Growth in Port of Savannah
Georgia Ports Authority (GPA) has announced a new program that will allow the Port of Savannah to simultaneously handle six 14,000 TEU vessels by 2024.
Called the Big Berth/Big Ship program, it was presented by GPA's executive director Griff Lynch at the Georgia Foreign Trade Conference held at the Sea Island from February 3-5, 2019.
"No other single container terminal in North America has the ability to expand berth capacity at this rate," Lynch said.
Currently, Savannah's Garden City Terminal is equipped to handle two of these vessels and by April of this year that number will increase to three.
As informed, the Port of Savannah had just last week achieved the busiest month ever in its history, moving 433,975 TEUs, an incredible 28 percent jump over the previous year.
"A strong global economy coupled with a growing awareness of Savannah's logistical advantages are driving sustained growth at our deepwater container terminal," GPA Board Chairman Jimmy Allgood said.
"GPA's Big Berth/Big Ship program will ensure Georgia stays ahead of demand and ahead of the competition," he added.
Over the next five years, the authority plans to add another 21 Neo-Panamax ship-to-shore cranes, replacing 14 of its older models to bring the total fleet to 37. Dock upgrades are already underway to support the new, larger machines.
In addition to the ship-to-shore cranes GPA is adding, a dozen new rubber-tired gantry cranes will bring the number Garden City Terminal's container handling cranes to 158. Ten RTGs will be commissioned in July, another two in September. Phase I of the Mason Mega Rail project will be complete in October 2019. Full completion a year later will double the Port of Savannah's rail lift capacity to 1 million containers per year.
In late 2021, the Savannah Harbor Expansion Project is slated for completion, delivering the deeper water necessary to better accommodate the larger vessels now calling on the U.S. East Coast.
Warehouse Space at Premium
Due to large amounts of orders for spring merchandise at the end of 2018 trying to avoid the possibility of tariffs on Chinese imports, the port complex of Los Angeles-Long Beach has morphed into a virtual warehouse. It also adds pressure for diminishing space in the coming year.
While distribution capacity nationwide rose in 2018, space in the two largest gateways (LALB and NYNJ) may be operating at maximum utilization. Two factors contributing to this are increased imports and a double-digit growth in online shopping.
Vacancy rates for logistics space remained at a record low of 4.8% at the end of 2018. However, containerized imports in the trans-Pacific rose 8.3% forcing warehouses to increase rents in most US markets. Southern California and the NY/NJ ports bore the brunt of the early orders and as such it has caused never before seen congestion for those markets. Coupled with the amount of inventory in warehouses was the record breaking cold in the US that kept transport of merchandise at a standstill in some cases for almost a week.
In addition, the trend among retailers has been to hold inventory longer-term to accommodate the every growing online shopping industry.
In the past, warehouse operators in the Southern California gateway were able to maintain fluid operations even during peak season by keeping about a 10% amount of excess capacity. Recently, however, this has begun to come up against more space devoted to last-mile fulfillment fueled by e-commerce, thus reducing the buffer previously held aside.
Governmental Moves Impact Ocean Freight
Important deadlines are looming in the first quarter of 2019 for both the US-China trade war and Brexit. The outcome of the two are likely to have significant repercussions on the ocean freight industry over the coming months or even years, according to Barcelona-based digital forwarder iContainers.
The market is awaiting a solution on the back and forth tariffs between the US and China as the two nations resume talks on new trade terms during their 90-day truce, launched at the beginning of December, 2018. A hard deadline has been set for March 1, after which an increase of additional duties from 10 percent to 25 percent on USD 200 billion worth of Chinese goods will take effect.
"Expect the shipping industry to keep close tabs on the trade war. So much of how the global trade movement will unfold depends on developments there, so it'll be interesting to see what happens," says Klaus Lysdal, Vice President of Operations, iContainers.
"These are, after all, the two biggest trade partners in the world with a huge potential to impact the global shipping capacity. Many US companies struggled with the first round of tariffs but hopefully, we will see some mitigation that can allow them to recover."
