The Port Authority of New York and New Jersey has project cargo in its sights – wind energy projects, to be precise. The authority is considering the establishment of a wind energy terminal on one of two plots of land at the port that are open for redevelopment.
The State of New Jersey gave the green light for an 1,100 megawatt offshore wind farm last month. New York State governor Andrew Cuomo has stated that he wants to quadruple the state’s offshore wind energy generation by 2035. Expressing his ambition to make New York the “hub of the burgeoning US offshore wind industry,” he indicated his willingness to invest US$200 million in port infrastructure to support this objective.
The US is expected to see lively activity in wind energy projects through 2023, as the existing production tax credit is being phased out, so operators are keen to get new plants up and running before the end of 2023. In addition, there will be traffic as operators replace older equipment with more powerful nacelles.
The number of cranes that can lift nacelles that weigh 150 tons is limited, so there are potential bottlenecks looming.
Offshore projects are going to be a major driver of demand for logistics solutions for wind energy. In the US, the Northeast is widely seen as an area that is more tuned to offshore wind as a source of energy than other regions, hence New York’s ambitions as a hub for offshore wind energy traffic.
Offshore wind energy projects are also going strong in other parts of the world. Last year 40% of all new offshore capacity added around the world came up in Chinese waters. Capacity expanded over 6% in the Asia-Pacific region, while Europe added less than 2%.
Taiwan has also been going strong. In June, Seajack secured a contract to move 47 wind turbines to a Taiwanese offshore plant. It was the company’s second contract in Taiwan.
One potential headache for project logistics firms is available vessel capacity for offshore installation jobs. In US waters, capacity is constrained by the Jones Act, which mandates the use of US flag vessels for such jobs. According to some reports, the authorities in Taipei are considering similar legislation that would make the use of ROC-flagged ships for offshore wind energy projects mandatory.
Users of airfreight capacity for wind energy and other outsize cargoes may have missed a heartbeat or two in mid-June, when a Ukrainian court ordered the seizure of five giant Antonov AN-124 freighters operated by Volga-Dnepr on the grounds that maintenance checks had not been completed by an authorized authority. The Russian freighter operator dismissed the verdict, arguing that it is fully authorized by the Russian aviation authorities for international flights without restrictions.
Four AN-124s were in action in July carrying almost 400 tons of components for a new power plant from France to Niger. The job, which was organized by Air Charter Service, included ten 40-foot containers weighing 35 tons each, which required the giant AN-124 freighter.
In May Volga-Dnepr dispatched an AN-124 to carry some 80 tons of energy equipment from Germany to Australia for the construction of a 32-turbine wind energy farm. The shipment included a 4 metre-long, 36-ton wind turbine and three generators weighing in at 12.6 tons each.
Boeing 747F carrier AirBridgeCargo Airlines, one of the scheduled freighter arms of Volga-Dnepr, has also been busy with outsize shipments. In the first four months of this year it registered growth of over 10% in outsize cargo traffic, with the strongest increase on the North Atlantic.
To reflect its focus on this market segment the airline recently rolled out a 747 freighter in “abc XL” livery.
These developments notwithstanding, there have been signs of a slowdown in the project sector, fuelled by predictions of reduced capital spending on energy projects this year. One element of doubt is the ongoing uncertainty over trade conflicts and tariffs, which is expected to hit a number of markets, including the US. In addition, there are indications that the chemical sector in the US is also about to lose momentum after years of growth.
Shipping consulting firm Drewry is still optimistic, though. It recently downgraded its outlook for the multipurpose cargo vessel sector but expects project volumes to rise in the second half of this year.
Without a doubt the need for more power generation is set to continue, as is the need for infrastructure development and maintenance. According to the McKinsey Global Institute, about US$49 trillion are needed for civil infrastructure investment worldwide to keep up with global growth, from new roads and railways in emerging economies to the repair of crumbling bridges in mature economies.
For project operators life is getting tougher, tough. Clients’ demands and the complexity of their jobs have been growing, as the scope of their tasks has kept expanding, but this has not translated into higher margins.
As in the rest of the logistics sector, the strong pressure to reduce costs has prompted thoughts of digitization. In June, startup firm CharterSync launched an online quotation tool for air cargo charters. At this point the platform targets time-critical charter shipments of up to 18 tons moving within Europe.
Charter brokers are sceptical, though. Mike Hill, director of group freight at Air Partner, argued that there are too many variables in charters, from required door sizes and volumes to load and balance issues. “Everything is ‘subject to.’ There’s a whole list of potential issues,” he said.
By Ian Putzger
Correspondent | Toronto