CHOOSE YOUR PORTS
Psssst. You looking for a port?
Well, you’ve come to the right place. What? No, we’re not a port, but we know a few. In fact, we know a few people who run a few ports. Quite a lot, actually. We asked them what folks like you should be looking for when it comes time to choose a port partner.
Turns out that just as important as knowing what a port can do for you is knowing exactly what you need from a port. Many of them told us that while location and price are many times the only factors that some people consider, there are lots of other things that make for a perfect partnership. Joseph Harris of the Virginia Port Authority said that he’s noticed the companies most serious about their search had a few things in common.
“The common theme among companies that were serious—prepared—was that they were very deliberate in their search,” he said. “They had the tools to research the transportation costs based upon their proximity to the port. They knew the costs of building or leasing a building in the area.
“The truly impressive companies did their research on what the ports could offer them in terms of levels of service, the services offered and the port’s ability to grow and handle increased demands being placed on it by larger and larger vessels. They had a vision and a goal and wanted to see if the facts lined up for achievement.”
Harris and many other of his port colleagues spoke to us about what you should be looking for and how you should be looking for it. Happy hunting!
THE RIGHT STUFF
Excuse us for the obvious, but probably the first thing you want to consider in a port is its infrastructure; it’s stuff. Does it have a lot of stuff? Is the stuff in good shape? Does the particular port’s stuff match your needs, i.e. if you’re going to be using rail to deliver goods, does it have dockside rail? Does it have the right kind of cranes, a deep enough harbor, how’s the trucking situation: free flowing or perpetual gridlock? And how does all the stuff fit and work together?
“Companies should ask what existing infrastructure is at the seaport, what the port’s capacity is, what types of cargo the port can accommodate, and efficiencies around that seaport such as harbor depth and off-port road and rail infrastructure,” said Niki McKinnell of the Florida Ports Council.
When possible, it’s great to go beyond asking and actually head out to the particular port you are considering and check it out in person. Yes, you can find out what new equipment has shown up at Port A in a press release but to see it to scale, in motion, in practice is a whole other thing. So much so that Harris says the Port of Virginia encourages clients and prospective clients to check them out.
“Yes, we absolutely think it is important and we take the opportunity to showcase the Port of Virginia whenever we can,” he said. “Every port is different in some aspect, and local operating procedures, practices and rules should all be discussed and looked at first-hand. It could be detrimental to success for a company to consider an investment in an area without personally visiting the port facilities.”
Since relationships with ports are many times long term affairs—sorry commitment-phobes—it’s also equally important to find out what infrastructure plans a particular port has for the future. If the American Association of Port Authorities’ (AAPA) recently released, Port Planned Infrastructure Investment Survey is your guide, there will be a lot to consider since it estimated that over the next five years, ports and their private sector partners will spend upwards of $154 billion on infrastructure.
According to the AAPA’s Aaron Ellis, new projects are all over the map.
“Port authorities are planning investments in terminals, berths, piers, equipment, navigation dredging, facility expansions and rehabs, security, rail and environmental improvements,” he said. “Their private-sector partners, such as terminal operators and tenants, are primarily planning investments in rails, terminals, equipment, bulk-handling and energy transfer facilities, storage, security, piers and facility expansions. The biggest project investments will be in ports along the U.S. Gulf Coast, where many new energy processing, production and transfer facilities are being planned.”
THE SMARTER STUFF
You know, there was a time when cutting edge technology at a port amounted to giving stevedores sharper hooks—Science!—nowadays, it’s a whole different game.
“The technology is constantly changing and improving,” said Chris Chase, marketing manager for the Port of Los Angeles. “You’re still going to have big cranes, big ships, big boxes, but now it’s just as important keeping track of all of that, as well as planning and having access to all data and information.”
When looking at a prospective port check out how far their technological reach, uh, reaches. But since, as Chase observed, this year’s high tech is next year’s Pong, check out what they’re working on. For example, the Port of L.A. recently partnered with GE Digital on a first-of-its-kind port information portal providing greater line-of-sight and planning capabilities to more effectively service ultra-large container vessels. Cargo data used in the pilot project will include filtered information from the U.S. Customs and Border Protection’s Automated Commercial Environment (ACE) system.
“To keep pace with the rapidly changing shipping landscape, operations at our ports must evolve,” said Gene Seroka, executive director, Port of Los Angeles. “Digital solutions that enable supply-chain partners to receive a ship’s cargo information well in advance of arrival, like with the digital portal we are envisioning with GE Transportation, are a critical key to optimizing U.S. cargo efficiency and trade competitiveness.”
To get an idea of what a port has planned, try going to its website and seeing what improvements it trumpets. In fact, it’s a good idea to go to websites just to see how they handle that rudimentary bit of tech, i.e. a lame website may signal less than a commitment or comfort with the latest technology.
And be advised, that kind of commitment is critical since tech and ports are not the most natural of buddies. As Chase put it: “Sensors and laser scanners don’t work really well in rain and on the water. Sensitive electronics and Mother Nature have never been the best of friends. When we look at developing technology we have to take those things into account, the kinds of things that are not inherent in most business environments.”
