Bulk powers, boxes lag as exports peak

Liz Wells, January 25, 2021

Portland in Victoria is already home to a GrainCorp terminal, and is a significant exporter of mineral sands, woodchips and other commodities. It has this week taken delivery of a large mobile shiploader to increase its grain-loading capacity. Photo: Port of Portland

AUSTRALIA is putting its increased bulk-export capacity to the test for the first time this harvest with success, while the container trade battles headwinds tied to global and domestic logistics issues.

Mobile shiploaders are providing additional clout to south-eastern Australia’s export capacity, and are this year expected to jointly load more than 1 million tonnes of grain for the first time.

With the arrival this month of Cargill’s unit in Adelaide, South Australia now has four mobile shiploaders in operation, while in Victoria, a second larger unit is being commissioned this week at Portland to bring the Victorian total to three.

Riordan Grain Services (RGS) loaded its first export vessel with a mobile shiploader in Geelong in 2017, and has done numerous cargoes since out of both Portland and Geelong.

Other grain exporters have also used the public berths and mobile shiploading at both ports, and in Port Adelaide.

They have proved that loading cargoes of more than 50,000 tonnes can be done by using road transport alone.

“We invest in infrastructure, and even though this shiploader is a mobile one, we consider it to be infrastructure,” Port of Portland CEO Greg Tremewen said.

With hourly loading capacities of 200-400t, the units are helping Australia to export what is shaping up to be a record monthly tonnage, including a string of 60,000t barley cargoes to Saudi Arabia.

Loaders in demand

Brisbane-based company Mobile Conveying Services (MCS) builds, supplies and operates most of the mobile shiploaders in use in Australia, and delivered the new unit to Portland this weekend.

MCS services multiple industries, and a company spokesperson said the company has been fielding increased inquiry about grain.

“We manufacture and assemble the shiploaders, and we supply the machines and the operators.”

MCS is in the midst of having its busiest grain season ever.

“We expect to do 600,000-800,000t from this harvest.”

Supplementing the majors

Independent operators collectively are small in comparison to the terminal heavyweights GrainCorp in eastern states, the majority Glencore-owned Viterra in South Australia, and CBH Group in Western Australia.

However, they add agility to the market in years like this when shipping stems are heavily booked.

Joining the ranks of independent bulk port operators last year was T-Ports at Lucky Bay on SA’s Eyre Peninsula.

Its grain is taken from shore to large vessels at anchor by the purpose-built MV Lucky Eyre, which has transshipped up to 60,000t a month of grain.

The company has plans to build a similar terminal at Wallaroo on the Yorke Peninsula to also be serviced by the MV Lucky Eyre.

Name Location Operator Type Started
Melbourne Port Terminal Melbourne, Vic Emerald Grain Bulk 2000
Qld Bulk Terminal Brisbane, Qld Wilmar Trading Bulk 2011
Bunge Bunbury, WA Bunge Bulk 2014
Berth 29 Port Adelaide, SA LINX MSL 2014
Newcastle Agri Terminal Newcastle, NSW CTC Terminals* Bulk 2014
Osborne Berth 1 Adelaide, SA Semaphore Container Services MSL 2016
Quattro Port Kembla, NSW Qube Agri Bulk 2016
Port of Geelong Geelong, Vic Riordan Grain Services MSL 2018
ADM Port Pirie Port Pirie, SA ADM MSL 2019
Port of Portland Portland, Vic Port of Portland MSL 2019
T-Ports Lucky Bay, SA T-Ports Bulk 2020
Berth 20 Adelaide, SA Cargill MSL 2021

Table 1: Australian grain terminals outside the CBH Group, GrainCorp and Viterra networks. *NAT’s additional shareholders are CBH Group, Glencore and Riverina. MSL = mobile shiploader. Other locations load bulk grain ad hoc and include geographic locations, such as Wyndham in WA, distant from the major terminal operators.

