Most projects to prepare for the Panama Canal were [and still are] largely funded by the ports themselves with some financial assistance of the Government, while other ports like Port Miami in Florida on the East Coast received full government funding for their projects before the flurry started. Those ports that have been asking for partial government funding for their projects have found the road to achieve this very long and lonely. But in recent developments two Senators have proposed new legislation for the allocation of funds but this latest news coming from the White House may have come a little bit too late. If passed the legislation, introduced at the end of February, would establish a fund within the Department of Transportation (DOT) which would be authorised at USD5 billion for each of the fiscal years 2014 and 2015.
Where would the money go?
To be eligible, a project would need to be transportation related (for example rail infrastructure, port, pipeline, airport, highway, bridge, etc). It would have to cost more than USD50 million or USD10 million if it is located in a rural area, with at least 30% of the total budget coming from sources outside the fund. And the project would have to provide measurable improvements to the economic competitiveness of all or part of the United States. “This bill would establish a creative new way to leverage federal funding and increase investment in projects that will expand rail capacity (and) that will modernise our ports and other infrastructure,” said Democratic senator Frank Lautenberg, Chairman of the Surface Transportation and Merchant Marine Infrastructure, Safety and Security Subcommittee. “The National Infrastructure Investment Fund created in this bill would supplement federal dollars with private investment to prioritise the large-scale transportation projects that will help our country and economy thrive.” The American Infrastructure Investment Fund Act would use loans and loan guarantees to encourage private, State, regional, and local entities to invest in selected projects. It would also authorise a multi-modal National Infrastructure Investment Grant program within DOT at USD600 million for fiscal years 2014 and 2015, which would provide funds to build new or improve existing transportation infrastructure.
In the meantime, most of the ports on the East Coast are simply forging ahead with their investments projects in anticipation of higher cargo throughputs as a result of the new Panama Canal and most of the ports are continuing to contribute a large share of the investments themselves as our port round-up shows.
Virginia
The Virginia Port Authority (VPA) owns and operates four general cargo facilities on behalf of the state including Norfolk International Terminals, Portsmouth Marine Terminal, Newport News Marine Terminal and the Virginia Inland Port in Warren County. In addition, VPA leases and operates APM Terminals in Portsmouth and the Port of Richmond. Last year will go down as the second-best year in the history of the VPA in terms of cargo volume, with the port posting increases in seven categories it uses to measure cargo moving across the state-owned terminals. Most notably, the port handled 2,105,887 TEU, an increase of 9.8% when compared with 2011 – only 22,479 TEU separated 2012 from 2007, which is the port’s best year on record for container throughput. “The Port of Virginia posted an 18.9% increase in containers and a 20.4% increase in TEU handled in December 2012 compared to 2011,” said Rodney Oliver, the Virginia Port Authority’s interim Executive Director. With 9.8% growth in 2012, the Port was the fastest growing container port on the US East Coast last year, according to comparative data from the coast’s leading container ports compiled by the VPA. Expansion is key for the VPA as work on the Craney Island project continues. In early February, the two southern-most dikes needed for the development of Craney Island Marine Terminal were above water-level as the massive structures began poking through the Elizabeth River’s low-tide line.
“This is an important milestone as we can now truly see the progress, it was hard to get an image of what we were talking about when everything was still underwater,” said Oliver. “As this project has now become something tangible, so too has the reality of The Port of Virginia becoming the East Coast’s cargo gateway. When Craney Island is finished, this port will have more container capacity than any of its peers on this coast.” When the dike-and-fill phase is done, the work will result in the creation of a 600-acre foundation for Craney Island Marine Terminal.
“The first phase of this project is to build the land on which the marine terminal will sit,” Oliver said. “It is, by far, the most complicated and costly part of the project. Once that 600-acre plot is in place, it will be there for us to develop as we need, as demand dictates.” The first marine terminal at Craney Island could open within 12-to-15 years, depending on market requirements. In 2012, VPA expected to grow their rail volumes but the year-end numbers surpassed their expectations. There were many contributors to that growth including the overall health of and their relationship with the two Class I railroads that have on-dock service at this port, new first-in and last-out vessel services that are taking advantage of their rail capabilities and 50-foot-deep channels and the development of a double-stack service into Greensboro, North Carolina, which is a market normally served by trucks from a competing port.
