Why Break Bulk? Gregory Gowans, Director Global Logistics CBIL. 1 Engineering Solutions... Delivering Results
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1 Why Break Bulk? Gregory Gowans, Director Global Logistics CBIL 1
2 Biography Gregory Gowans Director, Global Logistics 30 years in the Industry B. Commerce with Honors, Queens University, Kingston, Canada Areas of Expertise and Special Interest Global Logistics Work Process Management Project Management 2
3 A leading technology and EPC company Currently ranked number 3 among ENR s Top 25 Contractors, Petroleum CB&I Profile 2010 revenue of nearly $7 billion with backlog today in excess of $9 billion More than 19,000 employees worldwide Focused on the global energy market offering a full scope of services Total company commitment to safe work practices
4 Agenda 1. Capital Project Supply Chain 2. Break Bulk Transportation addresses specific challenges 3. Capital Project Break Bulk Transportation Markets Examples 4. Break Bulk Solutions 5. Shipping Configurations 6. Cost / Benefit 4
5 Key Take-Aways 1. One Size Fits All is not practicable 2. The box should not be a limit 3. Break Bulk Transportation methodologies exist to serve an important constituency 4. Transportation configurations will serve a market need or create an opportunity for new approaches
6 MEASURES OF LOGISTICS VALUE Cost Management Logistics supplier selection, contracting and effective management Cycle Time Management Ability to shorten or lengthen project cycle times with predictable cost and risk profile Cash Flow Management Effective logistics management supports shorter overall cycle time, reduced inventory, effective replenishment Risk Management Buffer between Supplier performance and Customer requirements 6
7 MEASURES OF LOGISTICS VALUE Communication Information Systems complement logistics supply channels to ensure visibility of material flows Innovation Unique distribution channels. Logistics scope flexes to accommodate internal and external requirements Agility Logistics processes incorporate the ability to change course quickly and without undue stress Differentiation Logistics competency provides recognizable competitive advantage 7
8 SHIPPING HISTORY 8
9 CONTAINER SHIPPING For as long as people have been sailing the oceans they have been trading with other countries. The great empires of the world, from the Egyptians to the British Empire, were all built on ocean trade. As far back as 1792, boxes similar to modern containers emerged in England and these were transported with horse and wagon and later moved via rail. The U.S. government used containers during the Second World War. Modern container shipping begun in 1956, when Malcolm McLean, a trucking entrepreneur from North Carolina, U.S., bought a steamship company with the idea of transporting entire truck trailers with their cargo still inside. Various companies in the U.S. began to adopt containerisation. In 1966, the vessel Fairland owned by Sea-Land sailed from the U.S. to Rotterdam in the Netherlands Various companies in the U.S. began to adopt containerisation. In 1966, the with vessel 256 Fairland containers. owned This by was Sea-Land the first sailed international from the voyage U.S. to of Rotterdam a container in ship. the Netherlands with 256 containers. This was the first international voyage of a container ship. During During the the 1970s 1970s container container shipping shipping expanded expanded dramatically dramatically and and ports ports were were established During the in in 1970s every container continent shipping in in the the world. world. expanded This was dramatically the beginning and ports of the were expansion This established was the that beginning made every container continent of the expansion shipping in the world. the that backbone made This was container the of global beginning shipping trade. of the the expansion that made container shipping the backbone of global trade. backbone of global trade. 9
10 CONTAINER SHIP 10
11 BREAK BULK TRANSPORTATION 11
12 BREAK BULK TRANSPORTATION In shipping, break bulk cargo or general cargo is a term that covers a great variety of goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. Ships that carry this sort of cargo are often called general cargo ships. The term break bulk derives from the phrase breaking bulk the extraction of a portion of the cargo of a ship or the beginning of the unloading process from the ship's holds. These goods may be in shipping containers (bags, boxes, crates, drums, barrels). Unit loads of items secured to a pallet or skid are also used. [1] A break-in-bulk point is a place where goods are transferred from one mode of transport to another, for example the docks where goods transfer from ship to truck. Break bulk was the most common form of cargo for most of the history of shipping. Since the late 1960s the volume of break bulk cargo has declined dramatically worldwide as containerization has grown. Moving cargo on and off ship in containers is much more efficient, allowing ships to spend less time in port. Break bulk cargo also suffered from greater theft and damage. 12
13 Break Bulk Transportation 13
14 Break Bulk Transportation 14
15 CAPITAL PROJECT SUPPLY CHAIN
16 CHALLENGES FOR LOGISTICS Project Scale Project Finance Aggressive time schedule Shortage of local resources and capabilities Inadequate infrastructure Route to Site Safety Environmental Considerations Local Community
17 TRANSPORTATION MANAGEMENT Directly manage significant air, road, sea, service carriers, including contracting to ensure best routes and services are provided to meet project requirements Attend Kick Of Meetings, Shipping Reviews, Planning Meetings and Load Outs with vendors and carriers when required. Direct the activities of the Project Freight Forwarder. Measure performance. Provide input to contract language for purchases of equipment and materials. Direct contract language for logistics services. Liaise with project personnel to ensure timely and effective delivery schedule is maintained. Review and update project master shipping schedule/planned routings. Ensure correct export and import documentation is completed. Control the importation and delivery to site of all cargo in country. Maintain an out of gauge, heavy lift and critical shipment register. Liaise with clients warranty surveyor s on the movement of critical shipments. Maintain required insurance procedures and reporting.
18 International Transportation EXPEDITED AIR Freight Cost By Mode STANDARD AIR COST $/KG EXPEDITED OCEAN - express liner vessel STANDARD OCEAN nonliner vessel TRANSIT TIME IN DAYS A step relationship exists between cost and transit time when modal choice is introduced. 18
19 CONSTRUCTION PHILOSOPHIES 19
20 Peru LNG RECENT SITE BUILT PROJECT Pampa Melchorita 170km South of Lima 4.45 MMT/yr LNG Export by May 2010 APCI Liquefaction Technology Add footer here 2 x 130,000m 3 Single Containment Tanks 1300m Jetty + Breakwater Plant Utilities & Offsites 20
21 RECENT MODULAR PROJECT 21
22 TYPES OF SHIPS Container Ships Roll On/Roll Off Ships Break Bulk Ships Combination Ships LASH Ships Tug and Barge Semi Submersible Ships Crude Carriers Dry Bulk Carriers Gas Carriers 22
23 ROLL ON / ROLL OFF SHIP 23
24 CONVENTIONAL BREAK BULK SHIP 24
25 HEAVY LIFT SHIP 25
26 COMBINATION SHIPS 26
27 LASH SHIP 27
28 BARGE AND TUG 28
29 SEMI SUBMERSIBLE SHIP 29
30 Key Take-Aways 1. One Size Fits All is not practicable 2. The box should not be a limit 3. Break Bulk Transportation methodologies exist to serve an important constituency 4. Transportation configurations will serve a market need or create an opportunity for new approaches
31 Why Break Bulk? 31
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