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Calgary Stampedes Onward

Calgary Stampedes Onward

Matko Papić, vice president of Engineering and Product Development for Evans Consoles Inc., the world’s leading custom maker of control room console solutions, sums it up simply: “Calgary is a perfect location for everything.”

While that characterization may be a tad hyperbolic, it captures the spirit of a Western Canadian city that is assertively living up to its longtime one-word motto—“Onward”— as a center of commerce and a crossroads of logistics.

Sure its location is propitious, at the roadway nexus of the east-west Trans-Canada Highway and the CANAMEX Corridor stretching to Mexico, at a critical point in the transcontinental rail networks of both the Canadian National Railway and Calgary-based Canadian Pacific, and at an ideal spot along international air routes.

But to understand what is propelling Calgary, Alberta, to prominence in the global trade arena requires a knowledge that transcends mere geography. And Papić is among the burgeoning numbers of businesspeople who recognize it.

Evans Consoles was started by Calgary oil and gas industry accountant Ross Evans in 1980. In that year, Papić was a kindergartner in his hometown of Sarajevo, then the capital of the Socialist Republic of Bosnia and Herzegovina. Papić emigrated from the embattled city to Calgary in 1996 and hired on with Evans Consoles three years later, seeking to live out his North American dream. He couldn’t have found a better place to do so.

The company’s head office and North American manufacturing center in Calgary—which serve clients from NASA and the Federal Aviation Administration to Boeing Co. and Union Pacific Corp.—not only is convenient to multimodal transportation links, which are key since 95 percent of the Evans’ customers are outside Canada, but also is well located for employing superior engineering expertise.

“The highest horsepower talent is here,” Papić says, making an unintentional reference to the Calgary Stampede, the annual rodeo and western-themed festival that began putting the city on the maps of many nearly a century ago.

Calgary is no longer known just for horses and cowboys, nor only for the energy products that flow from the oil sands that sprawl north of it. As Papić points out: “It went from ‘Calgary is where?’ to ‘I know where Calgary is.’”

David Kalinchuk, Economic Development manager for Rocky View County, which surrounds the City of Calgary on three sides, notes, “It’s not just all about oil and gas anymore.”

ENGINEERED FOR GROWTH While oil sands to its north have fueled much of Calgary’s growth, Matko Papić, vice president of Engineering and Product Development for Evans Consoles Inc., says the city is quickly emerging as a global engineering hub. (Photo by Paul Scott Abbot)
ENGINEERED FOR GROWTH While oil sands to its north have fueled much of Calgary’s growth, Matko Papić, vice president of Engineering and Product Development for Evans Consoles Inc., says the city is quickly emerging as a global engineering hub. (Photo by Paul Scott Abbot)

And it’s not just about the city, either. Rocky View County is home to such facilities as a 1.3 million-square-foot distribution center for Target Corp. and 1 million square feet of cold storage for Wal-Mart Stores Inc., plus a $200 million, 680-acre Canadian National Railway logistics park and intermodal yard that opened in 2013 to serve the flow of containers coming eastward from British Columbia’s Port of Prince Rupert. Construction in the county is moving at an equally fast pace as within Calgary’s city limits, drawing investments and workforce from far beyond Canadian borders.

Calgary and its environs have truly become a multicultural melting pot, where new habitants are now more likely to relocate from Asia and other parts of the world than inter-provincially from traditional Canadian business centers such as Toronto or Vancouver. Fully 26.2 percent of those living in the Calgary metropolitan area are immigrants, according to the quasi-governmental Calgary Economic Development agency, with those from the Philippines, India, China and Pakistan leading the way and the United States, Nigeria, United Kingdom and Iran not far behind.

F. Bruce Graham, president and chief executive officer of Calgary Economic Development, points out that, as the comparative value of the Canadian dollar and the price of oil decline, spending in Calgary actually increases. Calgary continues to boast Canada’s second-lowest unemployment rate, at 4.9 percent in 2013, after Edmonton at 4.8 percent, and Canada’s highest per capita annual wage, at CA$67,259 in 2013.

At the same time, Calgary’s population growth continues. In 1968, when the Calgary Tower opened as the city’s tallest structure, about 350,000 people called Calgary home. That number is up to nearly 1.2 million now and is forecast to exceed 1.5 million by 2018.
Calgary already is home to 21 international banks and 132 head offices for global companies. Adding diversity to the commercial mix, a $23 million film and television production center is targeted to open by late 2015, serving the area’s up-and-coming creative entertainment industry.

Recognizing the importance of transportation and distribution centers to Calgary’s continued success, logistics programs are in place or getting started at the University of Calgary, Mount Royal University, SAIT Polytechnic (formerly Southern Alberta Institute of Technology) and Bow Valley College, plus several area high schools.
Indeed, it was transportation that made the locale a settling place of First Nations peoples, who appreciated the confluence of the Bow and Elbow rivers, and later first made a town of Calgary (with 506 residents) in 1884, the year after the Canadian Pacific’s westward-expanding rail tracks—laid primarily by Chinese immigrants—reached the area that lies 50 miles east of the Rocky Mountains.

The CP moved its headquarters to Calgary from Montreal in 1996, two years before the railroad opened the first phase of its intermodal facility in the city’s southeast industrial sector. There’s still room for yard expansion on the 100-acre tract, where consumer goods that came in from Asia the previous day at Port Metro Vancouver arrive in containers double-stacked on railcars. Sears Canada Inc. and Canadian Tire Corp. have major distribution centers at the facility, and a 1 million-square-foot-plus Home Depot rapid deployment hub is slated to open in late summer 2015 on an adjoining property.

Vancouver, on the British Columbia coast, more than 600 often-rugged highway miles west of Calgary, had traditionally been the distribution hub of choice for all of Western Canada, but a trend is sweeping eastward toward Calgary, elevating the commercial climate just as the warm Chinook winds can raise winter temperatures as they pour in over the Rockies.

Brampton, Ontario-based third-party logistics provider Hopewell Logistics Inc. is among companies recognizing that Calgary’s inland crossroads location—within a 24-hour drive of 50 million people— is ideal for distribution over a wide area.

Hopewell’s 427,000-square-foot Calgary facility dedicates more than half that space to Kraft Canada Inc. products, from Kraft cheeses and peanut butter to Stove Top stuffing and Maxwell House coffee. It’s a perfect fit with Kraft’s philosophy of being close to consumers, according to Chris Marko, general manager of the Hopewell facility.

“Customer service is probably the biggest piece of what we can continue to provide,” says Marko of advantages to serving Western Canadians from Calgary as opposed to direct shipping from Eastern Canada warehouses.

Marko, who serves on Calgary Economic Development’s Logistics Advisory Committee, notes that Campbell Co. of Canada soups, Payless ShoeSource footwear and Under Armour Inc. apparel also move through the Hopewell facility, as do large items ordered by Western Canada consumers via the website that are delivered to doorsteps by owner-operator truckers.

Trucking firms with significant Calgary-area presences include Canadian Freightways, a less-than-truckload unit of Montreal-based TransForce Inc., which since 2008 has operated a 96-door service center and headquarters facility just across the city line into Rocky View County.

