Deep water, efficient and fast infrastructure and commitments from global steamship lines are the battle cries for seaports operating in the US. The eastern and Gulf of Mexico coast ports, in particular, are in a race to attract direct service from large vessels that will haul Far East and round-the-world trade once the new and larger set of locks open in 2015 at the Panama Canal.  

Currently, the canal can only handle vessels hauling up to about 5,000 twenty-foot equivalent units (TEUs). But once the new locks are completed, post-Panamax ships (a term denoting the size limits for ships travelling through the canal) of up to 12,000 TEUs, which already use ports on the west coast of the US, will be able to sail through its waters.

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Go east

Some post-Panamax ships transiting the Suez Canal and crossing the Atlantic Ocean already call on eastern and Gulf coast ports – those with deep enough water, berthing and cranes capable of accommodating their needs. But for the most part, the large ships come in at the ports of Los Angeles and Long Beach on the west coast, where cargos are shipped via mini land bridges, or rail, for markets further east. Studies indicate, however, that an all-water service direct to the east coast from Asia can save shippers some $2000 per container in cross-country rail charges if a shipper is willing to accommodate the longer voyage.  

Many contend that there is a lot of hype surrounding the Panama Canal expansion, particularly since the large ships – with many not operating to capacity – will not impact cargo demand. But there are big changes in how steamship lines utilise their vessels and what type of ships they put into service. “We might see more round-the-world vessel rotations and a softening of rates,” says Paul Svindland, chief operating officer of logistics services provider Pacer International.

Nevertheless, a wider Panama Canal is billed as a game changer and US ports are now spending $6bn to $8bn a year in federal, local and private money to make sure they can cash in on it. To date, only two seaports – the ports of Baltimore and Norfolk (Virginia) – have deep enough water and the infrastructure to receive post-Panamax ships. PortMiami contends that it will be ready by 2015, just in time for the canal’s re-opening.

At the ready

Pushing the Port of Baltimore into this exclusive club is a 50-year lease signed in 2010 between the Maryland Port Administration (MPA) and Ports America that created the environment for a $1.8bn investment in the port’s Seagirt Terminal. The public-private partnership quickly led to the development of Seagirt’s 50-foot berth, dredging to 50-foot depths, and four new 'super post-Panamax' cranes.

“In the past three years, Ports America has invested $250m in the port,” says James J White, an executive director at MPA. “It sees it as a great opportunity as the business grows.”

To make trade more efficient, a $90m rail transfer facility is being built by CSX – a class-one railway in the US – so that shipments can be loaded and offloaded a few kilometres from the port. Currently, the port is disadvantaged in that it cannot offer double-stack rail directly from its docks.

The Port of Norfolk offers all the elements for post-Panamax traffic, including terminal-side double-stack rail. While the Virginia Ports Authority (VPA) recently underwent some political upheaval regarding who would operate its public terminals, it is carrying out a number of new and ongoing initiatives that will position both the VPA and Virginia for growth.

Most significant is the construction of the 211-hectare Craney Island, a long-term eastward expansion that will entail an 8400 foot-long berth, 15 container cranes, non-terminal rail access to Norfolk Southern and CSX rail lines, and a capacity of 5 million TEUs. The Craney Island Marine Terminal project, which is slated to last beyond 2025, would eventually double the port’s cargo capacity. Its first phase is scheduled to open in 2020.

PortMiami is undergoing its own transformation, spending $2bn in cargo-related infrastructure improvements, funded largely with bonds that will allow the port to double then triple its container business. The improvements involve a new access tunnel, intermodal and rail connections, dredging to give the port 50- to 52-feet-deep water, four new super post-Panamax cranes (to be added to the four it already has), and new bulkheads and wharf strengthening.

“The improvements will allow us to become one of the top container ports in the,” says Bill Johnson, a director at PortMiami.

Playing catch-up

Other key seaports are actively working to attract the larger ships, although their infrastructure and water depths will not meet post-Panamax ship requirements when the expanded Panama Canal opens in 2015. 

The Port Authority of New York and New Jersey is spending $1.3bn to raise its Bayonne Bridge from its current height of 151 feet to 215 feet so that the post-Panamax vessels can make clearance at high tide. With an expected completion date of 2016, the Port Authority of New York and New Jersey says the bridge needs to be raised to allow larger container ships to get to terminals in Newark, Elizabeth and Staten Island. After a long battle, the Port of Savannah has finally received government approvals to dredge Savannah Harbor. The $652m Savannah Harbor expansion project will give the port 47-foot-deep water. “Ships such as the 9200-TEU MSC Roma already call on Savannah via the Suez Canal,” says Georgia Port Authority vice-chairman Steve Green. 

Streamlining measures from the US Army Corps of Engineers, coupled with the Obama administration’s commitment to expedite the project, have also shaved five years off the Port of Charleston’s harbour deepening project. This means dredging there can be completed by 2019.

At 45 feet at low tide and 50 to 51 feet at high tide, Charleston has the deepest harbour on the US south-east coast. Nevertheless, it needs to be deepened to 50 feet to be able to handle post-Panamax ships at any time of day rather than only high tide. More than 200 post-Panamax ships already call on the port annually.

The Port of Philadelphia will also be a major recipient of a deepening project that will bring the Delaware River’s 166-kilometre shipping channel from 40 feet to 45 feet. “The development of a regular, direct steamship service to and from China and the surrounding region is a continued goal for the Port of Philadelphia,” says Philadelphia Regional Port Authority director of communications Joseph Menta.  

Way out west

Meanwhile, west coast ports are not resting on their laurels. The Port of Los Angeles recently completed a multi-year, $370m main channel deepening project, which now stands at a depth of 53 feet. The project is part of the Port of Los Angeles’ five-year, $1.5bn capital improvement programme that aims to significantly modernise and develop efficiencies at its container terminals, including on-dock rail capabilities.

