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Ports Competing for ULCVs Along North America’s East Coast

Credit: South Carolina Ports
Credit: South Carolina Ports

By Harry Valentine 2019-02-14 17:33:05

When ultra-large container vessels (ULCVs) of 18,000-TEU capacity first entered service, very few major ports could berth and provide service to them. At present, several East Coast ports that include Jacksonville, Savannah, Ports of Virginia, Baltimore and Philadelphia have been developed to berth and provide service to neo-Panamax size of ships. While South Carolina Ports Authority has authorized the deepening of the navigation channel to Leatherman terminal to 52 feet (16 meters), the authority would be wise to recognize the future possibility of larger ultra-large container vessels (UCLV) built well in excess of 18,000-TEU capacity.

The South Carolina Port Authority's plans to develop the Hugh K. Leatherman have a sound logistics basis especially if the port were to include the transshipment option. The port City of Charleston is located within close proximity to several other American East Coast port cities such as Jacksonville Fla, Savannah GA and Norfolk – Newport News VA. It is also located close to the navigable intra-coastal waterway along which barges may carry container traffic. The water extends to Norfolk and Chesapeake Bay, giving inland waterway access to cities such as Baltimore, Philadelphia and even into Washington via the Potomac River. 

The Suez Canal

The steady increase in the size of ships that sail through the Suez Canal has prompted authorities to widen and deepen the canal and include a parallel section of channel. Within the next few years, the Suez Canal Authority is expected to develop parallel navigation channels between the Red Sea (Gulf of Suez) and Mediterranean Sea. ULCVs that sail between eastern Asia and Port of Charleston will sail either via the Suez Canal or via Port of Cape Town, South Africa. Parallel navigation channels at Suez Canal would be able to transit larger ULCVs.

There may be scope to attach removable bow wave deflectors to each future size ULCV that sails through the Suez Canal's future twin channels to change the angle of the bow waves and reduce channel bank erosion. A ship built slightly higher (greater air draft), slightly deeper and slightly longer may be able to carry 28,000 TEUs. 

The Suez Canal offers an air draft of 223 feet while the Port of Charleston’s Arthur Ravenel Bridge offers 186-foot air draft and will need to be raised to clear future ULCVs. At Port of Newark, the Bayonne Bridge was raised to transit larger container ships.

Competition

In Eastern Canada, both the Port of Sydney and the South Terminal at Port of Halifax offer unlimited air draft clearance for ULCV ships. If the air draft of the Ravenel Bridge remains unchanged, the Port of Charleston would deliver a competitive edge to Canada’s Port of Sydney. 

America’s ongoing trade dispute with China has the potential to impact future container based trade. A reduction in the number of containers arriving at East Coast ports could encourage ship operators to multi-port, that is, the same neo-Panamax ship serving a pair of nearby ports such as Jacksonville and Savannah.

If future trade declines, a single ULCV arriving from Asia could incur lower per-container transportation costs than multiple neo-Panamax ships by carrying the combined load of four nearby ports that could include Jacksonville, Savannah, Charleston and Norfolk – Newport News. A slight increase in the frequency of UCLV arrivals at Charleston could expand the transshipment region to include Baltimore and Philadelphia, courtesy of the Chesapeake – Delaware Canal. Most customers would be willing to save transportation costs by delaying arrival of their containers by one or two days, sailing via the Suez Canal instead of via the Panama Canal.

Port of Newark

Port of Newark is the busiest container port along the East Coast and through intermodal truck and railway connections, links to many inland cities that includes Boston, Buffalo NY, Toronto, Montreal, Pittsburgh, Cleveland, Toledo, Detroit and Chicago. The future arrival of ULCV’s at Port of Charleston would connect to cities such as Atlanta, Birmingham and Chattanooga with potential to divert some intermodal container traffic from Newark. A decline in container trade arriving at Newark from China would require some multi-port operations involving neo-Panamax ships that sail via the Panama Canal to Newark.

One option would be to combine container trade destined for both Newark and Montreal on board a single neo-Panamax ship that would stop at Ports of Virginia to partially off-load containers for transshipment to a ship sailing to Port of Montreal and during warmer weather, to the Port of Toronto. The future prospect of mega-size ULCV’s arriving at Charleston would through transshipment, potentially offer lower overall per-container transportation costs to Port of Newark. It may also become possible to load some trade from India aboard a future mega-size ULCV sailing from China to Charleston.

Eastern Canadian Ports

While Port of Halifax has been Eastern Canada’s major maritime port that has served the international container trade, other ports are being developed in the region to also serve that trade. Perceiving that a single railway company carried containers between Eastern and Central Canada, government authorities decreed to divide the railway container transportation between two railways, by developing the Port of Saint John to serve neo-Panamax ships. The strategy duplicates the business plan of Melford that has endeavored to develop their container port to the east of Halifax, while Port of Sydney chose to develop to serve ULCV transshipment traffic.

The future opening of the Leatherman terminal for ULCV traffic at Charleston would likely divert container transshipment market share from Eastern Canada. If Trump is re-elected and the trade dispute continues, there will not be a sufficient volume of business to sustain viable operations at four container ports in Eastern Canada. A neo-Panamax ship carrying future trade from India could serve the combined markets of Boston, Newark – New York and Montreal, using Halifax as the transshipment terminal for partial unloading of 4,000 to 7,000-TEU would occur. The Port of Sydney would depend on trans-Arctic sailing of ULCVs.

Charleston – Sydney Interlining

Under a very rare set of economic circumstances resulting from very unusual trade decrees for a future Trump White House, the same ULCV could stop at both Sydney and Charleston following the opening of parallel navigation channels at the Suez Canal and successful negotiations with the Suez Canal Authority to transit larger ULCVs. The UCLV would carry trade for the entire Eastern Coast, calling at Port of Sydney to off-load containers destined for the combination of Newark – New York, Boston and Montreal before proceeding south to Port of Charleston. 

The other circumstance involves future summer time navigation via the Canadian side of the Arctic involving future super-mega-size ULCVs of 28,000-TEU and a refusal by Suez Canal authorities to transit such vessels. During the northern winter, these ULCVs would have to sail the added distance via Cape Town. During a future extended duration Arctic navigation season, ULCVs that sail that route would first stop at Port of Sydney for partial off-loading of containers before proceeding south to Charleston. The number of off-loaded containers would have to greatly exceed the transshipment capacity of Halifax south terminal.   

Conclusions

The planned Hugh K. Leatherman terminal with 280-acres near the Cooper River would likely be capable of container transshipment involving ULCVs that carry 18,000-TEU. 

Given the possibility that larger ULCVs would enter future service, South Carolina Port Authority along with state and federal transportation officials would need to consider raising the Ravenel Bridge in the manner in which the State of New Jersey raised the Bayonne Bridge to provide increased air draft for higher ships. 

Charleston’s planned ULCV terminal shows prospects of being viable. Being able to sail ULCVs via the Canadian Arctic would enhance container transshipment prospects for Port of Sydney and also provide lower per-container transportation costs arriving at Port of Charleston.

During a period of reduced east-west trade, if Canadian trans-Arctic sailing conditions restrict vessel size to neo-Panamax dimensions, container transshipment would transfer to Port of Halifax and involve both north and south terminals with connections to several other eastern ports.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.