On the other hand, a no-deal Brexit looms, raising fears that the approaching exit of the UK from the European Union set for March 2019 will result in trade disruptions at major ports. Despite the March 29 departure from the European Union, the British parliament has yet to agree on an exit plan. The uncertainty is causing a growing sense of disquiet among shippers and ocean freight providers dealing with the outgoing EU member.
"Brexit will be another one to watch as we are really going into unchartered waters here. New regulations will need to be drafted and time will be needed for them to be implemented. This will take some getting used to and there's no saying how seamless the transition will be, if at all," Lysdal adds.
Commenting on another important date that's drawing close, the IMO 2020 deadline on 0.5% fuel sulfur content cap regulation, Lysdal said that 2019 is expected to a transition year as carriers and the shipping industry as a whole prepare for the IMO 2020 regulations.
Another trend to look out for in 2019 is the continued trucking shortage in the US, as the industry continues to grapple with both chassis and truck driver shortage, the latter of which was partly brought on by the ELD implementation last April.
Wind Power Shipments Growing
Approximately 38,000 megawatts of wind farm development were under construction or in advanced development in the US by the third quarter of 2018, up 28 percent from the same period in 2017. The surge is driven partially by tax credits for the industry. Thanks to the increasing viability of wind-based energy production, the building boom should continue through at least 2023.
For wind-related project cargo logistics, that points to an upturn in business, as well as a high risk of congestion and equipment shortages.
John Lusty, director of energy and utility solutions for Siemens Gamesa Canada, said the adoption of renewable energy has been "far greater than we anticipated and that's not slowing down, especially in light of recent reports from the United Nations and research organizations that confirm climate change is real and the effects of carbon dioxide-free emissions is exponentially beneficial. We're moving massive pieces of equipment in a heightened level of activity to execute installations of [qualified] wind farms before that PTC window closes." Although the incentive doesn't end until 2023, projects must be producing energy by then to receive the tax credit.
Greater lengths and weights add new "execution challenges" such as police escorts and night travel that "stretch the available capacity of the transportation industry." But, he added, heavy-haul transport companies that left wind a few years ago to serve other booming industries are coming back.
Keeping pace with the ever-expanding physical dimensions of an onshore wind turbine, which can be as tall as 300 feet when installed, is a continuing challenge for heavy haulers. In 2001, a nacelle, the power generating unit of the turbine, was rated at 0.6 megawatts, weighed 40,000 pounds, and moved on a normal, over-the-road double-drop trailer. Today, a 2.5- to 3-megawatt nacelle can weigh 168,000 pounds and moves on a four-unit, 13-axle rig that could extend more than 100 feet on the road and requires escorts, he said.
Several US ports, many in the Gulf, are expecting a surge in wind cargo during the next 24 months. Corpus Christi serves as the gateway to a "wind corridor" that runs from Texas through New Mexico, Colorado, Oklahoma, Kansas, and as far north as Nebraska, said Maggie Iglesias-Turner, the port's business development manager for wind energy and project cargo. Although trucks primarily serve these regions, a decent proportion of blades leave the port by rail. Corpus Christi has added 25 acres of laydown space, bringing the port's total to 100 acres.
Gulf ports don't have a lock on wind power logistics. The Port of Duluth, Minnesota, handled its first wind turbine component shipment in 2005. More than 90 percent of the wind components imported into the port move out by truck - west to Montana, Wyoming, and Colorado; north to Alberta, Canada; and south to Missouri and Oklahoma.
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The large unit was placed onto a flat rack for the overland transport in Oklahoma and hauled across the western states to the port of Long Beach, California.
Once aboard ship in Italy, the unit made its way to the port in Corpus Christi for unloading. From Texas,
the machine traveled overland to the delivery destination in Oregon.
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The recipients of the container were the staff at Saint Teresa Orphan's Foundation (STOF) in Songea, Tanzania, East Africa. They had worked tirelessly gathering the donations that would fill the container with Christmas presents for the children at STOF and had all things ready at the end of October.
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