“Calgary as a hub is perfectly situated for serving Western Canada from a central location,” says Jon Finnimore, director of Sales and Marketing at Canadian Freightways. The closing in early 2014 of four Canadian Freightways terminals in British Columbia has added to volumes through the suburban Calgary location.

In fact, through its partnership in The Reliance Network, Canadian Freightways can provide single-bill service throughout North America, with deliveries by Averitt Express Inc. and a half-dozen other regional partner trucking companies.

Major accounts served by Canadian Freightways’ Calgary-area service center include Starbucks Coffee Co., Whirlpool Corp., Bridgestone Corp., Panasonic Corp., LG Electronics Inc. and Shell Canada Ltd. Finnimore notes that shipments directly related to oil and gas activity represent about 20 percent of the center’s business, but, when groceries and other consumer products hauled to the Alberta oil sands area are added in, the impacts of the energy boom are far greater.

Finnimore adds that Canadian Freightways uses Canadian National intermodal rail for an increasing number of shipments and offers air freight as an additional alternative.

2M Or Not 2M?


With the recent launch of a pair of new mega-alliances of global ocean carriers, major U.S. importers are divided as to whether industry consolidation will help or hurt in an age of larger vessels.

As the 2M Alliance of Maersk and Mediterranean Shipping Co. and the Ocean 3 Alliance among CMA CGM, China Shipping and United Arab Shipping Co. set sail, a supply-chain executive for Walmart—by far the nation’s largest retailer and importer—says he thinks the proliferation of carrier alliances ultimately will lead to stability and reliability.

“We operate a diversified import network that allows us to mitigate risk and effectively flow product to our stores,” says Bryan Most, Walmart’s vice president for Private Fleet. “While there will be an adjustment period for all parties as the new services become operational, in the long term we believe that the new alliance structures have the ability to bring the most stable, frequent and reliable services to the industry.”

The Home Depot’s executive vice president for Supply Chain and Product Development, Mark Holifield, is a bit more cautious.

“We support the carriers’ focus on efficiency and productivity,” Holifield says. “But having available capacity when and where we need it is very important to our business. We would hope that alliances won’t adversely impact that.”

An executive of another Top 10 U.S. importer, who asked not to be identified, tells Global Trade that he is concerned, commenting,

“Obviously the proliferation of the alliances and the usage of the larger ships have caused great difficulty to supply chains.

“We can no longer properly predict delivery times, terminals, chassis availability and communication,” he adds. “Everyone seems powerless to provide the service that shippers need to ensure product flow. This has forced us to work toward awarding ocean bids to those carriers who can control the vessel strings and the cargo that we have to move.”

The 2M and Ocean 3 alliances plus the G6 (APL, Hyundai Merchant Marine, MOL, NYK Line, Hapag-Lloyd and OOCL) and CKYHE (with Evergreen Line joining Cosco, Hanjin Shipping, “K” Line and Yang Ming) combine to control about 95 percent of ocean cargo volumes in major east-west global trades.

Speaking at the Shifting International Trade Routes Conference, presented Jan. 29-30 in Tampa, Florida, by the American Association of Port Authorities in cooperation with the U.S. Maritime Administration, Bruce Cashon, senior vice president and chief commercial officer of terminal operator firm NYK Ports LLC, says that one thing is for sure: “The uber-alliances clearly are here to stay.”

On the negative side, according to Cashon, is the “extreme stress” that megaships deployed by the alliances are putting on all operational aspects.

And AAPA Chairwoman Kristin Decas, chief executive officer of Port of Hueneme, Calif., says containers on alliance ships aren’t necessarily stowed in a manner that facilitates efficient offloading at port terminals, commenting, “They’re getting delivered Easter baskets.”

Speed To Market


Shippers looking to save days—and dollars—in getting goods to key North American markets are looking to Canadian ports on Pacific and Atlantic coasts.

The Port of Prince Rupert, British Columbia, and the Port of Halifax, Nova Scotia, along with rail partner Canadian National Railway Co., are cutting days off transit times that beneficial cargo owners can expect to get via gateways on respective U.S. seaboards.

When opened in 2007, Prince Rupert’s Fairview Container Terminal was the first dedicated intermodal container terminal in North America. Thanks to its northwesterly location, it can be reached from many Asian ports in three fewer days than Los Angeles or Long Beach.

“That attribute only becomes an advantage for shippers when the partners and all the elements of the logistics chain perform well,” says Shaun Stevenson, the Port of Prince Rupert’s vice president of Trade Development and Public Affairs. “We look at things from a system-wide perspective, from rail transit to terminal velocity, realizing that reliability and consistency provide what shippers want—and that’s predictability.”

Stevenson says Asian shipments to the U.S. Midwest and Central Canada can reach destinations as many as eight to 10 days faster via Prince Rupert than through congested Southern California ports.
On the Atlantic coast, the Port of Halifax also teams with on-dock CN service, providing the shortest scheduled times to commercial centers as far as Detroit and Chicago for goods coming from Europe (two days closer than other East Coast containerports), as well as from Asia via the Suez Canal (a full day closer).

Being the last outbound port of call has the same benefits for exporters as being the first does for importers: excellent times coming out of major centers, shorter logistics time and reduced cost of capital, according to Karen Oldfield, president and chief executive officer of the Halifax Port Authority.

The Port of Halifax, with roots dating back to the 1700s, has seen $100 million in facility investments since 2011. It has the ability to triple capacity without significant changes to existing infrastructure, Oldfield says, adding, “We have the infrastructure, we have the experience and we have the capacity to grow with the industry as the shift to larger vessels continues.”

Georgia Roots For Business


Thiele Kaolin Co. is drawn to the Peach State for an obvious reason—the signature Georgia clay—but other attributes make the major kaolin clay processor even more at home on Georgia soil.

“Our mineral is in Georgia and you’ve got to be where your resource is,” says Randy Mayberry, Thiele Kaolin’s director of International Sales. “But that’s not all. We’ve just got wonderful logistics infrastructure here in Georgia.

“We’ve got good access to global transportation, plus good rail and road transportation, which make it easy to get our product to anywhere they coat paper or paperboard,” says Mayberry, noting that the Sandersville, Ga.-based firm’s shipments head throughout Asia, with India and Europe being particularly dynamic markets.

Like logistics leaders of many Georgia-based exporters and importers, Mayberry believes the $706 million deepening of the Port of Savannah’s harbor to 47 feet from its present 42 feet under a federal-state partnership will be a further boost.

“The dredging of the Savannah River is going to benefit us tremendously and keep us competitive with the best port facilities in the world,” Mayberry says.

The Georgia Ports Authority’s (GPA) Port of Savannah already ranks No. 4 in containerized cargo volume among all North American ports and, with 7.1 percent growth from 2003 to 2013, is the hemisphere’s fastest-growing containerport. Meanwhile, the GPA’s specialized Port of Brunswick ranks among the top three U.S. ports for handling imports and exports of automobiles.

