OVERVIEW
TOP PERFORMERS
Short-sea trade a growth market for North American ports
There were marginal gains and losses across North America’s top ten vehicle handling ports in 2019, though the prospects for growth in short-sea trade between the US and Mexico look lucrative ‑ just as soon as the impact of the coronavirus pandemic is past
There was little change in the make-up of North America’s top ten vehicle handling ports in 2019, though declines in sales across Canada, the US and Mexico in 2019 were felt in lower throughput at certain ports, while others picked up rerouted volumes because of congestion issues at others.
One consistent trend, however, was the growth in short-sea volumes between Mexico and the US, something that is forecast to grow with the signing of the US-Mexico-Canada Agreement (USMCA).
While all that changed in the second quarter of this year as the coronavirus gradually brought vehicle sales in the region to a standstill and froze outbound supply chains, there are now signs of movement and recovery.
Overall numbers were down slightly by just over 2% at North America’s busiest vehicle handling port in Veracruz, Mexico, reflecting a decline in production and sales in Mexico and general slowdown in sales in the wider region. Nevertheless, Veracruz moved half the vehicles imported through Mexican ports as a whole in 2019 and the state-run port authority API has been working with private terminal operators and service providers to make processing more efficient and solve Veracruz’s long-term battle with congestion.
Two new ro-ro berths were made available in 2019 and facility developer CSI Group worked to complete a $50m six-storey parking lot with storage capacity for 10,000 vehicles. Horizon Auto Logistics (HAL) has also added ten hectares to its nearby Puente Villa Rica processing facility as well expanding and upgrading its vehicle processing centre.
Read more about the Mexican ports in the following article in this supplement.
Hueneme is working on a new parking structure to secure more first point of rest/last point of rest areas for loading and unloading vehicles
US east coast
In the US the east coast ports remained the busiest with Baltimore, Brunswick and Savannah, Jacksonville, and New York and New Jersey ports making up the top five.
Baltimore retained its second position in terms of North American port volumes and was for the ninth consecutive year the busiest vehicle handling port in the US, maintaining principal customers, including FCA, Honda, Mercedes-Benz, Mazda, and Subaru.
The port is adding VW volumes this year following an agreement signed between the carmaker and logistics hub operator Tradepoint Atlantic. That 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.
As with a number of ports in the US, short-sea inbound volumes from Mexico into Baltimore were up last year and that growth is certain to continue with the USMCA, which replaces the previous North Atlantic Free Trade Agreement (Nafta), in effect from July this year following its ratification earlier in March.
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.
Imports through Jaxport actually grew by 4.5% last year and, as with the other east coast ports, Jaxport is confident of increasing short-sea trade with Mexico. Inbound volumes from Mexico grew by 3% in the financial year between October 2018-2019. However, there was a decline in exports.
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.
The ports of New York and New Jersey, which are likewise combined under the Port Authority of New York and New Jersey (PANYNJ), saw a marginal decline of 0.5% but report confidence in the growth of short-sea trade with Mexico in the coming year and are investing various berth-related construction projects to handle the increase in volumes, including a wharf replacement programme, roadway improvements, and regional rail infrastructure projects. Private investment by the automobile processors – include FAPS, Toyota Motor Logistics and BMW Port Jersey VPC – is also ongoing.
Read more about the east coast ports in our focus on that region in this supplement.
Brunswick is adding more capacity as new fast-growing trade lanes with Asia and Australasia add to existing import and export trade with Asia and Europe
West coast growth
Back in Mexico, the west coast port of Lázaro Cárdenas took sixth position in the North American top ten. The port has been gaining volumes over recent years and terminal operator SSA Mexico is completing an eight-hectare expansion to cope with numbers, as well as adding feeder services inland by railroad provider Kansas City Southern (KCS) Mexico.
SSA Mexico says it is seeing many more imports from Asia and there has been a lot of interest in short-sea services from the both coasts to the US, though rival operator HAL says there is room for improvement in terms terminal integration, which could bring more efficiency.
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Top 10 North American finished vehicle ports
Further up the west coast in the US, San Diego port is looking at the greater opportunities available for short-sea imports because of its coastal vicinity to Mexico.