Phillip Sanfield, a spokesperson for the Port of Los Angeles, emphasises that despite east coast port efforts to gear up for the Panama Canal expansion, the Port of Los Angeles offers world-class facilities, a strong labour force, and expansive warehousing. “We offer shorter transit times – five days quicker to get goods east by using the Port of Los Angeles plus rail,” he says.

The Port of Long Beach is already receiving many 10,000-plus TEU vessels. “More are scheduled to arrive in the coming year,” says Art Wong, a spokesperson for the Port of Long Beach (POLB).  

To ensure that Long Beach continues to be attractive to these larger ships, the port is undergoing a $4.5bn infrastructure improvement programme that includes a $1.2bn Middle Harbor modernisation project that will create one of the most technologically advanced terminals in North America.

The Port of Long Beach is also working on a $1bn bridge replacement project so larger ships can pass into the port’s inner harbour, and $1bn in rail infrastructure improvements, so that more containers can move across country by train.

Three become one

To retain its competitive position, the Port of Oakland is combining three existing terminals into one terminal operation. “This will create the third largest terminal on the US west coast, with 14 post-Panamax and super post-Panamax cranes,” says Marilyn Sandifur, a spokesperson for the port.

Since 2000, Oakland has been making major investments in infrastructure to expand its marine terminal capacity and rail facilities, and has added super post-Panamax cranes to its offering, to accommodate the new generation of container ships. Today, the port has 18 deep-water berths, 36 container cranes (including post-Panamax and super post-Panamax cranes) and more than 320 hectares of terminals. It connects to two class-one railways and the northern Californian domestic market. Efforts are also under way to redevelop the former Oakland army base into a modern intermodal logistics cluster.

“This project is a value proposition for Port of Oakland customers, because once completed they will be able to transload their goods within the port area, creating economies of scale and time efficiencies,” says Ms Sandifur.

After all, saving time and cost is what good logistics is about. If the US is to remain competitive in attracting trade and global investment, efforts here are paramount.

Miami's southern comfort 

Miami's southern comfort

PortMiami is keen to take advantage of its advantageous location when it comes to both East-West and North-South trade. “We’re the key port north of the Panama Canal and we are at the centre of the [western] hemisphere,” says port director Bill Johnson. “We’re well positioned to take advantage of trade opportunities, especially with Asia.”

PortMiami’s channel still needs to be dredged for deep water, however. The effort was delayed until August 2013 due to issues experienced by the US Army Corps of Engineers. But when completed, the 'deep dredge' will make PortMiami the only seaport south of Virginia to have a shipping channel 50-feet deep – 52 feet in some places. Mr Johnson expects the dredging to be completed in time to welcome the new generation of larger container cargo vessels arriving via the expanded Panama Canal in 2015.

Other developments also strengthening PortMiami’s position. In May 2014, PortMiami will become the only port in the US with unrestricted highway access, through a $1bn tunnel being dug under Biscayne Bay connecting PortMiami to Interstate 395. “This will offer a direct link without a single traffic signal,” says Mr Johnson.

The tunnel is intended to take cargo trucks off Miami’s streets and funnel them directly on to the country’s highway system and the port. “Few ports, if any in the world, have a direct connection to an interstate with no traffic lights,” adds Mr Johnson. “What’s more, we have no fog, no congestion, and are only [four kilometres from the coast].”

Miami also offers double-stack rail via partner Florida East Coast Rail (FEC) to Jacksonville, Florida, where it can connect to CSX or Norfolk Southern rail services. “This means with on-dock, on-port rail from PortMiami, cargo can access 70% of the US population in four days or less,” says Mr Johnson. “Containers can be in Cleveland, Memphis and Chicago in less time and at less cost than shipping further north.” 

Baltimore's northern charm 

Baltimore's big push

Besides its ability to accommodate post-Panamax ships, the Port of Baltimore is exploring further investments to foster trade and economic benefits.

The Maryland Port Authority (MPA) has applied for a $10m federal grant – to be matched by a $19.5m state grant – to widen the access channel to Seagirt Marine Terminal, and expand rail access and export storage at Fairfield Marine Automobile Terminal.

MPA plans to use the channel’s dredging material to fill in an unused slip at the Fairfield Terminal, the number one east coast port for roll-on, roll-off cargo. “Last year, we became the most important port in the country for auto imports and exports, a position I think we will retain,” says James J White, a executive director at MPA.

MPA is also planning to build a $24m pier that would include a rail spur so that ships could onload and offload more cars, and high and heavy cargo, particularly those being exported from the Midwest. “That would give us another dock to handle additional cargos and add job growth,” says Mr White.  MPA has applied to the federal government for funding for the pier.

Meanwhile, MPA is eyeing a 1250-hectare site called Sparrows Point to further expand its automobile and roll on, roll off business. The site, once home to what was the world’s largest steel mill, operated by RG Steel, represents the largest privately owned deep-water site available in the US.

Sparrows Point offers immediate interstate access, a private deep-water port terminal with multiple shipping berths on the Chesapeake Bay, and its own short line railway with connectivity to two class-one railways. Its flat surface and expansive space would make it easy for the port to expand its automobile and roll on, roll off trade.

Currently, all assets of the steel mill are being sold. “Once they are removed, and the property is remediated, we think we can strike a deal with the state to invest in a marine terminal,” says Mr White. “If we can make it happen, it would mean a [large number of jobs being created] and it would secure the port’s long-term future.”

MPA is also working on a 72-hectare site that it purchased in 1978 to develop into the Masonville Marine Terminal.