From a rail standpoint, Atlanta is the largest intermodal hub in the Southeast, while Georgia’s six interstate highways connect the state to 80 percent of the U.S. population within a two-day truck drive.

For air cargo, the state’s Atlanta Hartsfield-Jackson International Airport is among the 10 largest air-cargo hubs in North America.
More than 14 million square feet of warehouse and distribution facilities are within a 2 1/2-hour drive of the Port of Savannah. Statewide, companies with more than 3 million square feet of such space include Wal-Mart Stores Inc. (5,975,000 square feet), Target Corp. (5 million), Calhoun, Ga.-based flooring manufacturer Mohawk Industries Inc. (4,390,000), Lowe’s Cos. (3,941,000), suburban Atlanta-based The Home Depot Inc. (3,937,590) and Dalton, Ga.-based carpet maker Shaw Industries Group Inc. (3,040,000).

State officials point to factors such as Georgia’s cost-competitive climate for business, with its 6 percent corporate income tax based on single-factor sales; reasonable industrial lease rates ranging from $2.49 per square foot in the Augusta area to $3.92 per square foot in greater Atlanta; and industrial vacancy rates as high as 14.4 percent in the Savannah area. Also, Georgia’s workforce turnover rate in transportation and warehousing is 6.6 percent, lowest among all U.S. South states. The Georgia Quick Start workforce development program consistently ranks No. 1 in the nation among initiatives of its kind.

“Georgia’s unique corner store location makes it a perfect place for businesses to call home,” says Page Siplon, executive director of the Georgia Center of Innovation for Logistics. “The state’s uniquely complete logistics infrastructure from sea to air and road to rail positions it ahead of all others.”

On Track For Savings


As Crowley Maritime Corp. and its customers are quickly finding out, having Florida East Coast Railway (FECR) facilities proximate to South Florida port docks can deliver time and money savings and result in environmental benefits.

Before FECR’s 43-acre intermodal container transfer facility (ICTF) opened last summer adjacent to Crowley’s Port Everglades marine terminal, drayage trucks had to shuttle cargo containers back and forth between berth areas and an off-port rail yard using miles of clogged public roadways.

The draying typically meant delays and added costs for shippers, plus a lot of air pollution. In fact, Port Everglades officials say that, in addition to moving cargo faster and less expensively, the ICTF’s near-dock presence will, by 2029, take an estimated 180,000 truck trips a year off local roads and thus significantly reduce harmful carbon emissions.

“As one of the FECR’s largest intermodal customers, the location of the new ICTF is a win-win, not only for Crowley but also for our shipping and logistics customers who are now benefiting from faster and more efficient cargo handling,” says Bob Weist, a vice president of Crowley, which, like FECR, is based in Jacksonville, Fla., near the north end of the Class II railroad’s 351-mile corridor.

According to port officials, the ICTF allows FECR to increase its intermodal capacity at Port Everglades to 450,000 lifts a year from a prior 100,000 annual moves. That’s important because container traffic is on the rise at Port Everglades; in the fiscal year that ended Sept. 30, 2014, the port topped the 1 million 20-foot-equivalent-container-unit mark for the first time and is expected to grow even more following the 2016 completion of the Panama Canal expansion.

Weist notes that shippers of outside-the-box freight gain from the near-dock ICTF in addition to those moving containers. “Our breakbulk and out-of-gauge customers are particularly enthusiastic about being able to have their cargo off the ship and on the rail in a fraction of the time,” he says. “That’s good for everyone.”

Of the ICTF’s total $72 million price tag, $48 million came from state grant and loan funds, $19 million was the value of land contributed by Broward County’s Port Everglades, and $5 million was from FECR’s capital plan.

“Customers can reduce costs and achieve faster delivery through multimodal solutions and the availability of on-dock or near-dock rail,” says FECR’s president and chief executive officer, James R. Hertwig.

At South Florida’s other major containerport, Miami-Dade County’s PortMiami, FECR also is investing in similar capabilities, instituting on-dock intermodal rail service with direct ship-to-rail transfers.
“In order to meet the needs of supply-chain managers, it is important for various modes of transportation to work together seamlessly,” Hertwig says.

Of course, on- and near-dock rail capabilities are by no means limited to the South Florida market.

In the largest and most congested U.S. containerport gateway, for example, a $510 million expansion of the TraPac Container Terminal that’s slated for 2016 completion includes infrastructure to make it the last Port of Los Angeles container terminal to be served by on-dock rail. Likewise, the $87 million Green Port Gateway project under way at the neighboring Port of Long Beach, to be finished early this year, includes provision of additional on-dock rail capacity.

Why We Love These 20 Ports

From deep channels to leading-edge terminals to superior inland links, there’s a whole lot to love about these 20 ports, but we’ve somehow managed to boil each nod of praise down to about 75 words.
Down the Atlantic coast, across the Gulf and up the Pacific shoreline, here’s what we find most irresistible, along with comments from port officials.

Port of New York & New Jersey

At the Port of New York & New Jersey, two $1 billion-plus projects—raising the Bayonne Bridge roadbed and deepening the channel to 50 feet—are clearing the way for further growth for the East Coast’s busiest port by improving terminal access for larger, more environmentally friendly vessels. “Preparing the port for long-term success remains a prominent mission,” says port authority spokesperson Lenis Rodriguez, who notes that container terminal activity is already at record levels.

Port of Baltimore

The Port of Baltimore handles more cars than any other U.S. port and leads in other roll-on/roll-off cargo as well.
“The Port of Baltimore’s success in autos is due in large part to our geographic advantage as the closest East Coast port to the Midwest, our four on-dock auto processors—which provide our customers different choices for their vehicles—and our industry-renowned quality program,” says James J. White, executive director of the Maryland Port Administration.

Port of Virginia

The Port of Virginia’s rail access continues to expand beyond its traditional Midwest markets, giving users greater access to new markets through its rail partners, Norfolk Southern and CSX.
“A recent evaluation of our conveyance system for getting cargo to our on-dock rail yards showed we could be more efficient, so we invested in equipment, training and technology,” says John F. Reinhart, Virginia Port Authority CEO and executive director, who cites enhanced speed of service.

1Port of Charleston

South Carolina has allocated the entire estimated construction cost—a bargain at $300 million—for deepening the Port of Charleston harbor to 50 feet five years ahead of initial schedule.
“Recognizing that harbor deepening is the state’s No. 1 economic priority, South Carolina’s General Assembly has been the only state to set aside the full estimated construction costs of its deepening project, including the state and federal share,” says South Carolina Ports spokeswoman Erin Dhand.

Port of Savannah

At the Port of Savannah, container vessel operations are centralized at a single dedicated facility, Garden City Terminal, the nation’s largest single-terminal operation. The annual container-port volume just topped 3 million 20-foot-equivalent units for the first time.
“With 9,700 feet of berth space, Savannah offers greater scheduling flexibility for ships, one-stop check-in for trucks, and direct-to-rail service via two on-terminal ICTFs [intermodal container transfer facilities],” says Curtis Foltz, executive director of the Georgia Ports Authority.

