The Canal Gets Bigger, and U.S. Ports are Ready
All along the East Coast and in the Gulf of Mexico, major U.S. ports are scrambling to be the go-to destination for shipping traffic from an expanded Panama Canal.
THE CANAL GETS BIGGER
The expansion of the Panama Canal (also known as the Third Set of Locks Project), as proposed by the Panama Canal Authority, will double the capacity of the Canal by 2014. The project will create a new lane of traffic along the Canal by constructing a new set of locks, including the following integrated components:
• Construction of two lock complexes—one on the Atlantic side and another on the Pacific side—each with three chambers, which include three water-saving basins
• Excavation of new access channels to the new locks
and the widening of existing navigational channels
• Deepening of the navigation channels and the elevation
of Gatun Lake’s maximum operating level.
Twenty million years ago, the oceans covered the area now known as Panama, flowing through a large gap in the continents of North and South America.
Beneath the surface, two plates of the Earth’s crust were slowly colliding with each other, forcing the Pacific plate to slide under the Caribbean plate. The pressure and heat produced by this collision spawned underwater volcanoes. About 15 million years ago, some of these volcanoes grew tall enough to break the surface, forming a chain of islands. The islands gradually filled out as the two tectonic plates pushed up the sea floor, and, about three million years ago, the Isthmus of Panama emerged from the sea, a narrow strip of land dividing the two great oceans.
According to scientists, the formation of the Isthmus of
Panama was one of the most important geologic events on Earth in the past 60 million years, with great impact on the planet’s climate and environment. The sliver of land re-routed the currents of the great oceans, creating the Gulf Stream and warming the denizens of northwestern Europe. Biodiversity on the continents increased exponentially, as animals were able to migrate on land to all corners of the world.
Nobody complained about this magnificently unfolding
ecosystem until the guys with boats arrived. In the late 19th century, global commerce was carried on ships. Because there was no easy way to get from the Pacific to the Atlantic and vice versa, these ships had to travel thousands of miles out of their way to reach their destinations, through treacherous waters at the bottom of South America near Antarctica.
This nagging problem was solved by one of the greatest feats
in the history of human engineering, with a big assist from a political force of nature named Theodore Roosevelt. On August 14, 1914, the Panama Canal was completed, opening a 48-mile waterway between the two oceans and revolutionizing international commerce.
Over the past century, the waterway cutting through the Isthmus has been a reliable and indispensable artery for the world’s goods. But, like all arteries, it became clogged as traffic—and, more importantly, the size of ships—increased.
More than nine decades after it first opened for business, the Panama Canal finally maxed out. Designed before Titanic-sized ships were launched and air travel was limited to test flights on the outer banks of North Carolina, about 14,000 vessels carrying 5 percent of the world’s ocean cargo—280 million tons—pass through the locks of the waterway each year. Each day, on average, more than 40 massive ships, many of them three times as long as a football field and piled high with cargo, ride at anchor in impromptu fleets that stretch across the horizon. On the Atlantic side, most of the ships carry grain from the American heartland, bound for markets in Asia; the vessels on the Pacific side from the Far East are jammed with cars and electronics destined for the East Coast of the U.S. Some ships with daily operational costs of $40,000 wait as long as a week for passage.
During periods when traffic backs up, canal officials sometimes institute an auction to determine which ships get through first. A few years ago, during a particularly busy August, BP Shipping bid $220,300, a record for oil tankers, to jump to the head of the line. When combined with the regular transit fee, the passage cost BP $400,000. The auction price was not an anomaly: it was the fourth oil-tanker record that week.
For years, major shipping companies built vessels designed to fit the canal’s 110-ft.-wide lock chambers. These so-called Panamax ships carry the bulk of the cargo that transits the canal. Increasingly, however, global shippers are building even bigger vessels, known as post-Panamax ships, that cannot fit through the current canal. (In North America, goods that bypass the canal typically cross the U.S. or Canada by rail). In 2011, those vessels represent 37 percent of the world’s container ships. Egypt’s Suez Canal already handles 20 percent more traffic than the Panama Canal and generates more than twice as much revenue. The lockless, sea-level shortcut between Europe and Asia can accommodate supertankers that dwarf the largest vessels now utilizing the Panama Canal.
A $5.25-BILLION BIRTHDAY PRESENT FOR THE CANAL
Today, this problem is being addressed with a $5.25-billion expansion of the Panama Canal that is scheduled to be completed on the Canal’s 100th anniversary in August 2014. The expansion will permit large ships from Asia to travel directly to East Coast destinations instead of offloading their goods on the West Coast and shipping them across the country by rail and road. With 15 percent of the world’s maritime fleet unable to use the Canal because the ships are too large, the expansion project will have a major impact on trade across the world.
