Shippers Steady as Tariffs Bite

By Amy McLellan

Despite the volatility of the past year, project pipelines remain healthy, with the dislocation and disruption of tariffs creating only temporary bottlenecks rather than permanent blockages.

That at least was the message from the Inside the Project Pipeline: Shipper Market Outlook main stage session at Breakbulk Americas, which pulled together a panel of senior shippers to discuss the market hotspots that will be filling order books in the years to come.

“People are not using the tariffs to pull the plug but are instead taking time to recalibrate what they are doing, with the intention of then moving forward again fairly quickly,” said moderator Cyril Varghese, global logistics director at Fluor.

Geanean Ordonez, project logistics manager at Technip Energies, backed this, saying the tariffs would not derail projects, such as big LNG terminals, which had been many years in the making, and once built would have active lifespans lasting decades.

“Our procurement teams are working overtime reviewing and analyzing, looking at where we modularize, where the site will be and what will be the tariff impact from that origin,” she explained. “Companies are also reanalyzing their investments and how they are going to get to FID so there are slight delays based on having to restructure their financing, but these projects are still active and positive.”

Indeed, LNG is a key growth area, with Varghese noting that while oil prices are expected to be stable at around US$60 per barrel for the next few quarters, LNG prices will double by 2032. “LNG is on extremely high steroids,” he said. “There’s a lot of engagement, triggered by global demand for power, the geopolitical tensions and the intention of a lot of countries and companies to go greener.”

Nuclear is another segment to watch, with the International Atomic Energy Agency (IAEA) revising up its projections for the fifth year in a row and forecasting global nuclear operational capacity will more than double by 2050, with small modular reactors (SMRs) expected to play a pivotal role in this expansion.

The energy transition is continuing to generate a boom in mining, particularly for copper, metals and gold, while the forecast energy needs of AI data centers is fueling demand for all types of energy, although Varghese noted the scale of growth that had been predicted last year has not yet materialized.

Even so, there’s no doubt that power-hungry data centers are reshaping energy markets and creating a wealth of opportunity across the EPC, project cargo and supply chain industries.

“The data centers are a boom that no-one expected,” said Guillermina del Pino, head of project logistics Americas at Siemens Energy, adding that the resurgence of nuclear energy as part of the mix has been another opportunity from the leftfield. “Five years ago, it was a completely different scenario.”

The result is bulging order books, whether it’s gas generators, transformers or nuclear. “It’s a good problem to have,” she said. “We’re seeing three new projects every week and we’re selling projects now for 2030.”

Energy transition projects, including blue ammonia, hydrogen and carbon capture, are also filling pipelines. “Green energy is big for us, particularly in Louisiana and that Gulf Coast region,” Ordonez said.

Battery storage is key to the energy transition and is regaining momentum after the curveball of the tariff row at the start of the year.

“In January, everything stood still, and our customers paused a lot of things, but by May things started to pick up again,” said Christian Ohlrich, global director of logistics at battery storage company Fluence, a Siemens and AES Company. “The demand for this storage is still there, and the long-term trend is clear, but there’s a bit of caution now.”

The policy shift towards building domestic capability in strategic industries, such as a homegrown battery storage, is clearly on the agenda, but will take time to realize. “You don’t raise a factory in six months,” Ohlrich said, adding that the post-January stand-still had pushed Fluence to “import as much raw material as we could get our hands on.”

Despite the challenges of the past year, the speakers were in a positive mood about the brimming project pipeline, the wider market outlook and the potential to improve collaboration across the supply chain.

“If there’s any positive to all the chaos on the geopolitical side, it’s that it has raised awareness of us, and the value that we bring,” Ordonez said. “There’s huge value when we are engaged at the very beginning of these projects and now we see our clients reaching out to us very early on, and that’s something I hope sticks.”

The next event in the calendar is Breakbulk Middle East on 4-5 February at the Dubai World Trade Center. Secure your stand for the region’s leading event for the breakbulk and project cargo sector.

Top photo: Geanean Ordonez, Christian Ohlrich, Guillermina del Pino. Credit: Marco Wang Photography
Second: Cyril Varghese. Credit: Marco Wang Photography