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Expansion Mode

The surprisingly strong economy is boosting ro-ro traffic and triggering friendly competition at U.S. ports.

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Published Jul 24, 2024 11:12 PM by Tom Peters

 

(Article originally published in May/June 2024 edition.)

 

Move over Baltimore, Georgia wants a larger piece of the marine ro-ro action.

In fact, the Georgia Port Authority (GPA) is eyeing the number-one spot as the busiest ro-ro port in the country by 2026, a spot long-occupied by the port of Baltimore. It’s investing $262 million in the Colonel’s Island auto port and Mayor’s Point breakbulk terminal, both at the port of Brunswick.

“Because of its growth rate relative to other major ro-ro hubs in the U.S., Colonel’s Island is poised to become the nation’s busiest ro-ro port within two years,” says GPA President & CEO Griff Lynch. According to Lynch, with 300 acres available for expansion, the Port of Brunswick has more room to take on new business than any other U.S. auto port.

Recent improvements at Colonel’s Island include 350,000-square-feet of on-dock warehousing, 290,000-square-feet of warehousing and processing space on the south side of the island and 122 additional acres for ro-ro storage. Previous annual capacity at Colonel’s Island was one million units. The upgrades bring annual capacity to 1.4 million units, a 40 percent increase. As part of that expansion, GPA will triple its capacity for high-and-heavy equipment storage.

In calendar year 2023, GPA terminals handled 777,075 ro-ro units, up from 670,774 units the year before. The expansions and investments have garnered industry support with automotive carrier Wallenius Wilhelmsen signing a 20-year terminal agreement consolidating its port and logistics operations at Brunswick.

Meanwhile, the port of Baltimore, which is working diligently to return operations to normal after the collapse of the Francis Scott Key Bridge in late March, has been the busiest ro-ro port in the U.S. for several years. In 2023, it handled 850,00 cars and light trucks plus 1.3 million tons of farm and construction machinery.

Just over 9,000 imported vehicles were diverted from Baltimore to Brunswick in April as well as another 1,000 units of imported high-and-heavy equipment, said port spokesman Richard Scher. He added that diversions were handled on a vessel-by-vessel basis, typically on ro-ro services that were already calling on both Brunswick and Baltimore.

Carrier Perspective

While the GPA builds its ro-ro future and Baltimore deals with its collapsed bridge issues, Andrew Abbott, President & CEO of ro-ro carrier Atlantic Container Line (ACL), offered his assessment of what the ro-ro sector might have in store for 2024.

The year “started out as a repeat of 2023 but external factors have skewed the supply and demand picture,” Abbott says. “Construction equipment exports to the U.S. are still moving at very high volumes. The surprisingly strong U.S. economy is still absorbing large volumes of machinery, boats and agricultural equipment.”

Abbott says Chinese electric car exports continue to be strong, attracting car carriers and PCTCs (Pure Car and Truck Carriers) from other parts of the globe. He notes the Atlantic trade lost vessel strings due to these diversions so that transatlantic demand currently exceeds supply: “This was compounded by the political crisis in the Red Sea that swallowed up capacity to cover the additional steaming time around Africa to and from Asia.”

On the subject of newbuilds, Abbott states that “a fair number of newbuilding PCTCs and car carriers” are scheduled for delivery between mid-2025 and end 2026. “However, in contrast to the disregard for supply and demand impact by container operators, the new PCTC and car-carrier capacity will just about offset the expected increase in car volumes (especially from Asia) and the withdrawal of end-of-life vessels.”

He adds that U.S. vessels are booking out months in advance and the closure of Baltimore after the Key Bridge accident further congested East Coast ports. “Most of our existing ro-ro customers have greatly increased volumes in 2024, and we struggle each week to accommodate everyone who wants to book space.”

The current outlook “shows very strong U.S. import volumes of vehicles, construction equipment and oversized cargo for all of 2024 and most of 2025. U.S. export volumes show no significant growth prospects because the U.S. manufactures fewer types of machinery. Rate levels are continuing to increase westbound and are stable eastbound.”

Ports’ Perspective

Port Tampa Bay has benefited from the increase in vehicle imports mentioned by Abbott with a 45 percent jump in the first six months of fiscal year 2024, handling 61,500 vehicles.

“We’re still a niche player but growing in this business segment,” notes Wade Elliott, Senior Vice President, Marketing and Business Development.

The port hopes to bolster that growth by partnering with Glovis America, Inc., a logistics provider and the U.S. division of Hyundai, to establish a dedicated ro-ro terminal at the port. The terminal will include a 33,000-square-foot building adjacent to the berth that will be used for processing new automobiles. Port commissioners also recently approved a 10-acre expansion of the terminal that will be completed by early next year.

Glovis expects to bring at least 70,000 vehicles each year through Port Tampa Bay.

The port of Jacksonville (JAXPORT), always looking for high-level performance in all aspects of its operations, is making significant investments in partnership with the Florida Department of Transportation to increase vehicle volumes at its Blount Island Marine Terminal.

The project will see $45 million in berth upgrades to increase efficiency and accommodate additional vessel calls. Enhancements include Berth 20 being expanded to accommodate two larger ships simultaneously. Berth 22 is being enhanced to allow larger ships to simultaneously load and unload vehicles from both side and rear openings and is anticipated to be completed by the end of 2025.

In addition, Southeast Toyota Distributors, the world’s largest independent distributor of Toyotas, is moving forward with the construction of a new, 250,000-square-foot, state-of-the-art auto processing facility at the Blount Island terminal. Planned for completion in 2025, the $120 million public-private partnership modernizes the company’s operations, incorporating additional on-site rail connections and truck-loading areas.

Galveston Wharves’ ro-ro business is in the same expansion mode as other ports with new car imports through April up 14 percent compared to the same period last year. According to Rodger Rees, Port Director & CEO, Galveston Wharves is spending $90 million to expand its West Port cargo complex to accommodate ro-ro, breakbulk and other cargoes. It’s also adding nearly 30 acres in the West Port area by filling in two slips and demolishing a decommissioned grain elevator.

The port of San Diego has seen continuous growth and commitment from its 14 original equipment manufacturers. “In 2023 we handled approximately 360,000 vehicles through the port,” says Josefina Khalidy, Principal, Maritime Business Retention. San Diego has invested heavily to further support its ro-ro carriers by equipping the National City Marine Terminal (NCMT) with shore power, which is expected to be operational by 2025.

The port has also commissioned a bonnet barge system to provide an alternative emissions capture technology for ro-ro vessels that are not yet equipped with shore power capabilities. The barge system will be operational by the end of 2024.

NCMT has also seen facility improvements including structural repairs and lighting upgrades. One of the next major upgrades is additional rail connector track to support terminal operations. The port also continues to fulfill its role as a strategic port for the movement of military cargo. 

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.