Bulk and Breakbulk: A Status Report

Port of Everett
Port of Everett
A bulk cargo shipment at the Port of Everett. Photo courtesy of Port of Everett.

For the past 18 months, much of the industry talk has centered around the COVID-19 pandemic and its fluctuating effects on container movement, including record cargo numbers and congestion at the largest ports on the West Coast.

One interesting side effect to the ongoing bottlenecks has been a growing trend of shippers looking at ports with bulk and breakbulk capabilities as a creative alternative to moving commodities.

The Port of Vancouver USA, as well as the handful of ports in this feature, have seen more shippers move products in bulk and breakbulk in 2020 and 2021, many of them commodities that traditionally move in containers.

“We’ve just seen shippers start to—no pun intended—think outside the box, and start to say, you know what? I can’t move my product in a container, what are my other options?” said Alex Strogen, chief commercial officer for the Port of Vancouver USA. “So we’ve seen them start to move (products in) breakbulk again.”

Here’s a look at the bulk and breakbulk business at five West Coast seaports.

Port of Everett
A bulk cargo shipment at the Port of Everett. Photo courtesy of Port of Everett.

Port of Everett

For the Port of Everett, to say that the worries of two years ago versus now are night and day would be an understatement.

Ordinarily, Everett’s prime cargo value-wise consists of aerospace products and some container imports.

“The general (non-containerized) cargo that moves through here vacillates with the global economic conditions,” Port Marine Terminals Director Walter Seidl said.

When energy prices rise, the port sees robust energy cargo. When embargos on steel hit in 2016, Everett saw its steel volumes plummet. Log tariffs for cargo to China halted its log exports completely. The port’s core breakbulk commodities include project work for energy, construction equipment, steel, bagged cargo like fertilizers and high-value machinery.

This year, Everett has seen its bulk and breakbulk percentages shift, with bulk cement accounting for 35% of its total tonnage. Traditionally, bulk cement makes up 20% to 28%. In 2021, its tenant imported five vessels of bulk cement. Local demand in the construction market has also elevated the need for cement, the port said.

Everett’s general cargo position in 2021 is about 44% of total tonnage. This year, the port saw a return of steel and some energy products that were not so common for the last two years.

Meanwhile, the port moved less aerospace-related import cargo compared to previous years, a result driven by the pandemic that has led to fewer aircraft purchases.

Exports, however, balance out the port’s overall tonnage at about 21% year-to-date, pulp in bales from Canada to China as being its primary export. There are also small exports in containers to South Korea.

Because of the ongoing congestion at major West Coast ports, Everett is seeing an overflow of ship calls and cargo, and not in the traditional way with diverted container ships.

Everett is seeing shippers buy new containers in China and hire heavy lift ships, bulk ships, log ships and other non-traditional vessels to carry containers.

“This method comes with its own set of challenges, but it’s working and providing a path to circumvent congestion in other areas to move goods to market,” Seidl said. “Our challenges are simply navigating through these unprecedented times while continuing to serve our customers the best we can.”

Meanwhile, the Port of Everett continues to invest in modernizing and expanding its seaport amid a global pandemic.

In January 2021, the port finished its $57 million South Terminal modernization, adding a new full-service berth to support bigger ships and heavier cargo in Everett. The project called for bolstering a 700-foot wharf, obtaining and relocating a pair of post-Panamax container cranes from the Port of Los Angeles to the dock and upgrading electrical infrastructure at the docks to support future shore power.

“Congestion relief and handling the container surge we are seeing today would not be possible without these cranes,” Seidl remarked.

The port is also planning for future and continued growth in breakbulk and other cargo. Last July, Everett broke ground on its $36 million Norton Terminal, adding another 40 acres of upland capacity. The facility is expected to be operational next fall.

Port of Vancouver USA
A grain shipment at the Port of Vancouver USA.

Port of Vancouver USA

The Port of Vancouver USA has also seen more ships come to its docks, and more products that wouldn’t normally move by bulk and breakbulk, including brake pads, chemicals and aluminum, said Alex Strogen, the port’s chief commercial officer.

“Because containers are at such a premium at this time, we have seen a very pronounced trend of shippers transitioning out of containers, taking their products out of your standard shipping container and then moving them via breakbulk,” he said.

Vancouver USA has been receiving requests from major retailers to bring their shipper-owned containers through its port.

“It’s kind of fun…to work with logistics managers and logistics coordinators at these different companies that had never really thought about bulk and breakbulk in their entire careers,” he said. “There’s always been an ample supply of containers, and so for the first time in their careers, they’re learning about this breakbulk option.”

