As an overview of the state of American ports in 2008, a report issued by the U.S. Department of Agriculture is spot-on: “Maritime ports are getting busier, ships are getting larger, and the mix of cargo being transported is becoming more diverse. These increased demands for port infrastructure and services are also causing ports to run out of land, requiring them to dredge deeper harbors and waterways and to invest in expensive shipment-handling technology. As ships are being built larger and sailing greater distances and carriers are entering into more alliances, maritime arrivals at ports are increasingly bunched. Ports that are unable to adapt to these changing demands for port infrastructure and services will lose out to competitor ports for cargo throughput.”

What’s scary, is that this was written in 1998! And it’s just as accurate today.

Meanwhile two additional factors weigh heavily on planning at the nation’s ports. The first is the universal expectation that container trade between Asia and North America will continue to increase, with the bulk of the additional growth heading toward the east coast. The second is that once the widening of the Panama Canal is completed in 2014, a greater number of larger container vessels will be lured to America.

What follows is a survey of many of North America’s leading ports, looking at the steps each is taking to prepare for increased demands as trade volumes grow and public concern about the environmental quality of ports becomes more strident.

Port of Tacoma: A Case Study in Action

To appreciate the complexity of the different factors facing U.S. ports, look at Tacoma, which typifies the situation nationwide.

As Mike Wasem, Manager of Communications at the port explains, Tacoma is a gateway port, principally serving the upper Midwest and East Coast. Supply chain efficiency in such a setting goes beyond simply moving cargo off the ship and through the dock—it entails everything that happens on that long ride from the shipper in China to the customer in Kalamazoo.

With respect to the Port of Tacoma, Wasem cites three stages to speeding that cargo ride: port and terminal investment; rail connection to the port; and investment in the balance of the transportation system.

First step, Tacoma is expanding capacity, announcing plans last year to build a $300 million, 168-acre container terminal to be leased to a wholly-owned subsidiary of NYK Line.

Second, the port has been investing in its near-terminal rail facility, where link-up is made with BNSF and Union Pacific, including a $10.5 million capital project completed in 2006. Slightly longer term, the port has acquired property south of Olympia, Washington, with the intention of developing it as a logistics center.

“We see a need for continued investment, not just within the state of Washington but all the way along the supply chain served by the northern tier. There are needs for increased track and increased siding to maintain the efficiency of the flow or rail.”

The “fly in the ointment,” Wasem concedes, are factors outside the port’s control. And last November, that fly got stuck. Area voters rejected a proposition to finance a $17.8 billion package of major transportation improvements, including better rail linkage to the port, by a margin of 55-45.

Port Rupert, British Columbia: A Fresh Start

Port Rupert, British Columbia: A Fresh Start

One approach—which few are in a position to undertake—is to start pretty much from scratch.

That is the general story of Port Rupert in Prince Rupert, British Columbia, some 500 miles north of Vancouver. On October 31, 2007, the COSCO container ship “Antwerp” became the first to land at Port Rupert’s Fairview Terminal, recently converted from break bulk to container capability.

 While that converted terminal provides an immediate annual capacity of 500,000 TEUs, Port Rupert officials see a much bigger number in their future. By 2015, they expect trade through their port to mount to over 4 million TEUs annually.

Barry Bartlett, communications director for the port, cites three advantages: Due to its location on Great Circle lines, the sea voyage from Asia to Port Rupert is a day faster than to Vancouver and nearly three days faster than to Los Angeles/Long Beach; Port Rupert has the deepest natural harbor on North America’s West Coast—at low tide, the port offers a minimum depth of 62 feet without dredging; and third, Bartlett adds, starting from scratch has allowed for design of a “truck free” ship-to-rail transfer system. Offloaded containers are carried less than 200 yards to the Canadian National intermodal loading facility.

The new service represents an alliance struck by the port with COSCO, NYK Line, Yang Ming and Hanjin.

Port of Seattle: A Commitment to Excellence

When ocean traffic congested at Los Angeles and Long Beach, much of it found its way to ports further north: Seattle, for one, experienced a nearly 40 percent growth in container volumes between 2003 and 2005.

