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EXPANSION ALONE MAY NOT BE ENOUGH AS BUSY PORTS EYE SMARTER GROWTH

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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.

SAL

SAL Heavy Lift Confirms Fleet Additions for 2020

Three new vessels will make their debut for SAL Heavy Lift beginning in 2020. The fleet additions boast an 800t lifting capacity and will ultimately support the Harren & Partner Group member’s clients along the main trade lanes between Europe and the Far East in addition to the Africa service, all while furthering SAL’s position in heavy lift and project cargo sectors.

“The Type 171 vessels come with certain technical features such as ice class E3, equivalent to Finnish/Swedish 1A – amongst the highest in the industry,” said Karsten Behrens, Director, SAL Engineering. “The vessels also have very high crane pedestals which provide a much greater lifting height, in fact amongst the best in our fleet. In combination with the strong hydraulic hatch covers and large box-shaped holds with multiple tween deck configurations, it gives us an array of options when taking breakbulk cargo onboard.”

These vessels were confirmed in the announcement to be of the P1 Type design with an impressive amount of lifting capabilities (up to 800 tons) thanks to two 400t SWL cranes and one 120t SWL crane. Names have also been officially announced for the fleet additions: “MV Hanna”, “MV Klara” and “MV Lisa.” These names were selected after the family members of former owner and current technical ship manager, Heino Winter Group.

“I am very happy that we have been able to add these vessels to our heavy lift fleet,” added Dr. Martin Harren, CEO, SAL Heavy Lift. “This way SAL will be able to service clients who may at times look for ships that can take larger volumes of cargo in combination with heavy lift items. With SAL Engineering providing the engineering solutions and our SAL crew manning the vessels, we continue to offer our well-known SAL quality and know-how, but on a larger scale – something that I am sure clients, both new and existing, will come to appreciate.”

Image provided by SAL Heavy Lift

Pros and Cons of Maritime Shipping

For a long time in human history, maritime shipping was the best way to transport your goods across the world. About 71% of Earth’s surface is covered in oceans. Therefore, transporting your goods on a ship to another continent was a relatively straightforward operation in comparison to land shipping. However, with the advancements in technology, air-shipping has become a dominant form of long-distance transportation. Still, this doesn’t mean that maritime shipping doesn’t come with its own unique pros that make it a better choice in some cases. Of course, the cons of maritime shipping exist as well.

The pros of maritime shipping

We’ll begin by discussing the positive aspects of maritime shipping. As we said, in some situations, these advantages will be enough to tip the scales in favor of choosing maritime freight services.

There’s a lot of room on vessels and they can transport heavy goods

One of the biggest advantages of maritime shipping is that ships can carry all kinds of rather heavy goods. You will have to use ocean freight services if you’re running a business that imports or exports heavy objects, as airplanes usually cannot transport such goods. And if they can, the cost of shipping will be very high. Automobiles, various machinery, industrial parts, and so on, are just some of the things you won’t be able to transport by air (if you don’t want to spend a fortune, that is). 

Generally, maritime-shipping companies provide their customers with much more space than their air counterparts. Not only can they transport heavy goods, but they can transport a lot of them. This makes for high competitive rates and allows maritime shipping companies to easily take care of large demands. Whether you’re transporting heavy goods or a very large amount of lighter goods, maritime shipping is your best option.

Maritime shipping is highly affordable

The fact that there’s so much space on cargo transportation vessels means that it’s not hard to find the space for your goods. Then, there’s also the fact that all businesses whose goods are being carried will share the cost of the specific vessel arriving at its destination. It is primarily because of these reasons that maritime shipping is among the most affordable ways to move your cargo. And when compared with its biggest rival in terms of long-distance shipping (we’re talking about air shipping options, of course), maritime freight services are much (much) less expensive. What’s more, with maritime industry reshaping its supply chain, more accurate cost models are now being introduced. 

Vessels are more eco-friendly

When compared with aircrafts, vessels also provide much better options for eco-friendly shipping. Aircrafts use a lot of petroleum, leaving a very large carbon trail. This, in turn, damages the atmosphere. Such carbon trails disrupt the ecological balance and contribute to the negative effects of global warming. Even the slight cirrus clouds that form behind aircrafts contribute to impact these negative effects on Mother Nature.

As vessels don’t use a lot of petroleum, they leave a small carbon trail. In most cases, this makes them a better option for business-owners who are concerned with helping the planet Earth.

The cons of maritime shipping

Now it’s time to talk about the cons of maritime shipping. Depending on the situation, the advantages we’ve discussed sometimes won’t suffice, as these cons could make you choose another form of shipping.

Maritime cargo transportation is slow

If you need to transport your goods quickly, then maritime shipping will prove to be far worse for your needs than air shipping. Vessels usually have a long way to travel and they’re much slower than aircrafts. In a situation where an aircraft would transport your goods in a day or two, a ship would need an entire month to do so (and that is if there are no delays). While the situation is improving and maritime shipping is becoming faster, if you need fast shipping – vessels won’t do.

The key here is in deciding whether faster shipping will bring you more profit. If a much slower transportation speed won’t negatively influence the profits, then opting for much more affordable maritime shipping seems like the right thing to do.

Ocean freight services can suffer from delays

However, keep in mind that ocean freight shipping options can sometimes make your customers unsatisfied, as they’re not as reliable as air shipping options. Namely, ships operate on weekly schedules and different problems often occur. There’s always a good chance that your deliveries will be delayed. And your customers definitely won’t be pleased with that. While you will save some money if you opt for maritime shipping, you better learn how to communicate bad news to your customers

While their goods won’t get damaged, the possible delays will sometimes make your customers choose another supplier. However, if you don’t have a strict deadline and you don’t need to transport the goods very quickly, then maritime shipping could be the best option for you.

About the author: Originally from New Jersey, Alex Durick has been working for bfslebanon.com for three years now. He specializes in freight services related to relocation and also shares bits of knowledge on his company’s blog. Six years worth of experience in the freight business has made him an expert in many areas related to freight shipping, and he’s happy to share his findings with anyone who’s willing to listen.