With much of the West Coast’s market share of containers belonging to the ports of Los Angeles, Long Beach, Seattle and Tacoma, the Port of Vancouver saw an opportunity in the bulk and breakbulk business with a particular goal of being the primary wind-energy gateway on the West Coast. The Washington state port has it down to a science, working with various agencies to move massive wind components the size of the Statue of Liberty from dock to job site.

Port of Vancouver
A copper shipment at the Port of Vancouver USA.

That niche focus yielded a busy 2020, a record year for the port in terms of revenue and labor hours, Strogen said.

“A lot of what was driving 2020 was put into place over the course of the three prior years where we positioned ourselves to really take advantage of the wind energy market and put a lot of investment both from a labor perspective and infrastructure perspective, and that really paid out at an amazing time for the community,” he said.

The port has been handling wind blades, wind towers and other equipment for projects in the U.S. and especially Canada, whose companies use U.S. ports adjacent to the Columbia River to take advantage of big clearances on the river and the roads to move massive parts to Canada.

Meanwhile, the port is also delving into another sustainable endeavor—renewable fuels. Besides wheat, the port also handles soybeans and corn, two commodities that can be processed into cleaner-burning energy.

“We’re really excited about participating in that business as we as a country continue to transition to these cleaner, more sustainable fuels,” Strogen said.

Another major commodity is steel, which took a hit a couple of years ago because of tariffs, but has seen a resurgence with rising demand for construction materials. This year, the port moved nearly 200,000 metric tons of steel across its docks.

The $1.2 trillion infrastructure bill Biden signed into law in November could mean heightened demand, Strogen said.

Port of Stockton

With five million tons of commodity processed this year, 2021 is poised to be the Port of Stockton’s biggest year ever.

The Central California seaport specializing in bulk and breakbulk cargo is moving as much imports as it is exports this year. Typically, the port handles about 40% of exports and 60% of imports.

The backlog of containers at nearby ports has benefited Stockton, which has seen a 31% increase in business, said Port Executive Director Kirk DeJesus.

“What we’re getting is the commodity that would typically be in containers and we’re seeing it breakbulk,” DeJesus said. “They’re just taking them out of containers and moving to breakbulk.”

While Stockton is limited in how much cargo it can handle because of its draft—it’s used to accommodating 2,000-TEU vessels than mega ships—the port is doing its part to ease some of the delays and DeJesus is eyeing the potential business it could bring.

“It wouldn’t alleviate the backlog they have right now because those vessels that are waiting in either San Pedro Bay or in Oakland are going to have to unload there anyway, but what this would do in the future is it may give some shippers—maybe some small shippers—the ability to move commodities into an inland port,” DeJesus explained.

Coming to Stockton would create some efficiencies and mean less fewer truck trips, he said.

“Commodities that would normally come to the Central Valley anyway would unload in Oakland and then get trucked here,” DeJesus said. “If we could just bring it directly to Stockton, then that’s going to take some of those trucks off the road.”

Commodities vary, but Stockton typically moves steel, fertilizer, sulfur and imported cement, which so far is up 36% higher compared to than 2020 due to heightened construction demand.

Last year, about 43% of Stockton’s total tonnage was in fertilizer, with about 90% of the fertilizer coming to the Central Valley is used locally, DeJesus said.

With exports, Stockton saw a huge demand for rice this year, particularly sushi grade rice, posting a 362% increase in that commodity, typically heading to Asia.

Much of that increase was COVID-19-related, DeJesus said. The Port of West Sacramento, which usually ships the majority of that export, did not have enough available labor due to COVID, so Stockton benefitted from the business.

“A lot of that export had to go through us,” DeJesus said. “That’ll probably change next year. We assume it’ll be back down to more than normal export numbers.”

Meanwhile, the Port of Stockton has been gearing up for the future, with nearly $2 billion in approved projects over the last decade, including truck corridor and road-widening projects and a recently completed $13 million grade-separation project.

Stockton’s biggest push is in rail infrastructure. Officials are working on a plan that may feature some rail bridges to accommodate potential export customers, possibly doubling the port’s volume in the next five to seven years, DeJesus said.

“We expect to see increased volumes, and that’s just something we need to do,” he said.

Stockton is well-positioned for more cargo, DeJesus said.

“I think we’re in a really prime position based on our location for one—we have Highway 99, Interstate 5 running north-south, we’ve got (Union Pacific) and (Burlington Northern) intersecting both railroads in Stockton—so we’re in a really good position to pick up additional volumes,” he said.

Port of San Diego

Months before the media began to spotlight the backlog of cargo ships waiting outside the ports of Los Angeles and Long Beach, the Port of San Diego had been accepting additional vessels.

As one of the ports nearest to San Pedro Bay, San Diego has been accommodating some of the overflow, fielding about 30 requests a month from companies and carriers that don’t typically do business with the medium-sized port.