 That, however, was good news that didn’t last—with the easing of congestion, many shippers have returned to their earlier routes.

Seattle port planners have talked of building a capacity for 2013 of four million TEUs, a figure that has been described as the rational upper limit for the port. That increase will in part come from the planned transfer of 32 acres from cruise operation into an expanded 70-acre container handling facility. This move, which carries a $125 million price tag, should permit approximately 75 additional deep draft vessels to travel through Puget Sound each year.

At the same time, CEO Tay Yoshitani has publicly declared that Seattle would set out to be the “cleanest, greenest, most energy efficient” port in the nation and has committed to the sweeping changes this goal would create.

Oakland: A Base for Expansion

The Port of Oakland has found that rarest of commodities for urban ports, land for expansion.

In 2003 and 2006, half of the former Oakland Army Base was conveyed to the port. In September 2007, the port director was authorized to begin negotiation with the two class I carriers—BNSF and Union Pacific—who currently handle container traffic through the port, with the intention of establishing an expanded intermodal rail facility.

Port spokesman Robert Bernardo acknowledges that at Oakland, like many U.S. ports, the “ship/rail connection has been a challenge. Tightening that connection is an important step.” The current capital improvements plan allocates $24 million for demolition and site preparation. Bernardo notes that the City of Oakland—which received the second half of the former Army base—may locate planning and logistics functions there, “which would be perfect for us.”

The port’s current five-year plan allocates $341 million in capital investment for the port, a third of which is to go to container terminal improvements. The port’s eight marine terminals handled 1.7 million loaded TEUs in 2006, about ten percent of the U.S. West Coast total.

One priority project at Oakland is deepening both its channel and berth areas.

Long Beach: Environmental Action

Long Beach: Environmental Action

The Port of Long Beach is re-building its reputation after the fabled capacity short-fall several years ago that resulted in vessels lined up waiting to unload. Art Wong, public information manager, knows that the situation has improved and is spreading the word. “We undertake cargo surveys well into the future,” Wong says, “and we see no capacity issues surfacing in the next two to five years ahead.”

Capacity issues themselves reflect a welter of issues. Most American ports are carved into an urban landscape. Seaports, historically, are messy places—they produce air, noise and water pollution; truck traffic adds to local highway congestion.

Trade industry lawyer Jonathan Benner comments, “Ports cannot expand unless they can make a good faith showing to the communities around them that they are dealing with the pollution issues that go with that expansion.” A community, he adds, will not support port development if that development is likely to degrade the air and clog the roads.

Notable, then, are the recent actions at the Port of Long Beach, which has concluded “Green Port” covenants with two of its seven major cargo terminals. The more recent—carried in a long-term lease agreement with International Transportation Service, Inc. (a subsidiary of "K" Line)—targets a 90 percent reduction in air pollution.

Port of Jacksonville: Asia Connection

Already, Asian operators are placing their footprint on the eastern seaboard. This past autumn, JAXPORT [Port of Jacksonville, Florida] announced it had signed a memorandum of understanding with the Korean-based Hanjin Shipping Co., Ltd., to develop a new $360 million container terminal in the Florida port. The 170-acre facility, expected to handle one million TEUs annually, is expected to begin operation in 2011.

Hanjin will not, however, be the first Asian shipper to arrive at JAXPORT. Construction began in 2007 on a 158-acre terminal facility to be used by shipping line MOL and TraPac Inc., the U.S.-based subsidiary of MOL, which offers terminal and stevedoring services.

The port and the state transportation department are funding design of road improvements needed to handle the expected increase in traffic once the facility opens in 2008.

Port of Miami: 'Winning the World Series'

At the Port of Miami, port director Bill Johnson talks about a three-legged approach to his port’s future.

For Johnson, the first leg of his future is to be funded by money flowing from Washington. The Federal water bill includes authorization for the Miami Harbor Project—an Army Corps of Engineers deepening of the 6,200-foot wharf to 50 feet. Getting this approval, Johnson said—which will permit Miami to handle most of the world’s largest container ships—“felt like winning the World Series.”

The second piece is the nearly $1 billion 1.1 mile underground Miami Tunnel Project, which would give truckers what Johnson terms “seamless access from the Interstate” (currently, the port’s considerable truck traffic is routed through surface streets).

