Port activity reflects highly competitive ro-ro automobiles trade
The auto sector has been hot as imports roll through East Coast ports. The roll-on roll-off (ro-ro) trade in automobiles is highly competitive among East Coast seaports. In recent years, business has been brisk. The reason: a strong dollar has made imports cheaper, and the recovering US economy has resulted in US exports of automotive parts and vehicles soaring 4.5 percent to $159.5 billion in 2014, breaking a record for the fourth straight year. The International Trade Administration reports that the auto industry was the fourth leading exporter of goods in the United States last year. About 2.1 millions cars and light trucks were exported last year. Strong demand for American-made cars and SUVs came especially from Asia and the Middle East. The Wall Street Journal reports that US factories operated by foreign and domestic companies posted increases in exports to Canada, Mexico and overseas. About half of all US light-vehicle exports are shipped to Canada and Mexico – countries that are also big exporters of autos and trucks to the United States. Most increases in exports came from Ford, Jeep, BMW and Nissan. The slow down on the West Coast earlier this year resulted in a decrease in production by some auto manufacturers. Honda, for one, slowed production at plants in Ohio, Indiana and Canada because of shortages of several critical parts, including electronics and transmissions that arrive via West Coast ports. Plants in Alabama, Georgia and Mexico weren’t affected. (see Matt Miller article on front page) Port of Baltimore In 2014, the Port of Baltimore’s public marine terminals imported 331,756 cars—down 2 percent from 2013. “We exported a record 259,312 cars—up 9 percent from 2013,” reports Richard Scher, Maryland Port Administration (MPA) spokesman. “It was the fourth straight year for record auto exports.” Between Baltimore’s automobile terminals at Fairfield and Dundalk, the port handled 792,795 cars in 2014 – the most of any US ports for the fourth consecutive year. Baltimore already is regarded the nation’s No. 1 ranked seaport for automobile imports and exports. The previous record was 752,100 cars in 2013. With a new berth opening at Masonville/Fairfield Marine Terminal, MPA officials expect the port to exceed its 2014 record. Scher indicates that MPA has seen a weakness in auto exports so far in 2015 due to the strong dollar. “Imports are still very strong,” he said. Ports America, Dundalk Terminal’s stevedore, sees volumes continuing to hold steady as imports from both the Far East and Europe bring a variation of equipment types and models. “The Port of Baltimore is capable of offering services from discharge and load of the vessels to preparation, washing, fumigating, shrink wrapping, processor standard service, and, of course, truck, barge, and rail car load, and discharge operations,” says Steve Loevsky, Ports America VP auto/ro-ro and cruise. In October, MPA opened a new $22 million berth at Masonville/Fairfield Marine Terminal. The berth replaces one that has been in operation for more than 70 years and is expected to drive more automobile business to the seaport. Unlike the old berth, the new berth has rail access and is 1,175 feet long – nearly 300 feet longer than the old berth. It also expands from 110 feet to 130 feet and can support 1,000 pounds per square foot, compared to only 100 pounds per square foot for the old berth. According to Michael Rye, Wallenius Wilhelmsen Logistics (WWL) North Atlantic Port Operations Manager, the new berth is able to accommodate the smallest to largest ro-ro cargo in the world and allows companies to get automobiles to dealers more quickly. The terminal handles a range of automobiles from Mercedes-Benz, Chrysler, Jeep, Toyota and Fiat as well as heavy ro-ro construction equipment. Port of Brunswick Georgia Ports Authority’s (GPA) Port of Brunswick holds the rank as the country’s No. 1 port for imported new vehicles and No. 2 for imported and exported vehicles. In Calendar Year 2014 the port handled 538,019 imported vehicles; 140,190 exported vehicles. In 2013, Brunswick saw 502,573 vehicle imports; 127,925 vehicle exports. The Port of Savannah handled 27,480 exported vehicles in 2014; 19,248 in 2013. That port does not handle vehicle imports. Among the ocean carriers calling at Brunswick are American Ro-Ro Carriers, Eukor Car Carriers, Hoegh AutoLiners AS, “K” Line America, Mitsui OSK Bulk Shipping (USA), NYK Ro-Ro, Siem Car Carriers, Volkswagen Logistics GmbH & Co, and Wallenius Wilhelmsen Logistics. Those calling at Ocean Terminal Savannah are ACL Grimaldi Group, Bahri, Canada States Africa Line, NYK Ro-Ro, and Wallenius Wilhelmsen Logistics. Robert Morris, GPA spokesman emphasizes that Brunswick’s Colonel’s Island Auto Port has many advantages over other South Atlantic ports for handling automobiles. For one, it has 734 acres for future expansion of which 642 acres have already been permitted by the US Corps of Engineers for development. “By having the Corp of Engineers permit in hand for the entire 642 acres means we are in a position to move forward with OEM’s and auto processors as their plans for expansion continue,” Morris says. Colonel’s Island offers a superior road system connecting the terminal to major interstates with immediate access to I-95—a short 2.5 miles via a four-lane road from the terminal. It is also served by two Class I railroads (Norfolk Southern and CSX) via the Golden Isles terminal railroad. “Colonel’s Island offers a choice to the automotive manufacturer in order to give