Maritime Challenges: Ports Sea It Through

Maritime Challenges: Ports Sea It Through

Ports ease rough supply chain conditions with new services, technology, and other initiatives.

Even as many books, music, and movies travel electronically, physical goods still need to move, well, physically. More than four-fifths of global merchandise trade by volume travels by sea at some point, according to The Container Port Performance Index 2021, a publication of the World Bank Group and S&P Global Market Intelligence.

In 2020, water-going vessels moved $1.5 trillion worth of goods to and from the United States, the Bureau of Transportation Statistics (BTS) reports.

This drop from 2019’s $1.7 billion, a result of COVID, didn’t last. Instead, consumers shifted their discretionary spending from services to products. In the 10 months leading up to October 2021, the monthly value of U.S. international freight transported by ships jumped by more than 20% to $170 billion.

The increase led to backlogs at many ports. In late December 2021, about 112 container vessels were waiting to berth at U.S. container ports, the BTS reports.

“Some underlying trends and challenges were ripped open and laid bare by the stresses of the pandemic,” says Cary Davis, vice president, government relations and general counsel with the American Association of Port Authorities.

“While there have been some improvements in dwell times, challenges remain as some ports continue to struggle with the increasing flow of cargo volume,” says Jason Price, senior director of research, U.S. industrial and logistics with Cushman & Wakefield.

The highest a North American port ranked in the Container Port Performance Index, which measures total port time, was the Port of Virginia, at 23. One reason for the relatively poor showing of many U.S. ports is their inability to share information between various entities, like port owners and crane and terminal operators, says Matt Dollard, industrials senior analyst with consulting firm RSM.

The lack of communication hinders efficiency. In other countries, these organizations often are under the government’s control, and communication is more straightforward.

Another challenge, particularly at West Coast ports, is the “complex labor/management climate,” says William Hall, president of Seattle-based Seaport Consultants. That can make it difficult to bring in automation.

While workers often worry automation will cut their jobs, a recent report commissioned by the Pacific Maritime Association finds that automation at the Ports of Los Angeles and Long Beach actually boosted job growth opportunities for dock workers. Between 2015, the year before automation was introduced, and 2021, jobs at the automated terminals rose 31.5%, versus 13.9% at the non-automated terminals.

Among the technologies that come into play are driverless chassis and automated cranes. These help with “densification,” or stacking containers higher and closer together, which reduces the number of moves and the distance between them.

Moreover, a lack of workers currently challenges many maritime companies. “We don’t have a big pool of people getting into the maritime industry,” notes Kimberly Cartagena, spokesperson with Centerline Logistics:

One reason is a lack of knowledge. “Maritime is such a niche industry,” Cartagena says. Few people know they can earn a decent living working on a ship.

In addition, the jobs are often blue collar. “Many parents want their kids to go to a four-year institution and become CEO,” she adds.

Maritime careers offer a different path. High school graduates might start at about $25 per hour, and then work up to six-figure wages, along with benefits—often while in their 20s. The industry needs to let students and families know about the opportunities available, Cartagena says.

Addressing the Challenges

The challenges are real and a number of ports are tackling them. Some are changing operations to add third shifts and pre-position equipment and cargo to prepare for surges.

In addition, many North American ports are undertaking ambitious capital improvement projects. “Some ports have increased automation to help with efficiencies and many have completed or have infrastructure projects underway in order to handle more cargo volume,” Price says.

Port Houston Takes Action

Port Houston owns and operates eight public wharves and terminals, including the region’s largest breakbulk terminal, says spokesperson Lisa Ashley-Daniels. Two of its container terminals, Bayport and Barbours Cut, together handle about 70% of all container cargo through the Gulf.

Given the surge in volume, Port Houston’s management team is responding “with an accelerated infrastructure development program on all fronts,” says Roger Guenther, executive director. “The port is expanding the Houston Ship Channel to handle bigger ships, constructing wharves, adding container yard space, installing new equipment, and training our future workforce.”

In June, Port Houston, partnering with the U.S. Army Corps of Engineers, launched a $1 billion expansion of the Houston Ship Channel.  Known as “Project 11” because it’s the 11th major construction project in this waterway, the initiative will, among other changes, deepen some segments by up to 46.5 feet and widen parts of the channel by 170 feet.