Port Everglades

A 43-acre, near-dock intermodal container transfer facility, built via public-private partnership, was opened in July at Broward County, Fla.’s Port Everglades by Florida East Coast Railway.
Steven Cernak, Port Everglades’ chief executive and port director, says the state-of-the-industry facility “gives Port Everglades a cost and time-to-market advantage over many South Atlantic gateways,” adding that, with Panama Canal expansion, “There is great expectation for additional growth in our business which will be facilitated by the ICTF.”


Port Miami

Miami-Dade County, Fla.’s PortMiami in August opened a tunnel seamlessly linking the island cargo and cruise port to the Interstate highway system, averting downtown traffic. The $1 billion, public-private endeavor should help PortMiami fully benefit from its 50-foot “deep dredge” channel project, targeted for completion by the end of 2015.
“It’s going to be great for the city, great for the county, and it makes our port more competitive,” says Miami-Dade County Mayor Carlos Gimenez.

Port Tampa Bay

The rebranding in early 2014 of the Port of Tampa as Port Tampa Bay came with developments including ordering of two new post-Panamax gantries and completion of a dedicated truck ramp to Interstate 4, better linking Florida’s largest, busiest port to the fast-growing Central Florida region. “The density of the distribution centers along the Tampa/Orlando I-4 corridor now rivals that of Atlanta, and this is our backyard,” says Paul Anderson, the port’s president and CEO.

Port of Mobile

More than $700 million in investments have spurred diverse growth at the Port of Mobile, with more projects under way, including an intermodal container transfer facility, a steel-coil-handling facility and APM Terminals Mobile container terminal expansion.
“Investments at the Port of Mobile in recent years have led to double-digit growth in its containerized, steel and metallurgical coal markets and provided our shippers cost-competitive transportation solutions,” says James K. Lyons, the Alabama State Port Authority’s CEO.

Port of New Orleans

The Port of New Orleans, a triple-threat on inland links, scored a coup in May with the announcement that Chiquita Brands International Inc. is moving shipping operations there from Gulfport, Miss.
“The Port of New Orleans is a diverse general cargo port, named the top logistics port in the nation due to 14,500 miles of inland navigable waterway connectivity, all six Class I railroads and easy Interstate access,” says Gary LaGrange, the port’s president and CEO.

Port of South Louisiana

The Western Hemisphere’s largest tonnage port, the Port of South Louisiana handles more than 50 percent of U.S. grain exports at terminals along a 54-mile stretch of the Mississippi River, including at the 700-foot-long, 65-foot-wide finger pier at the transloading hub at the Globalplex Intermodal Terminal.
The energy sector is fueling additional growth,” says Paul Aucoin, executive director of the Port of South Louisiana, “with energy companies investing some $70 billion within the port’s jurisdiction.

Port of Houston

The Port of Houston, already the No. 1 U.S. foreign tonnage port, is deepening channels to 45 feet at its Bayport and Barbours Cut container terminals by mid-2015, plus updating the 1970s-era Barbours Cut terminal.
“The $700 million project to modernize Barbours Cut will include new cranes [slated for early 2015 delivery], lights and dock improvements to continue to provide customers the most efficient cargo handling possible,” says Port of Houston Authority spokesman Bill Hensel.

Port of Galveston

The Port of Galveston boasts a 45-foot-deep channel 30 minutes from the Gulf of Mexico, uncongested terminals, efficient labor, service by both western U.S. Class I railroads and adjacency to the Interstate highway system. It has added a new mobile harbor crane and has 100 acres available for additional cargo terminal development.
“The Port of Galveston is the complete port package,” says Capt. John G. Peterlin III, the port’s senior director of marketing and administration.

Port of Corpus Christi

The Eagle Ford shale play is spurring big global investment interest, in addition to record cargo volumes, at Port of Corpus Christi.
“The world is taking notice of our region’s ability to facilitate and support the creation of new industry,” says John LaRue, Port of Corpus Christi’s executive director. “Tens of billions of dollars are currently being invested by some of the world’s top entities, and there is significant interest for development from several other major investors.”

Port of Long Beach

The second-busiest U.S. container port, the Port of Long Beach is in year three of a 40-year, $4.6 billion lease with Orient Overseas Container Line and its terminal subsidiary—the longest such agreement for any U.S. port—for the Middle Harbor terminal, now undergoing construction.
“Our Middle Harbor project will be the world’s greenest terminal and our greatest example of how innovative technology and environmental sustainability deliver overwhelming advantages,” says Jon Slangerup, the port’s chief executive.


4Port of Los Angeles

No. 1 U.S. container port, the Port of Los Angeles, is completing significant rail link improvements with Berth 200 and TraPac Container Terminal projects highlighting a five-year, $1.2 billion capital program.
“Superior intermodal connectivity is a trademark of the Port of Los Angeles,” says its executive director, Gene Seroka. “We’ll continue to invest in our network well into the future to ensure our terminals, rail connections and supporting infrastructure are as efficient as possible for our customers.”

Port of Oakland

At the Port of Oakland, a multiyear, $1.2 billion project is transforming 360 acres of former U.S. Army base land into a world-class trade and logistics center, including a near-dock distribution center and terminal-adjacent intermodal rail yard.
“We’ll be able to transport more cargo efficiently to and from inland points in North America and our customers will find the services they need all in one centralized location,” says Chris Lytle, the Port of Oakland’s executive director.

Port of Stockton

California’s fourth-largest deepwater port, Port of Stockton is 75 miles inland from San Francisco, offering a 35-foot draft, secure 24/7 access and operations, 14 berths, 2,000 acres, distribution centers and true on-dock rail that handle bulk, containerized, steel, wind energy, roll-on/roll-off and project cargos.
“Our acreage-rich inland port has many advantages to make it the ideal location for a wide variety of cargos and real estate opportunities,” says Mark Tollini, Port of Stockton’s senior deputy director.

Port of Seattle 


The Port of Seattle, which already has three container terminals capable of servicing mega-containerships with capacities of up to 10,000 twenty-foot-equivalent units, is upgrading a fourth facility, Terminal 5, to such standards.
“Making Seattle’s seaport big-ship ready is critical for sustaining jobs and supporting the businesses of Washington State and the Pacific Northwest,” says Linda Styrk, the Port of Seattle Seaport managing director. “Completing the work on T-5 will make all four of our terminals big-ship ready.”

Port Metro Vancouver

Canada’s largest, busiest port, Port Metro Vancouver is advancing a program to facilitate tripling container volume by 2030. Elements include Centerm container terminal expansion, Deltaport rail and road improvements, and three more Roberts Bank container berths.
“In the next few years, Port Metro Vancouver is contributing over $700 million on infrastructure improvements to a total of $9 billion in collaboration with government and key stakeholders,” says Cliff Stewart, the port’s vice president for infrastructure delivery.

More Shipping. More Doing.


With transportation prices low and consumer expectations high, The Home Depot and other big U.S. shippers are forging carrier partnerships based more upon predictable service reliability and alignment with corporate objectives than upon sheer short-term dollar savings.

