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STATE OF THE PORTS 2006: North Carolina State Ports Authority

Published Dec 7, 2006 12:01 AM by The Maritime Executive

Remarks by Thomas J. Eagar
CEO, North Carolina State Ports Authority
N.C. World Trade Association ??" Cape Fear Chapter
November 30, Wrightsville Beach, N.C.

After finishing fiscal year 2006 with record revenues, the North Carolina State Ports Authority is moving forward with plans to meet steadily increasing market demand. Major expansion projects continue at the State’s Ports at Wilmington and Morehead City to meet short-term demand. Continued demand forecast over the next 15 years is also being answered, with long-term plans to develop a new terminal at Radio Island in Morehead City and the North Carolina International Port in Brunswick County.

Continued market growth during fiscal 2006 drove container moves up 24 percent, and general cargo volumes up 13 percent at the Port of Wilmington. Breakbulk cargo at the Port of Morehead City rose 19 percent. Breakbulk cargo refers to commodities like rubber, lumber, steel and woodpulp, shipped in units such as bundles, pallets or bins. General cargo includes both breakbulk and bulk commodities, things which flow, such as salt, fertilizer, or grain. With container tonnage included, the Authority's total volume for fiscal 2006 was 5.8 million tons.

For fiscal 2007, we are projecting a five-year compounded annual growth rate of 18 percent in container volume and 16 percent in general cargo numbers, although cyclical fluctuations in certain key commodities such as forest products and rubber have required adjustments to our market forecast.

The Port of Wilmington is marking an important milestone this week. Four new 100-foot gauge container cranes are being loaded on a ship at the ZPMC facility in Shanghai, China, for delivery in early 2007. These cranes are the linchpins of the $143 million container-terminal expansion, which includes significant upgrades to the dock infrastructure to support the cranes, which are electric rather than the traditional diesel power. A new terminal operating system is also being implemented.

At the Port of Morehead City, construction began in October on a new 178,000 square foot general cargo warehouse, expected to be ready for business in August 2007. A rail improvement project is nearing completion. New rail has been installed, and road crossings are being upgraded. The Port’s main access road, outside storage and truck parking areas are scheduled for repaving in early 2007. This repaving will nearly double the amount of outside storage capacity adjacent to the entry road. These projects improve the Port of Morehead City’s ability to meet the needs of existing customers and help attract new ones.

We have updated our economic impact calculations this year. Business coming through your Ports now supports about 85,000 jobs and $299 million a year in state and local tax revenues. Here in the Southeast region alone, Ports activities support more than 21,000 jobs and nearly $100 million a year in tax revenues.

North Carolina’s Ports have a tremendous window of opportunity to expand operations, increase business and profitability and create significant economic benefits to the State of North Carolina.

With international trade projected to double by 2020; container volumes expected to grow even faster, and adjacent ports running out of room and with limited ability to expand, the Ports Authority took advantage of a golden opportunity which presented itself in late 2005. We purchased 600 acres of industrial property on the west bank of the Cape Fear River, just 14 miles from the sea buoy, and intend to build a major international container port to capture that new business.

The North Carolina International Port will catapult North Carolina into the ranks of major East Coast ports, comparable to Virginia, South Carolina and Georgia. The Authority has hired CH2M Hill, an international engineering firm, to plan, design and construct the new port.

We are in the preliminary stages of planning the project, and expect to be able to service the new, much-larger container ships being built now to handle the tremendous growth in container traffic. Next week, the largest container ship ever to visit Wilmington is scheduled to arrive, moving into one of our regularly scheduled calls. It holds 5,000 TEUs ??" 20-foot equivalent units. It’s big, but last month a ship was launched that carries 12,000. The International Port will allow us to keep up with the growth in traffic, and with the growth in ship sizes.

Most importantly, the International Port will enable our State to compete more effectively for major manufacturing and assembly plants, comparable to BMW and Daimler Chrysler in South Carolina and Airbus in Alabama. Additionally, the International Port will attract distribution centers similar to those being built for Ikea, Target, and other major retailers at the Port of Savannah. All of those projects ??" bringing with them thousands of jobs to the chosen states ??" require a world-class port, and we plan to build that port for North Carolina.

And as other port facilities are being converted from bulk and breakbulk to container, these cargoes are looking for a home. Anticipating this new business, the Ports Authority is looking across the Newport River from the Port of Morehead City to Radio Island. We have completed preliminary studies and design of a new port terminal, with a site layout, traffic analysis, and environmental surveys in place.

The Port of Wilmington’s profile may shift a little when the International Port opens, but it will stay busy ??" definitely with general cargo, and very likely with continuing service from smaller container ships.

These vital economic engines are in full throttle to build economic prosperity for citizens across the State ??" additional jobs, income and tax revenues. Our State’s leaders ??" Governor Easley and the General Assembly, thanks to the leadership of our local delegation ??" recognized the importance of the State’s Ports this year, investing a $7.5 million appropriation, and $3 million in repair and renovation funding.

The time is right for North Carolina’s Ports to move to the forefront of East Coast ports. And we are ready, with the support of our communities and our leaders, to make that move.