Gulf state ports upgrade infrastructure to attract new commerce, including activity related to the Panama Canal expansion.

The states along the U.S. Gulf Coast are in a very desirable position. The states are part of a region of the United States-from Texas east to the Eastern Seaboard and north to Maryland-that was the fastest growing in terms of population (14.3 percent) in the 2010 census. That type of growth is projected to continue for at least the next one to two decades.

Business-wise, the Gulf Coast states are also in an prime spot because ports along the Gulf of Mexico have a great deal to gain when the Panama Canal expansion project is complete in 2014.

“The Canal [expansion] is changing the dynamics for cargo between Asia and the United States,” says Alec G. Dreyer, CEO of the Port of Houston Authority. “It will become more economical to move product through the Canal for product targeted toward the Central U.S.”

The economic possibilities are so substantial that the ports of Houston, Tampa, and Mobile agreed last year on a joint marketing initiative, “The Gulf Coast Advantage,” which presents a complete itinerary for the three markets that are currently underserved, with a strong cargo profile of both exports and imports, says Wade Elliott, senior director of marketing for the Tampa Port Authority.

James K. Lyons, director and CEO of the Alabama State Port Authority (the operator of the Port of Mobile), describes the initiative as a “very logical alliance” for three non-competing ports for their mutual benefit and the benefit of the companies they serve.

While not a part of the alliance, the Port of Gulfport, Mississippi, is also preparing for the Canal expansion. The state of Mississippi signed a memorandum of understanding with the Panama Canal Authority to increase trade at Gulfport. The canal expansion will provide the state with considerable opportunities for increased trade and worldwide shipping, says Don Allee, executive director and CEO of the Mississippi State Port Authority. The port is eyeing not only continued growth in the trans-Pacific market from the expansion, but also in South America and, in the long term, the African continent, Allee notes.




 

Preparing for the upswing in business

Gulf Coast port officials believe the Canal expansion, and the less-expensive all-water route, dovetails nicely into the view that manufacturers are looking for ways to minimize inland transportation costs.

“With the expectation of higher fuel costs and new distribution strategies, companies will want to be closer to their customers,” Elliott says.

Therefore, ports along the Gulf Coast, in an effort to make sure they are ready for this surge of commercial activity both related and unrelated to the Panama Canal, are upgrading their infrastructure for an increase in commercial activity.

Gulfport, which is home to the largest fruit importation operation on the Gulf of Mexico with two tenants, Dole and Chiquita, operating weekly inbound and outbound shipments, has replaced about 400,000 square feet of shed space and all but one of the seven docks destroyed by Hurricane Katrina in 2005. It is in the midst of a strategic master plan for expansion that will add 84 acres of new capacity, allowing it to handle an increase in containerized traffic and accommodate new tenants.

The Port of Mobile has undergone tens of millions of dollars in upgrades in recent years, which has helped drive major economic development projects to the state of Alabama.

The port designed and built a specialized steel handling facility that helped convince Germany-based ThyssenKrupp to site two operations-a carbon steel mill and stainless steel mill-in Alabama, rather than neighboring Louisiana.

“There is nothing like this facility anywhere in the world,” Lyons says.

Other facility upgrades are also underway to make it more cost effective for companies to ship out the Port of Mobile rather than New Orleans or Savannah, Georgia. The biggest example of these upgrades, Lyons says, is the Mobile Container Terminal. “The terminal has a broad impact, because it helps smaller companies that only ship a few containers a month and it helps companies that ship large quantities,” he points out.

The Port Authority is building an intermodal transfer container facility adjacent to an existing marine terminal. The facility, estimated to cost $75 million, will connect the terminal with up to five Class I railroads. The facility will add much needed infrastructure to reduce the number of trucks on the highways, eliminating both congestion and emissions, Lyons adds.




 

Adding intermodal, cargo handling capacities

The Port of Tampa, in preparation for the expected growth in container business, completed last year the most recent phase in an ongoing expansion of its container terminal from 25 to 40 acres. The terminal now includes 2,100 feet of berth space, three rail-mounted container gantry cranes, a 100-ton mobile harbor crane, 104 reefer plugs, and 43-foot water depth.

