It could be the sun, the mild weather, or the southern hospitality, but the U.S. Southeast is poised for growth and predictions for the future are optimistic. A fast-growing consumer market is driving infrastructure developments in the U.S. Southeast, particularly in and around the ports.

Despite the recent downturn in the economy and the slowdown in trade, developments in the Southeastern transportation and logistics infrastructure have continued. While the pace has slowed, plans to handle future increases in volume have long been in place and building has continued.

“You can’t just hold back,” said Thomas Eagar, North Carolina State Ports Authority CEO, “it’s an eight- to ten-year process for many of these capital developments, so you have to move ahead.” Eagar is optimistic about the region’s future and about the market’s recovery, and statistics support his sunny outlook.

The Southeast region has been identified as the fastest growing consumption zone in the U.S., and is projected to have the fastest growing population. U.S. Census data shows an expected 43 percent increase in the population of the southeastern states between 2000 and 2030, and with that comes increased investment in the services that the larger population will require.

The region has also benefited from the U.S. West Coast’s troubles. In years past, when ocean traffic coming in and out of the West Coast ports was experiencing congestion delays, many importers shipping from Asia began to look at East Coast alternatives. By shipping through the Suez and the Panama canals, importers have avoided the West Coast hassles, and established new patterns. And, with the completion of the Panama Canal widening project in 2014, volumes will continue to increase as the larger post-Panamax ships transit the canal.

Regionally, the future looks bright and the players in the states that make up the U.S. Southeast are making sure they’re laying the groundwork to capitalize on areas of growth and economic recovery.

North Carolina

While NC Ports’ Eagar admits that it will be a few years yet before the U.S. sees a strong recovery, he says that it’s not all bad news at North Carolina’s ports. “We had 28 percent container growth this year,” said Eagar, “and although there was a drop in imports such as lumber, steel, and cement aggregates, the U.S. dollar is driving exports.” Eagar says that he has seen a resurgence in the export business and that he expects that it will continue to remain strong.

With growth in mind, the North Carolina State Ports Authority has continued to build for future capacity. Work continues at the Port of Wilmington to revitalize berths and acquire new cranes that should allow the port to double throughput capacity within the next five to six years. An international port is also being developed in Southport. Although still in the greenfield stage, it is expected that the project will move into the feasibility phase within a year. The new port will offer 50-foot drafts and will be capable of handling 3 million TEUs.

On the warehousing and distribution side, there are three major sites under development. Included among these is BPG’s (a private equity real estate fund manager) proposal to build a 975,000-square foot global warehouse/distribution center. The new North Carolina Port Industrial Facility is being built in order to support the Port of Wilmington’s growing container volumes.

Eagar also says that over the past four years, the State has invested $234 million in infrastructure improvements, particularly in improving road quality and linkages.

South Carolina

“There certainly are near-term challenges, but regionally we are optimistic,” said Byron Miller, director, public affairs, South Carolina State Ports Authority. Like the rest of the country, volumes are down at the South Carolina ports, but Miller says that the outlook is positive and that the ports are focused on what will come next.

“As a region, the Southeast is projected to have the fastest population growth. Coupled with this, we are seeing changes in distribution patterns. The opening of the Panama Canal will lead to an increase in volumes, as will the use of larger vessels. Due to costs, there is a realignment of services, with some smaller vessels being replaced by one larger vessel.” Miller says that with the deepest water on the Southeast coast, Charleston is well positioned to benefit from these changes.

At the same time, South Carolina is also holding its own in the manufacturing sector. “We still have manufacturing and will continue to have it,” said Miller. Supporting this belief is the recent announcement by Boeing to add a second final assembly line to its facility in North Charleston.

In terms of distribution and warehousing, South Carolina has seen an upswing in activity. In October, TRC Corporation, one of the nation’s largest marketers of automotive replacement tires, announced that it would be opening a 1.1 million square-foot distribution center in the Rockefeller Group Foreign Trade Zone near Charleston. Additionally, the Port of Charleston area has projects involving more than 20,000,000 square-feet of spec industrial space in development within 30 miles of the port.