In 2006, then Panama President Martin Torrijos announced a plan to double the capacity of the Canal. Included in the plan were new sets of locks, dredging of the approach channels and deepening the passage between each set of locks. In October 2006, 76.8 percent of Panama’s voters approved in a national referendum a $5.25 billion plan to expand and modernize the canal. The project will include two new sets of single-lane, three-step locks—one set at the Atlantic entrance and one at the Pacific; two new navigational channels to connect the new locks to existing channels; and deeper, wider versions of existing shipping lanes. In all, canal crews will dredge 130 million cubic meters of rock and soil, enough to fill the Empire State Building nearly 130 times. The new traffic lane will be large enough to accommodate post-Panamax ships and will double the canal’s capacity.
The impending unveiling of the new and improved Panama Canal has created a frenzy among major East and Gulf Coast ports, all of which are aspiring to be the destination-of-choice for ships passing through the Canal. Economically, the stakes are enormous—the “winner” will reap billions of dollars in new shipping business.
The current scramble among U.S. ports reaches all the way up the coast to New York and beyond. For example, there currently is a push to replace the Bayonne Bridge in northern New Jersey, because the current bridge is too low for larger container ships to enter New York/New Jersey port facilities. If the bridge structure is not altered, its is likely the Port of New York and New Jersey will lose jobs after the expansion of the Canal is completed.
In Savannah, GA, they are working around the clock to scrape six feet of mud from the bottom of the Savannah River. Port officials are racing to complete a $625-million channel deepening project by 2014.
Ports from New York to Miami are scrambling to spiff up their harbors and shipping channels. Baltimore and Norfolk already have 50-ft. channel drafts, and the Port of Philadelphia is upgrading. According to a recent report in The New York Times, the competition to become the go-to port for ships passing through the Canal is fiercest in the Southeast and the Gulf Coast, which has the closest ports to the Isthmus.
“Everyone is lined up, and the door is about to open,” Bob Pertierra, vice president of supply chain development for the Metro Atlanta Chamber, told the Times. “If you can imagine the crowded three- or four-lane highway you’re driving on suddenly getting expanded to 12 lanes, you can picture what’s about to happen.”
Joining Savannah in the jousting are Charleston, SC, Jacksonville, FL, Miami and more than a dozen other ports, including major inland ports like Memphis. One hurdle that contenders must overcome is the fact that most major port expansions require Congressional approval, studies by the Army Corps of Engineers and a significant amount of federal funding.
According to another Times report, some sharp elbows are being thrown as state and local officials vie for the pole position in the big ports contest. Curtis Foltz, executive director of the Georgia Port Authority, noted Savannah already is a much larger port than Charleston. “All you have to do is look at the numbers,” he said. “The stats speak for themselves.”
The incoming governor of South Carolina picked up the gauntlet at a recent annual dinner for SC ports, which was held the same day last month that the Corps of Engineers announced its approval for Savannah’s dredging project.
“You now have a governor who does not like to lose,” Gov.-elect Nikki Haley declared. “Georgia has had their way with us for way too long, and I don’t have the patience to let it happen anymore.”
Somewhere, Teddy Roosevelt is smiling. May the best port win, and earn a well-deserved “Bully!” from Mt. Rushmore. Here is an up-close look at some of the contenders.
GEORGIA PORTS BRING THEIR ‘A’ GAME TO CANAL CHALLENGE
Facilitating global trade though strategic East Coast gateways, the Georgia Ports Authority (GPA) currently operates two deepwater seaports and two inland ports in Georgia. Its two Atlantic seaports are the Port of Savannah and the Port of Brunswick; its two inland ports, both linked to the Gulf of Mexico, are Port Bainbridge and Port Columbus. The Port of Savannah is based in Garden City and the Port of Brunswick is located in Brunswick. Each of these ports hosts multiple terminals. The Port of Savannah, by far the largest, is the flagship port.
Georgia’s ports are critical to continued economic growth in the state. Combined, its deepwater ports and inland barge terminals support more than 295,000 jobs throughout the state annually and contribute $15.5 billion in income, $61.7 billion in revenue and $2.6 billion in state and local taxes to Georgia’s economy.
In preparation for the Panama Canal expansion in 2014, the GPA has embarked on an expansion and modernization plan to more efficiently accommodate newer, larger vessels that already are calling on East and Gulf Coast ports. These vessels like the CMA CGM Figaro, which called on Savannah in August 2010, offer more capacity and lower cost per container compared to current Panamax vessels.