The $142 million the U.S. Army Corps of Engineers allocated to the project is designated to complete Segment 3 of Project 11, which focuses on the Barbours Cut Container Terminal section of the Houston Ship Channel. Completing this segment will allow the terminal to handle larger container vessels.

Georgia Ports Prepare

As delays have dogged some West Coast ports, more shipments, including those from Asia, are traversing the Panama Canal and heading to ports on the East Coast. This, along with organic growth in trade volume, prompted the Georgia Port Authority (GPA) to expedite its infrastructure expansion plan and boost staffing, delivering new capacity ahead of schedule, says Ed McCarthy, chief operating officer.

In November 2021, the Georgia Port Authority commissioned the final set of working tracks at the Mason Mega Rail Terminal at the Port of Savannah, boosting rail lift capacity to one million containers per year, a jump of 30%.

Spanning 85 acres and offering 18 working tracks and 10 rail-mounted gantry cranes, the rail yard is the largest of its kind for a port terminal in North America, McCarthy says. “The Port of Savannah can now build and receive six 10,000-foot-long trains simultaneously,” he says. Because dwell time for rail cargo at the Port of Savannah is less than two days, the expanded rail infrastructure improves cargo flow, he adds.

At the Garden City Terminal, also at the Port of Savannah, the Peak Capacity Project boosted the container yard’s annual capacity by 900,000 twenty-foot equivalent (TEUs). Another 300,000 TEUs of capacity are expected to come online during summer 2022.

“Growing our terminal capacity allows GPA to take on additional business without congestion,” McCarthy says.

A project to straighten a bend in the docks at Berth 1 and install new 130-foot gauge ship-to-shore crane rails is about 40% complete. These changes will enable the Port of Savannah to simultaneously serve four 16,000-TEU vessels—the largest class of container ships serving the U.S. East Coast—and three other ships.

“These enhancements to infrastructure and staffing mean Georgia is better prepared to handle the current level of cargo, future growth, and any influxes in trade that might occur,” McCarthy says.

Rehab at Port of Lake Charles

In Louisiana, a $30 million rehabilitation at Berths 2 and 3 at the Port of Lake Charles is scheduled to be completed in summer 2023, says Therrance Chretien, director of cargo and trade development. The project will replace the 1920-era berth structure that’s supported by wood pilings and lacks the weight capacity for modern cargo handling.

“This project will give the port the opportunity to handle project cargo such as wind components, steel, pipe, and other heavy lift cargo,” Chretien says.

Before Hurricane Laura hit the area in August 2020, the Port of Lake Charles had 1.4 million square feet of covered storage, including 900,000 square feet along the waterfront. The hurricane damaged or destroyed about half the covered storage. To provide additional storage in a timely manner, the port is constructing, at a cost of about $5.4 million, two tension fabric storage structures. These will offer about 100,000 square feet of storage.

Port Everglades Goes Long

The new, $471 million Southport Turning Notch Extension at Port Everglades in Fort Lauderdale, Florida, is the largest infrastructure project in the port’s history, says spokesperson Ellen Kennedy. The project lengthened the existing turning notch from 900 feet to 2400 feet, adding up to five new cargo berths in the Southport Container Complex area.

As part of this project, Port Everglades took delivery of three Super Post-Panamax container gantry cranes over the past year, while also ordering three more cranes that are scheduled for delivery by late 2023. “Each crane can move more containers faster and more efficiently than the existing cranes,” Kennedy says.

The Port Everglades Navigation Improvements Project (PENIP), to be done in partnership with the U.S. Army Corps of Engineers, is designed to enable safe passage of the larger neo-Panamax cargo ships. As the leading U.S. gateway for trade with Latin America, Port Everglades already was handling neo-Panamax vessels from Europe and South America, but the ships had to be lightly loaded, which is inefficient, Kennedy says. This project will deepen the port’s navigation channel from 42 feet to 48 to 50 feet and widen narrow channel areas. It will be complete by 2030.

