Mailbag: Readers Respond to Ernst Frankel's "Challenges for America's East Coast Shipping, Ports and Trade"

Mr. Munoz:

We are writing in response to Dr. Frankel’s editorial piece found in today’s MarEx edition entitled Challenges for America's East Coast Shipping, Ports and Trade in order to correct several misconceptions regarding preparations underway at the Port of New York & New Jersey to handle larger pPx vessels.

While Dr, Frankel correctly describes Savannah’s challenges with their proposed 48-foot harbor deepening program, he erroneously states that of the other USEC ports “none seems to plan the major expansions required to take advantage of these new services provided by the large ships expected to serve the US East coast.”

The Port Authority of NY & NJ, together with the US Army Corps of Engineers, are in the final phase of completing a 50-foot channel deepening project to all major container terminals in our Port.  The project will be completed prior to the opening of the Panama Canal.

The deepening project is just a part of the $2 billion in investments made by the Port Authority in the last 10 years that will provide an efficient, productive and environmentally sustainable platform. In addition, our private container terminal operator partners in the Port have invested approximately $1 billion in their facilities during the same period. The Port Authority investments also include an on-port intermodal system that can handle over 1 million intermodal rail containers per annum.  It is envisioned that the Port Authority will spend approximately another $2 billion in the next 10 years on projects that include the raising of the Bayonne Bridge’s airdraft to 215 feet.  The platform that our partners and we will complete is capable of accommodating the large pPx container vessels that we envision will serve the USEC through either the Panama or Suez Canals.

We ask that you inform your readers of the inaccuracies in Dr. Frankel’s piece.

Sincerely

Peter J. Zantal

General Manager – Analysis and Industry Relations

Port Authority of NY & NJ

*****

Mr. Frankel –

I recently read your article on The Maritime Executive website and was a little concerned/confused by some of your conclusions.  In your article, you mentioned that “there is no other East Coast port capable of serving these large vessels”.  Unfortunately, that just isn’t true.  The Port of Virginia has the required depth, air draft, cranes, and port facilities to handle these ships today.  In fact, the Emma Maersk (14,000 TEU) has already called on the port.  Granted, it was more of a publicity event to draw attention to APM’s new terminal.  Regardless, the vessel was able to make it into port.  As I am sure you know, the Port of Virginia also has the Craney Island project (http://www.craneyisland.info) underway which will be able to accommodate these vessels and will dramatically increase the capacity of the port by +/- 5 million TEUs at full build out.  This would run counter to your statement that, “apart from Savannah none seems to plan the major expansions required to take advantage of these new services provided by the large ships”.

Part of the consulting work I do is port related, working with infrastructure investors and developers to understand various opportunities.  Through this work, I have had several conversations with the Coast Guard and Pilots association at the Port of Savannah.  Both have indicated that the insurance companies have very significant concerns about allowing the big ships into this port.  First, even if Savannah is able to get the required funds to dredge to 48 feet, due to ship squat it still won’t have the required clearances for a vessel that large.  Second, the currents in the Savannah river, the relatively narrow channel, crabbing requirements and the Elba Bend would make navigating a vessel that long up the river  prohibitively dangerous.  Maybe if they can get the dredging funds AND get the joint GA/SC Jasper port underway that would stand a chance.  However, both those conditions are facing serous hurdles at this point.

While I 100% agree with your premise that the US needs to address its capacity to handle the new breed of large vessels, I feel that your assertion that Savannah is the only port with the potential to handle them is misleading.  I understand Savannah is in a battle to get appropriations of funds for dredging.  I get that.  And I get the fact that media coverage and pressure will be influential in that effort.  However, to do so at the expense of the facts doesn’t do any of us any good.

Now, with all that said, I would welcome the opportunity to be proven wrong about my contentions.  My goal is always to provide my clients with the most accurate information possible.  If my information is erroneous or out of date, please let me know.

Thanks for your attention,

Brad Rogers

*****

Dear Mr.Rodgers,

Thanks for your comments and the details of the Virginia Port expansion plans,which are very impressive,and meet an urgent need. I did not know the planned schedule and was as a result concerned about the timing,of US terminal availability,as the Panama expansion and the deliveries of the new mamoth Maers vessels is supposed to happen in 2014, at which time we may still not ready to handle these new vessels. More importantly, I am concerned with the longer term impact on US East Coast trade, as the major economic and industrial concentrations are in the North East, which may require much of the the trade to be trucked along the east coast, as we do not have an effective cabotage transport system. This largely because of the continued imposition of the build American clause of the Jones act, which in my opinion is not only outdated, but also damages the US economy, by forcing a huge waste of oil consumption, increased air pollution, added domestic freight costs, highway congestion, and even loss of ship repair, port, and seafarer jobs. It did not achieve its basic objectives of maintaining a healthy US shipbuilding industry and commercial shipping fleet.In fact we are now forced to charter in foreign build and owned container ships to carry our military cargoes to/from the middle east. I hope that these new developments will finally get us the rebuild our commercial shipping, so that we can become more self sufficient, save oil, and reduce our domestic freight transportation costs.For your information, I served as advisor to the Govt. of China for nearly 10 years in port and shipping developments,and convinced them to increase their use of waterborne freight transport/coastal and inland and downplay road construction and road transport.

Best regards and again thanks for the impressive info. on the Virginia port developments.

Ernst G Frankel

*****

Dear Sir,

Good to speak to you today.  I was intrigued by Mr. Ernest Frankel's article on the lack of port capacity in most of what we here in the U.S. consider our most important seaports.  The two largest seaports in the world, Hong Kong and Singapore, are also hampered by shore side space.  Regardless they have been able to operate efficiently by making use of huge near shore anchorages.  In Hong Kong's case the anchorage coupled with the use of moderately sized iron barges with cranes which are moved about by a fleet of tugs is really an inspiration in cargo handling.

I suggest using a much larger version of these iron barges with the same basic modus operandi.  This sort of an operation could be subcontracted out by the port authority in question or it could be accomplished as a public/private venture or some sort of consortium involving the shipping companies.  We would need to study the Hong Kong/Singapore operations in depth to adapt their advantages to our port operations.  To mollify the possible concerns of the environmentalists it should be noted that the Sentosa Island Five Star Resort, a project that Singapore considers to be a major triumph in tourism as well as a jewel in it's crown, sits on the city-state's southern seaside surrounded by huge container yards and the anchorage itself.  Either the Ritz-Carlton or Regent has opened a major five-star property there and, as far as I have, heard no pollution accidents or dramas have occurred.

This could be a very lucrative project for any forward thinking U.S. maritime company like Chouest, Crowley, McAllister or some combination not to mention a job creator.  Additionally, the Federal government has a huge stake in it's success, with all of the good and bad things that would imply.

I may be totally wrong, but give it a look.

All the best,

Larry Sardelli

*****

Talk about SLANTED. Everyone has their opinions and that is great, but his article is so far removed from reality. He starts with talking about the Pana Canal widening and the 18,000 teu ships. The new canal will not take 18,000 teu ships, it wont take 15,000 teu ships. He should know that and I assume that he does, so why does he offer that as a viable scenario.

Then he goes off on a tangent on the Jones Act, and here again a lot of opinions on that. Sen McCain tried doing away with the Jones Act 6 months ago and it died a quick death. Maybe it should. maybe it shouldn't, but this brief article is very slanted and maybe even something beyond that.

Regards,

Gary Ferrulli

*****

In case you missed it, here it is again: "Challenges for America's East Coast Shipping, Ports and Trade" by Ernst Frankel