The GPA is working with federal and state agencies toward the approval of the Savannah Harbor Expansion Project (SHEP), which would deepen the Savannah River from 42 feet to 48 feet. Although the port is able to serve 8,500 TEU (20-foot equivalent unit, the standard measure of container capacity) vessels, a deepened harbor will enable the port to more efficiently serve larger ships, the frequency of which will grow exponentially once the Panama Canal’s expansion project is completed.
“We’ve worked more than a decade to make deep water a reality here,” said Curtis J. Foltz, executive director of GPA. “This is the last piece of the puzzle. This tells our customers this state, this port is committed to being here for them.”
According to GPA, completion of SHEP is critically important to continued economic growth in the Southeastern U.S. and Georgia. As the fastest-growing and fourth-largest container port in the nation, the Port of Savannah was responsible for moving 8.3 percent of the U.S. containerized cargo volume and more than 18 percent of all East Coast container trade in FY 2010 (July 1, 2009—June 30, 2010). The port, which boasts a uniquely balanced export-import ratio, handled 12 percent of all U.S. containerized exports, a total of 1.14 million TEUs. The port also is a gateway to more than 44 percent of the U.S. population and 42 percent of all job-creating companies, officials said.
“This project—one of the most important and productive civil works projects in the country—will maintain and create jobs and commerce throughout the nation, while significantly reducing transportation costs for U.S. shippers,” said GPA Chairman Alec L. Poitevint. “As the Southeast’s gateway to the world, our harbor must be able to accommodate these vessels without tidal restrictions in order to efficiently serve global commercial demands.”
The project, recently approved by the U.S. Army Corps of Engineers is moving to construction. The project cost of $576 million will result in a 4.3-to-1 benefit-to-cost ratio, meaning that for every dollar spent on the project, more than $4.00 in benefits will be realized.
GPA’s Focus 2020 is a strategic development plan to invest more than $1 billion on innovative capital improvements to its terminals. Focus 2020 puts Savannah’s Garden City Terminal, with two on-terminal Intermodal Container Transfer Facilities (ICTFs), at the epicenter of its plans to proactively increase the capacity of the port to handle the anticipated growth in container cargo moving across its docks over the next decade.
The GPA plan includes equipment upgrades such as the ongoing addition of “reefer racks” for containers transporting temperature-sensitive cargoes, installation of nine additional super post-Panamax cranes (to be completed by 2020) and 64 rubber-tired gantry cranes. The project also includes construction of a “Cargo Beltway” to accelerate commercial traffic between the terminal and major near-by interstates.
Georgia’s ports provide a strategic gateway to rail and road distribution networks that offer the most efficient and reliable intermodal access to markets across the Southeast and Midwest. Served by Class I rail service—Norfolk Southern Railroad and CSX Transportation—Savannah offer unrestricted double-stack service and two- to three-day transit times to major hubs throughout the Midwest, Gulf Coast and Southeast, including overnight service to Atlanta, the fastest of any North American port. Immediate interstate access is available via Interstates 95 (North/South) within 5.6 miles and I-16 (East/ West) within 6.3 miles.
Currently, about 20 percent of the cargo the Port of Savannah handles moves by rail; that is expected to increase to as much as 25 percent over the next five to ten years, according to John Wheeler, GPA’s senior director of trade development.
“Shippers wanting to discharge their cargoes as near to inland markets a possible are seeing that Savannah’s rail connections give them a distinct advantage over moving their shipments through a West Coast port,” said Wheeler.
That, Wheeler says, makes Savannah “the head of the logistics funnel that moves cargo in a triangle from Chicago to Dallas and Atlanta and everywhere in between.”
In February, GPA announced significant volume gains at the Port of Savannah, reflecting the global demand for Georgia-based exports. In January 2011, Savannah posted the second best month ever with 132,257 containers (237,004 TEUs), which yielded a fiscal year-to-date increase of 14.3 percent and 13.3 percent, respectively. Container tonnage posted the third best month ever with 1,887,179 tons. More than 200 vessels called on the port, an increase of 20 percent compared with January 2010.
Breakbulk tonnage for the ports of Savannah and Brunswick totaled 171,761 tons, which is an increase of 43 percent compared with January 2010. At the Port of Brunswick, auto and machinery units practically doubled compared with January 2010, moving 37,313 units in January 2011.
“Accommodating recent increases in volume without impacts on our world-class speed and efficiency levels is due to the hard-working men and women on our terminal, but also to the strategic infrastructure upgrades,” said Poitevint. “As larger vessels continue to call on the
Port of Savannah, the increased global demand for trade through our ports necessitates the efficiency and additional capacity of a deepened harbor.”
PORT OF NEW ORLEANS IS READY
New Orleans has been a center for international trade since 1718, when it was founded by the French. Today, the port is one of America’s leading general cargo ports, holding the nation’s top market share for imported steel, natural rubber, plywood and coffee.
