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Ports And FTZs: Searching For A Safe Port

Ports and Free Trade Zones have taken on much greater importance as supply chain issues increase and demand for product grows from businesses and consumers.

By the BF Staff
From the March/April 2022 Issue

The lingering Covid-19 pandemic showed just how important America’s ports and free trade zones are to the overall supply chain and just how vital it is that these facilities are maintained and improved to stay ahead of the curve and meet increasing demand.

Whether by design or necessity, many ports have reacted to the supply chain crisis by developing short and long-term upgrades and expansions, all designed to make their facilities more efficient in coming days and years.

Competition between ports is also spurring these moves as different cities and states compete for attention from everyone from shipping firms to railroads and regular businesses. The common theme, many say, is that ports must become more efficient at getting more and more product in and getting more and more product out while maintaining costs. Those ports and free trade zones that accomplish these goals will grab added attention—and business—in an extremely heated marketplace.

Georgia Ports: Savannah To Grow Capacity By 60%

Georgia Ports will grow capacity by 60% to accommodate increased demand in container trade. The enhancements will bring the Port of Savannah’s annual capacity from 6 million twenty-foot equivalent container units to 9.5 million TEUs by 2025.

“Our expansion is being matched by incredible growth in both warehouse space and logistics workforce,” said Georgia Ports Authority (GPA) executive director Griff Lynch. “The public and private investment that we’re seeing, as well as the number of people being drawn to the business, make Savannah the hottest market in the country for transportation and logistics.”

Ports And FTZs
Aimed at serving larger vessels, Georgia Ports Authority is super-sizing Berth 1 at Garden City Terminal. (Photo: Georgia Ports Authority)

The Savannah market added 6.5 million square feet of industrial space in 2021, for a total of 84 million, according to Colliers International. Savannah led the nation in terms of net absorption of overall inventory, so the vacancy rate remains at only 2.3%. Another 17 million square feet are under construction, lifting the market beyond 100 million square feet. From July through December 2021, companies invested $10 billion in new and expanding business infrastructure across the state.

“Georgia’s growing manufacturing, distribution and retail sectors will mean additional cargo through the Port of Savannah, driving the need for increased container handling capacity,” said GPA Board Chairman Joel Wooten. “Higher demand for our services is the reason we have expedited major expansions at the Port of Savannah.”

Projects now under way will add 1.7 million TEUs of annual capacity in the next four months. GPA’s Peak Capacity project has already added 400,000 TEUs in container handling space at Garden City Terminal and will make room for another 820,000 TEUs by June. In the same month, a new container yard just upriver will add another 500,000 TEUs of capacity. Separately, the Garden City Terminal West project will add up to 1 million TEUs in phases by 2024.

Ports And FTZs
Five new rubber-tired gantry cranes sail past Historic River Street on board the vessel
Sampogracht on the way to being delivered to the Georgia Ports Authority’s Garden City Terminal. (Photo: GPA / Stephen B. Morton)

The Port of Savannah moved a record 5.6 million TEUs in 2021, growing volumes by nearly a million TEUs, or 20%, compared to 2020. The unprecedented level of trade crossing GPA’s docks is expected to continue well into 2022. Added capacity and adjustments to operations, including pop-up container yards, have restored fluidity for commerce. Now, Lynch said, GPA is building to ensure Savannah’s ability to grow new business for decades to come. He noted the Savannah Harbor Expansion Project will come online by mid-March, deepening the river channel to allow 16,000+ TEU vessels to take on heavier loads and transit the river with greater scheduling flexibility.

Ports And FTZs
Garden City Terminal infrastructure improvements. (Photo: GPA / Stephen B. Morton)

Also aimed at serving larger vessels, GPA is super-sizing Berth 1 at Garden City Terminal. By the spring of 2023, the expanded berth will allow Savannah to simultaneously serve four 16,000-TEU vessels as well as three additional ships. The renovations will add an estimated 1.5 million TEUs per year of berth capacity.

Efficient port services and a strategic location central to the U.S. Southeast make Georgia Ports an important factor in the location of industries involved in international trade. The Port of Savannah provides fast access to 45% of U.S. consumers and manufacturers. Immediate links to I-16 (East/West) and I-95 (North/South) means key cities and manufacturing points throughout the U.S. Southeast may be reached within a one- to two-day drive. Daily rail departures via CSX and Norfolk Southern put inland destinations in easy reach.