Containers hampered

Containers have long played an important part in supplementing the capacity of bulk to export grain, canola and pulses, but since new-crop came on stream in October, the boxed trade has struggled to attain its usual volume.

“Box availability is limiting exports,” Robinson Grain general manager Adam Robinson said.

Robinson Grain operates a container-packing facility at Dubbo in central NSW, and exports mostly through Sydney.

“There’s limited space on vessels, limited services coming to our ports, and delays in transshipment,” he said.

Sources have for many weeks said major transshipment ports including Singapore and Colombo are the bottlenecks which compound domestic logistics problems.

This has slowed the flow of containerised Australian agricultural commodities to some ports in South Asia and the Middle East.

“Some lines are refusing to take cargoes to some parts of the world, and we’re seeing increased costs out of Australia.”

While bulk is ideal for most markets, containers do the heavy lifting to some significant Australian markets, including Pakistan on chickpeas and lentils.

The largely even and high quality of grain harvested this year has helped to take the pressure off the container trade, which is crucial in years where small tonnages of off-spec or high-grade grain need to find export homes.

“Most traders are shipping to capacity now, but there’s a whole lot more demand out there than we have access to.

“What this does is push people into bulk.

“Bulk is a much more attractive option price-wise, but it doesn’t work for every market.”

First-half window open

Mr Robinson said container sales would be greater if more empty boxes were available, and full ones could be booked with confidence into the export supply chain.

“Demand is there now, but it might not be by the time the Northern Hemisphere crop hits the market.”

“Australia needs to have an export focus in the front months, and that’s hard for containers.”

Mr Robinson said of concern was a much-tightened timeframe between getting empty containers to the packing site, and having to send full ones to port to meet the ship.

Delays because of altered shipping schedules were also troubling exporters.

“You might book to ship in January and find yourself rolled into February.

Complex causes

Causes of the container trade’s woes are manifold.

They started with COVID, which hit in the Lunar New Year last January, and disrupted the flow of imports in 20-foot containers, and exports of empty and full containers.

Portside issues including industrial action in Melbourne and Sydney, consolidation in shipping lines, and an exacerbation of the normal imbalance where imports exceed exports, have made matters worse.

The container squeeze has also had an impact up country.

In southern NSW, Godde’s Grain trader Peter Gerhardy said exporters sweating on the arrival of empties to pack might be looking to buy all their requirements for an order in a few days once they were sure they had containers arriving and an export slot booked.

“That’s driving the market up a bit.”

ETG Australia country manager Shayne Clark said plenty of pulses and cereals are being exported in containers, but any going through transhipment ports are of particular concern as delays are prevalent.

“From an empty container point of view we’re getting by, but we feel it may be a problem very soon,” Mr Clark said.

“It all started last year when shipping companies decided freight quantities would be negatively impacted by COVID, and therefore scaled down services.

“This meant the space for full boxes got smaller, and now demand from agriculture has increased.

“What’s happened is unprecedented, and there’s been a lot of finger-pointing going on.”

ETG exports containers mostly out of Adelaide, Brisbane and Melbourne.

Mr Clark said Adelaide was as particularly difficult to export containers due to it being serviced by fewer vessels than Brisbane, Melbourne and Sydney.

Call for ‘sweepers’

In a statement released earlier this month, Shipping Australia said, empty container parks and holding spaces in NSW were “chock-a-block with empty boxes”.

It said at the beginning of 2020, the world’s inactive container-ship fleet was about three million 20-foot equivalent units (TEUs) but by this month, that inactive fleet had pretty much returned to work.

“Ocean shipping companies are chartering multi-purpose ships…to cope; shippers are having difficulty booking space and equipment; and the word’s just come in that the demolition market for containerships has evaporated.

“All around the world, empty shipping containers are in the wrong place.

“They are in the countries that receive cargo, like Australia; they need to be in the places that send cargo, like China.”

Shipping Australia said shipping lines were working to help alleviate the build-up through evacuating record numbers of containers by bringing empty ships known as “sweepers” or “extra loaders”, to evacuate empty boxes.

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