The Port of New Orleans has six trunk line railroads, more than any other seaport in the U.S., which are connected to the docks by a short line railroad, the New Orleans Public Belt Railroad. The Mississippi River and its tributaries provide 14,500 miles of navigable waterways. Barge traffic reaches major markets in the American heartland including Chicago, St. Louis, Tulsa, Memphis, Pittsburgh and many other locations.
The Port’s cargo profile is primarily breakbulk, heavy-lift and containerized cargo. It is the largest importer of natural rubber in the U.S. and the second largest importer of green coffee. Other important commodities include steel, non-ferrous metals (New Orleans is a certified London Metal Exchange Port), forest products, frozen poultry and chemicals.
The port’s facilities include 22 million square feet of cargo-handling area and more than 6 million square feet of covered storage area that accommodate an average of 2,000 vessel calls each year. The port ranked sixth in total trade by cargo volume in 2008 and moved 229,067 TEUs in 2010, according to statistics from the American Association of Port Authorities.
In anticipation of capturing a big chunk of the transpacific Asian trade previously destined for West Coast ports, the port is ramping up expansion projects to assure the availability of adequate terminal capacity and address transportation infrastructure needs and marketing for all-water Asian liner service. The port hopes to have finances secured and expansion projects completed by 2014.
“The Port of New Orleans and all of the ports on the Gulf Coast are preparing for the expansion of the Panama Canal,” said Gary P. LaGrange, president and CEO, Port of New Orleans. “We are in the process of adding incremental capacity to our container terminal through the addition of two gantry cranes and by adding marshalling area. In 2011, we increased our container volumes by 31 percent. We have an expansion footprint that allows us to continue to increase capacity as the need arises and as funding becomes available.”
Over the past 10 years, the port has invested more than $400 million in new state-of-the-art facilities. Improved breakbulk and container terminals feature new multipurpose cranes, expanded marshalling yards and a new roadway to handle truck traffic.
Currently, two gantry cranes are under construction in Korea for a total price of about $25 million and are expected to arrive in New Orleans by the end of 2011. The 100-foot gauge cranes will have the outreach needed to handle the super post-Panamax container ships.
The Crescent Corridor project, currently underway, will link the Port of New York and New Jersey to the Port of New Orleans. The Crescent Corridor is a railroad corridor expansion program that will be operated by the Norfolk Southern Railway (NS). The line, proposed by NS in 2007, will run along Interstate 81 and will be a major intermodal corridor running between Louisiana and New Jersey.
The port currently is looking to raise $150 million in financing for a $237 million expansion of its Napoleon Avenue Container Terminal Complex, the second of a three-phase, $500 million development. The Napoleon Avenue Container Terminal, completed in 2003, increased the depth available for container vessels at New Orleans from 33 feet to 45 feet. Subsequent investments have improved efficiency by adding space for the storage of empties and chassis, and building a near-dock rail yard that allows containers to be transferred quickly from ship to rail and vice versa. Right now, the port is in the process of adding four acres of marshalling area to the terminal.
As part of a Katrina recovery project, the port is building a new refrigerated terminal at Henry Clay Avenue Wharf on the Mississippi River. The facility includes a 140,000 square-foot warehouse able to store 35 million pounds of product between 15 and 40 degrees F and to blast-freeze 1.2 million pounds of product in 20 hours or less. This capacity will be available at the dock, adjacent to where refrigerated ships will call.
In January, the port started a project to renovate the Julia Street Cruise Terminal. The estimated $13.7 million project will renovate two smaller terminals at Julia Street into one large, modern terminal. The project includes the installation of a new climate-controlled articulated gangway, currently under construction in Sweden. The terminal will be home to Royal Caribbean’s Voyager of the Seas, which will home-port in New Orleans beginning this fall. The 1,020-foot cruise ship carries 3,838 passengers and will be the largest cruise ship ever to call on the Port of New Orleans. The project is expected to be completed in October.
PORT OF VIRGINIA’S CAPACITY GROWS BY LEAPS AND BOUNDS
For the past six years, the Virginia Port Authority (VPA), which owns and operates the Port of Virginia, has been working on various projects to prepare for the Panama Canal expansion. VPA’s lease of the massive APTM intermodal terminal at Portsmouth and its capacity expansion at the Norfolk International Terminal both help Virginia to be positioned favorably, as do the move of the local railroad line, and the planning for even more capacity at Craney Island.
The port is one of two ports on the East Coast which can already handle the channel depth of 50–55 feet and height clearance (approximately 50 feet) which are needed for the larger ships that would begin coming through the widened canal (the other is Baltimore). Its Suez-class cranes can handle ships loaded 26 containers across, giving them the ability to handle vessels larger than any currently built.
