backlog of $29 billion in expected businsss worldwide.

"We'll ride the wave," said Gary Dale Cearley, executive director of the Global Project Logistics Network in Bangkok, whose 100-plus members are involved in project logistics worldwide. He said he expects demand for project cargoes to soften with the economy, but he doesn't foresee a complete bust unless key currencies "go haywire" as Asian currencies did in the late 1990s.

"The long-term fundamentals are in place and globalizatoni will not go away. It will increase," said Axel Bantel, vice president and head of commercial and supply chain management for Europe at Wallenius Wilhelmsen Logistics.

Besides carrying industrial products and commodities that are less subject to consumers' whims than container carriers are, breakbulk carriers also enjoy a better supply-demand balance on vessel capacity. Although the size of the breakbulk fleet has increased, it hasn't gone through the ordering binge that has battered container lines.