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Top 30 U.S. Ports: Finding the right balance

The recent surge of U.S. exports has created a more balanced trade picture for U.S. ports and the stakeholders they serve. If this is a sustainable trend, analysts expect to see more investment in infrastructure and increased competition among the leading gateways.

The “mega-vessel” MSC Fabiola, a 12,562 (TEU) vessel owned by Mediterranean Shipping Co came steaming into the San Francisco Bay early this year.

By Patrick Burnson, Executive Editor
May 01, 2012

East Coast challenge
Infrastructure investment may help to eventually move some ports up in Zepol’s research rankings, however. The Port Authority of New York/New Jersey has committed $1 billion to increase the navigational clearance of the Bayonne Bridge from 151 feet to 215 feet in anticipation of the Panama Canal widening completion.

This expansion will allow for larger post-Panamax ships to access the region through the Kill Van Kull Channel. The project is currently undergoing the required Environmental Policy Act (NEPA) review with the U.S. Coast Guard, the designated lead federal agency under the U.S. Department of Homeland Security. Construction on the project is anticipated to begin in early 2013, pending federal and local environmental reviews.

“Every day becomes critically important to our goal of making sure larger cargo ships can call here,” says Port Authority Executive Director Pat Foye.

“Speed is essential, and I am committed to making our cargo operations faster and more competitive.”

With 45 feet of depth at mean low water, The Port of Charleston currently has the deepest channels in the South Atlantic region and can handle ships drafting up to 48 feet on high tide. But officials here say that with the on-going deepening project, Deepening Charleston Harbor will open the port to expanded trade opportunities and increased big-ship traffic via the new locks of the Panama Canal 24 hours a day.

“Already in 2012, we have handled 24 ships with actual docking or sailing drafts 40 feet or greater,” says Bill Stern, chairman of the South Carolina Ports Authority (SCPA) Board.

Jim Newsome, president and CEO of the SCPA, says much the same thing, noting that the local economy is thriving as a consequence. “We’re experiencing a very balanced trade between import and export containers, which is a credit to the companies in South Carolina and across the Southeast that are competing well in the global marketplace,” says Newsome.

Port Miami—the number one container gateway in the State of Florida—also needs to deepen its harbor to 50-feet by 2014. While containerized cargo movements were up 7 percent in its fiscal year 2010-2011, with a total of 906,607 TEUs, port officials say they expect more business in 2012.

Today, the State of Florida ranks number four in the U.S. for trade, “but we can be number one,” says Port Miami Director Bill Johnson. “Thanks to our trio of infrastructure projects at Port Miami—the port tunnel, on-port rail, and the Deep Dredge—we are well-positioned to capture new trade?with Asian markets.”

In the meantime, analysts note that Miami has outperformed many large container ports in the U.S. due in part to the strength of Latin American economies. More than 50 percent of its trade is with South and Central American nations. “There’s a reason we are called “the gateway to the Americas,” adds Johnson. “We are on our way to becoming a logistical hub linking North and South America.”

For the Port of Savannah, 50-foot depth is not the Holy Grail, however. The U.S. Army Corps of Engineers and the Georgia Ports Authority (GPA) have agreed to deepen the Savannah River channel from 42 to 47 feet.

GPA Executive Director Curtis Foltz says that this compromise will mean that most fully-loaded vessels will be easily accommodated, while saving money for other infrastructural needs.

“We all know how critical this extra depth is to the ability of our nation to move cargo efficiently,” adds Foltz. “The depth, along with an average seven foot tide, strikes the right balance between the needs of our industry and the environment of the Savannah River. Nearly 40 percent of the project cost is dedicated to environmental mitigation, preservation of cultural resources, or the improvements to river access for the public.”

Gulf Coast preparation
The Port of Houston is in the enviable position of not having to dredge, as its harbor is one of the deepest in the nation. According to Zepol, it posted an 11 percent increase in container throughput in the first quarter of this year. Along with Charleston, it was the only top 10 port to have an increase of more than 10 percent.

Furthermore, says Bill Hensel, Port of Houston’s marketing director, the port had a record 17.7 million tons of container cargo moved in 2011.

“It was a really good year for us. Container cargo was up 4 percent overall from 2010 when the port handled slightly more than 17 million tons.”

With the introduction of new dual carrier service called the Gulf of Mexico Express, or GME, Houston is expected to capture even more balanced trade. Last month, Cosco Container Lines and Hanjin Shipping launched a new service linking the Far East, Panama, and Houston. The two carriers, part of the CKYH Green Alliance among Cosco, “K” Line, Yang Ming, and Hanjin, are deploying eight Panamax container ships with capacities of 4,000 TEUs apiece on the new service. Cosco deploys six of the ships, while Hanjin deploys two.

Meanwhile, analysts point out that Houston may lose some regional market share to the Port of New Orleans if a “peak pricing program” is implemented in the future.
Last year proved to be a banner year for container volumes at the Port of New Orleans. Year-end figures show that the Napoleon Avenue Container Terminal moved 476,413 TEUs, up 11.6 percent compared to 2010—the Port’s previous record-setting year—and up 46 percent compared to volumes just two years ago.

Balanced trade played a crucial role in this story, too. “A strong export market, particularly chemicals and agricultural products, helped us achieve two back-to-back record-setting years,” says Port of New Orleans President and CEO Gary LaGrange. “Coffee and apparel were strong commodities on the inbound side.”

The port also added a new Latin American container service in 2011 and a new container carrier, as CMA CGM returned to New Orleans. The shipping line joins Mediterranean Shipping Company, Hapag-Lloyd, Maersk, Seaboard Marine, and CSAV in serving the Napoleon Avenue Container Terminal.


About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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