“With our 50-foot-deep channels, no overhead (bridge) obstructions, double-stack rail to Chicago and modern container terminals, Virginia is well-positioned for the future,” said Jerry A. Bridges, the executive director of the VPA. “There is no other port on the U.S. East Coast that has a comparable list of assets. So we are ready for an expanded Panama Canal—we’ve been ready for almost six years.”
In January, the port began the first phase of its $2.2-billion, multi-phase terminal project to build the Craney Island Marine Terminal, which will be the fourth state-owned, deepwater marine cargo terminal. The first phase involves construction of the foundations for a network of dikes that eventually will support a 600-acre marine terminal. The foundation work will be done in phases as finances permit.
“Another key asset of the Port of Virginia is our ability to expand,” said Bridges. “Right now, construction on Craney Island is underway; that long-term project could feasibly double the capacity at our port. All the permitting and paperwork is complete and we received $27 million in [President Obama’s] proposed budget for fiscal 2012.”
Last September, the VPA awarded two contracts worth a combined $30.9 million for this phase of work. The total cost to complete the 600-acre site is $700 million and that will be done through a 50-50 cost-share agreement with the federal government.
Projected benefits of the Craney Island Eastward Expansion Project:
- The construction phase will generate 1,176 jobs and $37 million in wages
- When it is complete, the cargo moving over Craney Island will generate 54,000 jobs, $1.7 billion in wages, and $155 million in state and local tax revenue.
- Its cumulative economic impact on the Commonwealth will be $5 billion annually
- It will generate $6 billion in national economic development benefits—money that will not have to be invested by the federal government in large transportation infrastructure projects needed to move goods to consumers
In July 2010, the VPA signed a 20-year lease agreement that gives the agency control over all operations at APM Terminals North America in Portsmouth, VA (APTM). The 576-acre terminal is heralded as the most technologically advanced marine cargo facility in the Americas. The lease agreement unifies all the marine cargo container terminals in the Hampton Roads harbor under the VPA flag for the next two decades.
“This asset presents a host of opportunities for The Port of Virginia,” said Bridges. “It gives us ample container capacity now and in to the future; we will be able to market the technology and efficiency of this facility to our customers; and it gives us on-dock rail capabilities that we previously didn’t have.”
In February 2011, following its 41-day voyage from China to Virginia, the Zhen Hua 24 eased its way into the Chesapeake Bay carrying two fully-erected Post-Panamax container cranes that were bound for service at APMT. Once the units are put into service, APMT will have eight post-Panamax cranes. In total, the VPA will have 22 container cranes in the Hampton Roads Harbor, Panamax-class and larger.
In April 2010, the port began work on phase II of its Central Rail Yard at Norfolk International Terminals (NIT). The $10.1-million project will add six new tracks to the existing Central Rail Yard configuration. The 648-acre facility, the port’s largest terminal, has 4,000 linear feet of berth and 3.3 miles of on-site rail with links to NS and CSX that boasts a current capacity of 1.4 million TEUs annually, with room for further expansion. It is home to 14 of the biggest, most efficient cranes in the world. These ZPMC cranes are the only cranes capable of handling the “ships of tomorrow.” Completion of the project is expected sometime in the spring of 2011.
The port’s rail business has always been one of its strongest areas of growth and with the completion of the Heartland Corridor, a three-year, public-private partnership project, the port now has fast, direct, double-stacked access to Chicago. This project is critical to East Coast ports since they move freight from the ports to inland locations quicker, cheaper and greener.
Called one of the largest railroad engineering projects of the past century, Norfolk Southern raised the height of 28 tunnels in the Appalachian Mountains to open the Heartland Corridor. The benefits to the port began immediately—nearly 250 miles will be sliced from current routes saving up to two days in transit time for shippers. In September, the VPA sent its first-ever double-stack train, which was more than 4,300 feet long, on its way through the corridor to Chicago.
“This project provides us with a solid, competitive advantage that has been drawing a significant amount of interest from our customers,” said Bridges. “Couple this capability with our 50-foot-deep channels and an expanded Panama Canal, Virginia is well-positioned for the future.”
PORT OF BROWNSVILLE: WORLD-CLASS AND CONFIDENT
The Port of Brownsville, which opened more than 70 years ago, is a world-class deepwater seaport located at the southernmost tip of Texas at the western-most terminus of a 17-mile channel that flows into the Gulf of Mexico at the Brazos Santiago Pass, which was the landing place of Spanish conquistador Pineda in 1519, and others.
The port, which is the only deepwater port directly on the U.S.-Mexico border, plays a significant role in the movement of goods between Mexico and the U.S., as well as globally. In April 2010, Breakbulk Magazine ranked the port as third among top 10 U.S. ports for steel imports, eighth for steel exports and third for steel imports and exports.