Georgia

Despite a challenging economy, in 2009 the Georgia Ports Authority (GPA) handled more than 2.4 million TEUs and added additional services, holding its place as the country’s highest volume container port.

The Chatham Intermodal Container Transfer Facility (ICTF) was opened earlier this year, making the Port of Savannah the only U.S. East Coast seaport offering two ICTFs. This allows the port to offer shippers double-stack rail service to various inland hubs and serves as a competitive advantage for the port. In the past year, the GPA also purchased four additional super post-Panamax cranes. The aim, according to GPA executive director Doug Marchand, is to expand capacity and provide superior services. The GPA’s long-term strategic growth plan aims to double its current capacity of 6.5 million TEUs by 2018.

Georgia is also home to Atlanta’s Hartsfield-Jackson Atlanta International Airport, which boasts total on-airport air cargo warehouse space of 2 million square feet. Each facility offers excellent access to four main interstate highways. Atlanta is strategically positioned as a logistics hub, with more than 80 percent of U.S. consumers within two hours’ flight time from Hartsfield-Jackson, or within one day’s drive by road.

Florida

Florida’s most active cargo ports include Miami-Dade, with Miami International Airport as a major air cargo hub, the Port of Jacksonville (JAXPORT), and Port Everglades.

Miami International Airport (MIA) is the leading airport in the U.S. for international freight. In 2008, MIA handled 1.95 million tons of cargo. The airport cargo facilities offer over 2.7 million square-feet in 17 cargo buildings. And, although airports around the world have struggled through 2009, MIA has added some new services and continued its capital development plan.

In March, for the first time, the airport received a cargo flight from Hong Kong to Miami. The service will fly three times a week, connecting Hong Kong to Miami, the world’s largest gateway to Latin America and the Caribbean. Officials at the Miami Airport say the Hong Kong route will greatly enhance trade between MIA, Latin America, the Caribbean, and all of Asia.

Oceanside, the Port of Miami continues to follow its 25-year master plan. With the expectation that most U.S. container port gateways will see volumes double by 2020, the port continues to make capital improvements and investments, access for ships, commercial trucks, personal vehicles, and rail cars.

At JAXPORT, things are also humming along. “Companies can’t wait for a recovery; they need to invest now,” said Roy Schleicher, chief commercial officer, JAXPORT. The port is moving ahead, along with its logistics partners, to build more capacity. According to Schleicher, regardless of the economic slowdown, there has been no real change at the port in terms of their capital projects.

Currently under construction is the Hanjin terminal, due to be completed in 2013, which will serve as a key hub operation for Hanjin’s East Coast port activity. As well, the area has seen significant development in distribution centers and warehouses. “Over the past eighteen months we’ve had over 9 million square feet of warehousing and distribution space developed,” said Schleicher. This includes the 400,000 square-foot Mercedes Benz facility, which opened earlier this year. Schleicher said that there are private investors building facilities on spec.

Among the fastest growing ports in the U.S., and certainly in Florida, is Broward County’s Port Everglades. The port boasts growing containerized cargo and is a major petroleum storage and distribution hub. The port is following its Master Vision plan, which includes $421.9 million in capital projects through 2012. The port recently broke ground for a new 41-acre marine terminal for containerized cargo, which is expected to be completed by spring 2010. The port also has plans for near-dock rail to improve efficiency.

With an eye on the completion of the Panama Canal expansion, Port Everglades formed an alliance with the Panama Canal Authority in August. “East Coast ports, especially ports in Florida, Georgia, South Carolina, and Virginia, are uniquely positioned to take advantage of shifting trade patterns, which will take place because of Panama’s visionary expansion plans. Consequently, for Southeast ports, it will be crucial to expand ship berths and ensure adequate harbor depth, as these larger ships will be the norm,” said Port Everglades Director Phillip C. Allen.

So while challenges remain, the U.S. Southeast is well prepared to take advantage of the recovery when it comes.  wt



Contributing writer Andrea MacDonald specializes in covering transportation and logistics developments.