Jimmy Lyons is on a hunt for a lot more empty import containers to load with all the export cargo funneling through the Port of Mobile.
“We are encouraging retail importers to see if Mobile will work in their distribution chain, because if they do, that creates an empty that we can fill back up,” he said.
Although the container volume handled by APM Terminals’ five-year-old Mobile Container Terminal has been growing at a hefty clip, Mobile remains primarily an export port for markets in the Caribbean and Central and South America.
“We are getting broader acceptance and recognition as an emerging gateway, and we are seeing new retail imports coming in now,” Lyons said. “That’s key for us, because we have a huge base of export cargo, and if carriers have to reposition boxes to us, that’s not going to work.”
The port’s robust volume of containerized export cargo includes steel, chemicals, poultry, paper and lumber. “We have all kinds of export opportunities that we are trying to match back up with imports.”
Mobile is getting a healthy flow of containerized auto part imports for all the new foreign auto plants that have sprung up across the mid-South in recent years. But the port has yet to attract much retail import cargo destined for emerging target markets in the Midwest, so it has not attracted new container services beyond the four carriers that call there. Current services include Maersk Line’s trans-Atlantic loop, the joint service by Mediterranean Shipping Co. and Zim Integrated Shipping Services, and CMA CGM, the only direct service from the Far East.
The port has been getting calls by increasingly bigger post-Panamax container ships thanks to infrastructure investments that allow it to handle vessels over 1,200 feet in length. The MSC Texas, for example, which has a capacity of 8,400 20-foot-equivalent units, calls Mobile on the direct weekly service to and from the North European ports of Antwerp, Felixstowe, Bremerhaven and Le Havre.
Mobile handled 224,614 TEUs in the fiscal year that ended Sept. 30, up 15 percent from fiscal 2012. This is half the 30 percent annual rate of growth recorded in both fiscal years 2011 and 2012. The slowdown was partly due to the sputtering U.S. economic recovery, but mostly to the threat of an ILA strike on the East and Gulf Coasts, which caused importers to divert cargo to the West Coast.
Even after slowing growth in fiscal 2013, the port’s container volume is growing steadily enough to justify the start of Phase 2 of the Mobile Container Terminal. “We’re talking to them right now about an expansion,” Lyons said. “I think they are one line away from pulling the trigger.”
He thinks the port is “underserved” by container lines, especially on routes to the Caribbean and Central America, which are mostly served through transshipment hubs in the Caribbean. “It’s a natural market for us that should be served directly through Mobile.” The port currently serves those markets through relay services via Kingston, Jamaica, and Caucedo, Dominican Republic.
Lyons expects to attract a new service by a smaller Caribbean carrier sometime in the next six to eight months. “We have the APM Terminal, which has the container capacity, but we also have our smaller Pier 2 Terminal that would be ideal for a smaller niche container carrier.”
The port, which does not currently have a refrigerated warehouse, is working on getting a new facility built on a nearby rail line that will serve the reefer trade with the Caribbean and Central American markets.
Most of Mobile’s import customers are served by truck from the port, but this will change when it completes the intermodal container transfer facility that is under construction next to the Mobile Container Terminal.
“That’s going to help us attract new carriers,” Lyons said. “Some of the carriers we’ve been talking to said, ‘look we don’t want to talk to you unless you have intermodal service.’”
Phase 1 of the rail ramp, which represents about half of the total buildout, will be completed by late 2015 or early 2016 at a total project cost that has grown to $36 million from last year’s $31 million estimate. CN Railway is the natural rail customer for the new rail ramp, since it has direct lines from Mobile through Jackson, Miss., and St Louis, Mo. to Chicago. The port is also in talks with Norfolk Southern and CSX about using the facility.