Grain has always been an essential commodity in maritime trade.
Although coal, steel and oil have gained more prominence in recent years, grain and other agricultural goods remain the "lifeblood" of many ports around the world.
Consolidation in the grain industry, a soft market for grain, the Asian economic crisis and Europe's recent agricultural reforms have had a profound effect on grain shipments at several major ports in recent years. The world export market also has moved from a system once dominated by large state-controlled buyers to one controlled by a greater number of private buyers more concerned with specific products and quality.
At the Port of Houston, Texas, in the United States, grain shipments in 1998 were off nearly 30% from the previous year, to about 6.3 million tonnes. Several public and private grain elevators along Houston's ship channel have closed in recent years. But the port's only public grain elevator had a very good year. The Port of Houston Authority's elevator handled more than 1.2 million tonnes of wheat, maize and milo in 1998, an astounding 220% increase over 1997.
"Such powerful performance is a result of a number of factors, including improvements at the facility, decreased competition and a strong customer base," according to an article in the May-June 1999 issue of The Port of Houston Authority, a magazine published by the port authority.
In 1992, the Port of Houston Authority purchased the 70-year-old Houston Public Grain Elevator No. 2 and replaced it with a new, more efficient 6.2-million-bushel (170,000 tonnes, wheat equivalent) capacity elevator, with a loading capacity of 120,000 bus (3,260 tonnes) per hour. Up to 30 trucks per hour can be unloaded at two truck pits and up to 22 rail cars per hour can be unloaded at three rail pits.
The automated facility is equipped with a sophisticated dust collection system, and high-speed handling equipment at the elevator contributes to some of the lowest throughput costs in the U.S., the port authority said.
About the same time that the Port of Houston Authority began its modernization program, three older grain elevators along the Houston ship channel closed, including an 8.5-million-bu elevator owned by Union Equity Cooperative Exchange; the 6.3-million-bu Houston Public Elevator No. 1; and the Port of Galveston's 6.0-million-bu facility.
As its competitors slipped away, the Port of Houston Authority began seeking a mix of clients with complementary export programs. The port's largest customers include Archer Daniels Midland Co., Louis Dreyfus Corp., Bartlett and Co., and the nearby Cenex Harvest States flour mill, which leases storage from the port authority.
Next year, the port authority plans to enlarge the main road coming into the facility to four lanes to accommodate as many as 250 trucks that unload at the elevator at peak harvest times in the summer. The port authority also has asked for additional railroad tracks into the facility.
"In the last seven years, I've watched the grain industry go from a ‘good old boy' business to high technology," said Bill Mullins, manager of bulk facilities for the Port of Houston Authority. "The port authority stood steadfast behind its investment, made a commitment to see it through and is now reaping the benefits."
Several hundred miles to the north, a U.S. port on the Great Lakes also has experienced a boost in grain shipments. "Grain shipments are surprisingly up — 37% ahead of last year — despite a soft world market," said Lisa Marciniak, port promotion manager for the Duluth Seaway Port Authority, Duluth, Minnesota (formerly known as The Port Authority of Duluth).
Grain shipments through Duluth in 1998 totaled 4.4 million tonnes, compared with 3.3 million in 1997. Most of the increase has come from U.S.-grown soybeans and maize headed for Europe, South America, Algeria and other regions.
Also contributing to the increased grain shipments have been low ocean vessel freight rates compared with delays and high barge rates on the Mississippi River, Ms. Marciniak said, as well as the arrival of a new Polish-registered vessel, which "gave grain a boost locally."
The Isa, a 22,000-dwt bulk carrier, is the first of five new ships built specifically for Great Lakes-St. Lawrence Seaway trade by the Polish Steamship Company. The Isa recently arrived at the AGP Grain, Ltd. elevator at Duluth to take a load of wheat and feed peas to Barcelona, Spain.
The Isa is equipped with deck cranes and bow thrusters, and is 658.8 feet long and 77.4 feet wide. The maximum width for ships entering the Seaway is 78 feet.
