For ports globally, but especially on the east coast and Gulf of Mexico, the current challenges and opportunities are largely rolled up in the expansion of the Panama Canal, says Andrew Cairns, ports practice leader for the Americas.
The Panama Canal expansion has helped trigger an upscaling of the container fleet globally. The new ‘Neopanamax’ vessels are almost three times the size of the old Panamax class, allowing owners to achieve unprecedented economies of scale. Bigger ships can pass rapidly from China to the US east coast – there’s no longer a lengthy navigation around Cape Horn, or the need to transfer freight from ship to road or rail for cross-country delivery. As much as 25% of container trade is expected to shift from west to east.
Adapt or be marginalised
Ports have been preparing with a variety of harbour dredging, infrastructure development, wharf restructuring and investment in new cranes.
The Port of New York and New Jersey is spending US$6bn, including a 10-year channel-deepening project completed at the end of 2016. The Bayonne Bridge will be raised from 50m to 70m to permit access to ships up to 14,000 TEU.
Baltimore, Norfolk and Miami have made adjustments in depth, berth capacity and handling equipment. In Savannah, the Georgia Ports Authority is deepening access to 14.3m by 2020, while neighbouring Charleston will provide 15.5m in 2019.
Speed has always been of the essence in winning business from ship owners, and the Neopanamax ships have made it even more so. The Port of Miami is tackling congestion with hinterland improvements, including a tunnel for trucks to bypass downtown Miami, and a new rail link, the Virginia Avenue Tunnel, which will allow transit of double-stack freight containers.
Large infrastructure projects are expensive. With the aid of advocacy by the American Association of Port Authorities, legislation has been passed to ensure tax revenue generated from port users is spent only on port maintenance and improvement. And shipping companies are increasingly willing to commit to ports they use, giving greater confidence that capital investment can be recouped.
Investment is enabling premier ports to adapt and compete. Subsidy via the Harbor Maintenance Trust Fund also enables second-tier ports to upgrade, to some extent. However, difficult labour relations have resulted in lost trade for principal west coast ports. And new entrants such as Canada’s greenfield Prince Rupert facility in the west, a potential Canadian Atlantic port, and port-rail-port projects in Mexico, mean there are plenty of volatile factors that owners and operators must stay aware of.