Echoing thoughts expressed by leaders of Walmart, IKEA and the two top U.S. shipper groups, Michelle D. Livingstone, The Home Depot’s vice president of Transportation, says price is not the No. 1 factor in carrier selection.

“We’ve placed a very large emphasis on service, and that’s been our mantra for the last few years,” says Livingstone, who oversees movement of all inbound and outbound shipments for the nation’s largest home improvement retailer, with more than 2,200 U.S. stores.

“We really like to think that we walk our talk with the way we have developed a carrier scorecard to be able to track performance across the different metrics that we’re passionate about,’ says Livingstone, who notes that The Home Depot’s management of domestic carriers closely mirrors how international carriers are handled.

“We are passionate about on-time delivery, we are passionate about booking reliability, and, on the international side, about EDI (electronic data interchange) commitment and compliance,” she says. “And, on the international side, billing accuracy is also one of our metrics.

“Those are the primary ones,” Livingstone adds. “But, of course, there are always the subjective ones that don’t appear on the scorecard, like who really steps up when we’re in need of additional capacity, who brings us innovative ideas, who helps us reduce our costs by identifying areas of opportunity.”

Livingstone says The Home Depot, based in suburban Atlanta, has developed an objective “rack-and-stack” approach to evaluating carrier performance, with domestic and international carrier partners informed weekly as to how they are doing in relation to The Home Depot’s goals and as compared to their competitors.

“There can absolutely be no surprises in terms of if we have a difficult conversation regarding on-time service or any of the components, because everybody knows how they are performing against our target and against their competition,” says Livingstone, who has been a supply-chain executive for more than 30 years and serves on boards of such groups as the Intermodal Transportation Institute of the University of Denver and the environmental-stewardship-focused Coalition for Responsible Transportation.

Wal-Mart Stores Inc., the world’s biggest retailer, with more than 10,000 stores globally, also places an emphasis on partnership when engaging with carriers.

“When Walmart chooses a carrier partnership, we look for companies who provide outstanding service, effective communication, and for a company that will exemplify Walmart’s mission to ‘Save people money so they can live better,’” says Kevin X. Jones, vice president of Inbound Transportation for the Bentonville, Ark.-based mega-retailer.

At IKEA, the world’s largest furniture retailer, with more than 350 stores in 43 countries, carrier collaboration and numerous factors not directly related to cost are keys as well.

“IKEA wants to grow together with suppliers who have a strategic fit, which means we have shared business models and values,” says Mona Astra Liss, U.S. Corporate Public Relations director for the Conshohocken, Pa.-based IKEA North America Services LLC unit of the Swedish company.

“IKEA strives for long-term partnerships with suppliers to secure efficient production and continuous development,” Liss says.

“IKEA is unique in that it owns its entire value chain. IKEA is dedicated to delivering the best product at the best possible price. To support this, IKEA works with a comprehensive value-chain strategy that includes raw material sourcing, transport, product design, packaging, delivery and logistics.”

Consistent with IKEA’s active social initiatives, transportation providers to IKEA are subject to a broad-reaching supplier code.

“IKEA has a world-class code of conduct for suppliers—IWAY (short for IKEA Way)—and a very ambitious verification system,” Liss adds. “IWAY is based on values and principles for human rights, environmental protection, legal compliance and worker safety. IWAY directly applies to all first-tier IKEA suppliers who, in turn, are responsible for ensuring that their sub-suppliers acknowledge, understand and meet the IWAY requirements.”

Service upon which shippers can unfailingly depend is the No. 1 determiner in carrier selection, according to Jonathan Gold, vice president for Supply Chain and Customs Policy at the National Retail Federation, the world’s largest retail trade association, with some 13,000 members in a full spectrum of industry sectors from more than 40 countries.

“The most important factor for shippers of all sizes is the service reliability of the carrier,” Gold says. “Shippers, especially retailers, need a predictable supply chain in order to maintain an efficient supply chain, which includes inventory management.

“This is not limited to vessel arrival time, but all of the other services needed to get the container where it needs to be,” he says. “If one area falters, it impacts the entire supply chain. As such, productivity is another critical issue for shippers to consider when dealing with their carriers.

“While the ocean carriers are moving to larger and larger vessels, there is a question as to whether the ports and other related services are actually prepared to handle those vessels or will we see new problems with getting containers from the port?” Gold continues.

Predictable, reasonable pricing is a significant consideration, too, Gold adds, highlighting that price paid should consistently equate to service delivered.

“Shippers want to know that they are getting actual service levels that they expect,” he says. “Finally, customer service is always a consideration. While carriers are cutting costs to save money, they are sometimes doing this at the expense of customer service to support the shipper.”

Indeed, balancing cost and service is critical, according to Bruce Carlton, president and chief executive officer of The National Industrial Transportation League, the nation’s oldest and largest transportation association, billed as “the Shippers’ Voice since 1907,” with current membership encompassing 700 companies.

“Shippers have always looked to that combination of price and service that fits their needs—and budget,” Carlton says. “Price is just that—how much? For some years now, rates have been depressed; I haven’t heard any shipper complaining about shipping rates in a long time. But the service parameters have become more complex over time.

“Probably the biggest source of friction is missed delivery dates, and the more time-sensitive the commodity, the more friction generated,” Carlton adds. “Many shippers have scorecards on their carriers that rate them on a number of service components: timeliness, damage, information systems and so on.”

Environmental considerations also are important, according to Carlton.

“We’re seeing more shippers—especially the more visible, large shipper accounts—seeking readouts on the carriers’ carbon footprint and other sustainability measures,” he notes.
And there are other concerns that factor into the equation.

“Here in the United States, there is still a mix of information and confusion on container chassis,” Carlton says. “The (ocean) carriers’ transition out of providing chassis for their customers appears to be a work in progress at best. Lastly, shippers are waiting to see if the new global alliances—P3, G6 and CKYHE—will have any consequences for them once they are up and running.

“Shippers and carriers might have an old relationship, but it’s anything but static,” Carlton says. “There are always new elements and new challenges for both.”

What’s Clouding Your LTL Procurement?

Dick’s Sporting Goods Shares Tip For Transparent Communications

When the head of logistics for Dick’s Sporting Goods Inc. looks to hit a proverbial grand slam with the burgeoning retailer’s supply chain, he focuses upon honest communications with carriers bidding for the company’s transportation business.

“It really is critical that you know what you look like as a shipper from a carrier perspective,” says Joshua J. Dolan, senior director of logistics for Coraopolis, Pa.-based Dick’s, the largest U.S. sporting goods retailer. “I’m either good to the market or I’m bad to the market.”

Through thorough and realistic communications with carriers, shippers not only can predictably get the best price but, just as importantly, can realize overall logistical improvements, according to Dolan.

For companies such as Dick’s—a Fortune 500 company with 2013 sales of $6.2 billion and plans to double its footprint to some 1,100 stores over the next several years—it is becoming increasingly essential to implement procurement practices that result in the most productive and sustainable carrier partnerships.

“There are certain things we have to do just because we’re growing at such a rapid pace,” says Dolan, who, prior to joining Dick’s in April 2012, held executive positions with Pep Boys, IKEA, Reebok International Ltd. and UPS Supply Chain Solutions unit Fritz Companies.