It is also busy improving intermodal access, Elliott says. Construction is underway on a $500 million project that will give trucks entering and leaving the port direct access to Interstate 10. On the rail side, the port is partnering with CSX to construct a new rail facility that will allow 100-car-long unit trains of ethanol directly into the port, where it will be blended with inbound gasoline.

Port Freeport, Texas, is expanding its operations with the construction of the first phase of its Velasco Terminal, which will add cargo handling capabilities. The terminal will have a new 800-foot-long dock and 20 acres of backlands. Eventually, the port will offer 2,400 feet of berthing space and more than 90 acres of supporting land.

Land has long been one of Port Freeport’s greatest advantages, with about 7,500 acres, conveniently located to the open Gulf waters and available for future development, says A. J. Reixach Jr., executive director and CEO of Port Freeport.

On the rail side, Union Pacific is putting a new bridge in place over the Old Brazos River, eliminating present weight restrictions. Roadway developments are led by the launch of a design and engineering project to elevate a major intersection involving Texas Highway 36.

The port is also designing a high efficiency truck queuing area and continues to work with federal and state officials to deepen and widen the port channel.

“Port Freeport and its customers are looking to gain from enhanced multimodal connections,” Reixach says.

Nearby, the Port of Houston lies in the southeast corner of what is considered the Texas Triangle, comprised of the Dallas-Fort Worth Metroplex and the Austin/San Antonio region. It is a market of more than 25 million consumers. Within 1,000 miles of Houston is a population of 100 million people.

From a cargo and freight-moving perspective, the Port of Houston is a centralized location for shipments to and from an area that encompasses east of the Rockies, west of the Ohio Valley and south from Canada, Dreyer explains. “We characterize ourselves as the maritime gateway to Texas the Heartland of America,” he points out.

To meet future business, the port is upgrading its two container facilities, Barbours Cut and Bayport. Barbours Cut, the older of the two, is at full build-out and can comfortably handle 1.7 million TEUs per year. Dreyer says plans are on the board to refurbish Barbours Cut.

And, anticipating increased volume because of the Panama Canal expansion, the port is further expanding the facility. At build-out, Bayport will have a design capacity of 2.3 million TEUs. The channel depth has already been widened to 530 feet and deepened to 45 feet, which will allow the port to handle larger vessels, Kunz notes. Target date for completion of Bayport is 2018.

The Port of Houston expects to invest about $1.5 billion in the two container facilities.

Houston is the largest break bulk port in the country. Dreyer emphasizes that investment needs to continue in this category to accommodate the trend of heavier, more concentrated cargo. The port expects to invest up to $3 billion over the next 15 years to stay ahead of the curve in what Dreyer sees as a growth potential for the port.

Galveston competes on turnaround time

The Port of Galveston, Texas, is ideally suited for companies looking to bypass the extra time it would take to travel to the Port of Houston (about 50 miles away) or the congestion in the Houston metro area once cargo is loaded onto trucks.

“From a cargo standpoint, shippers that have the need for a fast turnaround can benefit from Galveston,” says Capt. John G. Peterlin III, senior director of marketing and administration for the port. “Companies that need to get cargo to and from Houston typically can make more than one roundtrip a day. This keeps operating costs lower for companies.”

The port’s infrastructure includes two roll-on/roll-off terminals; a liquid bulk terminal with a tanker berth, where carbon black and heavy steel oil products are exported; and a chilled storage terminal operated by Del Monte Fresh Produce, which has at least one ship a week coming from Guatemala.

Logistically, the Union Pacific and Burlington Northern Santa Fe lines serve the Port of Galveston, and both operate rail yards at the port. A four-lane highway connects the port with Interstate 45 just a few miles away.

The port recently finished deepening Galveston Channel to 45 feet, which benefits its liquid and dry bulk customers, Peterlin says. wt



Ken Krizner is a freelance writer based in Cleveland, Ohio, where he writes often on economic development and technology issues.