The third piece is a whole scale modernization program, to include a new $90 million cruise ship facility, multi-level garage, new office space and bulk head improvements.

Governing this growth, Johnson said, is the realization that the best way for the port to grow is vertically: “For the past 18 months we’ve been looking at how we can maximize every acre of the port; if you look at the ports in Hong Kong and Shanghai, you realize the future will require the better integration of all infrastructure.”

Port of Savannah: Harbor Expansion

Top priority at the Port of Savannah, which handled 2.37 million TEUs in 2007, is the Savannah Harbor Expansion Project. Currently, the port’s channel permits entry of containerships up to 6,700 TEUs. The project will deepen the harbor to 48 feet, a depth to be reached before the Panama Canal improvements are completed.

To expedite truck and rail movement, the port will double the trackage at its Mason Intermodal Container Transfer Facility [ICTF] and, at its Chatham ICTF, added 12,000 feet of on-terminal capacity for building unit container trains.

Georgia Port Authority’s executive director Doug J. Marchand is pushing plans to raise the port’s potential capacity to 6.5 million TEU’s by 2018.

Finally, Marchand emphasizes, reaching the 6.5 million TEU goal will require that the port move to more of a 24/7 operation. To do this, Marchand commented, “We need buy-in from the ocean carriers, the trucking community, warehouse operators, logistics service firms and beneficial cargo owners.”

Ports of North Carolina: 'A Competitive Advantage'

North Carolina’s Ports of Wilmington and Morehead City, plus inland terminals in Charlotte and in the Piedmont Triad at Greensboro, are “ready, willing and able” to serve as competitive alternatives to ports in neighboring states for access to the global markets, say its administrators. Major short-term and long-term projects are underway to that end.

At Wilmington, the $143 million expansion of the container terminal is over half complete. When completed, the expansion should permit container traffic at the site to nearly double to 500,000 TEUs.

Thomas J. Eagar, CEO of the North Carolina ports authority, noted that improvements in Wilmington had prompted the CKYH Alliance, the port’s longtime trading partner, to add a second weekly service, linking north China directly with North Carolina.

Longer term, the business plan is now being completed for the proposed NC International Port on the Cape Fear River. Development, which is expected to be a public-private partnership, could eventually accommodate 2 million TEUs on the site.

Port of Virginia: Aggressive Expansion

Growth and expansion are the orders of the day at the Port of Virginia (Norfolk, Newport News, Portsmouth and the Virginia Inland Port in Front Royal).

With the best natural deepwater harbor on the East Coast, the Port of Virginia offers unobstructed channels to the largest container ships and has the largest intermodal facility on the coast.

Renovation of Norfolk International Terminal-South, which carries a 2010 completion date, will add eight new Suez class cranes to operation and completely re-figure the back lands. At NIT-North, 1,900 linear feet of new berth is being added, with new cranes set for delivery next summer. The port has re-incorporated 70 acres of land that was freed up from a long-term lease agreement with Maersk, when that carrier created its own dedicated terminal.

Completion of these and steps at other Port of Virginia sites are expected to increase TEU capacity from 2.1 million to 3 million.

In terms of port efficiency, spokesman Joe Harris is also looking to a major inland project, the Heartland Corridor, slated for completion late in 2009. This is the long planned clearing of obstacles to double-stack intermodal rail operation between Norfolk and Columbus, Ohio (the Feds have already appropriated $95 million for the project, with additional funding from Norfolk Southern).

New York/New Jersey: Acquiring Land to Grow

With 4.8 million TEUs handled in 2006, the Port of New York and New Jersey continues to rank as the busiest on the nation’s East Coast, but with major expansions pending down the seaboard, the port is scrambling to maintain that status.

One step is a $1.7 billion investment package that will pay for reconfiguring existing terminals, deepening harbors and berths and improving inland rail access. Additionally, high capacity cranes are being installed to speed container unloading.

In September 2007, the port authority moved to acquire a 153-acre parcel in nearby Bayonne, New Jersey. The land, which carried a $50.5 million price tag, will be added to the approximately 3,000 acres that now comprise port operation.