From the outset, Dolan says, shippers must, quite simply, make sure carriers know what their freight looks like.

“Carriers are very thirsty for that information and having a conversation about what the freight really does look like and how it fits in with their network,” Dolan says.

That view is shared by Paul J. Dugent, vice president of pricing for Richmond, Va.-based Estes Express Lines, the largest privately held U.S. Less-than-truckload (LTL) company, who recently held a “mini-workshop” with Dolan and several of his Dick’s colleagues to aid in “demystifying” the LTL pricing process.

“We’d like to see that we get better information so that we can respond with bids that we know are sustainable,” says Dugent, adding that Estes has begun to ignore bid-seeking shippers that do not provide complete information.

“The worst thing we can do is to have made a guess and then have to come back and renegotiate the deal,” Dugent says. “The more assumptions we have to make, the more conservative we get with our prices. And we don’t like to make guesses.

“If we don’t have good information, we make a lot of assumptions,” he continues. “We’re going to cover ourselves. We may not get the business, but we try to avoid making a mistake and having to renegotiate the deal, because we know what kind of disturbance that causes for the customer.

“There seems to be a large knowledge gap between what shippers believe an LTL motor carrier needs to develop an accurate pricing proposal and what carriers require,” Dugent says.

“If you can understand each other and collaborate on the distribution characteristics of your freight and LTL economics, if we can collaborate, we can take a lot of cost out of the supply chain,” he continues. “I think we need to do more of that, not so much necessarily looking for rate increases all the time, but let’s look at ways to take costs out of the system.”

Shippers should look beyond price, according to Art Nourot, vice president of carrier procurement for Unyson Logistics, the third-party logistics (3PL) unit of Oak Brook, Ill.-based Hub Group Inc., North America’s largest intermodal marketing company.

Shippers often look to a 3PL to assist in bid development and execution, as well as implementation and compliance.

“From a 3PL perspective, lowest price is not always the best solution,” says Nourot, who is based at Unyson’s special services center in Apple Valley, Minn. “You need to be focused on the best combination of cost and service to bring the best value to your client, and then be able to support their operations going forward, giving them the best intelligence that they need.

“Your ability to understand your customer’s network, getting all those pieces as clearly documented as possible to the carrier base, is going to help you retain your customer after the bid and for the long term,” Nourot says.

The reality, according to Nourot, is that prices may go up no matter how much information and collaboration is present: “On the LTL side and for transportation in general, cost is under a lot of pressure. Capacity is getting tighter. The truckload market is driving a lot of that, with the lack of drivers trailing into LTL. Costs are increasing.”

Dick’s Sporting Goods’ Dolan says that, whether working with a 3PL or dealing directly with bidding carriers, a shipper must ensure rates are valid, relevant and fair.

“If you go into your procurement process and expect a 20 percent reduction in your cost, that’s probably unrealistic,” Dolan says.

A better approach than concentrating just on price is establishing goals and strategies based upon a number of objectives. As Dolan says:

“What does the business require? Are we looking for cost reductions? Are we looking for changes in speed and performance? Are we looking for consolidation opportunities relative to our carrier base to drive efficiencies within our distribution network around the ‘drop-and-hook’ program, because we realize there’s value to that on the carrier side in terms of reducing their cost, therefore reducing our cost?”

Trucking industry leaders have referred to the “drop-and-hook” process as every driver’s dream. It entails taking a loaded trailer to a shipper or receiver location, dropping the trailer and then hooking up to, and leaving with, another loaded trailer. Most drivers prefer this because there’s no waiting for a trailer to get unloaded or loaded, which can sometimes take hours.

Whether it is implementing a drop-and-hook program or any number of other initiatives, partnering with carriers and other stakeholders is crucial, Dolan says.

“You want to make sure all carriers have a firm understanding of what’s happening today and what your expectations are,” he says.

“We want to be really open with our carriers,” Dolan explains. “The last thing we want to do is put ourselves in a position where we really think that we’re pulling one over on them, and then they come back in six months and say that they need to take a 50 percent price increase, after you’ve already set your budget for the following year.”

Since Dolan joined Dick’s, the company has begun a benchmarking process for LTL performance—a process that benefits shipper and carrier alike.

“Carrier-performance management is something we take very, very seriously,” Dolan says. “We provide scorecarding to all our carriers so they have an active understanding of where they are. It’s critical at the onset, as you can imagine, because carriers are making commitments to us based on price. And, if there’s a challenge, we want to make sure that a carrier is aware of that, rather than just saying to a carrier, ‘We have to push you out of our network because you’re not meeting expectations.’ So providing feedback is critical.”

The winning formula, according to Dolan, is this: “Partner with the people you’re doing business with, because, a lot of times, they know a lot more about our business than we do.” n


Dolan, Dugent and Nourot each made presentations during the Jan. 22 closing session of SMC3’s Jump Start 2014 conference in Atlanta. The session, “LTL Procurement Best Practices,” was moderated by this article’s author.

Sizable Expectations


Air Products and Chemicals Inc. serves more than 30 industries in 50-plus countries, supplying “industrial gases, performance materials, equipment and technology.” When the world’s largest supplier of hydrogen and helium needed a site to manufacture its liquefied natural gas heat exchangers, it located its facility just outside the gate of Port Manatee, Florida.

Headquartered in Allentown, Pennsylvania, the company exemplifies a trend gaining steam in the project cargo industry: locating facilities that produce overweight, over-dimensional units in closer proximity to the docks from which they may be exported.

Dedicated in January, the Air Products facility is gearing up to make units weighing 500 tons or more apiece that can be put on special trucks, taken a mile or so to port berths for loading on ships, then transported to customers throughout the world.

John McGlade, Air Products’ chief executive officer, is quick to note that the near-dock location of the company’s second major heat exchanger plant averts inland transport concerns and expenses related to moving the mammoth units from its factory in Wilkes-Barre, Pa., to the closest export terminal.

Demand for ocean transport of project cargos is anticipated to be on the upswing, with carriers serving the heavy-lift market optimizing lifting capabilities while increasing flexibility through deployment of multipurpose vessels.

Executives of most major project carriers seem to be in agreement that improving global economic conditions are spurring an eagerly awaited rise in the call for moving over-dimensional cargo, but enthusiasm nonetheless remains somewhat tempered.

“While we still see challenging market conditions in the break-bulk and heavy-lift market, in the past months optimism has started to grow,” says Ulrich Ulrichs, chief operating officer of Hamburg, Germany-based Rickmers-Linie, which has 18 specialized multipurpose heavy-lift vessels in permanent operation.

Activity increases are particularly noticeable in trades from Asia to South America and from the United States and Europe to the Middle East, according to Ulrichs, who notes that Rickmers’ westbound ’round-the-world service, initiated in March 2013, is now running on nearly a monthly frequency, and its eastbound Pearl String is operating with 10 vessels, up from nine, allowing maintenance of fortnightly frequency even with the company’s slow-steaming policy.

