With congestion a constant problem on the U.S. West Coast, similar capacity issues are threatening the East Coast as well. Some forwardlooking Eastern ports have initiatives underway to increase capacity on both the water side and the land side. However, major infrastructure growth is a longer term issue that could be bogged down with the reauthorization of the Transportation Equity Act for the 21st Century.
Industry experts have been warning for the past couple of years that our ability to grow infrastructure capacity cannot keep pace with actual need. Add funding needs and deadlines for homeland security initiatives, and the ports face a serious challenge.
Cargo levels have increased 7% through the first half of 2004 at the Philadelphia Regional Port Authority (PRPA) (www.philaport.com) when compared to the prior year. The port handled more than 87,000 twentyfoot equivalent units (TEUs), an increase of 23%. Brian Preski, chairman of the PRPA, has pledged to deepen the main channel of the Delaware River to 45 feet, but he's aware that he can't do it alone. He's called on the Philadelphia Chamber of Commerce to back him up on efforts to get the dredging project underway.
The U.S. Congress authorized the Delaware River Main Channel Deepening Project in 1991. The project is expected to take five years and cost $264 million. Though the channel is dredged to maintain its current 40-foot depth, the last time it was deepened was in 1942.
In Boston, growth has also been strong. The Massachusetts Port Authority (MASSPORT) (www.massport.com) reports cargo volumes are up 15% for the first nine months of 2004. Container tonnage rose 16% to just over 1 million tons. Expanded vessel calls are partly responsible for the growth. Mediterranean Shipping Co. doubled its Boston service from Europe, and a Far East alliance that began two years ago between Cosco, KLine, Yang Ming and Hanjin has added volumes from Asia.
MASSPORT also handles weekly barge service to and from New York on the Columbia Coastal Transport.
Boston boasts a 45-foot depth at berth at the Conley Container Terminal. Connecting on the land side is another challenge for America's first ports. The Conley terminal averaged 735 trucks per day during the week of October 18-22, a record for the terminal.
The Port Authority of New York and New Jersey (www.panynj.com) has seen a 27% increase in intermodal moves in the first half of 2004, or 138,277 containers. The port itself handled 1.5 million loaded containers during the period, a 10% increase over the same period in 2003. Asia accounted for 42% of the port's market (630,000 TEUs). In the month of June alone, Asian containerized imports through the ports rose 32%.
Latin America, another major market for New York/New Jersey, represented 195,000 TEUs, up 19% over the first half of 2003.
To cope with this and further expected growth, the Ports of New York and New Jersey have planned investments of $1 billion over the next five years. The port authority's board approved an additional $5 million to plan and design new phases of the ExpressRail system and to create ship-to-rail facilities at each marine terminal. As the end of 2004 approaches, the Elizabeth, N.J., ExpressRail facility was due to complete an expansion.
Ocean carriers clearly expect continued growth. Nippon Yusen Kaisha (NYK) recently ordered eight new 4,900 TEU container ships for delivery in fiscal year 2007. These are currently the largest containerships able to transit the Panama Canal. The order follows a December 2003 order for eight 8,100 TEU container ships for delivery in roughly the same timeframe.
Security is another challenge facing ports. Florida, with more major ports than any other Eastern state, has confronted this challenge head on. The Jacksonville Port Authority (JAXPORT) (www.jaxport.com) has been accelerating its port security in recent years, including hiring a director of seaport security, as well as fingerprinting and issuing identification badges to 6,000 port users.
Florida ports were the first in the U.S. to face tightened security, says Chuck White, JAXPORT's assistant director of port security. A state law was implemented targeting drug smuggling, stolen cars and other contraband. All of Florida's public ports had to meet state security standards that include fencing, lighting, a police presence and the stipulation that those entering port property will need identification badges.
The identification badges were issued only after a background check for felony convictions, notes White. These badges are currently being replaced by the federal Transportation Worker Identification Card, which adds biometric data to verify identity.
JAXPORT spends approximately 10% of its annual operating revenue in security costs. The port is continuing to analyze the impact of security costs and, according to White, has not passed those costs on to its customer base.
Some port tenants don't see security costs as a black-and-white issue. They say the state law is being interpreted as placing a requirement on the tenants to provide various security measures.
The East Coast is not seeing the congestion and delays that have plagued Los Angeles and Long Beach, but volumes are definitely rising and the ports are in a race to upgrade their infrastructure to meet the demand. Costs of infrastructure and security will be high. Rail capacity will play a role, especially in the Southeast where a brutal hurricane season battered transportation infrastructure.