With over $90 million currently invested in infrastructure projects, the port is positioning itself to remain very competitive and to provide multi-modal transportation options in anticipation of the increased shipping activity in the Gulf of Mexico as a result of the Panama Canal expansion.
“As cargo increases in the Gulf as a result of the canal expansion all ports in the Gulf region will benefit,” said Eduardo A. Campirano, Port Director and CEO. “Businesses make a logistical decision based on proximity to their facilities and the cargo’s final destination. We are a versatile port that can handle most of the cargo that comes through the Gulf region and feel very comfortable with our opportunity to compete.”
Finding new ways to give the port a new dynamic as a center of intermodal freight movement, the port is implementing an aggressive rebuilding and renovation infrastructure plan. Focusing mainly on capital improvement transportation projects, some of the latest developments at the port include the SH 550 Project, which will facilitate the movement of cargo to and from the port, the new Port Entry Road that will tie into the SH 550 Project, improvements to the Overweight Corridor and road and utility improvements inside the port.
“Our Overweight Corridor helps manufacturing plants keep costs low,” said Manuel Ortiz, public information officer for the Port of Brownsville. “Plants are able to load trucks at Mexican weight standards that are 1.5 times higher than U.S. standards—this cuts down on the number of trips and therefore overall expenses.”
In order to accommodate new ocean-going ships, the port is working to deepen and widen the Brownsville ship channel, which will help it to offer a cost savings through economies of trade and expand its growing transloading capabilities. Other projects include improving its short-sea shipping capabilities; pursuing expansion of its deep draft heavy lift general cargo dock to expand its break bulk capabilities; and constructing an additional oil dock to keep up with a growing petroleum and liquid cargo business.
The port recently received the U.S. Department of Transportation “Marine Highway Designation” due to its work on a Marine Highway Project with its partner Port Manatee, FL. The Marine Highway links not only two regions of the country, but also two countries, which is highly beneficial for the community and the environment because it improves job creation and federal funding potential and reduces the number of trucks on the already congested U.S. highway system, thereby lowering greenhouse gas emissions.
“In essence the Marine Highway is a virtual highway linking Port Manatee, Florida and the Port of Brownsville,” said Ortiz. “The designation is important because of the positive impact it will have from both a commerce and environmental standpoint. The designation will allow us to more effectively compete for future funding, which will in turn allow us to continue to develop this service.” To date the port has received over $3 million out of an initial $7 million dollars available for the funding of federal projects.
The port’s infrastructure already in place allows the region to maximize its potential and provides a way for the Rio Grande Valley region to transport goods globally. It is connected with the Mexican Port of Lazaro Cardenas and inland ports in Monterrey, San Luis Potosi and Saltillo by a rail line.
Since it was established in 1983, the Brownsville and Rio Grande International Railroad (BRG) line has grown to be a very successful operation. The BRG is a subsidiary of the Brownsville Navigation District and provides efficient and reliable railroad service. Operations are 24/7 with an average monthly load of 2,700 plus cars.
From 1994 to 2009, BRG saw an increase of 114 percent in car counts per year. In 2010, BRG was not only able to post a successful year financially—it also posted a record month in October. On average, BRG moves approximately 2,700 car loads per month; however, in October it moved 3,784 carloads.
According to Norma Torres, president and CEO of BRG, this is due to increased demand for scrap metal by refineries located in Monterrey Mexico. “We expect demand to increase over the next year,” said Torres.
With this demand, BRG is hoping to not only purchase additional equipment but also to build a new rail yard. “The development of the north rail yard is going to be a crucial component to our future,” said Torres.
In addition to having one of the largest Foreign Trade Zones (FTZ No. 62) in the U.S., the port offers over 40,000 acres of land, along with 12 cargo docks, four oil docks, one liquid cargo dock, 650,000 square feet of covered storage and 2.3 million square feet of open storage.
“We have sufficient draft, with intermodal capabilities, and we have the services in place to compete with every Port within the Gulf region,” said Campirano. “In addition, we have ample land to continue to grow as demand increases in the future.”
PORT OF SOUTH LOUISIANA: HEAVYWEIGHT TONNAGE KING
The Port of South Louisiana, a 54-mile port district on the Mississippi River between New Orleans and Baton Rouge, is the largest tonnage port in the Western Hemisphere. Over 4,000 oceangoing vessels and 55,000 barges call at the port each year. In 2010, the facilities within St. Charles, St. John the Baptist and St. James parishes handled more than 246 million short tons of cargo brought to its terminals via vessels and barges. With exports of over 48 million short tons of cargo in 2010, the port also is the highest- ranked exporter in North America.