The Port Of Long Beach – The Port Of Choice

The Port of Long Beach is a global leader in operational excellence and top-notch customer service, moving cargo with reliability, speed and efficiency—making it the premier U.S. gateway for trans-Pacific trade.

As the nation’s second-busiest container seaport, the Port of Long Beach handles trade valued at $200 billion annually and supports 2.6 million trade-related jobs across the United States, including 575,000 in Southern California and one in five jobs in Long Beach.

Ports And FTZs
Port of Long Beach: The nation’s second busiest container seaport. (Photo: Port of Long Beach)

Spanning 3,200 acres with 31 miles of waterfront, 10 piers, 72 post-Panamax cranes and some of the deepest berths in the country, the port’s world-class facilities can accommodate the largest shipping vessels in the world. Goods moving through the port originate in, or are destined for, every U.S. congressional district.

With a keen eye toward building a successful and sustainable future, the port is pursuing long-term capital improvement projects. In 2021, the port completed the final phase of the world’s most technologically advanced container terminal—the Long Beach Container Terminal at Middle Harbor. And there are many more capital improvements on the way.

In the next 10 years, the port is planning $2.3 billion in modernization projects, to further prepare for the demands of global trade. Plans include investing $1.5 billion in on-dock rail projects, aimed at substantially increasing reliability, adding capacity, strengthening competitiveness, improving speed-to-market and allowing for the rapid movement of cargo throughout the harbor.

And by operating Foreign Trade Zone 50 (FTZ), the Port of Long Beach lessens the impacts of tariffs and eliminates customs clearance delays by having shipments delivered directly to qualifying businesses within Orange County and parts of San Bernardino and Los Angeles counties.

The Port of Long Beach is proactively working to handle the ongoing surge in cargo shipments brought on by consumer demand for imports. Through day-to-day efforts by labor and terminal operators, the port is processing record amounts of cargo—with 9.38 million TEUs in 2021 alone.

A new data solution known as the “Supply Chain Information Highway” is being rolled out from Long Beach to other ports and stakeholders across the country to offer the industry a flexible, safe source of data. The new digital infrastructure will be used to better coordinate workforce and equipment deployments, and give operators the information they need, when they need it.

The Port of Long Beach is also continuing the conversation on the Biden Administration’s endorsement of a 24/7 supply chain for the U.S. that will provide the flexibility to cope with cargo surges and other challenges.

Customers choose the Port of Long Beach for the most dependable, cost-effective and fastest delivery of goods in the world, along with the strong relationships it maintains with industry, community, environmental advocates and partner agencies. In 2021, industry leaders named it “The Best West Coast Seaport in North America” for the third consecutive year.

For more information, please visit the website at www.polb.com.

Port Houston: Connecting The World

When companies are seeking to expand or grow their businesses, a primary deciding factor is the comparative advantage among competing locations. Port Houston and its variety of facilities is ripe for the taking for any future expansion or relocation project.

Port Houston has owned and operated the public wharves and terminals along the Houston Ship Channel for more than 100 years, including the area’s largest breakbulk facility and two of the most efficient container terminals in the country. Port Houston is also the advocate and a strategic leader for the channel. The Houston Ship Channel is home to more than 200 public and private terminals, collectively known as the Port of Houston. The Port of Houston is the nation’s largest port for waterborne tonnage and is an international gateway.

Ports And FTZs
Turning Basin Terminal: Located just a few miles from downtown Houston. (Photo: Port Houston)

Being the largest port on the Gulf Coast and the biggest port in Texas, the Port of Houston has been instrumental in the city of Houston’s development for international trade. It is home to a multi-billion-dollar petrochemical complex, the largest in the nation and second largest in the world. Carrier services on all major trade lanes link Houston to international markets around the globe. Businesses choose Port Houston because it connects them to the world. Its prime location supports trade and gives access to major distribution centers and industry service providers in the area. Added benefits include cost savings opportunities and access to critical transportation infrastructure. The Port Houston real estate team manages leasing, acquisition, and sale of all properties owned by Port Houston, giving customers direct contact support.