them the competitive edge,” Morris says. Adding to that, the present 39,260 linear feet of rail track will be expanded by 7,765 linear feet of rail track. “This will give the automotive manufacturer the capability of expediting their vehicles to market,” he emphasizes. “Even with great rail infrastructure we have designated a location for additional rail expansion that is 63 acres to be used as needed on Colonel’s Island.” There’s also modern deep water facilities with the fourth berth already authorized for the planning design and permit application to the US Army Corps of Engineers. “This means there’s no berth congestion,” he says. Other key points: “We offer the OEMs the opportunity to move import and export vehicles along with their domestic vehicles through the same terminal facilities, thereby creating better efficiencies for their truck or rail shipments,” Morris says. “The Colonel’s Island Auto Port has room to add two additional berths to serve our shippers and ocean carriers. Approximately 80,000 vehicles can be stored at any one time at our port and the estimated throughput capacity is well over a 1 million vehicles.” Meanwhile, GPA continues to expand Savannah’s Ocean Terminal’s auto footprint for exports. Twenty-one acres have been paved and two buck-loaders have been purchased to unload vehicle from the Norfolk Southern Railroad for export. JAXPORT Big news at the Port of Jacksonville (JAXPORT): In May Volkswagen began using the port to import vehicles. Some 100,000 cars and SUVs are expected the first year with 550,000 in the next five years. Models include Volkswagens, Audis and Bentleys. Volkswagen Passats made at the company’s plant in Chattanooga, TN, will be exported through Jacksonville. Volkswagen Group of America announced in February that it had chosen the Florida port for its import facility and Southeastern distribution center. The import facility represents a $3.4 million investment by Volkswagen. The vehicles are processed by Amports Inc., a long-time tenant at the port. Both Amports and the Jacksonville Port Authority provided incentives to Volkswagen, including financial incentives based on the volume of vehicles shipped. Volkswagen ships more vehicles to Florida than any state other than California, the company said. Volkswagen is headquartered in Herndon, Virginia. The company has operated a parts distribution facility in Jacksonville since the late 1980s. That facility was expanded in 2009. Frank Camp, JAXPORT director of Non-Containerized Cargo, explains that a plus for the port is its long time reputation for excellence as industry leaders in the safe handling of autos. “We offer fast load and discharge rates with three major auto processors located just minutes from our berths,” Camp says. “Add to that the 60 million consumers living within a one-day truck drive from our terminals and you see why JAXPORT just makes good business sense.” Overall, JAXPORT handled 278,587 auto imports in Fiscal Year 2014, up from 274,073 in FY 2013. In FY 2014, it handled 326,583 auto exports, down from 356,624 in FY 2013. JAXPORT’s Fiscal Year runs Oct. 1 through Sept. 30 JAXPORT handles large auto volume from all the major US, European, and Japanese original equipment makers (OEMs). “We are the No. 1 port in the United States for vehicle exports and among the top import ports for vehicles,” Camp says. According to Ports America, volumes on new cars slowed slightly during first five months due primarily to Mexican manufacturers of new vehicles that did not keep up with demand. However, the Mexican government is investing heavily in port infrastructure at Altamira and Vera Cruz. Ports America provides stevedoring and terminal services at JAXPORT. JAXPORT is positively impacted by infrastructure investment in Altamira and Vera Cruz given that JAXPORT is a major import/export port for those two Mexican ports. Ports America executives contend that rail service at JAXPORT has capacity issues that will drive continued use of short sea shipping. They estimate that imports of new vehicles into JAXPORT will match last year’s numbers by the end of the year. To encourage more ro-ro business, JAXPORT has made several terminal/port improvements that include new paving, striping, and sealing of a substantial portion of auto laydown acreage to accommodate expected auto volume increases; identification of additional acreage to accommodate expected auto volume increases, and port investments made to ease movement of rail traffic delivering auto units to Blount Island Marine Terminal. “JAXPORT is actively pursuing options for increasing our auto handling capabilities,” Camp says. Ports America added an additional tow truck at the port to handle non-runners for the African trade which will provide safer and quicker loading onto outbound vessels. Ports America, with the cooperation of JAXPORT, has added a berth at the Dames Point (cruise) terminal to accommodate export vehicles to coincide with non-cruise schedule. Port of Charleston Ports America reports that new auto import volumes at the Port of Charleston increased from last year. Charleston’s growth is attributed to the export of new autos and a 10 percent increase household goods. Last year, Charleston handled 236,812 vehicles (220,456 exports and 16,356 imports). According to the South Carolina Ports Authority (SCPA), this data reflects a 20 percent growth over 2013 totals. SCPA also handled approximately 2,100 fully-assembled BMW export vehicles in 2014 for shipment to South America, rather than loaded as rolling stock cargo. “We also handle semi-knocked down (SKDs) and