"It's no secret that the Seaway's size restrictions have been a limiting factor on the system's growth," said Davis Helberg, Duluth port director. "But it's highly encouraging that companies like Polish Steamship and others are dedicating themselves to future Great Lakes service. They recognize that our ports do indeed offer an attractive, competitive market."
Duluth also razed two grain elevators that have been inactive since the late 1980s — one nearly 100 years old — to make room for a future bulk cargo facility. The port authority acquired the elevators in 1989 from Cargill, Inc., which had purchased them from the F.H. Peavey Co. in 1970 and operated them as export grain facilities until completing a new major elevator complex at Duluth in the late 1970s. Cargill used the older grain elevators for grain storage until the late 1980s.
Demolition of the two elevators was scheduled to be completed at the end of September. The 28-acre site will then be offered for lease to companies interested in developing new bulk cargo facilities, the port said.
In western Canada, grain shipments through the Port of Prince Rupert plummeted in 1998, primarily due to the market decline in Asia, port officials said.
"There's an old homily that says when the U.S. catches a cold, Canada gets pneumonia. In the case of the Prince Rupert Port Corp., the Asian flu turned out to be a particularly virulent strain," the Canadian port authority said in its 1998 annual review.
Only 9 million tonnes of the three principal commodities — coal, lumber and grain — were shipped through Prince Rupert in 1998, down 31% from the 13 million tonnes shipped in 1998. The biggest declines were in grain and specialty grain shipments, the port authority said.
The Prince Rupert Grain Terminal shut down for five months and shipped only 2.9 million tonnes of grain in 1998, its worst performance in a decade and well below the port's 7.5-million-tonne potential annual capacity. Specialty grains were down to 44,544 tonnes in 1998, "due largely to reduced market demand," the port said.
"Justice Willard Estey's 1998 commission report on Canada's grain transportation system pointed to the chronic underutilization of the Prince Rupert Grain Terminal as the number one problem," the report said.
The report cited three major reasons why the port is underutilized. Prince Rupert Grain Terminal is owned by a consortium of five grain companies, but because of the terminal's high debt load, it is more profitable for the companies to ship grain through their terminals in Vancouver.
Prince Rupert has approximately C$200 million in debt from its original construction, and interest charges of about 11.5% make it virtually impossible for the terminal to be profitable, the report said.
Rail rates for hauling grain, which are based only on distance, also make it more expensive for farmers to ship their grain to Prince Rupert, even though the route is faster, has gentler curves and lower elevations through the mountains, the port authority said.
A new ship loader went into operation in July, and is expected to enhance the port's competitiveness as specialty grain shipments recover in the next few years.
At the Port of Rouen, France, grain shipments continue to be affected by the "turbulence" that began in 1994-95 with the implementation of C.A.P. reforms, said René Genevois, chief executive officer of the Rouen Port Authority. Grain exports through Rouen in 1998 reached 6.2 million tonnes, a 50% increase over the previous year but well off the 8 million tonnes that once shipped through the port.
"In 1994-95, we entered a period of traffic fluctuation, which was a consequence of the reform, bringing with it substantial changes in the environment for the French grain industry," Mr. Genevois said in a speech given in May at the 21st Journeé Céréales Grain Conference.
Grain production in France declined through the implementation of the compulsory 15% set-aside, while the use of wheat in animal feed increased to about 6 million tonnes, from 2.35 million in 1992-93, he said.
"The first effect of these two factors was to reduce substantially our potential for exporting to non-E.U. countries," he said.
Despite a good harvest in 1996, the depressed state of the world market due to bumper crops in many countries and lackluster demand caused by economic difficulties in Asia and Russia continued to affect Rouen's grain shipments.
The Port of Rouen has eight seaport grain elevators used by five operators, with eight loading berths and total storage capacity of 1.2 million tonnes. A total of 100,000 tonnes of grain can be loaded every 12 hours, for a commercial loading capacity of 2 million tonnes per month.
