Bosses at major US ports explain the reasons behind record volumes and reveal infrastructure investments
North American gateway ports handled an estimated 56M TEU in port volumes in 2017 according to ClipperMaritime.
And US ports expect to capitalise further on this growth as they continue to invest in infrastructure and facilities to cater for growing volumes and bigger ships.
Indeed, as ClipperMaritime’s Horizons June newsletter pointed out, “A likelihood of further vessel cascading, especially on routes from Asia, means that ever-larger ships could be calling at many US and Canadian regions moving forward placing further pressure on infrastructure.”
Ports America, which operates box terminals across North America, is certainly focused on boosting its infrastructure. Its president Mark Montgomery told Container Shipping & Trade “We will continue to increase capacity from berth, yard, rail, gate and handling equipment.” He added it was focusing on “vessel size changes and the impact of large volumes of cargo handled over shorter periods of time”.
Its Port Newark Container Terminal (PNCT) has embarked on a US$500M+ expansion plan that will upgrade the terminal from a 0.85M-lift per yearcontainer terminal without ultra large container ship (ULCS) or barge capabilities to a 1.4M-lift per year terminal with ULCSs, barges and significantly improved road and rail capabilities.
Mr Montgomery commented “Terminal expansion will enable PNCT to more efficiently move vessels in and out of the terminal and improve its ability to attract additional discretionary intermodal cargo while supporting overall cargo volume growth.”
Speaking about Ports America’s work across all its box terminals, he said “We continue to invest in super-post-Panamax cranes and berths and work with our partners on timing as larger ships continue to arrive.
Over on the west coast, container cargo volumes reached record heights at the Port of Long Beach in June, surging past the previous mark and distinguishing June 2018 as the port’s best month ever.
Trade increased 14.2% in June, compared to the same month in 2017. The port’s terminals moved 752,188 TEU – 4.4% higher than the previous ‘best month’ record set in July 2017.
In the first six months of the calendar year, the port handled nearly 4M TEU. The figure is 14.5% above the pace set by 2017, the port’s busiest year ever. June also capped the port’s best second quarter — dockworkers processed almost 2.1M TEU, 10% more than the corresponding quarter a year ago. The prior high was set in Q2 2006.
“We are on track to beat our historic pace from 2017,” said Port of Long Beach executive director Mario Cordero. “The domestic and global economies are good, which is why we’re seeing all of this activity.”
The port has made large investments in its infrastructure. US$4Bn has been committed in a capital improvement project and, due to this investment, the port is ‘big-ship ready’ and can receive vessels of 13-14,000 TEU. “Our investment was very prudent and we now have the benefits of this,” Mr Cordero observed.
Elsewhere, Long Beach Container Terminal is in the last phase of its construction. The terminal, which already has 70 ha operational, will be fully operational in early 2020 with 126 ha. “This state-of-the-art electrified terminal, once finished, will be the fourth-largest port in the country. This shows its magnitude,” Mr Cordero said. Once completed, the terminal will be able to handle 3.3-3.5M TEU per year.
West coast Port of Oakland is also enjoying strong growth in volumes. Steady growth on top of record volumes is forecast. Port of Oakland maritime director John Driscoll told Container Shipping & Trade “The main drivers include a continued strong local/regional economy for both importing finished products and exporting agricultural products”, and significant new infrastructure investments at the Port of Oakland including:
Meanwhile, Oakland wants to recapture cargo in Utah and Colorado that it lost a few years ago. Mr Driscoll explained “The natural gateway for Utah and Colorado is via the Port of Oakland but shippers have options. Some Utah and Colorado import customers shifted their gateways due to service issues and congestion Oakland experienced in 2013-15.”
He said that with “numerous improvements” in service (night gates, appointments, online portal) and fluidity of movement within the port, customers have been returning. “We have been making a concerted effort to meet with consignees to identify their needs and reintroduce them to a new and improved supply chain infrastructure we have developed and will continue to improve,” Mr Driscoll said.
It wants to market its services beyond north and central Californian shippers, primarily as an alternative gateway for midwest locations like the Ohio Valley, Memphis and other inland locations using its strong rail infrastructure connectivity with both Class 1 railroads.
He summed up “We are fortunate to have a balanced flow of trade through the Port of Oakland with a 51% export and 49% import cargo mix. This is a unique situation that reflects a true balance of trade through this gateway.”
