DC Velocity - February 2012

go figure …
Virginia port’s ability to
compete for megaships called
into doubt

Ted Prince, one of the nation’s leading maritime supply chain consultants, calls Virginia his home. But Prince’s recent comments about the ability of the Port of Norfolk to compete in the new world of an expanded Panama Canal are unlikely to win him many friends among his state’s port interests.

In remarks made in mid-January at the SMC3 annual winter meeting in Atlanta, Prince, who runs a Richmond-based consulting firm, said Norfolk is not well positioned to compete with other East Coast ports for container traffic that will transit the widened and deepened canal when it opens for business in the summer of 2014.

Prince told the gathering that most vessels that will sail through the expanded canal en route to East Coast ports will call at either the Port of New York and New Jersey in the Northeast United States, or at Charleston, S.C., or Savannah, Ga., in the Southeast.

The reason, Prince explained, is that New York in the North, and the two Southeast ports can serve vast and densely populated areas. Norfolk’s service area may lack the population density of the other ports, Prince said.

Vessel owners operating the large, expensive containerships capable of transiting the expanded canal will likely be able to serve just one U.S. port if they want to achieve economies of scale. The expanded canal can handle ships with a maximum capacity of 12,600 twenty-foot equivalent unit containers (TEUs), nearly tripling the existing maximum container capacity.

“Efficiency is only achieved when the ship is moving, not when it is sitting in a port,” Prince said. Gone will be the days when a vessel sailing from, say, China to the United States could call on more than one U.S. port, he added.

Prince said there is no vessel that currently uses Norfolk as its first port of call. “If you are not the first port of call today, why would you be the first port of call tomorrow?” he said.

2 million The approximate amount of total DC square footage that Amazon.com will control in South Carolina when it opens its second facility in the state this fall.

SOURCE: COMPANY DATA

Port officials maintain that, as the only East Coast port with 50-foot channel depths capable of accommodating large container vessels, Norfolk has a natural leg up on its “Given those developments, the fight for precious federal dollars for dredging, a pressing need for deep water, and the overall expansion of the rail operations here, we think we will be anything but the odd port out,” port spokesman Joe Harris said in an e-mailed statement prior to the port’s announcement of the new MSC rotation.

In the meantime, the New York/New Jersey port authorities are working on a $1 billion project to raise the 151- foot-tall Bayonne (N.J.) Bridge connecting New York and New Jersey by an additional 64 feet to provide adequate clearance for the mega-containerships expected to transit the expanded canal. The project is part of a multibillion dollar effort that will include deepening the port’s channels to 50 feet from their current depth of 45 feet.

Charleston, with a channel depth of 47 feet, and Savannah, with a depth of 42 feet with the hopes of deepening its channel to 48 feet, are not expected to reach 50- foot depths for the foreseeable future. ;