"The Port's current position shows strong potential where grain grading is concerned, this being an issue of great topical relevance in a world market undergoing major change," Mr. Genevois said.
"The lack of stability in traffic levels has not encouraged our operators to invest in extra capacity," he continued. "One thing is certain, however — the ‘globalized' economy will require us to be more stringent where the quality of our products is concerned, which will also need to be supplied at ever more competitive prices."
To increase its competitiveness as a port, Rouen in March 1998 began dredging its navigable channel by 10 meters. "Rouen is the only port which enables vessels to come upriver — ships being by far the most economic mode of transport — right into the heart of the Paris basin, the heart of France itself, close to the most productive grain-producing land in the country," Mr. Genevois said. "That is our raison d'etre and the value-added we can offer."
The three-year, U.S.$25-million project will make it possible for bulk carriers of 30,000 to 40,000 dwt to sail down the Seine fully loaded, Mr. Genevois said. "It will also permit the maximum loads of very large carriers to be increased by 1,200 to 3,000 tonnes, thus improving Rouen's positioning with respect to markets such as China, Egypt and Saudi Arabia, for which high tonnage vessels — Panamax and Cape-size ships — are used," he said.
Beginning in January 1999, Rouen also implemented new tariff measures aimed at reducing port dues of ships with capacities greater than 80,000 cubic meters.
Rouen is becoming a major agrifood center, Mr. Genevois said. Grands Moulins de Normandie, a 500-tonne-per-day flour mill owned by the Soufflet Group, exports nearly all of the 140,000 tonnes of flour it produces each year. Other new facilities at Rouen in recent years include a semolina processing plant, a oilseed crushing plant, a malting plant (also owned by Soufflet), a sugar terminal and a plant that produces "bio-diesel" fuel from rapeseed.
At the Port of Amsterdam, The Netherlands, agri-bulk shipments totaled 5.2 million tonnes in the first six months of 1999, a 16% increase over the same period a year earlier. Agri-bulk, which includes grain, feed and oilseeds, led all goods shipped through the port, including coal and liquid bulk.
"We are one of the few ports in western Europe to be showing growth," said Godfried C.G. van den Heuvel, executive director of the Amsterdam Port Authority. "If we can continue on this course, we will end the century with another record."
He said Amsterdam is successful primarily because port-based companies are concentrating on specialized niche markets and goods processing in addition to basic transshipment. "This is making Amsterdam a processing port with real added value, a characteristic we aim to emphasize and profile in the future."
Expansion of the sea lock complex at IJmuiden is an urgent priority, he added, in order to keep the port accessible to increasing maritime traffic.
The only deepwater port in Vietnam, the Baria Serece Port at Phu My, this year is expected to handle only about 100,000 tonnes of soybean meal and maize, mainly for nearby feed mills. However, grain shipments at the port are expected to increase in the next few years as several large feed mills and flour mills, located less than 10 kilometers from the port, expand and upgrade their operations, said Richard Szuflak, port general manager.
Baria Serece is the only port in Vietnam that can accommodate Panamax-size vessels, according to Mr. Szuflak.
The port recently received government approval to operate bonded warehouses for handling feed, agricultural products and fertilizers. The first phase of the warehouse project will include construction of a 2,500-square-meter covered warehouse, a storage area of 5,000 sq. m. and a dedicated weigh-bridge of 60 tonnes for trucks and containers.
Two bulk warehouses with bagging lines and a total capacity of more than 60,000 tonnes are planned in the second phase of the project. Both warehouses will be linked to the port by a 350-tph covered conveyor belt. Discharge capacity is expected to be about 6,000 tonnes per day.
The warehouses are expected to be operational by the first quarter of 2000, Mr. Szuflak said.
"That potential will allow traders and producers to use our warehouses for storage of cargo in the country without quota application," he said.
Baria Serece also is licensed to process cargoes for re-export, Mr. Szuflak said. "We envisage the possibility to receive bulk commodities originating from a given country, bag them in Vietnam and ship the total of the bagged commodities to another country," he said