North Atlantic ports get ready for influx of Asian cargo

Infrastructure investments will help ports retain their positions as major cargo gateways.

By Gordon Feller -- Logistics Management, 8/1/2005

NEW YORK—A number of East Coast ports are eyeing costly infrastructure-improvement plans that will help them handle the increasing shift of Asian cargo away from the West Coast. That shift, spurred by port and rail-yard congestion, could be further accelerated if the Panama Canal carries out a planned $8 billion expansion of the passageway that connects the Pacific and Atlantic oceans.

"The big story right now for the North Atlantic ports is not about security," says Thomas Valleau, executive director of the North Atlantic Ports Association. "Forecasting cargo volumes has become the big story for these ports."

To appreciate the wave of cargo that's now flooding many East Coast ports, Valleau suggests, think back to the time before the Civil War—a time when Southern California was still a desert, the transcontinental railroad was considered science fiction, and all ocean shipping in North America was centered on the East Coast.

Just as they were in those days, North Atlantic ports are once again bulging with cargo. In 2004, for instance, the Port of New York/New Jersey handled nearly 4.5 million TEUs (twenty-foot equivalent units), a 10-percent jump from 2003's volumes.

Managers of Atlantic gateway ports are scrambling to keep up with this cargo. Indeed, one port executive confesses to spending 70 percent of his time on facility development and planning.

According to Valleau, port managers are using cargo forecasts to draft master plans; once those plans are in place, they develop 10-year capital programs and income projections to support them.

But some ports aren't waiting to create master plans before they start on improvements to cargo handling facilities. The Port Authority of New York/New Jersey (PANY/NJ), for example, plans to spend $1 billion on its Port Newark/Elizabeth maritime terminals. Philadelphia, meanwhile, is planning nearly $400 million in projects to modernize its Delaware River waterfront area, and the Maryland Port Authority has scheduled similar funding through 2008 for projects at its facilities on Chesapeake Bay.

Further north, Massport, the agency that oversees the Port of Boston, plans to spend more than $100 million over the next five years to upgrade New England's only major freight gateway. Boston's two biggest marine facilities are the Conley Terminal container facility and the automobile processing center at Moran Terminal.

Executives at transportation companies that do business with North Atlantic ports applaud the planned improvements, which promise to open up more capacity and alleviate congestion. Brian Bowers, senior vice president of global business development for Schneider National, says he's encouraged by the growth that Boston and New York/New Jersey have experienced over the past three years. Both are benefiting from the fact that they are among the few major ports that have an adequate supply of domestic capacity to move cargo inland.

Despite that positive outlook, Bowers says, North Atlantic ports face significant challenges, such as a shortage of drayage capacity, the need to shorten equipment turnaround times, and insufficient harbor drafts. He also believes those ports need to assess how well their infrastructure and connectivity to inland and intermodal services will meet the needs of the new mega-container vessels.

In particular, Bowers adds, Boston and NY/NJ will need to devise ways to serve the larger class of new vessels if they want to remain viable as ocean gateways for inbound cargo from Asia.