NICHE PORTS ARE PUSHING FOR GROWTH
A lot of nerves were frayed in February and March last year, as cargo piled up at West Coast ports owing to the standoff between labor and terminal operators that nearly paralyzed loading and unloading activities. While electronics and garments produced in Asia were stuck on vessels moored in sight of the ports, California oranges and Washington apples were rotting on the docks at some of the nation’s most active ports. Farther inland, auto workers found themselves forced to slow down as car parts were waiting to be unloaded at the ports.
According to the North American Meat Institute, U.S. meat and poultry shippers were losing $85 million every week their shipments were stuck at the ports.
Shippers, importers and forwarders were increasingly resorting to emergency measures, in some cases diverting cargo from ocean to air. California citrus growers trucked their cargo to the Port of Houston to ship it to Asia via the Panama Canal.
According to one report published in March of last year, more than 40 percent of retailers and manufacturers were planning to shift traffic on a long-term basis to East Coast gateways to avoid a repeat of these problems. As a result, East Coast ports have reported significant increases in Asian traffic. The expansion of the Panama Canal is expected to accelerate this trend.
Some smaller ports have also registered gains. Duluth, Corpus Christi and Vancouver are among the ports that enjoyed record volumes in 2015.
The rise in traffic has left Corpus Christi tight on laydown and storage capacity. “Our general cargo docks are pretty full, especially with wind cargo,” says John LaRue, the port’s executive director. “We’re starting to run out of space in the inner harbor, so we’ve created some additional space in a barge channel.”
Several of these ports are expanding their capacity in anticipation of further growth. Duluth, which saw a 40 percent surge in tonnage last year, is in the middle of its “intermodal project,” an $18 million redevelopment undertaking on a 28-acre pier. This will triple the terminal’s outdoor storage capacity, add a new Ro/Ro dock and two new berths along a reinforced dock wall. It will also double the port’s handling capacity for rail and truck traffic.
The Port of Albany is spending some $15 million on the redevelopment of a wharf that will allow trucks to roll on and off vessels, and another $8 million on a warehouse on the site.
The Port of Cleveland is planning to set up a new warehouse and acquire a reach stacker to improve efficiency on the dock. It recently commissioned two new mobile harbor cranes to boost its vessel loading and unloading capacity. This was undertaken in May, when Lubrizol Corp., one of Ohio’s largest exporters, announced it would be shipping its specialty chemicals to Europe through Cleveland. The company’s decision was the result of a bold move made three years ago, when the port of Cleveland signed an agreement with vessel operator Spliethoff Group to run a weekly service to Europe, which kicked off the following year. It is the only scheduled ocean service between the Great Lakes and Europe.
The move has resulted in a rapid rise in traffic through the port and accolades for its management. The port’s container volume was up nearly 475 percent after just one year.
The Port of Albany has also set its sights on container services, albeit on a less ambitious scale. It is looking to establish a container barge service to the port complex of New York and New Jersey.
A regular container shuttle project on the West Coast failed to gain traction. In the summer of 2013, California’s Port of Stockton launched its Marine Highway project, envisaging a volume of 900 shipping containers per week between Stockton and Oakland. Failing to reach that volume, the operation was suspended after a year.
Vanta Coda, executive director of the Duluth Seaway Port Authority, says that the Great Lakes ports offer a value proposition but the time has not yet come for this. He reckons that a transatlantic container service from the Great Lakes is still too soon for the market. “I don’t think the time is right and the shipping community has not seen enough pain on the East and West Coast,” he says.
Despite the setback on its Marine Highway project, Stockton remains in expansion mode, fuelled by record vessel activity in its waters last year. In the main, its latest drive aims at improved access to the port through a road expansion project, and plans to boost rail capacity.
Better rail capacity is a key plank in the plans of several ports bent on building up their traffic. Port Canaveral, which is seeking to carve out a niche for itself in the project sector, has ample laydown area and can readily access heavy-lift cranes, but it lacks a rail spur to the docks. For Alberto Cabrera, senior director of Cargo Sales, getting a rail link to connect all cargo berths to the Florida East Railroad is a top priority.
“We hope to have this completed by 2019,” he says.
The Port of Longview in Washington plans to add a rail track and two 7,000-foot sidings to the existing two tracks of its industrial rail corridor this year. This will allow three simultaneous train movements plus storage of two trains on side tracks. Longview completed a $21 million rail corridor back in 2005, which was critical to attracting a $230 million export grain terminal to the port.
Corpus Christi is in the second phase of a rail yard project that includes a unit train siding capable of storing a full 160-car unit train. According to LaRue, this should be completed in the fourth quarter of this year.
Port of Vancouver, which recently completed an overhaul of its train and road access, struck a deal last year with Tesoro for the establishment of a $210 million energy terminal capable of handling up to four trains with 100 to 120 cars carrying oil every day. This added a second strand to the port’s expansion strategy, which was built on project cargo, notably wind energy.
In May this year, Port of Toledo announced an agreement for a high-tech axle manufacturing plant at its Overland Industrial Park, the first tenant on the recently redeveloped site. At the small end of the scale, the port authority announced a partnership in March with the Economic and Community Development Institute to provide small ventures with access to capital and technical assistance. Dubbed the Microenterprise Development Initiative, it is for qualified microenterprises and entrepreneurs in Lucas County and the Greater Toledo area.
Joe Cappel, Toledo’s director of Cargo Development, says that the venture is meant to nurture business in the region. Firms do not have to use the port to be eligible, but they would be very welcome, of course.