Additionally, Port Houston manages FTZ 84, which includes many privately owned and port-owned sites located throughout Houston and Harris County. It is one of the largest and most active zones in the United States and is rapidly growing. Benefits of FTZ participation include import duty and tariff savings. Additionally, customs duties on imported goods entering the zone can be delayed until the cargo is moved out. No duty is paid if the merchandise is exported directly from the zone.

Centrally located on the Gulf Coast, Houston is a strategic gateway for cargo originating in or destined for the western or midwestern U.S. Houston lies within close reach of one of the nation’s largest concentrations of 156 million consumers within 1,000 miles. Truck and rail connections allow shippers to economically transport their goods between Port Houston and inland points.

Looking ahead, Port Houston is committed to sustaining growth and meeting demand. Port Houston kicked off 2022 with noteworthy momentum following its busiest year in history for containers. Records show Port Houston container volume in January totaled 323,427 Twenty-Foot Equivalent Units (TEUs), which is 27% more than the same month in 2021.

The Houston Ship Channel Expansion – Project 11 is also currently underway, with federal funding for segment 3 recently announced. Project 11 will facilitate movement of larger vessels to more safely and efficiently navigate the channel and is expected to be completed in 2024. The accelerated, billion-dollar project is critical to the region and will accommodate future economic opportunities impacting the nation’s economy.

To learn more about Port Houston. visit www.porthouston.com.

Port Of Virginia: Updating The Terminals

Technology, modern terminals, an experienced operating team and quick decision-making are driving the Port of Virginia’s growth despite the ongoing challenges to world trade.

In 2021, the port’s container volume grew a record-setting 25%. While the world’s supply chain struggled, the Port of Virginia thrived: it processed more than 3.5 million TEUs (twenty-foot equivalent units), handled 1.2 million truck moves, had 640,000 rail lifts, moved more than 78,000 containers by barge and worked more than 1,500 ships. Most important, the volume moved with best-in-class results: no congestion, no lost workdays and no slowdowns.

Ports And FTZs
The Port of Virginia, Norfolk International Terminals (NIT) (Photo: Port of Virginia)

Much of the success of 2021 is attributable to a recently completed $800 million-plus investment to optimize, modernize and expand the port’s two primary container terminals, Norfolk International Terminals and Virginia International Gateway.

The project added more space to handle ultra-large container vessels, six Suez-class ship-to-shore cranes, 86 semi-automated rail-mounted gantry cranes, expanded truck gates and a port-wide terminal operating system. Now, with truck moves averaging 48 minutes, import rail cargo moving, on average, in 48(+/-) hours and berth productivity at an all-time high, the Port of Virginia is among the most efficient ports in the world.

Underpinning the port’s modern terminals is the Virginia Model, a unique operational set-up where the port is both the terminal owner and operator. “Owning and operating our terminals and the chassis pool allows for quick decision making that ensures the right thing is being done for the customer within the capabilities of the operation,” says Stephen Edwards, CEO and executive director of the Virginia Port Authority.

The Hampton Roads Chassis Pool (HRCPII) is a great example of the advantages of the Virginia Model. The port owns and operates HRCPII, a chassis fleet of more than 16,000 units. This allows the port to look across its operation and determine chassis needs based on cargo volumes. “Each day information is shared that drives decisions and ensures an ample supply of chassis for the motor carriers to move the cargo,” Edwards said.

Ownership of HRCPII also allows for close management of the assets. The port is renewing the chassis fleet and when complete in summer 2022, the average age of the fleet will be 3.5 years old.

Ports And FTZs
The Port of Virginia owns and operates their own chassis pool. (Photo: Port of Virginia)

In parallel to its operational success, the port is engaged in a second phase of capital investments: expanding rail capacity to accommodate 1.1 million annual lifts, further modernization and expansion of container capacity and dredging the Norfolk Harbor and its channels to at least 55 feet deep.

The Port of Virginia’s success is being seen and as a result, more ocean carriers are adjusting their rotations to make Virginia a first-in call to take advantage of the port’s efficiency. The port has become a magnet for speculative builders that see value in the ongoing expansion. Established businesses are expanding their Virginia operations with the understanding they will be able to grow in parallel with the port. And some of the world’s biggest companies are coming to Virginia to take advantage of the East Coast’s premiere global trade gateway.

Check out all the latest ports and FTZ news related to economic development, corporate relocation, corporate expansion and site selection.

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