Elsewhere, Port Everglades has seen “stable, consistent” growth in its operations, its chief executive Steve Cernak told Container Shipping & Trade. In 2017, its container volume hit 1.76M TEU.
The port is in the midst of a capital programme to boost its infrastructure. The port serves the north–south markets (predominantly the Mediterranean, north Europe and central and south America). But once the programme is completed, Mr Cernak is hopeful the port will win an east–west service, explaining it would benefit due to its “connectivity to north–south tradelanes and the transhipment opportunities to other services”.
The port’s south port expansion project is underway, with five extra container ship berths being constructed. Mr Cernak commented “The bottom line is that we are berth-deficient – we really need berth capacity.”
It is also in the process of ordering custom-built cranes to handle fully-laden vessels. Nine new super-post-Panamax cranes will be added, with an option for three more. The project is expected to be completed and in operation by 2021. “The cranes are critical.” Mr Cernak commented. “We need their reach.”
Port Everglades has also been given the green light to deepen its channel after a bill was passed in Washington DC in December 2016 for funding, allowing the project to go ahead. The environmental assessments needed for the project are being carried out. Currently, ships of 10-12,000 TEU can be accepted by the port, but cannot be fully loaded. Once the channel has been dredged from a depth of 12.8 m to 15.2 m, the port will be able to handle these vessels with ease.
But Mr Cernak said “[the dredging] is critical to our future, but more critical in the immediate term is the channel width – we are widening it as much as we can.”
This is currently 122 m, but will be widened to 179 m, to allow access for ships with larger beams.
Port Everglades is also moving forward with a public-private partnership to build a logistics centre on port property that includes cold storage. The project is being called the Port Everglades International Logistics Center, and will include design, construction, financing, operation and maintenance.
Port Everglades International Logistics Centre will contain a warehouse, refrigerated warehouse, office space and cross-docking facilities, which will enhance the services available to shippers using Port Everglades. The entire logistics center will be designated as a Foreign-Trade Zone. Construction is anticipated to be completed in late 2020/early 2021.
In addition to being chief executive at Port Everglades, Mr Cernak is also chairman of Florida Ports Council and chairman of the American Association of Port Authorities. Asked what the most common challenges ports in the US were facing, he said funding for federal projects.
Mark Montgomery (Ports America)
Mark Montgomery was appointed Ports America’s president and chief executive in May 2018. He is a 30-year veteran of the maritime industry. He previously served as president and chief executive of Ports America Chesapeake (PAC) from 2010 to 2014, where he led PAC through a successful public-private partnership with the Maryland Port Administration in 2010.
Mr Montgomery serves in board roles at the Port Newark Container Terminal, PAC, the Delaware River Stevedore joint venture in Philadelphia, the CP&O joint venture in Norfolk, the Port of Miami Terminal Operating Company, the Eller-ITO Stevedoring joint ventures in Miami, the National Association of Waterfront Employers, the North Atlantic Ports Association and the General Stevedoring Council.
Additionally, Mr Montgomery is a senior advisor and operating partner to the Infrastructure Investing strategy of Oaktree Capital Management
Montreal eyes ‘major opportunities’ with India
Canada’s Port of Montreal has seen its volumes rise. “Once again, 2017 has been a record year,” said its vice-president of growth and development Tony Boemi.
Volumes jumped by 6% in 2017 over 2016, which can be attributed to an increase to several of the port’s growing markets, for instance:
Mr Boemi added “Although the implementation of CETA (Comprehensive Economic and Trade Agreement between EU and Canada)is in its early stages, we are noticing an increased interest from several exporters towards European markets, especially on the reefer sector.”
He added that India is a market with “major opportunities” – Montreal noted a growth of 40% from that nation in 2017 over 2016. On a trade mission to India, the Montreal Port Authority signed a co-operative agreement with Mundra Port, Gujarat State. This agreement aims to develop co-operation in marketing and business development while sharing information on marine operations and industry best practices. Mundra Port is India’s largest commercial port and handles more than 3M TEU in annual container traffic.
The port has been boosting its facilities. Ongoing growth of the container market and future forecasts show that the Montreal facilities (2.1M-TEU per year capacity) will reach full capacity in a few years. Therefore the port is looking to build a new terminal on land it acquired at Contrecoeur, Quebec.