News Breakbulk & Project Cargo
A welcome respite
Project hiccups ease pressure on heavy transport providers
By Keith Wallis
“ With all the projects that were planned , the supply chain would never have been able to deliver .”
Despite strong demand , scattered project slowdowns and cancellations due to red tape and a tougher global financing environment are fostering a new realism among heavy transportation and engineering companies , industry executives said .
Several major offshore wind projects — key generators of project cargo — have been scrapped or slowed . In the US , for example , Danish developer Orsted cancelled 2,400-megawatt ( MW ) Ocean Wind I and II , to be built in New Jersey waters , in late 2023 . Orsted also withdrew from commitments to build 966-MW Skipjack I and II off the coast of Maryland , although it continues advanced development and permitting work , according to the Energy Information Administration .
Beyond macroeconomic issues , red tape and bureaucratic hurdles often stymie progress , but the heavy transport industry is well-occupied nonetheless thanks to global projects focused on power generation , infrastructure , and manufacturing .
“ The heavy transportation and engineering market remains very busy ,” said Yannick Sel , group commercial director for projects at heavy transportation company Sarens .
While some projects have been postponed , this only serves to make the supply chain outlook more realistic , in his opinion .
“ With all the projects that were planned , the supply chain would never have been able to deliver ,” Sel told the Journal of Commerce .
However , Riccardo Tippmann , a heavy
Ton Klijn Director , ESTA transport and lifting consultant who was formerly a director at Italian heavy transport and lifting company Fagioli , is less upbeat about the sector .
The market has slowed in the past year , and “ the unstable economic situation and the weak political situation in Europe does not help ,” Tippmann told the Journal of Commerce . “ The US elections will also play an important role which in some way may affect development in Europe as well .
“ While the oil and gas industry is continuing to develop out of Europe and new investments are planned in India and the Middle East , there appears to a slowing down in renewable energy in Europe ,” he added .
A shift in focus
Oil majors like Shell , Exxon and BP are shifting some focus from renewable energy projects including green fuels and wind to traditional oil and gas development , according to corporate sources including earnings reports and strategy documents that point to lackluster returns , rising costs and increased competition for these decisions .
Offshore wind developers are suffering from a reality check thanks to rising commodity prices , interest rate hikes , and supply chain bottlenecks that have put pressure on them , business consultant McKinsey said in a wind energy report released July 15 .
In the UK , for example , offshore wind failed to attract a single bid in a fifth round of bidding for governmentbacked renewable energy projects last September .
However , the country ’ s new Labor government has increased its offshore wind energy targets to 60 gigawatts ( GW ) by 2030 including 5 GW for floating offshore wind . To incentivize potential bidders in the sixth round of bidding , which closed in August , Britain ’ s new Labor government increased subsidies by 50 % to almost $ 2 billion , including $ 1.4 billion for offshore wind development .
Despite setbacks , the offshore wind industry holds significant room for growth , the McKinsey report said . “ In theory , there is potential for 20,000 GW of fixed offshore wind , in addition to 50,000 GW of floating offshore wind capacity globally ,” the report said .
In North America , power and infrastructure projects continue to invigorate heavy transport and engineering . Jeff Latture , executive vice president of Tennessee-based
Yannick Sel Sarens Commercial Director for Projects , Sarens
Riccardo Tippman Consultant
14 Journal of Commerce | September 2024 www . joc . com