Can the rise of US Gulf Ports driven by mega ships from enlarged Panama Canal divert cargo of rivals?
The fruits of the Panama Canal expansion have long been expected, even actively anticipated by the Port of Savannah with its aggressive marketing of the all-water route from Asia more than a decade ago.
On Savannah's coattails came the ports of Virginia and the Carolinas, after the Georgia Port Authority (GPA) cleared the way through 13 years of tortuous environmental litigation before dredging could begin to be street legal.
But rivals need not wait. Not with Obama's TIGER (Transportation Investment Generating Economic Recovery Tiger) grants and the full blessing of US Army Corps of Engineers, dredging approvals came through at warp speed.
More of a surprise were the benefits of the Panama Canal Expansion conferred on the long neglected US Gulf Coast. Except for Houston, long the centre of the petroleum-related shipping, the monthly Global Port Tracker ignored the Gulf Coast not giving the great cities of Miami and New Orleans the slightest glance.
But all that has changed with the developments in shipping, in a drive to reduce container slot costs, all made moves to do what was needed to accommodate mega ships - 10,000 - 13,000 TEUers - that could now transit the canal as "neopanamaxes".
In tracing events over the five years since the Panama Canal expansion, one tends to look at the developments at four ports, or port clusters, in Florida, Alabama, Louisiana and Texas.
While Florida ports, Miami, Tampa, Jacksonville and Fort Lauderdale, have rail and road facilities that qualify them as gateways, this cluster is more attractive to shippers for its immediate consumer-rich hinterland.
Florida's balmy weather attracts an annual inflow of semi-residential "snow birds" every winter. Add to that, the number of baby boomers in their 60s and 70s who are retiring there, to whom one can include a high number of military pensioners, who tend to retire at age 48 and choose to live in a right-to-work state, with an economy on the rise and good job prospects.
Next, there is Mobile, Alabama, which has moved into the major leagues now that the Canadian National Railway has joined with the short-line Alabama Export Railroad to make the port a major gateway for resin exports by building a US$16 million logistics park set to offer later 25,000-TEU capacity later this year.
Last year, Mobile handled 13,850 TEU in resins, up 32 per cent from the same period a year ago, according to PIERS. Mobile is the seventh-largest gateway for US resin exports, with fellow Gulf ports Houston and New Orleans taking first and second-place rankings.
Then comes to New Orleans, whose officials have long been interested in a container terminal downriver from the city, which is 100 miles up from the river’s delta, and projects have been planned yet abandoned since the 1970s.
Today, the Port of New Orleans plans to acquire 1,100 acres outside the city for a $1.5 billion container terminal that will handle two million TEU annually beginning in 2027, reports IHS Media.
The new terminal will allow the city to handle larger vessels as the port and other Gulf ports such as Houston and Mobile aim to deepen and widen their channels to attract bigger ships on services to the region.
Busy, busy Port Houston has expanded docks and added container yard space as well as commissioning four new rubber-tyre-gantry cranes, with three more in the offing.
Port Houston has become the sixth largest container port in the United States and is the biggest on US Gulf Coast, handling more than two-thirds of all the containers in the Gulf. Port Houston's terminals and the nearly 200 private terminals along the Houston Ship Channel were recently ranked No 1 for waterborne tonnage, by the American National Railway.
There are also a few demographic trends worthy of note. In the past, the southern states were somnolent and backward. No longer. As the northern states became congested with restrictive regulations, much of them at the behest of high-wage demanding unions, the US South embraced right-to-work laws, which drew off the entrepreneurial and the hard working as well as those simply grateful for employment, which attracted big business as employers.
To this, we add those who give up the snow to retire in the south whether the living is easier for the elderly. In the last five years there has been a high rate of emigration from increasing lawless of high-tax California where the nation's homeless gather to live on the streets in great linear encampments.
This has driven out the productive classes to the southern states, where the taxes are low and the newcomers are welcomed if they are willing to work and contribute to the community.
All of which is making the Gulf Coast ports attractive to shippers. "Importers are taking advantage of Houston's consistent and solid vessel productivity and quick truck turn times through our gates at Bayport and Barbour’s Cut," said port executive director Roger Guenther.
"Houston is not only the 'International Port of Texas', supporting the nation's number one export state, we're also well positioned to handle the huge pipeline of imports and exports across mid America. We're making history in Houston," he said.
Mr Guenther is optimistic that the rebound in container volumes at Port Houston will continue. Projections for indicate additional growth in containers and, despite the Covid crisis, Port Houston has continued aggressively expanding and preparing its facilities while simultaneously undertaking improvements of the Houston Ship Channel to handle larger vessels.
The Port of Mobile is the only deep-water port in Alabama and ranked by the United States Army Corps of Engineers as the ninth largest port by tonnage in the nation in 2014, with a trade volume of 64.3 million tons. This ranking had increased from 12th largest during 2010, with a trade volume of 55,713,273 tons and increase of 19.1 per cent.
The recent call of the Alliance's EC6 service bodes well container expansion prospects of developing links to Asia as this service rotation takes in Hong Kong, Yantai, Ningbo, Shanghai and Busan, and will have ships dock in Mobile from Germany's Hapax-Lloyd, Korea's HMM, Taiwan's Yang Ming and Japan's Ocean Network Express (ONE).
“The EC6 will allow us to better serve our current customers who have voiced their desire for options between the US Gulf and Asia as well as open up a growing market for us,” said Jay Lee, chairman and CEO of HMM America .
At long last the Port of New Orleans will soon win the recognition in the world of international shipping, after being overlooked since its ante bellum glory days of King Cotton.
Such ascendancy will likely bless the Florida port clusters too with all the advantages that balmy weather combined with incoming affluent residents and sound sophisticated administration can bring.