Reports
U.S. East Coast ports push forward with dredging
The Port of Charleston will be the deepest in 2021 at 52 feet, but will be surpassed when the Port of Virginia goes to 55 feet deep.
By Hailey Desormeaux on Dec 02, 2019 17:12

   Ports up and down the United States East Coast continue to push forward with harbor dredging and other major projects to provide more capacity and handle larger containerships.
   Expansion at U.S. East Coast ports has been spurred by the third lane of the Panama Canal opening in June 2016, allowing vessels of over 14,000 TEUs to sail through the waterway, compared to the prior limit of vessels around 5,000 TEUs. Additionally, container volumes at U.S. East Coast ports across the board have grown rapidly in recent years.
   Average container vessel size calling U.S. East Coast ports has increased since the Panama Canal’s third set of locks opened. Consequently, most prominent ports on the U.S. East Coast have channel deepening projects underway or are slated to begin such projects in the near future, while some have already completed major deepening projects.
   The Port of Charleston will offer the deepest harbor on the U.S. East Coast at 52 feet once its dredging project is finished in 2021, although it will be surpassed by the Port of Virginia in 2024 when the dredging project to deepen its channels to 55 feet is done.
   In addition to dredging, Southeastern ports in particular have been full speed ahead on expansion projects amid a strong economy as businesses continue to move in.
   “The economy of the U.S. Southeast remains a powerhouse,” GPA Executive Director Griff Lynch said in November.
   “Southeast ports continue to outperform other U.S. ports, which is a trend we anticipate continuing,” SCPA President and CEO Jim Newsome also said in November.

Onward expansion. Looking at prominent U.S. East Coast ports up and down the coast, dredging to deepen harbors at the ports of Charleston, Savannah and JaxPort is currently underway, while the Port of Virginia’s harbor deepening project is slated to begin in January 2020 and Port Everglades’ harbor deepening project is in the preconstruction engineering and design phase, as illustrated in the chart below, which was built using data from the relevant port authorities.

2019_12_2Dd

   Starting northward and moving down, a project was completed at the Port of New York & New Jersey in 2016 that deepened its harbor channels to 50 feet.
   Additionally, a project was completed in 2017 that increased the clearance capacity of the Bayonne Bridge between New Jersey and Staten Island from 151 feet and a maximum container vessel size of 9,800 TEUs to 215 feet and a maximum vessel size of 18,000 TEUs. Container vessels up to 18,000 TEUs are now authorized to sail beneath the bridge to call APM Terminals and Maher Terminals in Elizabeth, N.J.; the Port Newark Container Terminal in Newark, N.J.; and the GCT New York terminal on Staten Island in New York.
   Down the coast, the Port of Baltimore already has a 50-foot channel and a 50-foot berth, which is at the Seagirt Marine Terminal. Construction on a second, 50-foot berth, which will also be at the Seagirt Marine Terminal, will be completed in 2021, according to a September press release issued by the Maryland Port Administration.
   At the Port of Virginia, which currently has 50-foot channels and berths, a dredging project is slated to begin in January 2020 to deepen the shipping channels to 55 feet and widen the channel to more than 1,400 feet in specific areas, according to the Virginia Port Authority (VPA). The project is expected to be completed in 2024. 
   The total cost of the project, including the preliminary engineering and design work, is $350 million. The Virginia General Assembly approved $350 million for the dredging project in 2018.
   A contract had been finalized in October with New Jersey-based dredging firm Weeks Marine that will take on the project’s initial phase in January, which involves deepening the western side of the Thimble Shoal Channel, VPA said in an October press release. The first phase of the project costs $78 million.
   “When dredging is complete in 2024, the commercial channels serving the Norfolk Harbor will be able to simultaneously accommodate two, ultra-large container vessels,” VPA said.
   “This project, combined with the $750 million we are investing to increase container capacity by 1 million units per year, sets up Virginia to be the premier gateway for trade on the East Coast,” VPA CEO and Executive Director John Reinhart said.
   Meanwhile, at the Port of Charleston, a harbor deepening project is in progress that involves dredging the main channel from a depth of 45 feet to a depth of 52 feet and dredging the entrance channel from a depth of 47 feet to a depth of 54 feet. The project is expected to be completed in 2021. 
   Deepening of the entrance channel began in February 2018 and is still underway. Additionally, deepening of the lower harbor up to Wando Welch Terminal recently started, with the awarding of the third contract, the South Carolina Port Authority (SCPA) said in an October press release. “Deepening this section of the Wando River to 52 feet and widening the turning basin to 1,650 feet will greatly increase capabilities at the Wando terminal. Future project work involves deepening the Cooper River to 52 feet up to the Leatherman terminal,” SCPA said.
   “The $550 million Charleston Harbor Deepening Project is fully funded after receiving $350 million from the S.C. Legislature, $108 million from the U.S. Army Corps of Engineers and $138 million set aside in President Donald Trump’s budget,” SCPA added.
   The Hugh K. Leatherman Sr. Terminal is a new container terminal that’s currently being built at the Port of Charleston. The first phase of the terminal is expected to open in early 2021. Phase one of the new terminal will include a 1,400-foot wharf; five, 169-foot tall ship-to-shore cranes; and 25 hybrid rubber tired gantry cranes.
   Additionally, upgrades at the port’s Wando Welch Terminal will allow the terminal to handle three, 14,000-TEU ships at once by the end of 2020. “Upgrades to Wando terminal and the opening of Leatherman terminal will enable S.C. Ports to handle four, 14,000-TEU ships at once, as well as handle a 19,000-TEU ship,” SCPA said in October. 
   Further down the Atlantic coast in Georgia, the Port of Savannah is in the midst of a dredging project that will deepen its harbor. “The first half of the project deepened the outer harbor to 49 feet at low tide (56 feet at high tide). The inner harbor channel will be expanded from its current low-tide depth, 42 feet, to 47 feet (54 feet at high tide),” the Georgia Ports Authority (GPA) said in late February 2018, when it had announced the completion of the outer harbor dredging.
   “The outer harbor now extends from approximately Fort Pulaski to about 20 miles into the Atlantic Ocean,” the USACE Savannah District said in late February 2018.
   Just this September, deepening of the inner portion of the Savannah harbor began, with the USACE Savannah District saying how, “Workers will be in the channel from approximately Fort Pulaski, up the Savannah River to the Garden City port.”
   “The deepening remains on schedule, and we’re anticipating a fully-deepened channel by January 2022,” Col. Daniel Hibner, commander of the USACE Savannah District, said in a September press release.
   The overall cost of the Savannah Harbor Expansion Project is $973 million. “Except where otherwise provided by law, the Savannah Harbor Expansion Project is cost-shared at the rate of 75% federal and 25% non-federal,” Billy Birdwell, senior public affairs specialist at the USACE Savannah District, told BlueWater Reporting in an emailed statement in November.

