Ports bulk up their ro-ro facilities in anticipation of better days to come.
(Article originally published in May/June 2022 edition.)
The marine cargo industry continues to be rocked by the global pandemic, supply chain issues, fluctuating rates, fuel costs, port congestion and the Russia/Ukraine war that has no immediate end in sight.
When normalcy in the industry will return is anyone’s guess, but hopefully – with a slight alteration to one of Abraham Lincoln’s favorite sayings – “These, too, shall pass.”
Ports involved in the roll-on, roll-off sector, however, aren’t waiting for things to pass and are pushing forward with infrastructure improvements to handle the anticipated rebound, especially with automobiles.
On the Move
At the Georgia Ports Authority’s (GPA) Port of Brunswick, for example, things are on the move at Colonel’s Island, one of the nation’s largest auto import terminals. “No other ro-ro terminal in the U.S. can scale up like Colonel’s Island,” says Bruce Kuzma, GPA’s Senior Director of Trade Development for Ocean Carrier & Non-Container Sales, “which features 355 acres permitted for expansion. From channel improvements to new dock space, additional warehousing and greater vehicle-processing capacity, GPA is building the necessary infrastructure in Brunswick to grow along with our customers.”
GPA recently received federal approval to add a fourth berth at Colonel’s Island. Kuzma says the project is currently in the engineering stage and is expected to be completed in 2025. The new berth will allow the port to more efficiently accommodate the 7,000+-unit vehicle carriers that are becoming the industry standard at U.S. ports.
Improvements are also underway beyond the berth including two warehouses totaling 350,000 square feet to serve vehicle-processing and high-and-heavy storage needs. The buildings will support both import and export cargo. Anticipated completion is April 2023.
Like the container sector, ro-ro ships are getting bigger with the largest having capacities of 8,500 units.
Ro-ro traffic at the Port of Virginia is up as shippers look for safe havens from the escalated rates and capacity constraints on the container side, says Aaron Katrancha, Director of Breakbulk & Ro-Ro Sales: “Two of our long-time customers, ACL (Atlantic Container Line) and WWL (Wallenius Wilhelmsen), are building their businesses and increasing their ro-ro volumes moving over Virginia. The conversion of the Portsmouth Marine Terminal into the logistics hub for the Mid-Atlantic’s offshore wind-to-energy industry will definitely create an increase in ro-ro business as well, but that won’t take effect until late next year.”
From the shipper’s perspective, the boom in imports of heavy construction equipment from Europe is helping offset any falloff in ro-ro deliveries.
“When the $1 trillion USA Infrastructure Investment & Jobs Act was signed into law in November 2021,” says Andy Abbott, ACL’s President & CEO, “most experts had anticipated a nine-month lag while project specifications were written and put out to bid. However, the supply chain turmoil of the past year prompted most manufacturers to try to get a jump on the expected boom in construction equipment cargo volume. Oversized import cargo had already been picking up during 2021, but we were caught off-guard by the surge that began in January 2022 and continued to grow with each passing month.”
In other words, the current situation is one of demand exceeding supply. “Ships are now booked out completely with North American imports for eight weeks in advance,” Abbott adds, “yet project specifications are still on the drawing board. The major construction equipment manufacturers are looking to lock in more space, but that’s difficult to do when cargo volume, prices and costs continue to rise.”
He says what happened in the container markets during the past 18 months is now hitting the high-and-heavy market: “Customers who were ‘burned’ by lack of container space last year do not want to make the same mistake again on oversized cargo.”
And the peak is nowhere in sight. “We’re probably at least a year away from that,” Abbott says. “Luckily for now, operators of car carriers have opened up more space for high-and-heavy cargo because of the reduced car volumes associated with semi-conductor shortages. However, the semi-conductor problem will soon be fixed. When that happens, the huge backlog of automobile orders will quickly gobble up a huge amount of the available car carrier space, reducing the space for high-and-heavy cargo significantly.
Meanwhile, on the North American export side, high-and-heavy volumes had begun to pick up at the start of 2022. Since then, however, the impact of the war in Ukraine has cut cargoes into Russia, Ukraine, Belarus and their neighbors to the south. Most units initially destined for those countries are now being diverted back to the U.S.
