Pacific Maritime Magazine - Marine Business for the Operations Sector

By Jim Shaw 

East Coast Ports Push Development Projects Forward

 

A new accord has been reached between most East Coast ports and organized labor but terminal operator Kinder Morgan has dropped its bid to take over operation of Delaware’s Port of Wilmington because of strong union opposition. Photo courtesy of HPA.

With a major labor contract signed, East Coast ports are now able to return to development issues as they continue to ready themselves for an expanded Panama Canal and larger ships arriving from Asia. In late April the Board of Commissioners of the Port Authority of New York and New Jersey awarded a $743.3 million contract to the joint venture of Skanska Koch, Inc. and Kiewit Infrastructure Co. to increase the navigational clearance of the Bayonne Bridge as part of a major $1.29 billion expansion program.

In nearby Baltimore, rail carrier CSX Transportation Inc. is moving forward with its plans to build a major new intermodal rail facility in South Baltimore at a cost of over $90 million. At the same time, the Virginia Port Authority has rejected offers to privatize its facilities and will instead reorganize its operations as it moves forward with the creation of a 600-acre foundation for its proposed Craney Island Marine Terminal. To the south, the states of South Carolina and Georgia are continuing to work together toward the construction of a new container port on the Savannah River, but both are also competing for dredging funds to deepen the ports of Charleston and Savannah.

In Florida the drilling of a $1 billion tunnel connecting the Port of Miami with nearby expressways has been completed while the neighboring Port of Port Everglades plans to add five deepwater container berths as it prepares to open its own on-dock intermodal rail yard.

New York and New Jersey

Long the East Coast leader in container traffic, the Port of New York and New Jersey (NY&NJ) expects construction of the new Bayonne Bridge to begin as soon as environmental review and permitting processes can be completed. It will see a new bridge built over the old bridge, with traffic continuing to flow on the older structure until it can be safely removed in 2015. The new bridge, to provide 12-foot traffic lanes as well as emergency shoulders and a center median divider, will stand 64 feet taller than the bridge it replaces, allowing post-Panamax ships to access regional box terminals. Construction is expected to create more than 2,500 jobs, $380 million in wages and more than $1.6 billion in economic activity. “This investment of $1.29 billion to raise the roadway is a clear example of the agency’s strong commitment to improve its aging facilities and continue to serve as the key economic engine in the region,” said Port Authority Chairman David Samson, who noted that the project is also a “critical step” toward preserving NY&NJ’s standing as the premier hub port and gateway for the East Coast.

In addition to the bridge raising, the port is also close to completing a $1.6 billion harbor deepening project that was initiated prior to the announced improvements to the Panama Canal. Earlier this year the New York District of the US Army Corps of Engineers awarded the final contract of the project, one that will see deepening of the Arthur Kill Channel to 50ft completed by early next year. In 2012 the Port of NY&NJ moved 5,529,908 million loaded and unloaded TEUs, setting a new box handling record for the port.

Port of Baltimore

Also setting a new record in 2012 was the Port of Baltimore, Maryland, which handled 9.6 million tons of general cargo last year, up 8 percent over the previous year and valued at a record US$54 billion. Looking at long-term expansion, a Baltimore County task force has recommended that a new shipping terminal be built at the site of the old Sparrows Point steel mill located near Baltimore, which has been closed by its owner, RG Steel, and is scheduled for demolition. Although outside Baltimore city limits, the task force feels the 3,300-acre site could be made into an “annex” of the Port of Baltimore, thus giving the Maryland gateway room to grow. However, consultants feel it would be at least a decade before an operating marine facility could be built on the site. In the meantime, the port is working with the CSX railroad to complete a new intermodal facility that would allow the rail carrier to more efficiently handle containers moving to and from the port’s Seagirt terminal, where four new Super-Post Panamax container cranes have been installed. The rail facility would also allow CSX to maximize its $900 million National Gateway project, which is aimed at improving intermodal rail connections between the Midwest and several Atlantic ports.

CSX plans to open the rail yard, which will use zero-emissions electric cranes, by 2015. “A new rail intermodal facility will help Baltimore keep and grow jobs in the city while securing our port’s future economic growth for the next generation,” said Baltimore Mayor Stephanie Rawlings-Blake of the project.

Port of Paulsboro

Another regional port development project still on the drawing board but hit by several delays is the proposed construction of the Port of Paulsboro, New Jersey that will be operated by the South Jersey Port Corporation (SJPC). Being pushed forward by the regional Gloucester County Improvement Authority (GCIA) the project was to have originally gotten underway this summer, but three construction bids were turned down in September because of higher than expected costs.

The estimated $274 million, 190-acre project was initiated in October 2009 as the first new marine terminal facility on the Delaware River in more than 50 years but, to date, only work on a needed highway overpass and bridge is underway. That project is scheduled to be completed by the end of this year. “The vision was always to do the roadway and bridge, and then the port,” said GCIA Executive Director George Strachan, who noted that the delay in bidding for berth construction would allow the structures to be “more closely tailored” to potential users.

To date a firm tenant for the new port has yet to be signed but JSPC officials confirmed that they have been in talks with several “prospective tenants” and that they plan to sign an agreement shortly. In late April a feasibility study regarding the port’s ability to be a construction site for a massive wind energy project being planned for offshore New Jersey came out positive, with the study finding that the port would be an “ideal site” for the project’s construction and logistics requirements.