The port, stated Port Commerce Director Richard M. Larrabee, anticipates a doubling of cargo volumes in the next decade, yet faces severe restrictions on its physical growth: “This parcel is a gem in the New York harbor that will allow us to begin to address the critical issues we face.”

Port of Baltimore: Beyond the Ro-Ro

At the Port of Baltimore, early November brought good news and bad news—both, indeed, came in the same ship, the 997-foot long Michaela. With a 6,700-TEU capacity, it was the longest ship ever to dock in Baltimore’s 301 years as an ocean going port.

The bad news was that, while the port’s 50-foot channel could readily accommodate ships of the Michaela’s size, the port lacks capacity to unload such ships. The Michaela was in Baltimore largely to pickup empty containers.

The circumstances are well known—in fact, they were identified in the port’s own 2002 master plan.

Now a major roll-on roll-off (ro-ro) facility as well as bulk freight (especially steel handling), port director James White estimates that it will take Baltimore $100 million—and three to four years—to create a berth capable of handling larger container vessels. Without such expansion, he says, “We will only be able to get smaller container ships, and that’s not the way the industry is going.”

Port of New Orleans: Back in Action

New Orleans is largely a break bulk port, and did surprisingly well in Katrina’s aftermath. Buoyed by a strong market for imported steel, activity at the port in 2006 was actually up four percent over the average of the preceding five years. Through July 2007, TEU handling was up sharply—nearly 60 percent over the previous year.

At the Port of New Orleans, the best recent news was a $75 million Congressional grant to provide low interest loans to assist port tenants affected by Hurricane Katrina move to the Mississippi River as well as an $80 million authorization of low interest loans.

Further down the road, port spokesman Matt Gresham emphasized, New Orleans will shortly complete a master plan for port growth through 2025. An estimated $800 million in new projects may be involved.

Port Freeport: The Spanish Connection

At Port Freeport in Texas, the talk is more of Spain and Latin America than Asia.

Port director A. J. Reichach has announced the pending signing of a partnership agreement with the Spanish-based Dragados SPL to develop a $225 million international intermodal terminal with an annual capacity of 750,000 TEUs. This step would be the first major terminal addition at the port in a quarter century.

Major channel improvements are also under discussion. Currently, ships enter Port Freeport through a 400-foot wide, 45-foot deep channel. The port is working to secure federal funding that would allow the Army Corps of Engineers to design and construct a new channel—600 feet wide, 55 feet deep—permitting access to larger intermodal ships.

Port of Mobile: Gulf Coast Container Handling

In Mobile, Alabama, Brian Clark is looking toward a late summer 2008 completion date for the Mobile Container Terminal, for which he is project director. At opening, the 95-acre site will have an initial annual capacity of 350,000 TEUs in container traffic, with a 2,000-foot wharf and 45 feet of water at dockside. The project is to include a separate intermodal rail transfer facility and a modern distribution complex, which, its promoters say, will make it the most modern container handling facility on the Gulf Coast.

Over time, the container port is planned to expand to 135 acres, able to handle 800,000 TEUs annually.

The terminal has drawn $300 million in public and private funding, much of the latter from overseas. Developed through a concession agreement with the Alabama State Port Authority, it is a joint venture between APM Terminals North America, a subsidiary of Maersk, and the French-based container shipping line CMA CGM.

Port of Houston: Master Plan

The Bayport Container Terminal at Houston is an example of the long-term planning that trade demands. The first phase of the project—taking 90 of the site’s planned 1,043 acres—opened in January 2007, with CMA CGM as its first customer.

Bayport is a master planned facility, to be expanded over the next 15 to 20 years as market conditions dictate. Eventual container traffic capacity at the site is pegged at 2.3 million TEUs, which will triple container traffic at the site.

The Bayport facility follows the 2005 completion of a five-year effort to deepen the port’s main channel from 40 to 45 feet, while widening that channel from 400 feet to 530 feet.

As elsewhere, container terminal development in Houston has carried some environmental pledges. Among them, a commitment to create three acres of wetland for each acre affected, use of dredged material to build up inter-tidal marsh, and creation in the buffer zone around the facility of a 20-foot high sight and sound berm. wt