Terminal Outlook 2018

Terminal Outlook 2018

Looking to 2018 and beyond

In retail, as the old saying goes, the three most important things are location, location and location. For Stolthaven Terminals’ global network of 19 bulk liquid storage facilities, our focus is location, modernisation and integration.

An article appeared in the May 2, 2005 issue of BusinessWeek with the headline, ‘No longer the lab of the world – US chemical plants closing in droves as production heads abroad’. The story cited a compelling statistic: of new chemical plants under construction costing $1 billion or more, 50 were in China, one in the US. Planned US investments by chemical companies were being scrapped, and the funds shifted to projects in the Middle East and Asia.

What a difference a decade or so makes, along with a little US shale oil and gas production. For providers of bulk storage and their customers, change – and adapting to change – is a constant. The search for increased efficiency and better access into and out of markets worldwide is ceaseless. In retail, as the old saying goes, the three most important things are location, location and location. For Stolthaven Terminals’ global network of 19 bulk liquid storage facilities, our focus is location, modernisation and integration.

That Stolthaven operates terminals in all key hubs worldwide is a given. Our focus on modernisation ensures that our facilities are state-of-the-art, particularly with respect to safety for people, the environment and product handling. Finally, giving our customers choices that allow them to capitalise on multiple supply-chain solutions – by leveraging the integrated capabilities of Stolt Tankers and Stolt Tank Containers in sync with the storage capabilities of Stolthaven – is what makes our offer unique.

2017: ANOTHER YEAR OF PROGRESS

In Houston, where port congestion and the need for more storage continues to create headaches and costs for customers, Stolthaven has invested heavily in infrastructure expansion and improvements. The goal is not only to increase capacity and operational efficiency, but to minimise waiting and turnaround times at the terminal, and to enhance ship-to-shore synergie, which help to reduce supply-chain costs for customers.

In 2017, Stolthaven Houston announced plans for the construction of a new ship dock capable of handling both ships and barges. The dock follows the addition of more than 100,000 m3 of storage at the terminal in 2014, a doubling of the capacity of the terminal’s existing barge dock, and an expansion of the terminal’s TCEQ centralised waste treatment facility on the Houston Ship Channel. Future expansion options include the development of 162,000 square meters of adjacent land, which, if fully utilised, could double the terminal’s existing capacity. Current plans include new truck and rail stations, another new barge dock and an advanced biological water treatment system. Major capital projects are also underway at Stolthaven’s terminals in Dagenham, UK, Ulsan, South Korea; and Moerdijk, The Netherlands.

The Dagenham terminal – acquired in 2012 and located on the River Thames – has benefited from more than $20 million in extensive modernisation and expansion investment. In Ulsan – a gateway strategically located in North Asia – more than 160,000 m3 of storage has been recently added. In Moerdijk, a facility that Stolthaven shares with Stolt Tank Containers, customers have access into and out of the ARA region, without suffering from the constant congestion in the ports of Antwerp, Rotterdam and Amsterdam.

Stolthaven’s terminal in Santos, Brazil is another example of a facility adapting to changing customer needs. When demand dropped for storage, related to Brazil’s sugar cane-derived ethanol, our Santos team shifted gears and is now working with diesel fuel distributors. Storage capacity is currently being increased by 16,000 m3.

But helping customers is not just a matter of investing in infrastructure. Increased chemical production in the Middle East has been accompanied by increased demand in Asia. The challenge is how to get product to those markets quickly, safely and efficiently. Singapore, in fact, is a strategically located gateway to many parts of Asia. By storing product at Stolthaven Singapore, our customers – mainly Middle East producers of intermediate and finished products – can redistribute cargo on short notice. This solution effectively shortens supply chains and increases competitive advantage.

LOOKING TO 2018 AND BEYOND

Looking ahead, there are four key issues with significant implications for the bulk storage industry that we are watching closely.

  • Rising costs: The costs of operating a bulk liquid terminal are rising faster than the market’s willingness to pay. While higher costs are attributable to a number of factors, we see increased regulation as the main driver. Safety for people and the environment is paramount - we all agree on that. At the same time, investment in infrastructure takes resources – and that requires profits.
  • Port inefficiency: In Houston and Santos for example, port inefficiency is taking a significant toll, by raising the cost of doing business and we see little evidence of relief on the horizon. Until parties begin to work together on solutions, the integrated supply-chain solutions Stolt-Nielsen offers customers can help hold down costs. Customers that ship with Stolt Tankers, for example, benefit from enhanced ship-toshore efficiency when our ships call at our terminals.
  • A shift to ISO Tanks: In recent years, we have seen increasing volumes of chemicals being shipped by tank containers – a shift that is already impacting the tanker/terminal supply chain. How all this may play out is unclear. But here, too, Stolt-Nielsen’s integrated capabilities across shipping, storage and tank containers present a unique set of global supply-chain options and solutions for customers.
  • Pension and infrastructure funds: The terminal business has been targeted by pension and infrastructure funds as a safe investment, with the potential upside for flipping those assets down the road. But as investors – not long-term players – operating and maintaining facilities for the future is not a primary consideration. Making enough money to support such infrastructure investment isn’t a concern, either. The chemical tanker industry has wrestled with similar effects, resulting from investments by private equity over the last decade, which depressed the industry due to an oversupply of tonnage. While it is unclear how this will play out, the impact is unlikely to be positive for the industry.

Like every year before it, 2018 will bring its share of challenges. Maintaining our facilities to high standards and working collaboratively with customers to create innovative supply-chain solutions will remain Stolthaven’s approach to overcoming those challenges.