BREAKBULK QUARTERLY - Orion Marine thrives on breakbulk challenges

By: | at 07:00 PM | Channel(s): Maritime  

By Gene Linn, AJOTPirates, ice-choked ports and government embargoes are some of the challenges faced by Orion Marine Corp. as the Chicago-based logistics company seeks breakbulk and heavy-lift business in out-of-the-way-places.
“We go more off the beaten track,” said Peter Schauer, Orion Marine chief executive. “We always look for areas that are not over-served yet.” Once an area gets a lot of service, Orion Marine usually moves on. Take Nigeria, for example. It wasn’t the Nigerian pirates that took over a barge being used by Orion Marine that caused the company to shy away from the country.
Said Schauer, “We used to go to Nigeria, but it got so much volume that we shifted our emphasis.”
Orion Marine also emphasizes breakbulk and project cargo. Much of the heavy-lift business goes to burgeoning energy projects in Far Eastern Russia and mining operations in Mongolia and other locations. Breakbulk cargo includes crates of 42-feet-long lengths of pipe going to Libya and smaller, more easily damaged cargo such as wood working machines, boats, tools, lab equipment and modular homes. All cargo sails from US ports, mainly on the East Coast and in the Gulf. Business is handled by a lean staff, with Schauer right in the middle of the activity. “I keep it (the company) small,” he said. “I don’t want to be an administrator; I’m a doer.” Business is good.
“Now there’s strong demand in breakbulk,” said Schauer. That’s largely because high commodity prices are attracting investors to numerous large projects. Weakness in the US dollar against the Euro and Japanese yen also helps exports, Orion Marine’s specialty.
Profits are the mainspring of any business, but Schauer personally gets a bonus from the challenge of sending breakbulk and heavy lift cargo to exotic destinations. “I’ve been in this business for almost 50 years, and I always loved working with those juicy areas,” he said. “I’ve reached retirement age and was at a point I could have conked out, but I stayed in because I love it.”
The challenge comes from the nature of the breakbulk industry, as well as from problems posed by difficult markets. “Breakbulk requires huge investment and it’s cyclical,” Schauer said. “It may take one or two years to get enough specialized cargo ships, and by that time the market may have turned.” Breakbulk and heavy lift cargo is often expensive equipment that is a key part of a massive project, which means it has to be delivered on time.
“If something goes wrong,” Schauer said, “you have to have a plan B.”
Far flung challengesSince Schauer loves both profits and challenges, he must have been in heaven when Orion Marine helped provide transportation for a huge gold and copper mining project in Mongolia. Mining equipment, road building machines, housing and other products flowed steadily from the US to the isolated fourth world country in northeast Asia. “All of a sudden, the company in the mining project had a falling out with the (Mongolian) government,” Schauer said. “In mid-stream the company abandoned the huge project. For us it had been extremely important and profitable.” Orion Marine was left to look elsewhere for business. Schauer noted that such dramatic shifts in political and business alliances are common in many out-of-the-way countries. “It happens all the time,” he said.
Even the US government can interfere with business. Orion Marine had sent one large shipment of irrigation equipment to Libya and had another one on the way when the US State Department embargoed trade to Libya.
These days few, if any places present tougher transportation problems than war-torn Iraq and Afghanistan. Orion Marine used to often deal with Afghanistan, but the sharp decline in civilian demand has hurt. The US military is shipping enormous quantities of materials to that country, but it must be carried by US flag carriers, which Orion Marine does not have access to. The company still does quite a bit of business with the Iraqi government, but stopped providing inland transportation t

American Journal of Transportation