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Growing Pains

Ports spend billions as container ships get bigger.

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By Tom Peters 02-13-2020 03:00:21

(Article originally published in Sept/Oct 2019 edition.)

Transformation and innovation, do they ever stop? Not if you’re a seaport involved in the highly competitive world of moving cargo by container or any other means. Every day seems to bring something new or different that presents challenges and requires new strategies. The situation is the same in all ports – big or small.

In May of this year, Karen Oldfield – who steps down as President & CEO of the Halifax Port Authority at the end of November – gave a speech to the local Chamber of Commerce that hit on key words and phrases that have become common in port boardrooms around the world. Some words we have already mentioned – “transformation,” “innovation” and “strategies.” But there were others like “digitization,” “evolution,” “market exploration and development,” “staying ahead of the curve” and bigger ships and so on. It’s a whole new world out there, and it’s not getting any easier for port authorities.

Efficiency & Safety

The movement of container cargo has changed dramatically in the last few years, especially on the North American East Coast since the expansion of the Panama and Suez canals and the raising of the Bayonne Bridge in New York. These developments have meant larger container ships to the point that vessels with capacities of 10,000 to 14,000 TEUs (twenty-foot-equivalent units) have become the norm.

So what kinds of challenges do these behemoths present? The most obvious is infrastructure to handle these giants.

For the past two and a half years, the Port of Virginia has been expanding capacity at its two primary container terminals, Virginia International Gateway (VIG) and Norfolk International Terminals (NIT). As a result, says Joe Harris, Senior Director of Communications & Spokesperson for the Virginia Port Authority (VPA), many of the challenges facing the port have been addressed but many still remain.

“Our expansion is resulting in greater volumes of cargo moving across the port faster than ever before,” he explains. “We’re posting world-class numbers at our gate and rail operations and are now focusing on building greater velocity at the berth. As we do those things, however, we have to maintain our focus on ensuring the safety of every person on the terminal. We pursue health and safety excellence through a rigorous program to identify hazards, develop solutions to control those hazards, measure compliance with operational procedures and, finally, motivate all employees and patrons toward safe behaviors.”

A second challenge is maintaining reliability and growing volumes while NIT is under construction. “We are past the halfway point of construction there with 15 new container stacks served by 30 new rail-mounted gantry cranes with 15 more stacks to come,” Harris notes, “but we still must focus on building volumes and maintaining efficiency there.”

While container cargo is a major focus for VPA, cargo diversification is also important.

“Predictability is one of the most important factors in world trade,” he adds, “and today’s uncertain trade environment is helping the Port of Virginia focus on the importance of a diversified cargo mix. To that end, we’re working to ensure that ocean carriers and beneficial cargo owners understand that we are capable of handling multiple types of vessels and cargo.”

Competition in the Sunshine State

Larger ships are certainly on the list of challenges for the Port of Jacksonville (JAXPORT) with infrastructure investments underway to allow the port to accommodate the largest ships calling the U.S. East Coast.

“JAXPORT and SSA Marine, one of the world’s largest terminal operators, are set to break ground on a $238.7 million, state-of-the-art international container terminal at JAXPORT’s Blount Island Marine Terminal,” says Eric Green, CEO of the Jacksonville Port Authority. “The facility will include $109 million in dock and berth upgrades and will be able to simultaneously accommodate two post-Panamax container ships.”

JAXPORT’s shipping channel is wide enough for two ships to pass at the same time and deepening to 47 feet is on track to be completed in 2023.

Currently Florida’s largest container port by volume, Jacksonville faces stiff competition from other Florida ports as well as nearby Savannah, Georgia.

“To address this, we’re working to market the advantages of shipping through Jacksonville,” says Green. “Jacksonville is within a day’s drive of 70 million consumers including 20 million Florida residents and another 120 million visitors annually. This offers importers a large market within easy reach of the port. Other advantages include access to three interstate highways and three Class 1 railroads, available and low-cost industrial space, fast truck turn times (20-30 minutes per terminal) and a large and experienced labor pool.”

