US EAST COAST
Capacity and flexibility key to east coast ports
Vehicle handling ports on the US east coast have been making significant investments in expanding their operations and many are looking toward the benefits of increased trade with Mexico
The US’ busiest vehicle handling port, Baltimore, maintained volumes through 2019, increasing the number of vehicles handled by nearly 8,000 to reach a total of almost 858,000, the ninth year of growth for the port.
The port is adding VW volumes this year following an agreement signed between the carmaker and logistics hub operator Tradepoint Atlantic. It will be Volkswagen Group of America’s seventh vehicle processing operation in the US. The deal involves the development of a multimodal vehicle processing and storage facility that will cover more than 46 hectares and handle around 120,000 vehicles a year from VW’s European and Mexican production plants.
It will be situated on the former home of the Bethlehem Steel factory, once one of the world’s largest steelmaking works.
Though the new Baltimore facility will be leased to VW, the company will make a “significant investment” in the new base, said Tradepoint Atlantic. Operations are planned to begin in the autumn.
Speaking at the announcement of the agreement last year, Anu Goel, executive vice-president for group aftersales and services, Volkswagen Group of America, said the facility would process and ship vehicles for VW, Audi, Bentley and Lamborghini and help the carmaker improve service and advance its growth plans in the mid-Atlantic market.
In addition to the rise in passenger vehicles and light trucks, the port of Baltimore also takes the lead again amongst the US ports for the handling of agricultural and construction machinery.
Numbers were also up at the ports of Brunswick and Savannah, which are calculated together as part of the Georgia Ports Authority (GPA). The GPA is working with its terminal operators and carmaker customers to add a lot more capacity as new fast-growing trade lanes with Asia, Australia and New Zealand added to already healthy existing import and export trade with Europe.
Short-sea growth for PANYNJ
At the combined ports of New York and New Jersey a slight decline of 0.5% did not dampen the enthusiasm for growth in short-sea trade with Mexico.
Top US east coast vehicle handling ports
“A positive development for the NY-NJ gateway in 2019 was the continued use and slight increase of short-sea shipments from Mexico,” says the port’s spokesperson. “New finished vehicle imports from this region are expected to increase over the next couple of years with short-sea shipping being the preferred routing. We anticipate strong future growth on this trade lane as additional new production factories open and current facilities ramp up to full production.”
That growth is being helped by the signing of the US-Mexico-Canada Agreement (USMCA), which took effect as of July 2020, and is something the Port Authority of New York and New Jersey (PANYNJ) sees as helping to secure trade.
“The signing of the USMCA removed the tariff uncertainties that delayed or cancelled investments in Mexico production,” says the spokesperson. “Additional import volumes are anticipated as OEMs open and/or ramp up new finished vehicle production.”
The removal of tariff uncertainty will ease pressures on capacity that the ports felt at the beginning of 2019, when it caused carmakers to frontload imports of new finished vehicles. According to PANYNJ, as these volumes increased it was able to flexible use available space to help meet the needs of its tenants.
“Additionally, during this period of increased volume, PANYNJ was also working on various berth-related construction projects,” says the spokesperson. “Tight coordination and communication among our port authority operations staff, the ro-ro carriers and stevedoring companies prevented delays and operational impacts.”
Construction projects are set to continue at the ports, with planned investments to include a wharf replacement programme, roadway improvements, and regional rail infrastructure projects, aimed at ensuring maximum velocity for all import and export cargo.
Private investment by the automobile processors – include FAPS, Toyota Motor Logistics and BMW Port Jersey VPC – is ongoing, according to PANYNJ, as they need to maintain the best possible throughput and to accommodate the specific needs of individual carmakers. [Article continues below]
Number of vehicles BMW Group has sold in Mexico in the past 25 years
New finished vehicle imports from [Mexico] are expected to increase over the next couple of years with short-sea shipping being the preferred routing. We anticipate strong future growth on this trade lane
spokesperson for Port Authority of New York and New Jersey
Our operations have remained fluid during this time, and we have available space to accommodate the industry’s changing demands. As auto production and consumer confidence rebound, we are well positioned to see our auto volumes rebound as well
Alberto Cabrera, Jaxport
Capacity and flexibility at Jaxport
Jacksonville port (Jaxport), in the state of Florida, is also confident of increasing short-sea trade with Mexico. Through 2019 inbound volumes from Mexico grew by 3% in the financial year between October 2018-2019.