The port offers users a strategic location at the intersection of the Mississippi River and the Gulf of Mexico and an intermodal transportation network of waterways, roadways, rail and air featuring access to four interstate highways, four Class I railroads, Louis Armstrong International airport and St. John Parish Airport, and deepwater via the Mississippi River. The inland barge system, comprised of 19,262 miles of waterway, moves more than 124 million short tons of cargo upriver to major U.S. markets in the Midwest and Northeast.
In the heart of the port lies the Globalplex Intermodal Terminal, a 335-acre maritime industrial park for both vessels and barges that provides handling and storage for bulk, breakbulk and containerized cargos. Its deep-draft bulk terminal has one of the largest cement facilities in North America. Cargo is quickly moved to and from landside storage via an extensive covered conveyor system.
The proposed expansion of the Panama Canal is a key factor influencing Louisiana ports. The expansion will allow the Panama Canal to approximately double its logistics capacity, which will significantly increase cargo volume.
“We believe that Louisiana can win a significant share of new logistics business and that Chinese investment funds are a potential source of Louisiana foreign direct investment,” said Don Pierson, assistant secretary of Louisiana Economic Development. “Moreover, the Panama Canal has traditionally been a gateway for dry goods, such as grains, minerals, fertilizers, coal and liquid goods, such as chemical products, crude oil and oil derivates. These are all strong suits for Louisiana.”
In April 2010, port and economic development agency executives traveled to Asia to share some of the advantages and benefits Asian companies—which typically ship via ports located on the west coast of North America—would have in the Port of South Louisiana. Since then, the port has been even more committed in expanding its operations and in securing new capital investment within the region, such as the planned terminal on the Mississippi River at the Bonnet Carré Spillway.
In June 2010, the port officially opened Transit Shed #4 at Globalplex Intermodal Terminal. The $6- million warehouse, which was designed to withstand 130-mph winds, was funded in part by $4.8 million from LA DOTD’s Port Construction and Development Priority Program. Erected adjacent to the general cargo dock access bridge, the building layout and location will permit future expansion of the structure to triple its current size in addition to the installation of conveyors connecting the warehouse to the general cargo dock and to nearby railroads.
In the summer of 2010, the port began an $18.9-million project to construct a 65-foot-wide x 700-foot-long finger pier adjacent and downriver from the existing general cargo dock that will allow the berth of a Panamax-size vessel and direct vessel-to-barge transloading. The project is expected to be completed in the fall of 2011.
The Port of South Louisiana offers access to 66 percent of the North American market and access to Mexico and Latin America in 2-7 days. It provides 60 percent of the nation’s grain exports and 7 grain transfer facilities, 50 million short tons of crude oil imports on average per year and four major oil-processing plants, which refine more than 1 million barrels daily, and 11 petrochemical manufacturing facilities. In short, within the 108 miles of deepwater frontage on both banks of the Mississippi are more than 50 piers and docks. Its impressive group of resident tenants includes Chevron Phillips, ArcelorMittal, Cargill, Dow, ADM, DuPont, Motiva Enterprises, Marathon, Shell and Nucor Steel.
PORT FREEPORT: POISED FOR GROWTH
Port Freeport, TX is expanding in depth and width, as well as in economic impact for the state of Texas. Located on the Gulf of Mexico, Port Freeport’s traffic has increased substantially in recent years with the opening of the Freeport LNG facility and growth in the importation of windmill components, pipe and project cargoes. In fact, the port has grown from being the 29th port in the U.S. to the 16th port in the U.S. in international business in the last 10 years with about $2 billion in investment in that time period in the port, according to Michael Wilson, Director of Trade Development. Last year total tonnage for Port Freeport was up 6 percent over 2009. And that growth shows no signs of slowing down, with new improvements and enhancements being done to the port on an ongoing basis.
In 2009, Port Freeport was granted permission by the U.S. Army Corps of Engineers to widen the offshore entrance and jetty channels to the Freeport harbor. The widening of the six-mile offshore entrance and jetty channels up to 600 feet from the current 400-foot width will allow larger LNG, crude oil and other cargo vessels to access Port Freeport.
“The deepening and widening project that we’re doing right now would bring our channels down to 55 feet and 600 feet wide, and that would allow post Panamax-type vessels to call in Freeport,” says Wilson. “Right now the largest vessel we’ve had in the port is probably 900 feet long, and most of the Panamax vessels are about 925 feet long and the Post-Panamax vessels are about 1,200 linear feet long, and hold up to 8,500 or 10,000 containers in a vessel.”
