EXPANSION ALONE MAY NOT BE ENOUGH AS BUSY PORTS EYE SMARTER GROWTH
A sharp increase in container cargo in the second half of 2020 and into the early months of this year has proven to be a pleasant surprise for several U.S. ports. But even prior to the impacts of COVID-19 on container cargo, many ports were already dealing with substantial growth and operational success. “Deeper, wider, bigger” has been the theme as ports and terminals spent and continue to spend billions of dollars to capture greater market share.
So, is “deeper, wider, bigger” the secret to growing the container business?
“There really is no secret,” says Joe Harris, spokesman for the Port of Virginia, who adds that his home facility “offers a modern, technologically advanced port run by a team of experienced professionals. We focus on customer service, efficiency and providing a predictable experience to our customers–the ocean carriers–and the cargo owners choosing to move their goods over our terminals. Those things, combined with a long-term plan of strategic infrastructure investments that is shared with the port’s users, are vital to our future.”
From 2014 through 2024, the Port of Virginia will have invested nearly $1.5 billion in modernization. This includes expanding annual TEU (twenty-foot equivalent units) throughput capacity by 1 million units and deepening and widening commercial channels to make Virginia the deepest port on the U.S. East Coast.
“The strategy is to leverage these investments to grow volume, expand market share, build our competitiveness and continue to be a catalyst for economic investment and job creation in Virginia for decades to come,” Harris said.
Supporting the strategy is a team of professionals across the world, including the U.S., representing the port. These professionals are continually engaged in driving business to Virginia, according to Harris. “They are supported by a business analytics team that is helping to identify emerging markets, new industries, expansion among beneficial cargo owners and ocean carriers,” he adds.
Port Tampa Bay has also witnessed a strong uptick in container cargo.
“Our container business increased by 33 percent last fiscal year and is up another 43 percent in the most recent quarter,” says Wade Elliott, the port’s vice president of Business Development. “The primary driver is the continued rapid growth of the Florida market, which was the second-fastest-growing state by population last year.”
The Tampa Bay/Orlando I-4 Corridor region, home to Florida’s largest concentration of distribution centers with close to 400-million square feet of space, “was already one of the hottest industrial real estate markets in the U.S. pre-COVID-19,” Elliott notes.
“New container service connections from Asia, and more recently Mexico, have helped facilitate this increased business,” he says, “and the port’s close proximity to these distribution centers allows importers and exporters to make multiple round-trip deliveries per day, resulting in significant savings in trucking and supply chain costs.”
To keep pace with the growth, there is a need to develop more infrastructure.
“Port Tampa Bay recently completed 25 acres of additional paved storage, bringing the total container terminal footprint to 67 acres with plans to add another 30 acres,” Elliott said. “Work has also begun on a third berth which will bring the total to over 4,500 linear feet, allowing three large ships to be worked at the same time. Construction is also about to start on a new container gate complex and the bid process has begun to acquire two, additional gantry cranes,” Elliott concluded.
The Jacksonville Port Authority (JAXPORT) saw container volumes rebound up by 5 percent year-to-date in FY21 (Fiscal Year) which began in October. Nearly 353,400 TEUs moved through JAXPORT during the first quarter of FY21, making it one of the port’s busiest first quarters on record for container volumes.
“Location and efficiency are both central to JAXPORT’s success throughout our various trade lanes and business lines,” says Robert Peek, JAXPORT’s general manager of Business Development. “JAXPORT is located in the heart of the southeast U.S. and offers fast access to 70 million consumers within a day’s drive.”
Historically, Puerto Rico has been JAXPORT’s largest trading partner, accounting for about half of all JAXPORT’s containerized volumes, but Jacksonville has been actively pursuing new business.
“Today, container shipping lines service additional Caribbean islands through JAXPORT, as well as Central and South America,” Peek added. “JAXPORT also offers robust container vessel service with China and countries throughout Asia.”
With the benefits of congestion-free terminals and infrastructure enhancements, anchored by a harbor deepening project, JAXPORT will “continue to work to grow our offerings in the trans-Atlantic and African trade lanes as well,” Peek said.
With Jacksonville also in the “deeper, wider, bigger” mode, its infrastructure projects will support its growth plans.
“The federal project to deepen the Jacksonville shipping channel to 47 feet from its current depth of 40 feet will be completed through our Blount Island Marine Terminal in 2022,” Peek said. “Harbor deepening is JAXPORT’s single biggest growth initiative and positions us as a port of choice for the increasingly larger container ships calling the U.S. East Coast.”
More than $200 million in terminal enhancements are also underway at the SSA Jacksonville Container Terminal at Blount Island. “These enhancements include phased yard improvements to allow the facility to accommodate more containers, berth enhancements to enable the terminal to simultaneously accommodate two post-Panamax vessels and the addition of three additional state-of-the-art, eco-friendly container cranes, bringing the facility’s total to six,” Peek added.
California’s Port of Long Beach is a leading gateway on America’s most important trade route, the trans-Pacific, and it offers the fastest and shortest route between Asia and the United States.
“We offer more connections to interstate highways and national rail lines, along with access to 2 billion square feet of warehouse space in the region,” says port Executive Director Mario Cordero.
In 2020, Long Beach handled more than 8.1 million TEUs, the best year in its history “and to start off 2021, we’ve had our best January and February on record,” Cordero adds.
The port sees growth opportunities in markets such as Southeast Asia as well as Latin America, and eventually Long Beach would also like to see a resurgence in U.S. exports, Cordero says.
Capital improvement projects are crucial to maintaining successful and growing operations. Cordero says the port is completing “the world’s most advanced container terminal at Middle Harbor,” known as Long Beach Container Terminal.
Slated for completion later this year, this automated terminal will have 14 ship-to-shore, dual-lift cranes. Six of the cranes will be big enough to handle a 22,000 TEU ship. There will be 70 stacking cranes and 72 automated guided vehicles (AGV) at full build-out, adding an annual capacity of 3.3 million TEUs.
“In 2021, planned capital expenditures of $379 million account for 58 percent of our spending,” Cordero says. “Over the next 10 years, the port will invest $1.7 billion in infrastructure and $1 billion of that is for the development of the port’s on-dock rail capacity.”
Not surprisingly, the growth of the container business has spurred innovation in other aspects of the industry.
California-based Blume Global, for example, has co-developed with Fenix Marine Services (FMS), a marine terminal operator at the Port of Los Angeles, a technology platform to add efficiencies to container movement.
“This service doesn’t simply help the terminal operate more efficiently, the entire port ecosystem (ocean carrier, rail carriers, motor carriers, labor interests, logistics service providers, beneficial cargo owners) gains an advantage,” says Lincoln Pei, account manager, Blume Global. “When containers flow quickly through port complexes and marine terminals, vessel berth and rail car capacity are optimized, gate transactions are timelier, and dray carrier wait times are reduced, among other improvements,” he says.
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