For the next five years VPA is forecasting an average growth rate of 6% and the opening of the Panama Canal is a factor in determining that figure. They believe Virginia will benefit, but it is difficult to pinpoint a specific figure. It is their belief that volumes will grow slowly and there are a handful of issues that will influence growth such as the overall health of the economy, size of the ships that will be deployed in the trade and how many other USEC ports are ready to receive deep-draft vessels. Their market is established and showing signs of growth/health so the goal VPA set itself is to expand within those markets and begin to make inroads into new areas.
The VPA is also seeing continued growth in the number of ships from China and the Indian subcontinent that are coming to Virginia via the Suez Canal.
So, is the port of Virginia ready to accommodate larger vessels that will transit the new Canal? “Absolutely, said Joe D Harris, Spokesman & Media Relations Manager, Virginia Port Authority. “Our message is simple and straightforward: In Virginia, the investment has been made, our channels are 50-feet deep and we have been ready – for years, April 2006 to be exact – for the opening of the Panama Canal.” Other parts of that readiness include the NS and CSX on-dock rail services at the port. Virginia is also home to the most technologically-advanced container terminal in the Western Hemisphere, they have capacity to expand, zero congestion, zero pilferage, solid labor relations, no congestion and a terminal complex that is located with a day’s drive of two-thirds of the nation’s population.
Charleston
In January, the port of Charleston saw an increase of 7.7% in container throughput, with a total of 121,286 TEU handled, compared to the same month last year. Container throughput for the first seven months of the fiscal year rose more than 11% to 892,487 TEU handled from July to January, up from 801,495 TEU over the same period in the previous fiscal year. South Carolina Ports Authority (SCPA) President and CEO Jim Newsome noted that container business has been growing well above the market in recent months. “In 2012, North American container port volumes were up 2% overall, while Charleston grew 10%,” Newsome shared. “We will continue to focus hard on growing our cargo base. This includes discretionary cargo, such as agri-cultural products that can be trans-loaded to containers at or near the port.” Newsome also not
ed that several ocean carriers are planning service changes that will benefit Charleston by adding a call or by deploying larger ships. One of these is CMA CGM, which announced it would add the Port of Charleston to its Pacific Express 3 (PEX 3) weekly service in April, providing an additional connection for the region’s shippers to ports across Asia. “As a long time and loyal client of the South Carolina Ports Authority, CMA CGM is pleased and excited to announce the addition of the Port of Charleston to the new rotation,” said Frank Baragona, President of CMA CGM (America) LLC. Significantly, Charleston is the last US port outbound on the service, highlighting the port’s strategic role for exports to growing consumption markets in Asia. Ports in the rotation include Hong Kong, Chiwan, Ningbo and Shanghai, China; Busan, South Korea and Punta Manzanillo in Panama.”The addition of the PEX 3 further shows Charleston’s growth in the Asia trade lane,” said John Wheeler, vice president of carrier sales for the South Carolina Ports Authority (SCPA). “Many of the Port of Charleston’s users ship high-value cargo year-round with little seasonality, and export loads are plentiful. Both of these points are very attractive to carriers when selecting a port.” In other news, Charleston, the first-in-the-Southeast port truck replacement programme, run by the South Carolina Ports Authority (SCPA), received USD145,000 in additional federal grant funding to help continue reducing related air emissions across the Charleston area. Launched in the fall of 2011, the SCPA’s truck program provides truck owners who are frequent users of the Port of Charleston’s facilities a financial incentive to replace pre-1994 model trucks with 2004 or newer models. Eligible truck owners can get a USD 10,000 incentive, plus the scrap value of their pre-1994 truck, to use toward the purchase of a newer, cleaner truck. The South Carolina Department of Health and Environmental Control (DHEC) awarded the SCPA USD 145,000 from an EPA diesel-emissions reduction grant to continue the programme. The grant funds cover half of the incentive for the program, with the SCPA funding the remaining USD 5,000 per truck. The SCPA has committed to eliminate 85% of the pre-1994 trucks that regularly call the Port of Charleston’s container facilities by the end of 2013. In addition, newer equipment uses less fuel and is less likely to require extensive maintenance work, thereby reducing operating costs to the truck owner.