“We continue to evaluate vessel potential each week with an eye to assisting the supply chain issues in LA and Long Beach,” Port of San Diego Maritime Business Development Principal Greg Borossay said.

While it cannot accommodate mega container vessels based on its size, capacity, infrastructure and available labor, San Diego is able to take in about two to four cargo ships a month with various cargo types, including lithium batteries for solar and wind farms, juice concentrate for juice packs for children and various home improvement goods for nationally recognized brands.

“We are prioritizing our commitments to and agreements with our existing cargo businesses and customers, ensuring that any spot cargo we do take in does not interfere with or slow down their operations,” Borossay remarked.

Last year, about 70.2% of the nearly 2.1 million metric tons of imported cargo San Diego processed was breakbulk, including autos. About 26.2% was dry bulk and 3.5% was liquid bulk.

San Diego’s top bulk and breakbulk cargo include:

Bauxite, a red, powdery substance generally used with cement for construction. Last year, the port processed about 113,000 metric tons.

Bagged fertilizer from Norway, which accounted for about 22,000 metric tons in 2020.

Steel coils that are typically used for shipbuilding, power stations, roof panels and other construction projects. Last year, San Diego handled about 26,000 metric tons of steel the coils, mostly from Japan.

Sugar from Mexico that’s sent to a plant in the San Diego region and converted into four different sugar products. Last year, the port handled over 50,000 metric tons of it.

Wind-energy parts from Europe and Asia for U.S. wind farms. Last year, San Diego received about 3,800 metric tons of wind energy such parts.

Meanwhile, San Diego continues to draw new cargo business, thanks to a the newly-finished $24 million Tenth Avenue Marine Terminal modernization effort. Completed last fall and partly paid for with a $10 million federal transportation grant, the upgraded terminal allowed for more laydown space and flexibility for project cargo like windmill components, roll-on/roll-off and breakbulk cargo.

Before the project was done, San Diego was able to secure a contract with major bulk and breakbulk shipping company G2 Ocean in 2018, bringing in steel products such as steel coil, steel pipe, steel plates and slabs, as well as project cargo such as transformers and yachts, and fertilizer (both bagged and bulk). The port and G2 recently extended their contract.

“Securing G2 as our trans-Atlantic shipping liner is just the first step in our long-term breakbulk and project-cargo strategy. Next, we’re looking to secure a trans-Pacific liner service,” the port said. “The modernization has also helped us attract more spot cargo opportunities from the ports of Los Angeles and Long Beach.”

Meanwhile, San Diego garnered the U.S. Customs and Border Protection’s and City of San Diego’s approval last year to activate a Foreign Trade Zone at Tenth Avenue Marine Terminal.

In addition, at At the National City Marine Terminal, Pasha Automotive Services last summer finished a project with Porsche Cars North America to renovate a warehouse facility to enhance its capability for receiving, processing, repairing and storing automobiles.

Port of LA Pier 400 facility
Ongoing bulk and breakbulk operations at the Port of LA’s Pier 400 facility, which is operated by APM Terminals. Photo via APM.

Port of Los Angeles

While the Port of Los Angeles is known for mainly moving containers, the nation’s busiest seaport also has a solid breakbulk business. About 25% of the commodities that come through Los Angeles are not in a container, including steel products from Korea and Japan and coils, pipes, wire and other products from China.

Los Angeles also receives 70,000 to 90,000 metric tons of palletized fruit from Chile that typically arrives in the wintertime, when Chile is experiencing summer temperatures that yield grapes and stone fruits. About 17 ships carrying fruit arrive at L.A. starting in December.

Auto rounds out the port’s breakbulk business, with about 103,000 units from automakers such as Nissan, which provides cars to the dealerships throughout the Western U.S.

The Port of Los Angeles is also seeing a lot of requests for shipping products such as paper and plastic resins out of containers, said the port’s cargo marketing manager, Marcel van Dijk.

For many shippers, it’s all about freight cost per ton, and the spot rate for containers has been fluctuating, at times making it more expensive to move goods by containers rather than by breakbulk, van Dijk said.

“There are additional commodities that were originally breakbulk cargo that went into containers because the freight rates were so low, but now the freight rates have increased,” he said.

So shippers have been looking into breakbulk as an option, but that also presents challenges, van Dijk said.

“We see a little bit of softening of the markets on the container side, but due to the congestion, people are moving to breakbulk,” he remarked. “But breakbulk also has congestion.”

In November, there were about six breakbulk ships at anchor, waiting to enter terminals, he said.

Los Angeles also said that it expects to see more steel and cement come across its docks as early as 2022 with President Biden’s new infrastructure package as early as 2022.

“When the infrastructure bill that is just signed comes into play and we see more bridges or freeway (projects), then there will be construction steel products, beams etc. that will come through to the terminal,” he said.