The results of the Army Corps of Engineers’ first phase study were so good that they pushed the second phase of the project by 18 months. The port is coming to the end of the second phase of the project, which is a study of the economic impact, return on investment and calculations related to trade and volume to justify the federal government spending on the project. Basically it’s a written recommendation by the Corps to tell the federal government to move ahead on the project. Once that’s done the engineering and construction phase can begin. The $350 million project will make Port Freeport the deepest port in the West Gulf of Mexico enabling it to handle the largest container ships, largest LNG ships, largest chemical tankers and second largest crude tankers in the world.
“Fort Freeport is considered to be a strategic national asset,” says Wilson. “We’re one of the few ports in the U.S. that has 8,000 acres on deep water, and we do both 28 million barrels of crude, plus LNG and we can distribute all over the U.S. with the infrastructure that we have here. So when you look at our project, we actually only have a seven-mile channel, so it’s not as expensive to maintain us or to finish us out to the new depth as it would be for those ports that might have 50-mile long channels or to have to deal with bedrock as they do in the northeast or some of the other things that they have to do with this type of infrastructure improvement.”
Along with the widening and deepening project, Port Freeport has spent the past few years developing the Velasco Terminal having begun construction in 2006. Velasco Terminal is a 120-acre site designed to become an 800,000 container capacity terminal. Around 800 feet of the berthing line and 20-acres of back plan have been completed already. When it is complete it will have 2,400 feet of berthing line with an operational depth of about 47 feet and have 90 acres of back land. Total build out is estimated at about $280 million.
A final project at Port Freeport includes a multi-modal facility with five unit trains of capacity designed in it. The port is working with Union Pacific Railroad to create the rail improvements and new rail lines on this $40 million project.
“When you look at these three major infrastructure investments, what you see is a positioning for the future,” says Wilson. “Not necessarily just for the Panama Canal, but for the future of this port and Texas and the U.S. There are going to be shifts in the global patterns and a lot of people are trying to predict what’s going to happen with the Panama Canal.”
Current growth projections for Port Freeport, even without the addition of the Panama Canal freight, are expected to be at a 10 percent to 15 percent growth rate per year for the next 15 years.
PORT EVERGLADES IS MOVING TO DEEPEN HARBOR AND CHANNELS
As one of South Florida’s leading economic powerhouses, Port Everglades is the gateway for international trade and cruise vacations. Already one of the busiest cruise ports worldwide, 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.
Located in Broward County, Port Everglades reached another milestone toward expanding its cargo-handling capabilities when Board of County Commissioners recently reaffirmed the need to increase berth space at the port’s Southport Turning Notch as well as to continue toward the completion of the U.S. Army Corps of Engineers Deepening and Widening Study, which called for a deepening of the port’s channels to 50 feet from the current depth of 42 feet.
“This is a two-pronged plan to expand berth capacity and increase operating depths that points to the comprehensive strategy to meet future service demands,” said Port Everglades Director Phil Allen. “We are pleased with the Army Corps’ recent findings because they justify the need for a deeper harbor at Port Everglades to handle the increase of ship traffic that we expect to see as a result of the Panama Canal expansion and the anticipated growth of the market in South Florida.”
ARMY CORPS OF ENGINEERS PLAN FOR PORT EVERGLADES:
The Army Corp of Engineers (ACOE) Deepening and Widening Feasibility Study for Port Everglades currently includes a Tentatively Selected Plan (TSP) which has a preliminary benefit to cost ratio of 2 to 1 and consist of the following improvements:
• Deepening and widening the Outer Entrance Channel (OEC) from an existing 45-foot project depth over a 500-foot channel width to 57 feet depth by 800 feet width for a flared extension and extending 2,200 feet seaward.
• Deepening the Inner Entrance Channel (IEC) from 42 feet to 50 feet.
• Deepening the ship simulator-optimized portion of the Main Turning Basin (MTB) from 42 feet to 50 feet.
• Widening the rectangular shoal region to the southeast of the MTB (Widener) by about 300 feet and deepening to 50 feet.
• Widening the South Access Channel (SAC) in the proximity of Berths 23 to 26, referred to as the knuckle, by about 250 feet and relocating the United States Coast Guard (USCG) facility easterly on USCG property.
• Shifting the existing 400-foot-wide SAC about 65 feet to the east from approximately Berth 26 to the south end of Berth 29 to provide a transition back to the existing federal channel limits.
• Deepening the SAC from about Berth 23 to the south end of Berth 32 from 42 feet to 50 feet.
• Deepening the Turning Notch, including a portion of the Sponsor-constructed westward extension, from 42 feet to 50 feet in the area extending 1,300 feet from the SAC, with an additional 100-foot widening parallel to the channel on the eastern edge of the SAC over a length of about 1,845 feet.
• Widening the western edge of the SAC for access to the Turning Notch from the existing federal channel edge near the south end of Berth 29 to a width of about 100 feet at the north edge of the Turning Notch.
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