Seemingly unaffected by the slowdown in global trade, ports along the US Eastern Seaboard are going strong. Major gateways like Savannah, Virginia and Charleston are handling record container volumes, and they are bent of further growth with aggressive expansion plans.
An increase of 2.2% in container throughput to 387,024 TEU set a new record for July in Savannah, with intermodal traffic rising 10.5%, reflecting the growing portion of the port’s throughput that is headed for markets further inland.
In a similar vein the port of Charleston celebrated the busiest July in its history, with container throughput up 5%. The port’s two inland facilities were instrumental in processing these volumes. Rail moves at Inland Port Greer were up 57% in July, while Inland Port Dillon, now in its second year of operation, saw rail moves increase 122%.
A throughput volume of 265,559 TEU made July the second busiest month in the history of the Port of Virginia, with loaded import containers up 4% and overall container traffic up nearly 6%.
“We are continuing to set volume records. The cargo is flowing across the port of Virginia with efficiency and dependability as a result of expanded container handling capacity at VIG (Virginia International Gateway) and NIT (Norfolk International Terminals),” said John Reinhart, CEO and executive director of the Virginia Port Authority. “Our volumes, on a month-to-month basis, continue to grow, and we anticipate this trend to continue well into fall.”
These increases are in stark contrast with the West Coast, where the combined container throughput of the ports of Long Beach and Los Angeles was down 2.7% in the first seven months of this year.
The relative decline of West Coast ports is a long-term phenomenon. The port of Los Angeles estimates that it has lost more than 20% market share to competing ports since 2002. The expansion of the Panama Canal and lower costs on the East Coast have been major drivers of this trend.
The US-China trade conflict has added to this momentum. The value of exports from China to the US in the first half of this year is 12.3% lower than the corresponding figure for the January-June period in 2018.
Moreover, the shift of sourcing from China to Southeast Asian countries like Vietnam and Thailand translates into more attractive transit times from these origins to the eastern US via the Panama Canal or even the Suez Canal. Savannah recorded a 43% surge in container imports from Thailand in June.
None of the East Coast gateways are showing any inclination of resting on their laurels. On September 12, Griff Lynch, executive director of the Georgia Port Authority, announced new rail service to Chicago with a transit time window of 67 hours.
“Our expanding offerings with Norfolk Southern and CSX will be a game changer in the growth of cargo at the port of Savannah,” he declared.
Savannah has also striven to speed up transfers from ship to rail. This is now done in 24 hours, two-and-a-half times faster than Savannah’s previous schedule.
To accelerate vessel loading and unloading and to make sure they can handle ultra-large container vessels, ports are investing heavily in cranes. Savannah is spending US$70 million on six gantry cranes, Charleston has received 14 of 24 new cranes ordered, and the port of Virginia is in the middle of a massive expansion project that includes the addition of two ship-to-shore cranes. Other ports like New Orleans and Everglades are also beefing up their crane lift capacity.
The Port of Virginia is looking to speed up transit times to the interior by moving more containers through a renovated intermodal yard. At the same time, it is embarking on a new strategy of reshuffling terminals used by shipping lines, which is based on alliances of the lines with the Class I rail operators serving the port.
Rail capacity at Savannah is set to receive a major boost next spring when the first phase of a US$200 million rail terminal at the port’s Garden City terminal is due to open. The second phase of the project, slated for completion late next year will bring the capacity of the new facility to 2 million TEU per annum – twice the port’s current rail capacity.
To accommodate larger container ships, the big gateways in the Southeast are deepening their ship channels. Contracts for dredging work in Savannah and Charleston were awarded in August. Charleston’s inner harbor is going to be dredged to a depth of 52 feet, while Savannah and Jacksonville are both dredging to 47 feet.
Further up the coast the port complex of New York and New Jersey is working on its master plan, which aims to double its volume by 2050. To accommodate this growth, the Port Authority of New York & New Jersey sees a need for the construction of a new marine terminal as well as more efficient use of the existing terminals.
Even without such mega projects, West Coast ports are getting nervous. Los Angeles and Long Beach revealed in August that they are planning to collaborate on supply chain optimization initiatives to stem the drainage of traffic to the East Coast.
It remains to be seen if this can dent the momentum on the Eastern Seaboard. The ports there have an eager ally in the Panama Canal authority, which is trying on its part to keep costs low. On September 11 the government of Panama approved reduced toll rates for container vessels transiting the canal.
By Ian Putzger
Correspondent | Toronto