October 3 - The length of capital expenditure (capex) project life cycles - from initial definition and funding authorisation, through to detailed engineering, procurement of materials, components, transport and logistics services, and construction - has
Speaking at the recent Breakbulk Americas conference in Houston, Texas, Phyllis Kulkarni, North American director for Independent Project Analysis (IPA), says the average time to complete detailed engineering for projects in the USD150 million capitalisation range has grown from 14 to 20 months on average.
IPA studies find such slippage is common in today's capex market, regardless of project cost and scope.
One factor she cited was: "A retirement of the baby boom generation of middle managers has created a shortage of the skilled and experienced people who oversee and push forward the critical design engineering stage of project development. Delays here then ripple through to procurement, transportation and construction."
Speakers on the shippers' panel at the event also alluded to staff shortages and the growing difficulty of keeping talented professionals in the project logistics market.
Some of the panellists suggested that many young executives were choosing to follow career paths in the pharmaceutical, automotive or e-commerce industries, due to harsh market conditions in the project sector.