Friday, February 07, 2014
Container shipping began 50 years ago and developed into a huge industry that has made the boom in global trade possible. Marc Levinson, author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, tells us how cargo moves around the works, and looks at the sweeping economic consequences containerization brought about.
Friday, October 28, 2011
(Houston--KUHF) The Port of Houston is busy these days. There are 25 miles of public and private facilities along the Houston Ship Channel, which brings in traffic from Galveston Bay and the Gulf of Mexico. Figures show the port ranks first in the U.S. in handling foreign waterborne tonnage and second in terms of overall tonnage. Officials tout numbers from a recent study showing the port has about a 118 billion dollar economic impact in Texas. There's also state and local sales tax revenues, pegged at close to four billion dollars.
"Any business that can demonstrate profitability in these times of economic uncertainty is on the right path," said Houston Port Authority Chairman Jim Edmond outlined successes and challenges in his annual "State of the Port" address.
Edmonds says diverse cargo is part of the reason for the port's strong performance in down economic times. They're handling more steel pipe for one, showing a 62 percent increase from last year, and officials say that's because of increased drilling activity. Edmonds cited a ten percent increase in total tonnage for the first nine months of the year, along with a 12 percent increase in revenue and a 35 percent increase in net income.
"The worst thing for the people of Houston and the state of Texas is to operate as though we are in a recession. We aren't. Economic recession can be a fear-driven dynamic," he said optimistically.
Still, challenges lie ahead for the Port of Houston. The widening and deepening of the Panama Canal is only a couple of years away and that could bring ships to Houston that are two to three times larger than the ones the port currently serves.
It's what Edmonds calls a "game changer." He says it will require three billion dollars in capital improvements to get ready for the bigger vessels. That includes work on six wharves at the 35-year-old Barbours Cut terminal, which sits at the mouth of Galveston Bay. Work is slated to begin next year.
"It's expected to take about 18 months to modernize each wharf at Barbours Cut at a cost of $25 million per wharf, and about $65 million per wharf to equip it with wharf cranes and RTG cranes," the shorthand for rubber tire gantry cranes for stacking and storing large quantities of shipping containers
Edmonds says the Port of Houston is one of about a dozen ports around the U.S. that's aggressively getting ready to handle the larger ships, in what he calls a "high-stakes" competition.
Thursday, March 17, 2011
(Matt Dellinger, Transportation Nation) At noon today, Florida Governor Rick Scott is scheduled to take a helicopter tour of the Panama Canal expansion, to see firsthand the third set of locks that will allow bigger ships to pass from the Pacific Ocean into the Caribbean and, Scott hopes, on into the Port of Miami.
Scott traveled to Panama—his first trade mission as Governor—just weeks after he suggested that his state should fully fund a planned deepening of Miami’s port to allow those bigger ships to dock. He announced the plan on the same day he formally rejected $2.4 billion dollars in federal high speed rail money. In the face of criticism that he is thwarting economic development by refusing to pursue rail, Scott has made a point of touting the 33,000 jobs the dredging is projected to create. Miami is already the nation’s eleventh largest container port by volume, and allowing “New Panamax” ships to call could double its capacity when the canal widening is completed in 2014.
The dredging, which would increase the shipping channel’s depth from 45 feet to 50 feet, is expected to cost around $150 million. Normally the federal government would pay half of that (they pay 65% for dredging down to 45 feet), but in its 2012 budget proposal, the Obama Administration failed to earmark the money Miami needed to proceed, leaving the role of port champion open for Scott to fill.
The Governor has presented the port enhancements as a sort of alternative to the Tampa-to-Orlando High Speed Rail project, but money for the two projects would flow from different springs in Washington: while rail is a Department of Transportation responsibility, ship channel dredging is the purview of the Army Corps of Engineers, and appropriations come from Energy and Water bills.
However, transportation dollars are already playing a huge role in the port’s expansion. The TIGER II stimulus program provided $22.7 million to help rebuild the port’s freight rail connection, and construction has already started on a $610 million tunnel that will obviate what is now a parade of containers through downtown Miami, as trucks make their way to Interstate 95.
Both projects are on track to be completed in 2014, the year the Panama Canal expansion opens. State and local governments have already come up with financing for the tunnel, their half of the dredging, and ancillary tasks like strengthening retaining walls and installing newer, wider, taller cranes. The federal share of the dredging funds—a relatively small sum of $77 million—is the last and the most important piece of the puzzle. The necessary studies have been done, and there’s not much time to wait.
“It's such a tight schedule,” Juan M. Kuryla, the Deputy Port Director, told me. “The canal is going to open in 2014, you're going to have a tunnel open in 2014, the rail is going to be open in 2014, and the last leg of the stool is this deep dredge. I always equate it like you're building airport. The brand new airport is done, you've got the connection to the interstate highway system, you got the terminal and everything done, and the only thing you're missing is the runway is not long enough to land the 747's. And our runway is our water and it's not deep enough.”
Kuryla and his colleagues have not been shy about expressing their needs. When I toured the Port of Miami late last year, before Rick Scott’s tenure began, a sign at the downtown entrance to the bridge leading to the port read “Mr. PRESIDENT, Deep Dredging = 33,000 new jobs.” Obama had recently come through town, and port officials were eager to communicate just how badly they needed recognition in the federal budget.
Container shipping companies joined the chorus as well, sending letters to the President last fall. Ian Calms, Vice President of Terminal Strategy & Development for CMA CGM wrote the president to “respectfully urge” him to fund the deep dredge. “The Port of Miami is the only port south of Norfolk, Virginia, that has Congressional authorization to dredge to -50 feet,” he pointed out, “and perhaps most importantly is the only port that can complete the project in the next three-four years.”
On November 14th, CMA CGM brought its ship the Don Carlos to Miami to show just how impressive these new, larger post-Panamax ships were. The Don Carlos carries an impressive 8500 TEUs (Twenty-foot Equivalent Units, or standard containers). The current Panama Canal locks permit boats carrying about 5000 TEUs, but the expansion will allow ships carrying 13,000 TEUs. “The largest ship we do now is about 5800 TEUs, and if that one comes fully laden, we have to wait for high tide and only the two newest cranes can work it,” Kuryla said. “They couldn't bring the Don Carlos in here fully laden. You could see the watermark on the ship. It was more than half empty. But with the 50 feet dredge, we can handle 8500 TEU's fully laden with the proper equipment. We're excited. But we need the 50 feet. If not we're going to remain a second tier port.”
Kuryla says the port doesn't even need the full $77 million to get moving on the deep dredge. A "symbolic appropriation" from Congress would allow the Corps to start drawing up contracts. But with the current budgetary climate in Washington, the port will likely find its money closer to home.
Since Governor Scott's initial declaration, almost two weeks ago, that he had "directed the Florida Department of Transportation to amend their work plan to include $77 million so that Florida can take another leap forward in international trade,” there have been no further news or details on the state's efforts to fund the dredge. Emails and calls to the Governor's office from Transportation Nation went unreturned on Wednesday. We will update this post with any developments.