Virginia is dangling its 50-foot-deep harbor as a fisherman dangles a lure.
While Georgia and South Carolina squabble over whether Savannah or Charleston should get federal funding to deepen their harbors, the Virginia Port Authority is quietly moving ahead with efforts to attract some of the containerized imports from Asia that move through its southern neighbors.
The VPA isn’t focusing only on prospects in the Southeast, of course, because it has always sought to increase its share of container volumes that move to the Midwest through all East Coast ports. But now it’s specifically prospecting new territory to attract some of the container trade moving through North Carolina and North Georgia.
The port authority’s strategy is rooted in the fact that Norfolk’s harbor boasts the only 50-foot draft on the U.S. East Coast, as well as the most automated container terminal, the APM Terminal Virginia. Norfolk likely still will be one of only three harbors with the depth to handle the bigger ships that will start coming up the East Coast at the end of 2014, when the Panama Canal opens new locks capable of handling ships carrying up to 12,600 20-foot equivalent container units.
Ships that carry that big a load will need deep water, especially on their first port of call before they can unload enough cargo to get into shallower harbors.
“Virginia has unique opportunities of being able to penetrate farther inland as a result of bigger ships on the various trade lanes,” said Jeff Keever, the VPA’s senior deputy director for external affairs. “This isn’t going to happen tomorrow, but at some point when carriers deploy bigger vessels, they will have to decide to make fewer port calls. As a result, we’re analyzing and contemplating how we are going to have a longer reach inland.”
Norfolk’s container terminals are ready for the dawn of the post-2014 post-Panamax world. They already handle the 8,000-plus-TEU ships that Mediterranean Shipping Co. deploys on its Golden Gate Service from Asia via the Suez Canal. MSC has notified the VPA it will deploy 9,200-TEU ships on that service that will start calling at the port this summer.
The Port of Virginia, which ranks third in East Coast container volume after New York-New Jersey and Savannah, depends on cargoes going to and from points outside of Virginia, because the state’s population is only 7.8 million, not large enough to attract the kind of volume drawn to the 21 million living in New York’s metropolitan area. Some 55 percent of VPA volumes already are shipped to and from destinations outside of Virginia.
“Long-term, there are opportunities to get the freight out of here by rail on the two Class 1 railroads that serve us to other inland markets,” Keever said.
Norfolk Southern Railway and CSX Transportation, the two largest eastern railroads, have daily services to North Carolina’s major population centers, as well as to Atlanta, the largest population center in the Southeast outside of Virginia and Florida.
Increasing the share of cargo moving to these markets isn’t a slam dunk for any East Coast port, however, because the vast majority of volume moving to Atlanta, for example, still moves by intermodal rail from the West Coast.
Other ports also are setting their sights on the Atlanta market. Miami, which has all the permits needed to deepen its harbor to 50 feet but is seeking funding, says it can ship containers by rail to Atlanta a day faster than Savannah can.
In prospecting for customers in the South Atlantic, the VPA is following a model it created in pursuing Midwest-bound cargo. The Heartland Corridor rail route that opened last September provides clearance for NS’s double-stack rail service from Norfolk to Columbus, Ohio, and on to Chicago. The corridor has cut time and distance off the service to the Midwest and is building volume in line with the recovery of the VPA’s container volumes after the 2009 recession.
The VPA’s container throughput last year reached 1.52 million laden TEUs, up 9.1 percent from 2009, according to PIERS, a sister company of The Journal of Commerce. It still lagged 2008’s pre-recession volume of 1.66 million TEUs by 13.6 percent. But laden container throughput increased another 10.3 percent in January 2011 vs. a year earlier.
Of the container volume moving into and out of the Port of Virginia in 2010, 68 percent moved by truck and 28 percent by rail, according to the VPA.
Norfolk won’t be the only East Coast port with deep water when the new Panama Canal locks are completed. Baltimore’s Seagirt Terminal is on schedule to complete a new berth with 50-foot draft by August 2012. As dredging continues in New York harbor, the Port of New York and New Jersey also will have channels that deep leading to its four main container terminals in New Jersey and Staten Island by 2014, but the low air draft of the Bayonne Bridge that blocks access to some larger ships won’t be fixed by then.
And, even if carriers using bigger post-Panamax ships after 2014 reduce the number of port calls, the VPA hopes Norfolk won’t be the only East Coast port to have deep water, because carriers will want to call at three deep-water ports with their bigger ships.
“Being one of only two ports with 50 feet of water doesn’t do a whole lot for us,” Keever said.
Contact Peter T. Leach at firstname.lastname@example.org.