Mexico is one of the three main markets of origin for imports through the southern-most west coast port, along with Asia and Europe. In terms of improving storage capacity and speed of throughput further, San Diego is working on a project called the National City Balanced Plan, which is currently under environmental review, which its says will improve operations for Pasha Automotive Services, which operates the National City Marine Terminal (NCMT), through greater rail efficiency using a connector track. That connection opens up additional rail car storage spots at the existing Burlington Northern Santa Fe (BNSF) National City Yard, east of the National Distribution Center.
Hueneme port has also been making improvements with regard to inland connections to speed up throughput by switching some inbound exports from truck to rail. That has helped the its customers get vehicles to the port faster, while also providing them with empty railcars to load back imports.
Hueneme is also currently working on its 2030 Strategic Plan to align future investments with customers’ needs, such as a parking structure on dock to secure more first point of rest/last point of rest areas for loading and unloading vehicles to and from the vessels at berth.
As well as handling volumes of vehicles for BMW, GM, Hyundai, Jaguar Land Rover, Kia, Mini, Mitsubishi and Volvo, in October 2019 Hueneme celebrated its first year of processing Subaru volumes.
To the north of Hueneme, the port of Portland says the biggest change it is seeing is in the rise of Japanese vehicles being imported from Mexico rather than Japan. In terms of annual value, shipments of vehicles from Mexico through Portland increased from $62m in 2018 to $225m last year and the port added substantial trade from GM in April this year.
Read more about the west coast ports in our focus on that region in this supplement.
Finding room for the Covid overflow
The impact of the coronavirus on vehicle throughput at the ports in North America in the first half of 2020 has caused some headaches in terms of storage but port authorities across the region have worked with terminal and vessel operators to find overflow spaces in which to store vehicles on a temporary basis.
Plant shutdowns continue in Mexico and while trade at Veracruz was down -2% in March 2020 based on the same month last year, in April it had dropped by -58%.
As with ports across the world, carmakers looked to the Mexican ports as locations for storage as outbound supply routes seized up but there were lessons learned after the 2008 economic crash that meant Veracruz was better prepared and terminal operators quickly found additional yard space at external yards and were able to make use of public yards inside the port.
Likewise at PANYNJ, which worked with its terminal operators to establish contingencies for reductions in vehicle throughput and maintained fluid processing thanks to cooperation between port and processors on the survey of available private and public warehouse space. The ports of New York and New Jersey were able to identify open and available land, and establish communication channels and customer outreach programmes.
Jaxport says its diversification across trade lanes and business lines helped it weather the coronavirus disruption relatively well and it maintained operations. The temporary decrease in commercial ro-ro volumes was offset, in part, by an increase in US military cargoes shipped through the port, says the port authority.
South Carolina Ports Authority (SCPA) reports that volumes through Charleston were disrupted and many businesses temporarily halted operations but it reports that automotive volumes have picked up again and are trending back to normal levels.
The US west coast ports have remained fully operational in the face of the ongoing disruption caused to the automotive sector by the coronavirus pandemic but the impact on port throughput got worse in the second quarter as dealerships closed and the outbound supply chain seized up. Volumes dropped dramatically in April and May.
The Northwest Seaports Alliance (NWSA) saw vehicle volumes drop -21% through the port of Tacoma in May and volumes through Port of Vancouver USA dropped -79% in the same month based on the same period in 2019.
The port of Hueneme also saw volumes drop by around 30% with the biggest impact felt at the beginning of May, when vessel calls dropped from around four a week to approximately one a week, a trend that is expects to remain through July.
At San Diego vehicle imports from Asia and Europe continued in March and mid-April, but gradually began to slow in late May and June. Vessel calls were reduced for four to eight weeks, stopping completely from Europe during that period.
As with the east coast ports, the port authorities on the west coast worked with their terminal operators to find overflow properties for vehicles stuck in the outbound supply chain and vessel operators also used their ships as garages as inventory was worked through on land.
Top 10 North American finished vehicle ports
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Number of vehicles BMW Group has sold in Mexico in the past 25 years
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