“Mexico is an important part of Jaxport’s trade lane diversification within the ro-ro sector, accounting for about 15% of the port’s overall auto volume business,” says Alberto Cabrera, director of automotive accounts at Jaxport.
The rest of that trade is made up of imports from overseas markets, including Germany and Japan, as well as exports to West Africa, the Middle East and the Caribbean.
Terminal operator Amports increased its operating space at Jaxport last year to provide capacity and flexibility for new volumes. Forty acres (16 hectares) of storage space is currently being developed by Amports and is expected to be ready by 2023.
As is evident from the numbers processed last year Jaxport saw a volume decline of 17% through 2019, despite a 6.4% increase in the first six months of the year compared with the same period in 2018. However, the port is planning for growth.
“As we look to the next 20-30 years, expanding Jaxport’s vehicle-handling capabilities is a critical part of our strategic planning process,” says Cabrera. “Our long-term plan is to continue to build on our already strong position as one of the nation’s top two vehicle-handling ports.”
More room at Philaport
The main news at the port of Philadelphia (Philaport) in 2019 was the ramp up of operations at the new $110m vehicle terminal at the Southport Marine Terminal Complex, which is being operated by terminal operator Glovis America.
Previously, vehicles were unloaded at the Packer Avenue Marine Terminal, which mostly handles containers, and moved to a vehicle-handling facility at Pier 98. The new facility, combined with Pier 98 gives the port a total of 250 acres (100 hectares) and enables Glovis America to directly unload imports into a dedicated vehicle-handling facility.
Glovis and Eukor vessels call at the port on a weekly basis from Busan, South Korea and Veracruz, Mexico.
Glovis America has contributed $10m to this latest development of the terminal, with the rest provided by Pennsylvania state funding. That forms part of an overall $300m government investment in infrastructure, warehousing and equipment at the port, which was first announced in 2016. It is the first major capital injection into equipment and infrastructure at the port in four decades.
The Southport Auto Terminal, situated at the former Navy Yard, has parking capacity for 24,000 vehicle units, though there is additional space for overspill as well.
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BMW at Charleston
At Charleston in South Carolina, South Carolina Ports Authority (SCPA) continued to benefit from strong exports of BMWs made at the carmaker's plant in the state, 70% of which are moved through the port of Charleston. Mercedes-Benz and Volvo Cars are also big customers for Charleston and together the carmakers contributed 211,000 export units last year. Along with the 14,000 vehicles imported it pushed total handling up 4% at the port.
In June this year BMW celebrated its building its five millionth car at the Spartanburg plant in South Carolina and the carmaker is on record as stating that its success depends on the strong relationship it has with SCPA.
Talking in October last year, Knudt Flor, president and CEO of BMW Manufacturing said: “During our 25 years of production, SC Ports has consistently run efficient operations, enabling BMW to export 70% of our South Carolina-made vehicles to more than 125 countries around the world. They have also found creative ways to move our vehicles to customers faster, including overnight rail service from inland Port Greer to the port of Charleston.”
Continuing through the coronavirus
The impact of the coronavirus on the east coast ports has been as bad as in other regions, though port authorities and terminal operators have similarly continued operations and supported customers with storage options as the outbound supply chain slowed to a stop.
That included at PANYNJ despite the region becoming the epicentre of the public health crisis. Both New York and New Jersey ports saw automotive numbers decline in the first half of the year. Volumes were down 24% in April compared with the same month in 2019 as carmakers slowed or stopped production, but the port authority says that impact has been limited and segments are being affected differently. In terms of movement of vehicles through the port by the processors, whether for import delivery or export loading, everything has remained fluid to date, according to the authority.
“The port authority is working with its port tenants, which includes the auto processors and container ports, to establish contingencies for any possible reduction in velocity,” says PANYNJ’s spokesperson. “This included surveying available private and public warehouse space, identifying open and available land, and establishing communication channels and customer outreach programmes. The terminals and processors, however, remain open and fluid with little to no operational impact.”
At Jaxport, terminals have also remained open through the pandemic with ro-ro vessels continuing to call, though with fewer vehicles aboard because of production and supply chain disruption. Vehicle volumes for the first seven months of the financial year (October to April) were down 14%.
“Jaxport’s diversification across trade lanes and business lines has helped the port to weather the coronavirus disruption relatively well,” says Cabrera. “For example, for the month of April, our revenue was down just 1%, despite the temporary drop in some commercial cargo volumes and the suspension of cruise activity.”