   In addition to dredging, other expansion projects at the Port of Savannah that GPA has shined light on recently include:
      • It’s plans to expand beyond its 1,200-acre footprint at Garden City Terminal to establish a new container port on Hutchinson Island, across the Savannah River channel;
      • It’s ability to serve three, 14,000-TEU and four other post-Panamax ships simultaneously, now that berths 4,5 and 6 were strengthened to accommodate larger cranes and vessels;
      • And the decision of A&R Logistics to select the Savannah market for its new global export hub for plastic resins, which will be operational by late 2020.     
      • The expansion of its ship-to-shore crane fleet from 30 to 36 in the first half of calendar year 2020;
      • The expansion of its RTG count from 158 to 178 in calendar year 2020,when its slated to receive five in June, five in July, five in August and five in September;
      • And the decision of A&R Logistics to select the Savannah market for its new global export hub for plastic resins, which will be operational by late 2020.

   “A&R Logistics' Export Division will also be headquartered in Savannah to support global supply chain development for the chemical industry,” GPA said in November. “In April, Plastic Express announced it is investing $172 million in two resin packaging warehouses in Savannah - each measuring 1 million square feet.”
   Down in the Sunshine State at the Port of Jacksonville (JaxPort), dredging is underway to deepen its shipping channel from 40 feet to a depth of 47 feet. 
   The 13-mile project is divided into segments A-D, beginning near the mouth of the river, according to a dredging fact sheet issued by JaxPort. However, the port is currently only focused on contracts A-C, which cover 11 miles of the project, being that the current funding model only covers contracts A-C.
   The Jacksonville Harbor Deepening Project began in February 2018 and will be completed in 2023. “The 2023 completion date refers to the first 11 miles (contracts A-C),” Chelsea Kavanagh, public information officer at JaxPort, told BlueWater Reporting in a November emailed statement. “The first 11 miles takes the deepening through our Blount Island Marine Terminal.”
   Contract A is scheduled to be complete in Spring 2020, contract B is scheduled to be complete in May 2021, and contract C is in the final design phase.
   “New turning basins will be added and there will be full two-way traffic with further widening at strategic locations. The project consists of deepening the existing 40-foot channel to 47 feet; widening at Mile Point, the Training Wall Reach and St. Johns Bluff Reach, plus construction of two new turning basins at Blount Island and Brills Cut,” JaxPort said in a project fact sheet.
   In regards to funding, JaxPort said, “The estimated cost of the initial three segments is $484 million. Final project costs will depend on contracts awarded for each of the segments. The Jacksonville Harbor Deepening Project is being funded through federal, state and JaxPort investments, plus contributions from specific private tenants and potentially from the City of Jacksonville.”
   Additionally, terminal operator SSA Marine is expanding its operations at JaxPort’s Blount Island Marine Terminal to handle more containers. The project, which involves $238.7 million in infrastructure and equipment upgrades, broke ground in November and is expected to be complete in 2023, although operations will continue throughout the redevelopment, JaxPort said in November. The project is a public-private partnership between JaxPort and SSA Marine, with more than 65% of the landside improvements being funded by SSA.
   Down in South Florida, the USACE is moving forward with a plan to deepen the port’s navigation channels from 42 feet to 48 feet (plus 1-foot required and another 1-foot allowable overdepth for a total of 50 feet), and widen narrower sections of the channel, according to the port. “The preconstruction engineering and design phase of the U.S. Army Corp’s navigation improvements project is nearing completion,” a Port Everglades spokesperson told BlueWater Reporting in a November emailed statement. “The next step will be to move the Fort Lauderdale Coast Guard station to the east to straighten out a chokepoint in the channel.”
   The USCG station reconfiguration, which is included in the overall costs of the deepening and widening project, involves reconfiguring the facility to the east to allow for the widening of the Southport Access Channel by 250 feet.
