Monday, September 20, 2010

Gulf Coast Ports Growing

By Jim Shaw

Gulf Coast ports are continuing to focus their attention on the expansion of the Panama Canal, and the benefits it will bring for growth, while keeping watch on the recent oil spill developments off Louisiana and the beginning of what may prove to be a very active hurricane season. The new locks at Panama, to measure 49 meters (160 feet) by 366 meters (1,200 feet), will allow bigger container ships to move across the Panamanian isthmus as well as larger grain carrying bulk carriers. This will serve to detour some Atlantic-bound box traffic away from West Coast ports and influence grain movements out of the Midwest growing region to Asia.

A number of southern gateways are already building or expanding their facilities to take advantage of this development while the ports of Galveston and Houston are considering the construction of what would be a completely new container terminal on Galveston’s Pelican Island. This would be in addition to Houston’s current Bayport project, a box terminal that is still under construction and not expected to be completely filled out until 2020.

Smaller ports on the Gulf are attempting to keep up with this type of expansion but may find it difficult to compete with the new load centers.

Tampa Bay Boxes
On Florida’s gulf coast the ports of Tampa and Manatee have both been expanding their facilities and adding new equipment in expectation of the Panama Canal widening. Earlier this year Tampa completed the latest phase of its ongoing container terminal expansion program, with the facility now having 40 acres of paved storage and backing a 2,100-foot wharf. This structure, to be lengthened by an additional 700 feet this year, is served by three rail-mounted container cranes and a 100-ton capacity mobile harbor crane. Terminal operator Ports America plans to eventually quadruple the size of the facility, to more than 160 acres, which will allow it to handle upwards of 1 million TEUs annually.

Looking at this development, nearby Port Manatee has acquired its second mobile harbor crane, a Gottwald unit, to increase its own container handling capacity. The purchase was the result of a public-private partnership between the port and terminal operator Logistec, which split the crane’s $4 million cost with the port.

Port Manatee handles approximately 9 million tons of cargo annually, a large portion of which is containerized fruit and produce shipments being brought in by Del Monte.

Alabama Additions
Another Gulf Coast port investing heavily in new facilities and equipment is the Port of Mobile, Alabama, overseen by the Alabama State Port Authority. Over the past several years Mobile has built a completely new $300 million container terminal on Mobile Bay and has also been expanding its steel handling facilities. The two-berth box terminal, operated by Mobile Container Terminal LLC, has been chosen as the second Gulf Coast port-of-call for CMA CGM’s new PEX3 service linking the Far East with the US eastern seaboard. The French container carrier’s Terminal Link division was a partner in Mobile Container Terminal, along with the A.P. Moller-Maersk Group’s APM Terminals Americas subsidiary, but in July APM took full control of the facility in exchange for its interest in a box facility at Dunkirk, France.

In another partnering at Mobile, the port has joined forces with Barnhart Crane & Rigging Company to provide heavy lift barge crane services within Mobile Bay for steel and other heavylift items. In one of its first cargo liftings the 900-ton-capacity crane was used to transload a 102-ton down coiler machine from Star Shipping’s 43,712-dwt Star Grip to a barge at Mobile’s Pier 2 facility.

The Alabama port has also begun handling rolled steel coil imports for the new ThyssenKrupp steel plant near Mobile, with the first ship docking in late June.

Gulfport Growth
The Mississippi state port at Gulfport is continuing to press ahead with its reconstruction, following Hurricane Katrina of 2005, but progress has been slow to date, with only a fraction of the $570 million in federal funds allotted for the project having been spent. However, port officials say the multi-year construction project is on schedule, with $15.5 million recently allocated to fill in 60 acres of water around the port’s West Pier, a project that is due to be completed before the end of the year. At the same time, the Mississippi port is completing the final design and environmental review phase covering its redevelopment, which should take it from 220 acres to around 300 acres while elevating port property by at least 25 feet above sea level.

A few years ago, port officials had discussed expanding the port to nearly 1,000 acres, and significantly increasing its capacity to handle containers, but the recession has placed that type of development on hold after fewer than 200,000 TEUs of containerized cargo were moved last year. Nevertheless, if the economy starts to grow again, and a new tenant can be found to help pay for the final phase of West Pier expansion, a total of 681 acres could be added to the port, pushing it out to 954 acres.

Gulfport has been handling about 2 million tons of cargo annually and is currently the nation’s second largest importer of green fruit.

Big Easy Back
The Port of New Orleans has also been recovering from the effects of Hurricane Katrina and has been doing so considerably quicker than Gulfport. Next year the port could set a new cruise passenger record after Carnival Cruise Line announced it would position two of its mega-ships to the Mississippi in 2011. “With Carnival’s decision to homeport two cruise ships in New Orleans, the Port of New Orleans is poised to exceed our pre-Katrina volumes for cruise passengers and break new records,” said Gary LaGrange, the port’s president and chief executive officer.

LaGrange, who noted that New Orleans has been rebuilding its cruise terminal and container terminal infrastructure over the past five years, also said the port will shortly launch construction of a new $25 million dockside refrigerated warehouse. The warehouse, to be built at the port’s Henry Clay Avenue Wharf, will be operated by New Orleans Cold Storage when it is completed in August of next year. The company’s current warehouse, which is capable of freezing more than 500 tons of food products daily, is located at the port’s Jourdan Road Terminal but this facility can no longer be served by deep-draft shipping because of the closing of the Mississippi River-Gulf Outlet.

Some $23.5 million in funding for the new warehouse will come from the Community Development Block Grant Disaster Recovery Program of the Louisiana Office of Community Development - Disaster Recovery Unit. The port has also requested $16.5 million in federal funds for improving access to the site, for office space at the terminal and for dredging work.