The Port of Virginia

In Virginia, the Virginia Port Authority (VPA) has rejected offers to privatize its terminal operations and will instead streamline its own Virginia International Terminals (VIT) agency and bring the nonprofit operating entity under more direct control. VIT was established by the state in 1981, primarily as a mechanism to enter into contracts with union labor, which the state itself is prohibited from doing. In April 2011, Dutch operator APM Terminals submitted an unsolicited bid to run the port for 48 years after which the state called for additional proposals. It received three: the original APM proposal plus bids from JP Morgan and VIT.

In March, the Virginia Port Authority Board of Directors voted unanimously to reject the offers, with board Chairman William Fralin stating that the rejection move would make the port more competitive. “We will move forward as a stronger, leaner organization that is better-positioned to serve the ocean carriers and port customers, attract cargo to Virginia and be more accountable to Virginia taxpayers,” he said.

The port, which has terminals at Norfolk, Portsmouth and Newport News, recorded its second-best cargo volume year in history during 2012 and has an estimated economic impact of $41 billion annually on the regional economy. Still targeted is the development of a new container terminal on Craney Island, which is currently receiving dredging spoils from harbor improvement projects. When the island’s dike-and-fill phase is completed later this year a 600-acre foundation will be available for development of the terminal, which could open within 12-to-15 years, depending upon cargo needs.

South Carolina

To the south of Virginia, the states of South Carolina and Georgia remain partners in the potential development of a new container port on the Savannah River but are also competitors for dredging funds to deepen the ports of Charleston and Savannah. Charleston, with 45 feet of depth at mean low water, currently has the deepest channels in the region, and can handle ships drafting up to 48 feet on high tide, but wants at least 50 feet. This would open the port to the largest post-Panamax container ships 24 hours a day. The South Carolina General Assembly has already set aside $300 million to cover the estimated cost of the deepening project, which would cover both the state’s 60 percent share as well as the federal government’s 40 percent share – if needed.

To date, the federal government’s fiscal year 2014 budget includes only a $1.165-million allocation to continue the project’s feasibility study, which is now at its midpoint. A Draft Environmental Impact Statement (DEIS) for the project will be released next year.

In the first nine months of the port’s current fiscal year Charleston’s container volume rose 10 percent, with the expectation that the year will close out strongly. Numbers will also be enhanced by completion of the $47.4 million South Carolina Inland Port at Greer, South Carolina, which will allow trains to replace trucks in moving goods to and from the port’s main shipping terminals.

Georgia

Having watched South Carolina’s fund-raising efforts for dredging, the state of Georgia appears ready to take a similar approach to get the Savannah River deepened from 42 feet to 47 feet. The Georgia Ports Authority (GPA), which oversees the Port of Savannah, has been pushing for the $652 million dredging project ever since the 1990s but federal tax money, which would cover 60 cents of every dollar spent, has been extremely hard to get. Georgia officials now want to get digging underway along 30 miles of the river before year’s ends, and may pay for the first year of work with state money. Georgia lawmakers have set aside $231 million toward the state’s 40 percent share of the project but the federal government has come up with only $1.28 million this year.

In the meantime planning for the proposed Jasper Ocean Terminal, to be sited on the South Carolina side of the river downstream from Savannah, is proceeding slowly. When first visualized in 2008 the facility was to have been completed by this year at a cost of $4.5 billion. The recession put a hold on those plans and a much longer development period is now envisioned, possibly resulting in a reduced price of about $3.3 billion, although some speculate that the true cost may be more like $5 billion.

Walter Kemmsies, chief economist at the engineering firm Moffat & Nichols, told port officials in April that “demand does support” the development of the Jasper terminal, but added that officials must move quickly to make sure it stays that way. A joint board overseeing the project, the Jasper Ocean Terminal Project Office, has been told it should start seeking environmental and construction permits immediately.

Florida

In Florida, the drilling of a $1 billion tunnel connecting the Port of Miami with nearby expressways has been finished but the two-bore structure won’t open to traffic for another year. The tunnel is one of three major projects that form part of a comprehensive modernization of the Port of Miami, all aimed at attracting more cargo traffic once the new locks at the Panama Canal are completed. The other improvements include dredging of the port’s main navigation channels to 50 feet and the upgrading of intermodal rail facilities to handle cargo moving north to Jacksonville. The rail project is due to be finished before the end of this year, while harbor dredging will be completed in early 2015.

Canada’s Port of Halifax enjoyed a 14.7 percent increase in its total cargo volume through the first quarter of this year compared to the same period in 2012 with ro/ro cargo increasing substantially. Photo courtesy of Port of Halifax.

Miami received a boost in its deepening efforts when Florida Governor Rick Scott offered $77 million in state funds so the work could move forward without waiting for federal money. The Florida port also has four Super Post-Panamax container cranes on order with China’s Shanghai Zhenhua Heavy Industries that are due to be delivered later this year. This will give the south Atlantic gateway a total of 13 cranes, six of which are in the super post-Panamax category.

Nearby Port Everglades has also been seeking money for dredging but could only come up with $600,000 in additional federal funds this year. However, in January, governor Scott announced that $13 million in state funds would be spent to help enlarge the port’s turning notch. This is expected to open up sufficient space for the construction of five new cargo berths. In addition, $42.5 million is being invested in a new highway overpass that will allow freight trains to access the port’s new on-dock intermodal rail yard, a facility that is due for completion by next year and will help eliminate about 180,000 truck trips to and from the port.

 
 

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