Two-way auto traffic drives South Atlantic port volume

Two-way auto traffic drives South Atlantic port volume

Port of Jacksonville.

Roll-on-roll-off cargo at the Port of Jacksonville. Autos have been central to Jacksonville’s cargo base for decades. The port recorded 693,000 units handled during its most recent fiscal year. Photo credit: Port of Jacksonville.

When it comes to finished-automobile shipments, US South Atlantic ports are in a sweet spot. Regional population growth is boosting demand for imports, and new auto assembly plants are bolstering exports.

“If the market is up, the Southeast outperforms. If the market is down, the Southeast is better than the market as a whole,” said Griff Lynch, CEO of the Georgia Ports Authority (GPA), which operates the ports of Brunswick and Savannah. “We’re in a good position.”

Brunswick and nearby Jacksonville, Florida, annually rank with Baltimore among the top three US ports in roll-on, roll-off vehicle shipments. GPA terminals and Jacksonville each handle nearly 700,000 units in their most recent fiscal year. Charleston handled more than 260,000, and Port Canaveral, Florida, has a growing market presence, albeit from a much lower base.

US automobile sales are forecast by IHS Automotive, a sister product of JOC.com within IHS Markit, to slip by 1.7 percent, to 16.9 million units, in 2018 but remain well above the 8.9 million units in the Great Recession year of 2010. South Atlantic auto ports see this as a temporary respite, and are continuing to expand in anticipation of a resumption of growth.

GPA expects unit volume growth to resume

“We can’t get growth every month, every year. We’re mindful of that,” Lynch said. But he said the long-term trend is upward and supports continued infrastructure investment. The GPA is implementing a master plan that will expand the port’s 800,000-unit annual throughput capacity to 1.4 million units.

Vehicle parking capacity at the port’s Colonel’s Island terminal has risen to 90,000 spaces from 60,000 in 2016. Last month the port authority approved demolition of a bulk terminal that will be developed during the next year into 40 acres of additional auto storage space. Roadway improvements also are under way.

The port’s Colonel’s Island terminal has three on-terminal auto processors — International Auto Processing, Mercedes-Benz USA, and Vehicle Services America — that now sprawl over 600 acres leased from the port. Marine terminals handling high and heavy cargo include Wallenius Wilhelmsen Logistics and Georgia Atlantic Terminal Services.

The GPA invested $25 million in increased capacity last year at Brunswick, which handled 607,000 units of roll-on-roll-off (ro-ro) cargo during the port authority’s 2017 fiscal year. An additional $20 million in investment is planned during the next 18 months. Further expansion also is planned at Savannah’s Ocean Terminal, where vehicle shipments are primarily on services to Oceania.

In addition to auto shipments, GPA terminals are enjoying “very strong” volumes of heavy equipment and oversized ro-ro cargoes, Lynch said.

High and heavy shipments also are growing at Jacksonville, fueled by rising commodity prices and a recovery of mining activity in places such as Australia and the west coast of South America, said Frank Camp, the port’s director of cargo sales.

Heavy equipment exports through the port include new and used construction machinery. To handle these shipments, the port has installed special laydown pads to prevent metal treads from chewing up regular pavement.

Jaxport is continuing to develop a 100-acre auto processing facility at its Dames Point Terminal. The new terminal will expand the port’s auto-handling capacity by 25 percent. The first phase, which makes up 25 to 30 percent of the overall project, is expected to be completed by the end of 2018.

“This is a very big deal for us,” said Camp. He noted that the Dames Point terminal has good road and rail access, which enables vehicles to be moved quickly from the ship to a point of rest at the terminal.

The new facilities at Dames Point will augment space the port uses to handle 30,000 to 40,000 vehicles per year at an adjacent cruise terminal. The port’s other ro-ro facilities are at the Blount Island and Talleyrand terminals.

The port’s three auto processors — Amports, Wallenius Wilhelmsen Logistics, and Southeast Toyota Distributors — currently operate on more than 250 acres and 300,000 square feet of processing facilities.

Auto cargo: a Jacksonville staple

Autos have been central to Jacksonville’s cargo base for decades. The port recorded 693,000 units of vehicles during its most recent fiscal year. Camp said volumes this year are expected to be close to that level.

Besides auto processing capacity, frequent services, productive labor, and road and rail connections, Camp cited geography as a key to Jacksonville’s auto trade.

“For the last 20 years, investments in auto production have been concentrated in the Southeast,” he said. Exports from these plants through Jacksonville move mainly by CSX and Norfolk Southern rail lines. Most imports leave the port by truck to dealers or distributors in the region. “From Jacksonville to Atlanta or Miami is eight hours. For points in between, it’s shorter,” Camp said.

Geography also supports vehicle shipments through Charleston. BMW has a large plant at Spartanburg, South Carolina, and Volvo is building an assembly plant outside Charleston.

These and other plants have made the Southeast a “stalwart” in auto manufacturing, said Barbara Melvin, senior vice president, operations and terminals, at the South Carolina Ports Authority. “The automotive industry is extremely important to us in South Carolina,” she said.

Charleston handles imports of auto parts and components for BMW and other manufacturers, and exports of finished vehicles and tires. Exports, mostly BMWs, make up more than 90 percent of Charleston's volume of finished vehicles.

Largely because of a lull resulting from plant retooling, volume leveled off last year at about 260,000 units after rising at a compound annual growth rate of about 4.5 percent since the recession.

The ports authority relocated its BMW business from the Union Pier terminal in 2010 and 2011. Since then, the port has invested $23.5 million in improvements at Columbus Street. In addition, the port recently completed a $16 million paving project at the terminal.

Other auto ports in the South Atlantic region include Port Canaveral and Port Everglades in Florida.

AutoPort Canaveral leases 16 acres and operates a 20,000-square-foot processing warehouse at Port Canaveral, which is near Orlando, a large auto rental market and home to several automobile and heavy equipment auctions.

At Port Everglades, Horizon Terminal Services (a subsidiary of Hoegh Autoliners) this year leased 8.67 acres with a warehouse that will be converted into a vehicle processing center. The new location shortens the distance that cars now must travel between ship and terminal.

Horizon said it expects to increase volume of autos and heavy equipment from the current 15,000 units per year to 40,000 to 50,000 units within the next five years.

Contact Joseph Bonney at joseph.bonney@ihsmarkit.com and follow him on Twitter: @josephbonney.