“As long as the war drags on,” says Abbott, the North American high-and-heavy export market will stagnate. But if the war could be brought to a peaceful conclusion, the construction and agricultural equipment boom would be significant.”
Meanwhile, after a pandemic-related decline of 23 percent in 2020, the Port of Galveston’s ro-ro tonnage has fully recovered and is projected to grow in 2022, says Rodger Rees, Galveston Wharves Port Director & CEO.
Located on the Gulf of Mexico, the Texas port moves all types of ro-ro cargoes including new cars, agricultural and construction machinery, heavy equipment and household goods for military service men and women returning from overseas. Ro-Ro accounts for about 10 percent of Galveston’s cargo. Wallenius Wilhelmsen, “K” Line and American Roll-On Roll-Off Carrier (ARC) are some of the ro-ro shippers that regularly call on Galveston.
In 2021, the port invested in infrastructure improvements at its West Port Cargo Complex to consolidate operations and accommodate more large ro-ro construction and farming equipment. The project included new paving, dock repairs, an equipment processing center and an industrial wash pad for equipment exports. The complex is designed to handle a wide range of cargoes including ro-ro, large wind turbine pieces and grain with rail service, laydown areas and more. New imported BMWs are prepared at a separate vehicle-processing center at Pier 10.
“The complex provides direct access to major interstate highways and rail lines, making it an ideal location for efficiently moving ro-ro cargoes to their final destinations,” says Rees.
The Port of Jacksonville (JAXPORT) is also gearing up to further grow its massive auto business. “The investments underway to increase our auto capabilities, combined with rapid population growth in the southeast U.S. and Florida in particular, make us well-positioned to build on our role as one of the nation’s top vehicle-handling ports in the coming years,” notes Alberto Cabrera, JAXPORT’s Director of Automotive, Cruise & Cargo Development.
Cabrera says demand for vehicles is not slowing down and is likely pent up due to dips in supply stemming from the lingering parts shortages impacting the industry: “While we never want to see volumes decline, the current industry slowdown makes for an ideal time to build new facilities. We couldn’t have picked a better time to make these long-term strategic improvements including the Southeast Toyota expansion and the buildout of our ro-ro berths. We’re building the auto-processing infrastructure now to be ready to serve the needs of the industry when volumes rebound.
In 2019, before the pandemic, JAXPORT moved nearly 700,000 vehicles – a port record. “Over the next three to four years, we expect to return to and surpass pre-pandemic levels, retaining our role as one of the largest vehicle-handling ports in the nation,” Cabrera adds.
The most recent development at Port Tampa Bay is a new tenant, North Atlantic International Ocean Carrier, says Wade Elliott, Vice President for Business Development.
“They’re a North American vehicle transportation and freight forwarding company that has facilities at various ports in the U.S. and Central America,” he explains. “They’re leasing property for the storage and transloading of vehicles for export to Central America. Among the services they will be supporting is the Dole Ocean Cargo Express service to Honduras and Guatemala, which began calling Tampa last July.”
At the Port of San Diego, which handled 361,008 autos in 2021, the speed and efficiency of vehicles being off-loaded at the National City Marine Terminal hasn’t been affected by supply chain issues, says Greg Borossay, Principal, Maritime Business Development.
“Both rail and truck services out of this terminal continue to function smoothly,” he says. “There are no waits for vessels and no delays in operations. We’re continuing to see regular business with Mexico including Toyota Tacoma pickups from Tecate,” San Diego is still moving more volume than any of the West Coast auto-processing ports, he adds.
The National City Marine Terminal is now the focus of an environmental review phase for a project that will help improve operations, increase maritime commerce and add maritime jobs. “The new land use plan will include a road closure that will provide the terminal with more contiguous space to improve terminal efficiency,” Borossay says. “It will also include rail efficiencies with connector track.”
The port has also been working on a project to study ways to improve mobility and safety for users of Harbor Drive, a main link between the two cargo terminals and maritime industrial businesses on the waterfront, and plans to add shore power infrastructure at the National City Marine Terminal.
The Board of Port Commissioners recently approved a public/private project for the acquisition of a bonnet to curtail air emissions. The bonnet will be manufactured and delivered in 18-24 months. This will supplement, not replace, the planned shore power.
Ports columnist Tom Peters writes from Halifax, Nova Scotia.
The opinions expressed herein are the author’s and not necessarily those of The Maritime Executive.