complete knocked down (CKDs) BMW vehicles for export,” adds Erin Ehand, SCPA spokesperson. Currently, SCPA handles the export of BMW X-series models 3,4,5,6 and all deviations (engine, right or left-hand drive), which are made in South Carolina. “We also handle import vehicles produced by the BMW brand (3-series and other sedans, including the MiniCooper) for their employee/corporate use, as well as event vehicles imported for BMW-sponsored events,” reports Ehand. “We handle Daimler Sprinter vans, military personal vehicles shipped by IAL (International Auto Logistics), and will expand our ro-ro business with Volvo vehicles once their new facility is constructed.” Charleston has numerous advantages when it comes to ro-ro. First is the state’s growing auto and tire manufacturing industry. Auto assembly is also growing throughout the Southeast region. Forty percent of all auto parts imported to the Southeast move through the Port of Charleston. Consequently, auto parts are the SCPA’s top import commodity. Mercedes announced significant expansion plans this spring to begin full production of Sprinter vehicles at their assembly plant in Ladson, SC, which will further drive automotive-related import gains for SCPA. Volvo also announced plans in May to locate its first production facility in North America in North Charleston, SC. The $500 million factory is expected to produce 100,000 a year with the first cars produced in 2018. “Finished vehicle exports are also on the rise as a result of increased vehicle production by our customers, she adds. The $21.7 million enhancements made by SCPA in 2011 to its Columbus Street Terminal helped accommodate this business. The terminal is dual-rail served, with warehouse space and capacity to handle growing vehicle volumes as well as other rolling stock, including large machinery, power-generating equipment and specialized non-container cargo. SCPA is preparing to begin construction this summer on further enhancements to the terminal that will enable Columbus Street to accommodate hybrid vessels carrying both containerized and ro-ro cargo. Other services include inventory control for BMW export vehicles. “We drive efficiency of the vehicle export process by minimizing the distance traveled by the vehicles, both from the railcar to point of rest and again from the point of rest to the vessel,” Ehand says. “This entire process is handled completely on-terminal.” On the import side, SCPA provides just-in-sequence container handling for BMW operations and offers Mercedes’ Alabama-based manufacturing facility a “Quick Pick” program, which reduces the length of on-terminal storage time for import components critical to the manufacturing process. Port Canaveral Port Canaveral may have lost out to JAXPORT on its bid for the Volkswagen business, but the port is anxious to court the ro-ro vehicle business. The port’s current business is minimal. (In FY 2014 Port Canaveral exported 1,245 cars/trucks.) But there are pluses. Port Canaveral’s ro-ro facilities include a 72 foot wide x 150 foot long ro-ro ramp. Additionally, all general cargo berths are available for ro-ro vessels. Port Canaveral offers paved acreage ready for autos and a 60,000 square foot warehouse for automotive processing. Easy direct rail access is just minutes away with connectivity to both Norfolk Southern and CSX. In the planning stage is a multi-level 7,500-car parking garage and 9,500-vehicle multi-user auto processing facility. With 783,000 square feet per floor and speed ramps up and down, this vehicle pre-processing and truck loading facility would provide distribution throughout Florida. “As Orlando’s port, Canaveral is located 45 minutes away from the auto auctions and the world’s busiest rental car market, as well as auto consumers,” reports Alberto Cabrera, senior direct, Cargo Business Development at Port Canaveral. “Best of all, our central Florida location offers uncongested, nonstop, direct highway access that puts more than 70 million consumers within a three-hour drive.” In addition to Phase 1 widening and deepening Canaveral Harbor, other projects slated for completion in 2015 include new berths and cargo terminal, backup area with regional storm water improvements, and the refurbishment of two post-Panamax ship-to-shore container cranes. They will enable Port Canaveral to service its newest cargo partner, GT USA, and current customers, and enhance port marketability and reach. GT USA officially opens for business on June 12, 2015. Port of Wilmington, DE The big news coming out of the Port of Wilmington is the multiyear contract inked by the former Chrysler Group with AutoPort Inc in February. The company had been using the Port of Baltimore for imports and exports. AutoPort began exporting Chrysler, Dodge, Jeep and Ram cars and trucks manufactured by FCA US LLC of Auburn Hills, MI, to the Middle East in March. While the length of the contract or the volume of vehicles has not been made public, The News Journal stated that as FCA US expands its distribution to more markets outside North America and imports vehicles from locations such as Poland, Italy and Turkey, the company found it necessary to find another port for some of its business. AutoPort, which has been working at the Port of Wilmington an ISO 9001 certified comprehensive vehicle processing and modification company, has expertise in exporting to the Middle East. The company customizes vehicles for General Motors, which uses the Port of Wilmington for exports to the Middle East. An auto berth at the port offers a dedicated roadway to automobile storage areas.