Hopeful that a project backlog caused by the worldwide financial crisis will experience some alleviation in 2014 and 2015, Ulrichs says Rickmers looks forward to delivery by early 2015 of two new vessels for its service from Europe to the Middle East and India. Consistent with industry trends, these new ships will feature enhanced fuel efficiency plus powerful shipboard cranes capable of combining to lift cargo units of as many as 900 metric tons.

For his optimism, Ulrichs cites a recent Drewry Shipping Consultants Ltd. forecast, which indicates an average annual growth rate of 3 percent for multipurpose vessel volumes through 2017. That forecast comes after a series of comparatively dreary prognostications.

Leer, Germany-based BBC Chartering, which operates 150 vessels serving the multipurpose and heavy-lift market, is well into multiple new building programs for delivery of “ecoships” that facilitate both optimum speed and fuel utilization.

“New developments in project cargo vessels aim at optimizing cargo-handling productivity and voyage efficiency,” says Raymond Fisch, BBC Chartering’s senior vice president for Public Relations, Corporate Communications and Group Marketing.

The company has completed its BBC Congo series, with seven vessels good for 17,000 deadweight tons—a measure of how much weight the ship can safely carry—each with two cranes combining for 500-metric-ton lifting capacity. Also completed were its BBC Everest series of eight 9,300-deadweight-ton ships, each with combined lifting capacity of 700 metric tons; and, by the end of 2013, nine of 14 vessels in the BBC Amber series of 14,800-deadweight-ton ships, each offering combined lifting capability of 800 metric tons.

According to Fisch, Asia remains the hotbed of project cargo activity, plus North America and Europe are busy exporting heavy lifts to developing markets such as South America and Africa, and he describes the trade within Europe as “lively” as well.

Fisch observes that clients are tending more and more these days to rely upon a single source for shipping solutions—which may combine regional cargo consolidation with overseas transport, dedicated shuttles or offshore floating storage and feedering—and this is requiring that carriers bolster their project management capabilities.

Another trend cited by Fisch is greater risk awareness on the part of clients, with an increased focus upon occupational health, safety, environmental and quality-management issues throughout the execution of a shipping project.

Torin Swartout, vice president of the Spliethoff USA unit of Amsterdam-based Spliethoff Group, which operates more than 100 multipurpose, heavy-lift and roll-on/roll-off vessels, notes that safety, transit time, energy reduction and cost-cutting benefits are all being achieved with moves toward vessels that can run on liquefied natural gas and with direct services such as one being initiated this spring by Spliethoff between the Great Lakes and Europe. That scheduled service, operating from the Port of Cleveland and using the St. Lawrence Seaway, is to handle heavy-lifts as well as containers.

“We see the big pieces getting even bigger and heavier, and everything that can be containerized being shipped on liner services,” Swartout says, relating these trends to the startup of the Great Lakes-Europe service and to the recent building by Spliethoff Group member BigLift Shipping of the Happy Sky, with a combined lifting capacity of a whopping 1,800 metric tons. “We see increased demand for larger and heavier cargos, as well as more requests for scheduled services for smaller projects that have containerized cargo included.”

Energy-related projects represent a significant sector of Spliethoff’s business, from oil and gas industry components heading from Asia to the Americas to wind-power units going from Europe to the Great Lakes, according to Swartout.

“Concerns for the environment and new regulations for energy production have been a driving force in updating power production facilities,” he says, “and at the same time, the growing demand for power means more oil and gas projects.”

Brent Berg, Houston-based managing director of Thorco Shipping A/S, says that while wind, solar and wave technologies are “great ideas,” projects related to oil and gas will continue to be primary in providing project cargo opportunities—including equipment for new refineries and for extracting natural gas from recent finds, as well as green-lighted undertakings that had been put on hold while global economic uncertainty lingered.

In July 2013, Thorco Shipping merged with Clipper Projects, continuing under the Thorco name, with headquarters in Copenhagen and a 90-vessel fleet. For Berg, it’s great timing. “I think 2014 is going to be a really refreshing, fun year,” he says, opining that the upturn is beginning in the traditional seven-year cycle for project cargo activity.

Berg believes the days of big investments by carriers in heavy-lift-specific vessels are likely over, with the emphasis now on combination ships that are able to handle a variety of cargo types, including containers. And ship designs are continuing to move away from traditional bows to those that help to reduce fuel consumption.

Charles Atkinson, Baltimore-based national sales manager for Bahri General Cargo, notes that his company, formerly known as National Shipping Co. of Saudi Arabia, anticipates spring delivery of its sixth new “RoCon” roll-on/roll-off container vessel. He says this should be propitiously timed with demand growth in the Middle East, in particular in Saudi Arabia, where some $77 billion in infrastructure investments are under way.

“For the Middle East area,” Atkinson says, “there is an ever-growing demand for project-savvy carriers offering various alternatives.”


Will East and Gulf Coast Ports Be Ready to Accommodate Post-Panamax Ships?

Preparing for an expanded Panama Canal means far more for U.S. ports than having 50-foot-deep channels at a handful of maritime facilities.

The $6 billion expansion project, which began in 2007, initially was slated for completion in 2014—the 100-year anniversary of the canal’s original opening—but there have been multiple delays, with expectations now that the endeavor will be finished sometime in the second half of 2015.

Will that be enough time for East and Gulf Coast ports and related infrastructure to be ready to handle larger ships and increased cargo volumes?

“I hope they can open it up in 2015, because we don’t want to keep talking about it,” says port economist Dr. John C. Martin, president of Lancaster, Pa.-based Martin Associates, who opines, “We are not ready on the East Coast and the Gulf Coast to handle the bigger ships that are coming.”

There are a few exceptions.

The Port of Virginia’s channel has been ready for years, with its 50-foot project having been finished in 2006.

“Our investment has been made and we are ready,” says Joe Harris, media relations manager for the Virginia Port Authority, who notes that for nearly three years Virginia facilities have been handling ships with capacities of more than 9,000 20-foot-equivalent unit (TEU) containers coming from Asia via the Suez Canal. That’s the size ship that will soon be able to ply all-water routes via the Panama Canal.

“Right now, we’re just polishing things,” Harris adds, citing an emphasis on preparing rail operations to handle greater volumes.

“We think we’re in a real advantageous position for the next five to seven years,” Harris says. “We think we can make some real hay.”

Florida’s ports have been getting significant state funding support as the Sunshine State is on the cusp of eclipsing New York to become the third-most-populous U.S. state. Florida’s maritime community has long grumbled that most goods flowing into the state enter U.S. soil via seaports to the north of Florida and are then railed or trucked southward to meet the needs of some 20 million residents and 90 million annual visitors.

PortMiami, Florida’s southernmost containerport, is joining with state, federal and private-sector partners to invest more than $2 billion in infrastructure improvements that include a 50-foot “Deep Dredge” channel project; a tunnel link between the island seaport and the interstate highway system; four more super-post-Panamax cranes; and restoration of on-dock rail service, with all upgrades either in place or slated for completion by late 2015.

“PortMiami is in transition,” says PortMiami director Bill Johnson. “The Deep Dredge will make PortMiami the only U.S. port south of Norfolk that can accommodate the new mega-cargo vessels that will pass through the expanded Panama Canal. We will be big-ship ready!”