Farther to the south, Florida’s Port Everglades faces a number of challenges including berth and land constraints and construction issues. “But all are temporary challenges with the goal of continued growth in sight,” says Ellen Kennedy, the port’s Assistant Director of Business Development & Communications.

Everglades has nearly $900 million in infrastructure improvements planned for the next five years as part of a larger $1.6 billion capital investment program.

“Underway is a $471 million berth expansion, the largest infrastructure project in the port’s history,” Kennedy comments. “The Southport Turning Notch Extension will add new cargo berths by lengthening the existing turnaround area from 900 to 2,400 feet.” Part of the expansion includes installing crane rail infrastructure for three new Super Post-Panamax gantry cranes currently under construction.

The U.S. Army Corps of Engineers is in the pre-construction, engineering-and-design phase of deepening the port’s navigation channels from 42 feet to approximately 50 feet and widening narrower sections of the channel. In addition, commercial developer CenterPoint recently broke ground on a state-of-the-art international logistics center at Port Everglades.

“These projects, once completed and fully functioning, will significantly increase cargo and cruise passenger numbers,” says Kennedy.

On Florida’s west coast, Port Tampa Bay sees its big challenge as making sure it continues to keep pace and stay ahead of the curve given the tremendous growth in its market and the recent addition of new services. “Fortunately,” says Wade Elliott, Vice President of Marketing & Business Development, “we’re blessed in having significant adjacent land available for continued expansion and a great partner in Ports America, our container terminal operator.”

New services include COSCO Shipping’s adding Port Tampa Bay to its Gulf of Mexico Express (GME) service in January, offering fast direct service from China. In June, CMA CGM added Tampa to its Pacific Express 3 (PEX 3) service while Zim, MSC and Maersk have also launched a new Asia-Gulf service that will include a Port Tampa Bay call beginning in late September.

“The latest phase of terminal expansion will see capacity doubled from 40 to 80 acres this year,” says Elliott, “and then doubled again to 160 acres in the next few years. It also includes extending berth lengths from 3,000 to 4,000 feet and adding more gantry cranes and yard equipment.”

Georgia Peach

The Georgia Port Authority (GPA) is going big at the Port of Savannah.

“Ships carrying up to 14,000 TEUs make up a growing portion of our vessel fleet,” says Pat Richardson, GPA’s Manager of Commercial Communications. “Not only are these ships larger, they deliver and take on more containers with each call.”

To meet the challenge, GPA commissioned four new ship-to-shore cranes in 2018, bringing its Garden City Terminal fleet to 30. Six additional ship-to-shore cranes will arrive in 2020, allowing GPA to move up to 1,200 containers per hour across a single dock. The authority also received 10 new rubber-tired gantry (RTG) cranes over the summer with two more scheduled to arrive in September, bringing that fleet to 158 and allowing GPA to move more containers onto trucks without terminal congestion.

Shifting more cargo to rail is a strategic objective. Currently, about 20 percent of GPA’s container cargo moves by train. When the Mason Mega Rail Terminal opens next year, it will double the port’s rail-lift capacity to one million containers per year. The Mason Mega Rail Terminal will be the largest on-dock intermodal rail facility in North America and allow Savannah to better accommodate 10,000-foot-long unit trains. It will also improve vehicle traffic flow and ease congestion in neighboring communities by moving all rail-switching on terminal and transitioning more cargo from trucks to train.

O Canada!

North of the U.S. border at the Port of Montreal, Director of Communications Melanie Nadeau says the port is addressing challenges from its steadily increasing container cargo business with both short- and long-term infrastructure solutions.

For the short term, the port and LOGISTEC Corp. will expand capacity at the existing Viau Terminal by an additional 250,000 TEUs, bringing its capacity to 600,000 TEUs. The long-term solution is the new Contrecoeur Terminal, which will add 1.15 million TEUs annually to the port’s total throughput. Construction starts in 2020.

To improve traffic flow, the port plans additional rail capacity and improved road access to the Viau Terminal for trucks. The port will also build an innovation center that will employ new technology to improve cargo moves.

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