Oh, and a word to the wise (we’re whispering now): keep an eye on which ports are making advancements in the realm of automated facilities and equipment. So far, U.S. ports lag pretty significantly behind their European counterparts in automation, i.e. Robot Revolution, but the day is coming as with self-driving trucks. You’ll want to pay attention which ports are getting to it first.
LOCATION, LOCATION, LO … WELL, YOU GET THE IDEA
Now, it kind of goes without saying—but we’ll say it anyway—that if you’re shipping to China it’s probably best to be doing so from the West Coast not the East Coast. Certain ports are simply positioned better geographically to connect with certain areas than others. Florida ports do tons of business with the Caribbean and South America; Asia is most quickly reached from California or Washington ports.
But it can be equally important where a port sits in the good ’ol U.S. of A. Where a port sits in relation to a supply chain, available warehousing as well as trucking and rail lines can be absolutely crucial to success.
“Many of our ports have warehouse facilities to allow manufacturing on site, storage space available for large bulk commodities, extensive berths and modern cargo terminals, and manage perishable transport,” McKinnell said. “In addition, some of our ports have tunnels, bridges and expressways allowing trucks to bypass urban traffic and decrease travel time–in many cases, a truck can go from Florida to New Jersey without stopping at a single red light.”
Customers of the ports of Long Beach and Los Angeles have at their disposal more than 2 billion square feet of warehouse and distribution center space within a short drive. The Port of Houston is consistently one of the nation’s top facilities for both exports and imports because it lies within close reach of one of the nation’s largest concentrations of 142 million consumers, all within 1,000 miles. Ample truck, rail and air connections allow shippers to economically transport their goods between Houston and inland points.
“If your company is locating within trucking distance of a port, location should be the primary driver as it will directly impact your bottom-line ability to get product to your door,” says Virginia Port Authority’s Harris. “North Carolina is an example of a state that, depending on where the business locates in the state, could legitimately use four ports to handle its cargo—Virginia, Wilmington (N.C.), Charleston or Savannah. If you are a company choosing to locate in the interior of the country and your cargo would arrive or depart by rail, then you really need to review the options, particularly the rail services, dwell times and capacity as you will often have multiple ports that could service your needs. You should also speak with your ocean carrier about which port they prefer to route their rail cargo.”
Now, we know that normally you wouldn’t give two cents or seconds to stud your competition because, frankly, those guys are punks. You’re waaaaay better than them. But, the fact is, when it comes to choosing the port best for you, it’s wise to see who else has chosen to do business there.
Be sure and check what other similar outfits use a prospective port. If you’re in a business that is extremely time sensitive, see where other time sensitive outfits are flocking.
“With retailers, every penny makes a difference,” said Port of L.A.’s Chris Chase. “The more fashion-based something is, the more service that retailer needs. There’s a difference in providing service to something like furniture, which isn’t really seasonal, and ski jackets and sweaters, which have to be moved by a certain date. It’s too late once beach season comes around.”
Also, pay attention to the mindset of companies heading to certain ports. Are these forward thinking, smart cookie outfits? Let’s say you’re thinking about colonizing Mars—and what right thinking business person isn’t?—then maybe you think about Port Canaveral where they’ve already made a commitment to having nearly 100,000 square feet of combined commercial space for SpaceX to process rocket boosters for reuse.
By the way, what is the recycling fee on returned boosters these days?
Yeah, sorry to get all Burning Man on you, but there is no doubt that certain ports have a positive energy, an attitude, a vibe that is palpable and likely profitable. By way of example, Mary Lamie, executive director of the St. Louis Regional Freightway, when announcing a partnership with the Port of New Orleans, said she saw the coming together as “a great opportunity to better market our competitive advantages and take advantage of that growth in the Port of New Orleans and bring it to our region.”
That growth she was talking about included New Orleans’ recent addition of a dockside intermodal rail terminal on a 12-acre piece of property with six different rails of more than 4,000 feet that increased New Orleans from a capacity of 20,000 TEUs to 200,000 TEUs.
“Quite an upgrade,” said Gary LaGrange, Port of New Orleans president and CEO. Yes, it was. But, as Lamie alluded to, it also was emblematic of a positive tide that can lift many others. And this is for real. When ports have their mojo working, they are more likely to invest, more likely to expand to work well with others. In short, they are more likely to create, everything from wealth to jobs.
Commenting on AAPA’s estimate of $155 billion in infrastructure spending, economist John C. Martin said that kind of investment would create about 1.6 million jobs direct and indirectly.
“Those are really significant job numbers,” Martin said. “U.S. coastal ports also generated $4.6 trillion dollars for the U.S. economy, about 26 percent of the U.S. Gross Domestic Product. From a dollars-and-cents perspective, it’s hard to overemphasize the value of investing in ports, particularly when you factor in how much these investments contribute to our overall economic prosperity and help lower the cost of imports and make our exports more competitive overseas.”
Why Do Global Shipping Costs Continue to Skyrocket?