   As far as the timeline goes for the USCG station reconfiguration and the rest of the deepening and widening project, Port Everglades estimates a construction contract for the USCG station reconfiguration will be awarded in 2020, a construction contract for the channel deepening and widening will be awarded in 2021, the USCG station reconfiguration will be done in 2022, and the deepening and widening will be completed around 2025, according to a port fact sheet.
   In terms of costs, the overall dredging project (including the USCG station reconfiguration) is expected to total $347.8 million (as of an October 2019 estimate), with the federal share standing at $234.9 million and the non-federal share totaling $202.9 million. For the non-federal share, the port’s portion stands at $111.65 million and the state’s share totals $91.25 million.
   Additionally, Southport Turning Notch Extension (STNE), the largest infrastructure project in the port’s history, remains underway and is expected to be completed in 2022. The $471 million project (including crane rail infrastructure) involves lengthening the existing deep-water turnaround area from 900 feet to 2,400 feet. Crane rail construction began in February 2018, design for STNE is complete and construction began in October 2018. 
   Port Everglades has a lot of potential and will continue to remain resilient to any headwinds (such as the U.S.-China trade war), being that it’s the top gateway in the U.S. for trade with Latin America, the top port in Florida for overall exports in terms of value, the leading refrigerated cargo seaport in Florida in terms of TEUs and the top seaport in Florida by revenue.
   Meanwhile, about 25 miles south, PortMiami has been big ship ready since before the Panama Canal expansion was even completed. PortMiami has had a channel depth of 52 feet and 50 feet at the turning basin since September 2015.

Stacking up. These dredging and expansion projects are necessary, considering these prominent U.S. East Coast container ports all saw container volumes (TEUs) increase between 2016 and 2017, as well as between 2017 and 2018, as illustrated in the chart below, which was built using data from the relevant port authorities. For the ports of Jacksonville, Miami and Port Everglades, fiscal year data was used, with the fiscal year ending Sept. 30 instead of Dec. 31.

2019_12_2Eee

   Based on the information in the chart above, the chart below illustrates the percent growth in total TEU volumes at these ports between 2016 and 2018, with JaxPort seeing the largest growth in container volumes and PortMiami seeing the slowest growth.

2019_12_2Ff

   Meanwhile, data from BlueWater Reporting shows container vessel information for these eight U.S. East Coast ports, as illustrated in the chart below. The ports of New York & New Jersey, Baltimore, Norfolk and Savannah currently handle the largest containerships that call the U.S. East Coast at 14,424 TEUs. However, average container vessel size calling the Port of Charleston is larger than any of the other U.S. East Coast ports at 7,752 TEUs, while the Port of Savannah is called by the most container vessels, with 273 container vessels operating on services that routinely calling the port.

2019_12_2Gg

   Looking at average container vessel size on the Asia to U.S. East Coast trade in general, vessel size has risen 52.4% over the last five years, clocking in at 8,841 TEUs as of November 2019, compared to 5,800 TEUs as of November 2014, as illustrated in the chart below, which was built using BlueWater Reporting’s Capacity Report.

2019_12_2Hh

   However, average vessel size on the Asia to U.S. East Coast trade did slip 2.4% between the November reporting periods in 2018 and 2019 as the U.S.-China trade war continues to bog down the Asia to U.S. trades, although the Asia to U.S. West Coast trade is bearing the brunt of it. Drewry’s World Container Index showed spot container rates from Shanghai to New York were down 38% year-over-year as of Nov. 28, while rates from Shanghai to Los Angeles were down 44% year-over-year.

BlueWater Reporting’s outlook: BlueWater Reporting believes these U.S. East Coast ports are taking the right approach in staying steps ahead when it comes to upgrades to handle more TEUs and larger container vessels, particularly in the Southeast. Regardless of how much these East Coast ports will be impacted by the U.S.-China trade war, or other economic and geopolitical headwinds, they must be able to handle larger containerships as they continue cascading down from the Asia-Europe trade.
   Interested in our data? Contact sales here for more information.