Honolulu Star-Advertiser

Friday, April 26, 2024 82° Today's Paper


News

A race to capture a bounty from shipping

SAVANNAH, Ga. >> Port officials here are racing to dig 6 feet of mud from the bottom of the Savannah River by 2014. In the world of major waterway expansions, that is an impossibly tight timeline.

Few can recall a civic project in Georgia that has had more unified support.

Without the $625 million deepening project, a breed of huge ships loaded with foreign-made iPods, furniture and other goods that will soon be able to traverse a newly widened Panama Canal will head elsewhere. And with them would go potentially billions of dollars in business.

Like Savannah, other East Coast ports from New York to Miami are scrambling like shoppers at a post-Thanksgiving door-buster sale, trying to become the go-to port once the canal is widened.

“Everyone’s lined up, and the door is about to open,” said Bob Pertierra, vice president of supply chain development for the Metro Atlanta Chamber.

But the battle is especially fierce here in the South, where several ports are competing to become the region’s top destination for the superships. They hope to cash in on the biggest shift in the freight business since the 1950s, when oceangoing ships began carrying goods in uniform metal containers.

The Panama Canal, 48 miles of water that connects the Atlantic and Pacific Oceans, is undergoing a $5.25 billion expansion that is scheduled to be completed by Aug. 15, 2014, 100 years to the day after it opened.

In what has long been considered a speed bump for major shipping companies, the canal is too small to accommodate a class of superships that came on the scene in the 1980s and went into heavy use a decade later when China became a powerful exporter.

Some of the big ships can carry three times as many containers as the industry average. The expansion, though it still will not allow the canal to accommodate the largest of the ships, will enable products made in Asia to be sent directly to the East Coast instead of being unloaded on the West Coast and then sent east by train or truck.

A result could be a shift in business worth billions of dollars to ports and big savings for companies like Ikea and Home Depot Inc., which are always on the hunt for more efficient ways to serve shoppers in the Eastern third of the United States, where a majority of the population lives.

With so much on the line, the canal expansion has pitted city against city and is testing the mettle of lawmakers torn between their opposition to federal earmarks, which pay for the bulk of port projects, and the gold rush that is about to begin along their shorelines.

“If you can imagine the crowded three- or four-lane highway you’re driving on suddenly getting expanded to 12 lanes, you can picture what’s about to happen,” Pertierra said. “It’s a global shift.”

To capture some of the new traffic, almost every large East Coast port and those along the Gulf of Mexico have projects under way. Some ports that are too small to handle the giant ships are improving railroads and truck routes, making them more efficient in anticipation of an overall increase in the number of containers coming to the East.

Others want to dig deeper channels and become the leading port in their regions for companies operating the big vessels, including Savannah; Charleston, S.C.; Jacksonville, Fla.; and Miami.

Those projects, however, rely on a long process that requires congressional approval, studies by the Army Corps of Engineers and, finally, a lot of federal money that usually comes as budget add-ons, or earmarks.

Bill Johnson, the Port of Miami director, needs a $75 million federal appropriation and has gone to Washington to push for it. Meanwhile, his counterparts in Jacksonville are making their own case for deeper water, saying their port is geographically better suited than Miami’s and is one of the few American ports that have seen consistent growth in container traffic.

Containers have become the name of the game in shipping. Although cruise ships and imports and exports of cars, oil and bulk agricultural loads like cotton and fertilizer still make up a good portion of port traffic, most of the growth is in containers filled with products that Americans like to buy.

The newest, biggest ships can carry the equivalent of as many as 15,000 20-foot-long containers. But they are also heavier, wider and require deeper water. In Savannah, for example, the water is only 42 feet deep. That is enough, with tidal variations, to handle ships loaded with 5,500 containers.

The port at Norfolk, Va., is 50 feet deep, and is the only one on the East Coast that can handle the biggest, fully loaded container ships.

The navigation channel that feeds the Port Newark-Elizabeth Marine Terminal in New Jersey is deep enough, but the Bayonne Bridge is not tall enough for the new container ships to pass under. As a result, officials at the Port Authority of New York and New Jersey are pondering options. They might raise the bridge by 64 feet. A study by the Corps of Engineers this fall estimated the cost at $1.3 billion.

As Savannah port officials are learning, digging up 6 feet of mud is not easy or cheap. Environmentalists are concerned that dredging will cause historic Savannah buildings along the shore to tumble into the water, suck sand from the shores of Tybee Island and ruin freshwater marshes.

The Corps of Engineers’ environmental impact document, issued in November after 14 years of study, suggested deepening but not widening the channel to protect the buildings along the shore and adding 3,000 acres of wildlife preservation land to help offset the impact on freshwater marshes.

Of course, no one really knows how much traffic will be diverted and whether the expected increase will make up for the costs of improving the ports.

In Los Angeles, port officials dismiss any concerns.

“The Port of Los Angeles is not expecting increased cargo diversion as a result of the Panama Canal expansion,” said Rachel Campbell, a spokeswoman.

Some shipping companies and manufacturers have already shifted their supply routes from the West Coast to the East after labor problems and an influx of freight in 2004 that caused gridlock among ships in Los Angeles.

Officials in Panama are also expected to charge higher tolls for the canal to pay off the national loan that is financing the expansion. Those costs to shippers could offset potential savings in improved logistics.

Comments are closed.