By Jim Shaw
Looking at a slow but steady economic recovery, and the potential for
more cargo following the enlargement of the Panama Canal, East Coast
ports from the Great Lakes to the tip of Florida are modernizing and
expanding facilities. They are also going green, with the Massachusetts
Port Authority recently joining the Port Authority of New York & New
Jersey and the South Carolina Ports Authority in implementing a
Clean-Truck program. In addition, the development of offshore wind power
is drawing attention and the South Jersey Port Corporation has started
construction of a new terminal that will specifically target this
emerging market. In the north, a resurgent US auto manufacturing
industry and purchases by China are driving up demand for iron ore, a
trend that is seeing substantial mining activity taking place along the
Mesabi Range and in Eastern Canada. This has already generated expansion
plans at Quebec’s Port of Sept-Îles and the possibility of new
construction at Sault Ste. Marie, Ontario.
At the same time, US ports are gearing up for the larger size of
“Panamax” ships that will be allowed by bigger locks at the Panama
Canal. This has seen a number of harbor deepening initiatives launched
as well as the expansion of docking facilities. It has also seen the
Port of New York & New Jersey launch a billion-dollar project to
raise the Bayonne Bridge while the Port of Miami is tunneling under its
main navigation channel at a similar cost. It remains to be seen how
much extra business the enlarged Canal will generate for these efforts
but most East Coast gateways feel some West Coast traffic can be
diverted.
Great Lakes St. Lawrence Recovery
Although few containers are funneled in and out of the Great Lakes,
cargo shipments along the Great Lakes St. Lawrence Seaway totaled over
37.5 million tons in 2011, a modest upswing from 2010. This year marks
the Seaway’s 54th shipping season and the St. Lawrence Seaway Management
Corporation expects about 38.6 million tons of cargo to be moved. This
would represent a near 3 percent increase over last year, with coal
exports expected to account for most of the additional tonnage. Exports
of coal have been boosted by producers in the Rocky Mountains region
sending coal by rail to Lake Superior ports where the commodity is
loaded on to Lake freighters for transportation to deepwater ports on
the lower St. Lawrence. From there the coal is transshipped to
ocean-going vessels for movement to Europe and Asia. Ore cargoes on the
Lakes and along the St. Lawrence have been up recently because of
additional purchases by China as well as a resurgent US auto
manufacturing sector.
“The mood in the industry is that we are moving in the right
direction,” said Glen Nekvasil, vice president of the Lake Carriers’
Association (LCA), a trade group representing 17 US lines active on the
Lakes. “We have seen iron ore and limestone rebound and in the case of
iron ore, it has rebounded very nicely.” Nekvasil added that shipments
handled by the Association’s member vessels were about 27 percent ahead
of the 5-year average through this year’s first quarter.
Ore Rebounds
Several mining projects currently being developed in the Great Lakes
region and along the lower St. Lawrence are expected to continue
boosting iron ore movements. India’s Essar group plans to open new
capacity at its iron ore pellet plant in Minnesota later this year,
which will increase total output capacity to around 7 million tons
annually. Most of this production will be sent to the group’s Essar
Steel Algoma plant in Canada but about 1 million tons will be available
for disposal on the open market. Another international firm,
Luxembourg-based ArcelorMittal, plans to invest over $2 billion to
expand its iron ore facilities at Mont-Wright, Quebec in order to
produce 24 million tons of iron ore concentrate annually. This will be a
major increase over the 14 million tons the facility currently
produces.
As the world’s largest steel producer, ArcelorMittal has already
acquired considerable assets in Canada, including the former Dofasco
steel-making facilities in Hamilton, Ontario and the Baffinland Iron
Mines Corporation operations in Nunavut. US-based Cliffs Natural
Resources also has its eyes on expansion after acquiring the former
Consolidated Thompson Bloom Lake iron-ore operations in eastern Canada
for $4.9 billion last year.
Bloom Mine to Bloom
The Bloom Lake mine, in which China’s Wuhan Iron and Steel Group is an
investor, shipped its first concentrate in mid-2010 and is expected to
reach its targeted production rate of 8 million tons annually by the end
of this year. However, Cliffs Natural Resources CEO Joseph Carrabba
said feasibility studies are now being undertaken to see if it would be
worthwhile to expand the mine’s iron-ore production to 24 million tons
per year. If so, Cliffs will invest around $600 million in the project,
which could be completed by as early as 2016. Construction is already
underway at the site to boost production to 16 million tons per year
over the next two years, with first-phase expansion expected to be
completed by the second-half of next year.
The expansion is considered “strategic” as the Bloom Lake mine is
located about 20 miles from Cliffs’ existing operations at Wabush,
Canada where a 5.6 million ton per annum iron-ore pellet operation with
integrated rail and port infrastructure is already in place. The company
believes the existing rail and terminal network there will support the
Bloom increase to 24 million tons, although some infrastructure
enhancement will be required. The rapid growth of ore production in
eastern Canada has already pressured the Canadian government to invest
in new facilities at Quebec’s Port of Sept-Îles, where ore producer
MillenniumTata plans to construct a $1 billion pelletizing plant.
NY&NJ: Higher Bridge, Deeper Channel
South of the St. Lawrence, in New York state, the Port Authority of
New York and New Jersey (NY&NJ) plans to spend $345.9 million on
seaport projects and another $15.2 million on work related to the
planned elevation of the Bayonne Bridge this year as it works to expand
and modernize facilities.