Everglades
Already one of the busiest cruise ports in the world, Port Everglades is also one of the nation’s leading container ports and South Florida’s main seaport for receiving petroleum products including gasoline, jet fuel and alternative fuels. In 2011, Port Everglades was ranked the top exporting Foreign-Trade Zone in the country for warehousing and distribution activities, according to the Foreign-Trade Zones Board’s 73rd Annual Report to the US Congress released in January 2013. Data shows that Port Everglades’ Foreign-Trade Zone No 25 (FTZ) experienced a 68% increase in merchandise received during 2011, while exports from the Zone increased by 66% over the previous year. In 2011, merchandise received and exported from the Zone reached USD3.7 billion and USD3.6 billion, respectively. “Our FTZ leads the nation in the value of international goods handled through its facilities,” said Steven Cernak, Chief Executive & Port Director for Port Everglades. Michael Vanderbeek, Port Everglades Director of Business Development added “our proximity to South America, Central America and the Caribbean makes it efficient to transport goods through our seaports and airports and re-export merchandise admitted to the Zone to these and other markets.”
Savannah
At 1,200 acres, the Garden City Terminal at the Port of Savannah is the fourth busiest container terminal in the nation and second busiest for the export of container tonnage in the nation. While their container throughput in 2012 was just shy of 3 million TEU, their build-out capacity within their existing footprint is twice that volume. Their largest current project is the Savannah Harbor Expansion Project, which will deepen the Savannah River channel from 42 feet, to 47 feet. By better accommodating larger and more heavily laden ships, the project will cut shipping costs by USD 213 million a year. Lower shipping costs per container are driving the transition to Post-Panamax vessels. Debate exists regarding the magnitude of growth through East Coast ports, but lower shipping costs will translate into incremental growth. While Post-Panamax vessels are currently calling on the Port of Savannah via the Suez Canal, the deeper channel will allow the ships to arrive and depart with greater scheduling flexibility. Dredging is on schedule to begin in 2013, with a completion date in 2016. Last year, the deepening reached a major milestone when the US Army Corps of Engineers issued its Record of Decision, granting final federal approval for the project. In November 2012, Georgia Governor Nathan Deal announced he will seek an additional USD 50 million in funding for the Savannah Harbor Expansion Project. If approved, state funding for the deepening project will be USD 231.1 million, with the total cost of the project estimated at USD 652 million. Georgia Ports Authority has also undertaken another major infrastructure improvement with the purchase of four new Post-Panamax ship-to-shore cranes. The cranes are due to arrive in September 2013, bringing the total number of ship-to-shore cranes to 27. In December 2012, the GPA unveiled its first four electrified rubber-tyred gantry cranes (eRTGs). The eRTG roll-out makes the GPA the first in North America to introduce this cleaner and more efficient method of operation. The new technology reduces fuel consumption by an estimated 95% per crane. The four currently in use are part of a larger, 20-crane purchase. In November, the GPA’s expanded Mason Intermodal Container Transfer Facility opened for business, with improvements cutting round-trip Norfolk Southern train movements to Atlanta by six hours. The USD 6.5 million, 6,000-foot rail yard extension expands capacity, improves efficiencies and cuts costs for customers. In May 2012, the GPA installed the first phase of a new lighting control system, which will save more than 30% on the cost to light its Garden City Terminal container yard. The high mast lights are now controlled by a computer system programmed according to an astronomical clock set for the port’s location. The lights turn on at dusk and grow in intensity until full dark. They then begin to dim as dawn approaches, and turn off after sunrise. As the seasons change, the system adjusts the intensity and duration of the lighting.
PortMiami
At PortMiami Bill Johnson, Executive Director reports that the port is moving at only one speed – Full Speed Ahead! In recent months, many capital improvement projects and business development efforts have reached important milestones. Projects include a tunnel under Biscayne Bay, scheduled for completion in spring 2014, that will provide quick, efficient and direct access to port facilities and will relieve traffic congestion in downtown Miami. In conjunction with Florida East Coast (FEC) Railway, on-dock rail is returning to PortMiami with the first phase scheduled for completion later this year.
The US Army Corps of Engineers will soon sign a construction contract to begin the deepening of the Port’s channel ensuring that PortMiami will be the only port south of Norfolk, Virginia at -50 feet when the expanded Panama Canal opens in 2015. “As the closest US port of call from the Canal, PortMiami is looking forward to new trade opportunities with Asian markets in the coming Post-Panamax era,” says Johnson.
In 2012, PortMiami saw a modest increase in container traffic putting the port just under the one million mark for TEU. The numbers show a double-digit recovery from 2009 which was the worst of the recession. Traffic is up a lit
tle more than 13% over the four years. PortMiami has long been known as the “Cargo Gateway to the Americas” with more than half of their trade with South and Central America and in recent years they have benefited from the strength of economies in countries such as Colombia, Peru, Chile and Brazil. Export activity in Latin America is growing faster than any other trade lane in the world and PortMiami intends to capitalise on this.