Canaveral Looks for More Value, Not More Containers

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By MarEx 2017-06-29 15:27:04

Port Canaveral, Florida is best known as a home port for cruise ships: it is just 50 miles due east from Walt Disney World, making it an easy choice for tourists who would like to combine a theme park vacation with a cruise.

But it does a lot more with its 900 waterfront acres. Port Canaveral is on Florida's busy I-95 corridor, putting it in a good location for breakbulk, heavy lift and ro/ro cargoes. It is also directly adjacent to Kennedy Space Center, the new home of two commercial rocket ventures, SpaceX and Blue Origin. SpaceX lands its used booster rockets on what it calls a "drone ship" – an unmanned, converted deck barge with thrusters and dynamic positioning for precise stationkeeping. This floating landing pad has to come to shore to offload each rocket, and Port Canaveral is only a few miles away from the launch area. This gives the port an East Coast monopoly on a very new line of project cargo: high and heavy loads arriving from orbit. Blue Origin intends to use a similar arrangement and is said to be in talks with Port Canaveral for berthing and storage space. 

Port Canaveral is doing novel things, but director and CEO Capt. John Murray is also clear about what it does not do. Unlike many of its competitors, Port Canaveral does not intend to make a big foray into the commodity business of container freight. The port doesn't have that much land for storage, so it allocates its real estate for more concentrated uses – for example, ro/ro cargoes with low dwell time, a marquee cruise ship business and its strategically important fuel terminal. This focus guides its development plans: it is investing in a replacement for an aging passenger terminal, but it is not spending hundreds of millions on harbor deepening. "44 feet of channel depth is enough for our business," Capt. Murray explains. "We’re not looking to attract Neopanamax container ships, and there’s no reason to dredge to 50 feet for cruise ships that only draw 31."

Before his arrival at Canaveral, Murray rose through the ranks at Lykes Lines and CP Ships to become president and CEO of Hapag-Lloyd USA. With decades of experience managing ocean carriers, he understands just how commoditized the container freight industry has become. "With the advent of ultra-large container vessels, each carrier's boxes are right next to cargo from four or five other carriers, all on the same ship. That's the only way to fill up a vessel," he says. "So you can't advertise better freight service than the competition – all you can really do is to be more responsive to customers." With a commodity business comes commodity price pressure, and as the industry has seen over the past year, that can make it a tough business to be in.   -Marex