Other Florida Atlantic ports are gearing up, too, with South Florida’s Port Everglades advancing channel and berth projects, the Port of Jacksonville focused on getting a 47-foot-deep channel and, perhaps most aggressively, Central Florida’s Port Canaveral proposing to have in place by 2020 a 55-foot-deep channel with an accompanying automated container terminal.

In May, the Port of Baltimore pronounced its readiness with the Maryland Port Administration’s opening of a 50-foot-deep berth, in conjunction with private partners. Port Authority of New York & New Jersey officials are confident their 50-foot project will be finished before the end of 2014, while an undertaking to raise the Bayonne Bridge roadbed to allow larger containerships to reach key New York and New Jersey terminals isn’t set to be done until 2015.

Port leaders are looking to Congress for passage of water resources legislation that will provide the authorization and funding framework for numerous additional channel projects, including at the Port of Savannah and others on East and Gulf coasts.

“The investment of more than $100 million a year in terminal improvements to increase capacity and improve efficiency, coupled with the imminent construction of Savannah’s harbor-deepening project, is a signal to the international shipping community that Georgia is moving in concert with the Panama Canal expansion as the gateway for trade to the Southeast United States,” says Curtis Foltz, executive director of the Georgia Ports Authority.

That still means only a handful of East and Gulf Coast ports will have deep enough channels to accommodate the largest super-post-Panamax containerships, but Lori A. Baer, former executive director of the Port of Palm Beach, Fla., and now vice president for South Region ports and marine at Los Angeles-based AECOM Technology Corp., points out that it’s not only those ports with 50-foot channels that should see benefits.

“All ports are gearing up and will be prepared for some level of increased trade from the Panama Canal,” Baer says. “Some ports are indeed ready to accommodate much-larger-sized vessels, but it is important to keep in mind the preparation must focus just as much on accommodating moderate-size vessels that may cascade to more and different ports.

“So the great majority of our ports are ready, with projects completed or well along for increased berth capacity, new cranes and operating equipment, as well as enhanced backland,” adds Baer.

While 18 East Coast ports will be competing for additional cargo, only four Gulf Coast ports—those of Houston, New Orleans, Mobile and Tampa—will be fighting for the increased throughput, according to Matthew Gresham, director of External Affairs at the Port of New Orleans, where new cranes, expanded marshaling yards and an intermodal terminal are among major projects.

Richard Steinke, who served 14 years as executive director of the Port of Long Beach, Calif., before becoming ports practice leader at Long Beach-based planning and design firm Moffatt & Nichol, emphasizes that deeper channels—which, as a matter of nature, are more prevalent on the West Coast—are just a part of preparation.

“I think the one thing that sometimes gets overlooked by many is that with the bigger ships comes more volume,” Steinke says. “And the larger volumes have to be handled in an efficient and productive way in those marine terminals.

“Having more volume puts more stress on the landside infrastructure,” he continues. “The cranes have to be higher to accommodate additional stacks of containers on a containership. The yard equipment needs to move more containers through that facility in a more productive manner, and, to the extent that there is discretionary cargo going to other parts of the United States from the port, a more developed intermodal yard with good connections with the hinterland also needs to be developed.

“It’s not just a waterside issue,” Steinke adds. “It’s a systematic issue relative to goods movement that needs to be focused upon. Whether it’s West Coast ports that are going to be seeing the likes of a 14,000- or 15,000- or 18,000-TEU ship or East Coast ports that are going to be seeing the 8,000-, 9,000- and 10,000-TEU ships, optimizing landside dynamics is still going to be very, very important.”

Development of better intermodal connections inland from East Coast and Gulf Coast ports may be seen in the building of enhanced roadway links and, on the rail side, in construction of on-port intermodal container-transfer facilities and in the advancement via public-private partnerships of corridors capable of handling long trains with double-stacked containers.

These high-clearance corridors include two Norfolk Southern Corp. projects—the Heartland Corridor from the Port of Virginia to Chicago and the Crescent Corridor from New Orleans to New Jersey—and CSX Corp.’s National Gateway through North Carolina, Virginia, Maryland, Pennsylvania, West Virginia and Ohio.

The rail projects are critical to the equation as to at what point in the Midwest it becomes more cost-effective to bring cargo via East Coast or Gulf Coast ports as opposed to through West Coast gateways that have long handled more than 40 percent of the nation’s imported goods, most of which head inland on rails of BNSF Railway Co. and Union Pacific Railroad. Some experts suggest that line is in Ohio, while others say it may move as far west as St. Louis.

As port economist Martin puts it, “The Midwest becomes the battleground.”

It shouldn’t be overlooked that Vice President Joe Biden, in a Nov. 6 visit to the National Gateway hub in North Baltimore, Ohio, said the CSX project is “the inland version of widening the Panama Canal.”

Whereas the canal project has been getting most of the attention and credit, Kurt Nagle, president and chief executive officer of the American Association of Port Authorities, is quick to note that overall competitiveness is as much a reason behind the enhancement of port facilities throughout the Western Hemisphere as the expansion of the Big Ditch.

“While the Panama Canal expansion may be one of the factors attributed to the more than $9 billion a year of port-authority and private-sector investment in America’s seaport infrastructure, Panama itself is undertaking the canal expansion to maintain its competitiveness due to global trade growth, increasing vessel sizes in the world fleet, dynamic trading patterns and other factors,” Nagle says.

“Similar big-ticket infrastructure projects,” Nagle continues, “are also planned or under way elsewhere in the Western Hemisphere, such as Brazil, Canada and Mexico, which have formulated national infrastructure programs and policies and are investing heavily into everything from their ports to their power plants.”



Just because enhanced harbor depths and expanded container terminal facilities won’t be ready at but a few U.S. East and Gulf coast ports when the widened Panama Canal opens, optimism about future cargo volume increases abounds in places such as Charleston, S.C.

Although the Panama Canal project is now targeted for late 2015 completion, the deepening of Charleston Harbor is not anticipated to be done until 2018, the same year the South Carolina Ports Authority is slated to open a new 288-acre container terminal on a former U.S. Navy base site in North Charleston.

“I’d say 2018 will be a really big year for South Carolina Ports,” says Jim Newsome, president and chief executive officer of the South Carolina Ports Authority.

Charleston’s main shipping channel presently is maintained at 45-foot depth, although some deeper-draft vessels—requiring as many as 48 feet—are able to access port terminals during hours when a significant tidal lift provides a boost.

A key Charleston Harbor report from the U.S. Army Corps of Engineers is scheduled to be released by late summer 2015, and South Carolina officials remain confident that, thanks in part to a state legislative set-aside of $300 million, the deepening to 50 feet should be able to proceed swiftly after final federal approvals.

The Palmetto State authority already is geared up to move greater volumes inland, thanks to the October opening of the 91-acre South Carolina Inland Port at Greer, linked to the Port of Charleston by 212 miles of Norfolk Southern Railway main line as well as a couple hundred miles of Interstate highway.