The temporary decrease in commercial ro-ro volumes has been offset, in part, by an increase in US military cargoes shipped through the port. Jaxport is one of the nation’s 17 strategic seaports able to move military cargo. It also reports taking in certain volumes rerouted from another east coast port because of space constraints.
“Our operations have remained fluid during this time, and we have available space to accommodate the industry’s changing demands,” says Cabrera. “As auto production and consumer confidence rebound, we are well positioned to see our auto volumes rebound as well.”
SCPA, meanwhile, reports that the global pandemic has impacted cargo volumes through Charleston as supply chains were disrupted and many businesses temporarily halted operations. However, SCPA’s spokesperson says automotive volumes have since picked up, trending back to normal levels.
Another year of growth for Norad at Davisville
At the port of Davisville on the US east coast in Rhode Island, imported vehicles numbers were up by almost 20% last year to more than 302,000 units. Port operator North Atlantic Distribution (Norad), which handles 95% of the vehicle throughput at the port, says that is the 16th year out of 17 that it has topped the previous year’s annual volume.
Last year Norad increased trade lanes for Fiat Chrysler Automobiles (FCA) by sea and rail, as well as adding short-sea business for GM. New business at the port last year was driven primarily by short-sea imports from Mexico.
“Vessel lines have adjusted trade lanes to accommodate a larger demand for the Mexico to Davisville business, which has given the OEMs more choices and great scheduling options,” says Matthew Martyn, director of business development at Norad in Davisville.
Martyn says that Norad’s growth in volumes meant a greater number of vessel calls combined with a greater number of trucking and rail providers calling at the port to move the vehicles out. Norad has been using electronic schedule sharing to provide customers and stakeholders (including the port authority Quonset Development) with greater transparency, including through its online berthing calendar.
“By allowing vessel lines and agents to discuss times of possible congestion early, it allowed for better planning,” says Martyn. “Along with the better communication, we quickly expanded our footprint to accommodate the larger ground stock and truck away area.”
Martyn adds that Norad is weeks from opening another yard that will add another 20+ acres of space and reduce turnaround times when staging the vehicles after processing for truck pickups.
Working as a distribution hub for land transport, the port of Davisville has also seen an increase in the number of vehicles delivered inbound via rail and truck for onward distribution to the US and Canada. Volumes last year rose to more than 42,000 across these modes, an increase of 3,500 on 2018. The port serves as a railhead for Subaru distribution in the northeast as well as for Fords from all over North America. In 2019 the port also carried out rail projects for FCA and VW.
“We are working to leverage our connection to all the North American class one railroads via Providence and Worchester Railroad, which services our facility,” says Martyn. “By expanding the use of rail the OEMs can take advantage of a no harbour maintenance fee for their cargo and [the connection] services the entire US and Canada.”
Capacity during Covid
As with the rest of the east coast ports, volumes in the second quarter of 2020 have been significantly lower because of the impact of the coronavirus pandemic. Norad has been working with Quonset Development to expand storage capacity into space adjacent to its facility for both existing customers and new customers looking for short-term assistance.
“Welcoming vehicles that had to be removed from other areas into our full-service facility allowed our customers to rest easy knowing their vehicles were cared for,” says Martyn. “Norad has been able to assist its customers as they expanded or created their maintenance programmes for vehicles in long-term storage, keeping the vehicles in prime condition for their eventual delivery to the dealer and ultimately, the customer.”
Along with FCA and GM, those customers include Bentley, Honda, Porsche, Subaru and VW Group (including Audi).
As production returns, the terminal operator is faced with ensuring the safe distancing of its workforce while maintaining high levels of throughput and servicing, according to Martyn. While Norad expects volumes to be negatively affected year-on-year, it is hopeful for a strong recovery in the fourth quarter, he says.
Volume increase to destinations beyond Europe
South Africa 24.9%
*figures from Anfac based on total export increase on 2018 of 20k
The [Baltimore] facility will process and ship vehicles for VW, Audi, Bentley and Lamborghini and will help us improve service and advance growth plans in this key market
Anu Goel, Volkswagen Group of America
Tarragona finished vehicle handling in 2019
Hyundai-Kia, VW Group, SsangYong, Opel
Terminal operators: Berge-Gefco, Noatum Terminals
*See top ten ports in the supplement overview for Barcelona, Santander, Valencia and Vigo
During our 25 years of production, SC Ports has consistently run efficient operations, enabling BMW to export 70% of our South Carolina-made vehicles to more than 125 countries around the world
Knudt Flor, BMW Manufacturing
Busiest vehicle handling ports in Spain 2019