Port of Los Angeles Stays Busy

For more than two decades, the Port of Los Angeles has been the busiest in the Western Hemisphere. In 2021, it handled 10.7 million TEUS.

To continue managing this volume, a number of capital projects are underway. The Everport Container Terminal Improvement Project, among other changes, deepened the berth to 53 feet and improved the electrical infrastructure to allow for three additional container cranes, says Tony Gioiello, the port’s deputy executive director of development.

The project launched in September 2019 and was completed March 2022, at a cost of $65 million.  

The Pier 400 Corridor Storage Tracks Expansion Project, budgeted at $73.2 million, expands existing rail storage yard, adds 43,000 track feet and five railroad storage tracks, and extends an existing rail bridge. Construction started in February 2022 and is expected to end in mid-2024.

A project currently in the design stage is the On-Dock Rail Expansion of Berths 302 to 305, which will add 17,500 track feet to the existing on-dock rail yard at the Fenix Container Terminal. The expanded yard rail configuration will allow for rail mounted gantry crane operation.  The project is expected to begin construction in July 2023, with completion by mid-2025.  

Flowing Through St. Louis

Cargo vessels don’t only travel the ocean. Roughly 60% of the grain in North America floats down the Mississippi River to New Orleans for export, says Susan Taylor, director, port authority, with the St. Louis Development Corporation.

In 2022, given the expected decline of Ukrainian and Russian exports, she expects the number of agriculture barges to significantly increase.

A $7.2 million BUILD (Better Utilizing Investments to Leverage Development) grant received in 2021 will expand rail services at the Municipal River Terminal (MRT) and a grain conveyor plant, both on the Missouri side of the river. It also will expand rail service at two Illinois locations. BUILD Grants are a program of the Department of Transportation.

Inland Ports Step It Up

Although the term may seem like an oxymoron, inland ports are a growing segment of the port sector, Davis says. Moving intermodal containers from vessels to rail to inland ports, where they can be unloaded and transshipped, means more functions occur away from congested seaports.

A case in point is the Utah Inland Port Authority (UIPA), which in 2021 inked a deal with the Port of Long Beach to use the on- and near-dock rail system at the Port of Long Beach to speed rail deliveries to and from Utah. In turn, UIPA committed to developing its transloading capacity.

In August 2021, UIPA announced a partnership with QuayChain Technologies to build and operate a private LTE/5G network dedicated to the supply chain, the Intelligent Crossroads Network.

QuayChain’s solution digitizes information and connectivity gaps in the supply chains with port and logistics centers.

Challenges and Opportunities

“Not since the Titanic, or maybe even before that, have ports and shipping been in the news like they are today,” Davis says.

On the bright side, the challenges that ports and shippers have been confronting have also highlighted the upgrades and policy changes needed to construct a port system that works today and into the future, he adds.

Policymakers appear to be taking note. The Infrastructure Investment and Jobs Act, signed into law in 2021, includes $5 billion specifically geared to ports and another $27 billion for which ports can apply. The funding is spread over five years.

“The bill was an awesome down payment on upgrading port infrastructure and technology, which had been ignored for generations,” Davis says.

Moreover, even with the obstacles of the past few years, U.S. ports are moving approximately 20% more cargo than they did pre-pandemic. “Something is going right,” Davis says.

The investments and changes many ports are making will lead to even better performance.

The Port of Valdez: Modern-Day Gold Rush

While smaller than many other ports that dot the North American coastline, the Port of Valdez in Alaska has potential, and Jeremy Talbott, ports and harbor director, has ambitious plans for its growth.

He notes that the state of Alaska has enough coast land to take over worldwide production of kelp, a type of seaweed. Among other uses, seaweed can be used in fertilizer and animal feed; when included within animal feed, it can cut the methane emitted by animals by about three-quarters, Talbott says. Companies from across the globe are interested in its potential. “It’s a modern-day gold rush,” he says.

The Port of Valdez is home to nine grain silos that could play a role. Built in the 1980s to hold winter wheat, that market failed to materialize due to a lack of rail transport, Talbott says. Other than their use as cell towers, the silos have sat dormant.

Talbott is working with several companies to obtain grants to upgrade the silos so they can be used to help develop the state’s mariculture industry.