The new 140,000-square-foot warehouse will be able to store approximately 175,000 tons of product, primarily poultry, at temperatures between minus 15 and plus 40 degrees Fahrenheit and to blast-freeze 600 tons of product in 20 hours or less.

Pelican Island Project
In nearby Texas, the ports of Houston and Galveston are considering building a completely new container terminal on Pelican Island, situated across from existing Port of Galveston facilities. The terminal would be built on 1,120 acres of land purchased by the Port of Houston nearly ten years ago for $6.1 million. At that time Houston was already operating its Barbours Cut Container Terminal and hadn’t yet started construction of its Bayport project while Galveston operated a small four-crane box facility. The proposed new terminal, drawn up in a $750,000 conceptual planning study paid for by both the ports, would take up to 800 acres of land and cost between $500 million and $1 billion to build.

According to its supporters the new facility would make economic sense because it would be located closer to the Gulf of Mexico’s deeper water while the Barbours Cut and Bayport terminals require that ships travel up the congested Houston Ship Channel. However, a possible competing terminal is also on the drawing board at nearby Texas City, which has been working with Seattle-based terminal operator SSA Marine to plan and build a similar-sized facility on Shoal Point.

Although the US Army Corps of Engineers has issued a permit for first-phase construction of this terminal, its development has been delayed by the current economic downturn. This has left Houston as the Gulf Coast’s major box handler, moving nearly 1.8 million TEUs annually.

Galveston Gains
Although Houston has long left the Port of Galveston behind when it comes to container handling the smaller port has easily bested its larger rival in cruise ship traffic, despite Houston’s construction of a $87 million cruise terminal that has sat vacant since its completion.

This past summer Galveston Port Director Steve Cernak was able to announce that Miami’s Carnival Cruise Lines would be basing one of its newest and largest ships, the 3,690 passenger Carnival Magic, to Galveston starting next November. Cernak said that because of the size of the massive ship, which is still under construction in Italy, the port will have to build new gangways and mooring facilities to accommodate it at a cost of $8 million. “This puts us in the upper echelon of home ports,” Cernak said, noting that the ship’s deployment, in conjunction with the shift of other Carnival vessels, will boost the number of Carnival passengers coming through Galveston by 28 percent.

At about the same time that Carnival Magic positions to Galveston the company’s 2,758-passenger Carnival Triumph will also move to the port, allowing the 2,974-passenger Carnival Conquest and smaller 2,052-passenger Carnival Ecstasy to be repositioned to New Orleans. Carnival spokeswoman Jennifer De la Cruz said the cruise line chose Galveston over Houston because of a long-standing relationship with the port and its closer access to the Gulf of Mexico.

A Royal Caribbean Lines cruise ship, Mariner of the Seas, is also to be based in Galveston for part of the year.

One of the Port’s particularly successfuland growing lines of business is roll-on/roll-off import and export cargo, which currently averages more than 300,000 short tons annually. The Port of Galveston is served by global ro/ro carriers CSAV, Höegh Autoliners, “K” Line Americas and Wallenius-Wilhelmsen Logistics, all of which operate their Gulf Coast hub terminals at the Port. Predominant cargoes include agricultural machinery, construction equipment, new and used vehicles, “high-heavy” and NCC. The Port is currently planning a ro/ro terminal expansion at the east end of the Port with a planned in-filling of two slips and the reclamation of nearby pier and upland areas. When completed, this project will add approximately 1,000 feet of ship berth backed by 18 acres of terminal space to the Port’s ro/ro capacity.

Other growing cargo sectors include refrigerated cargo at the Del Monte Fresh Produce terminal, export grain, import fertilizer and liquid bulk export cargoes. The Port and its tenant ADM are currently expanding rail car capacity at the Port’s export grain elevator. At the completion of the project later this year the export grain terminal will be capable of simultaneously chambering three 100-car grain shuttle trains. At the same time, with an eye toward the Panama Canal expansion, the Port will complete by early 2011 the deepening of Galveston Harbor Channel to 45 feet from its current authorized depth of 40 feet.

Corpus Christi Contracts
Although the Port of Corpus Christi, Texas has also been competing in the cruise ship business, fielding a small cruise ship terminal of its own, it is now looking at two large tracts of land to develop for cargo traffic. The first is the long-planned $250 million La Quinta Trade Gateway project, which will include a mixed-use container terminal. To date, design contracts for the terminal and its dock have been awarded to engineering firms Goldston Engineering, CH2M Hill Company, and Lockwood, Andrews & Newnam, with the multi-purpose facility to be configured in such a manner that it will be able to handle a wide variety of cargoes. These will include military vehicles, wind turbines and steel products as well as containers.

At the same time, the port has chosen Texas A&M University as its Master Developer for the recently acquired Naval Station at Ingleside, Texas, which was closed by the federal government in April under the Base Realignment and Closure (BRAC) Act of 2005. The facility encompasses 576 acres with more than 70 buildings as well as a large pier and wharf area. To date, a portion of the wharf has already been used to lay-berth a Military Sealift Command (MSC) vessel. Texas A&M has put into place a four-phase prospecting procedure to identify companies that might be interested in development of the site for commercial activity.

In mid-July the port’s commissioners rejected an offer by Midland, Texas-based Service Marine Group to purchase the former base, as well as adjacent port-owned property, for ship repair activities. However, John LaRue, the port’s executive director, said the commissioners’ vote didn’t mean that the port has rejected Service Marine, just “certain terms” of the company’s proposal.

“This is not a rejection of them,” said LaRue, “just of the proposal. We still want to keep working with them.”