The largest amount of spending, $87.4 million, will go for the
development of the Global Terminal on the Port Jersey Peninsula in
Bayonne and Jersey City where additional money will be spent to improve
intermodal rail and road connections to the 98-acre cargo facility. The
second-largest capital project will see $58.3 million spent on the
development of a new rail ramp at the Greenville freight yards, which
the authority acquired in 2010. Another $36.3 million will go to funding
capital projects at the New York Container Terminal on Staten Island,
which will require approximately $30 million in dredging, while $12.4
million will be spent to revive portions of the aging Brooklyn Marine
Terminal in Brooklyn.
The two major long-term projects for NY&NJ will be raising the
Bayonne Bridge and deepening the harbor, with the Port Authority
recently applying to the federal government for “fast-track”
environmental permitting for the bridge-raising. This could shave six
months off the billion-dollar project, which will raise the roadway to
215 feet to allow taller container ships to pass under, but would still
mean that the raising will not be completed until 2016, two years after
the Panama Canal enlargement.
New Port for New Jersey
In South New Jersey work is continuing on construction of the
Paulsboro Marine Terminal, which is being sited across the Delaware
River from the Philadelphia International Airport. The South Jersey Port
Corporation (SJPC) and the Gloucester County Improvement Authority are
developing the facility, largely on speculation, with the state
providing approximately $200 million in funding. To date, about $70
million has been spent to clear the site, construct a shoreside
retaining wall and raise the site elevation using some 300,000 cubic
yards of fill material. Later this month bids will be advertised to
construct the main wharf, which will be followed by new equipment
purchases.
Kevin Castagnola, executive director and CEO of the SJPC, has stated
that about $65 million in construction and equipment-supply contracts
will be executed before the end of the year. When completed late next
year the terminal will encompass a total of 190 acres and feature three
berths designed for both breakbulk and project cargo handling.
Castagnola said port officials have been talking to several potential
tenants, including offshore wind farm developers, about using the new
facility. He noted that eleven private offshore wind farm developers are
already considering developing farms that would total more than 12,000
megawatts of capacity off New Jersey’s coast.
Georgia and South Carolina Duel
In the South Atlantic range the states of South Carolina and Georgia
have been dueling for dredging funds and it appears that Georgia may
have come up the winner. In mid-April the US Army Corps of Engineers,
after a decade of research, reached the conclusion that the proposed
$652 million deepening of the Savannah River shipping channel by five
feet, from 42 feet to 47 feet, is economically viable, environmentally
sustainable and is in the best interest of the country. According to
Col. Jeff Hall, commander of the Corps’ Savannah District, the project,
which has been given a benefit-to-cost ratio of 5.5 to 1, could be
completed by the fourth quarter of 2016. The state of Georgia has
already set aside $180 million for the job but the remaining$472 million
will have to come from federal funds.
In addition, there are several groups in neighboring South Carolina
who see the deepening of the river as a threat to that state’s Port of
Charleston, which is also searching for dredging funds. Charleston
harbor currently has a draft of 45 feet but port officials would like to
see it deepened to 50 feet and South Carolina lawmakers have been
considering a bond measure to get the work jump-started. Container
volume at the South Carolina gateway during the first quarter of this
year was the highest it’s been since the summer of 2009, registering a 7
percent jump – and a 12 percent jump in March alone.
More Lift in Florida
While South Carolina and Georgia duel to the north, Florida ports are
laying track, deepening channels and adding new box handling capacity.
Last year the Port of Jacksonville added two new Chinese-built container
cranes to its Blount Island Marine Terminal at a cost of more than $10
million. This has brought the terminal’s container crane count up to
eight, with the latest units standing 165 feet tall with a lifting
capacity of 50 tons. In south Florida, Seaboard Marine has added two
more Liebherr-built LMH400 mobile harbor cranes to its facility at the
Port of Miami, each having an outreach of 148 feet and a maximum
capacity of 115 short tons. The new machines are allowing Seaboard to
handle boxes up to 13 across on container vessels as well as bulk
products and breakbulk cargoes.
New cargo handling equipment is also being added to a 25-acre marine
cargo terminal recently brought on line by SeaFreight Agencies at Port
Everglades, Florida following the signing of a ten-year lease agreement.
The facility is located within a 41-acre containerized cargo area
opened at the port last year following a $12.3 million investment. The
site will eventually be connected to an Intermodal Container Transfer
Facility (ICTF) to be built near the port by the Florida East Coast
Railway (FECR) at a cost of $72 million. The ICTF is due to become
operational by the beginning of 2014 following completion of a required
$53 million highway overpass.
Laying Track and Tunneling Under
The Port of Miami is also gaining additional intermodal rail capacity
as the FECR completes construction of a 4.2-mile extension that will
link the port to the railroad’s Hialeah switching yard and its mainline
running north to Jacksonville. The new connection, being built at a cost
of $22 million, will allow the FECR to transport port cargo, including
containers, to northern Florida for interchange with trains moving to
and from other parts of the nation. As the rail project nears completion
the construction of a new tunnel to the port’s Dodge Island terminals
is just getting started (see Pacific Maritime Magazine, March 2012).
Public concern over material disposal sites had delayed the project
at the start of the year but trucks are now moving some 280,000 cubic
yards of tunnel spoils from Watson Island to nearby Virginia Key under a
$1 billion project being overseen by Miami Access Tunnel LLC (MAT). The
tunneling, expected to be completed in 2015, will see two parallel
highway tunnel bores constructed between Watson Island and Dodge Island
big enough for heavy trucks but low enough to allow the port’s main
navigation channel to be deepened, with the Corps of Engineers having a
permit to widen the channel’s entrance by some 300 feet and deepen it by
as much as 52 feet. Miami, which has four post-Panamax container cranes
on order with China’s Shanghai Zhenhua Heavy Industries, moved in
excess of 900,000 TEUs last year, ranking it No. 11 in the nation.
