Will deepening the channel for the Port of Gulfport make it more competitive or would it be a boondoggle bigger than the likes of Kior and the Beef Processing Plant fiascos? Some experts say the port will fall further behind its competitors once the expansion of the Panama Canal can be completed.
Daniel Ikenson of the Cato Institute pointed out Southeastern port are not prepared for the expansion in a recent Wall Street Journal Column:
The 10-year project to widen the Panama Canal for more traffic and a new class of supersize container vessels called “Post-Panamax” ships, with cargo capacity 2½ times greater than the current standard Panamax ships, is nearly complete. According to the American Society of Civil Engineers, these vessels can lower shipping costs from 15%-20%, but harbors need to be at least 47 feet deep to accommodate them. The U.S. Army Corps of Engineers reports that only seven of the 44 major U.S. Gulf Coast and Atlantic ports are “Post-Panamax ready.”Hofstra University spelled it out in this map and the study The Geography of Transport Systems:
The absence of suitable harbors, especially in the fast-growing Southeast, means fewer infrastructure- and business-development projects to undergird regional growth. It also means that Post-Panamax ships will have to continue calling on West Coast ports, where their containers will be put on trucks and railcars to get products from Asia to the U.S. East and Midwest—a slower and more expensive process. Rest of the column.
As the world container fleet gets upgraded with larger ships, major ports are facing the challenge of accommodating deeper vessel drafts. While a typical Panamax containership could be accommodated by a 35-foot channel, the new generation of post-Panamax containerships handling above 5,000 TEUS requires a berth depth above 42 feet and a depth of 50 feet is required to handle ships above 10,000 TEUs. Under such circumstances, many ports are not accessible to the new post-panamax containerships. The expansion of the Panama Canal to a depth of 50 feet and a capacity of 12,000 TEU (New Panamax ships) has also placed additional pressures. This has triggered a "race to the bottom" in the dredging of several East Coast ports such as Miami (50 feet by 2014), New York (50 feet by 2014) and Savannah (47 feet by 2017). Other ports have dredging plans. Yet, such projects are very expensive and require careful consideration of the marginal benefits they convey. Study
The question that should be asked is will the ports on the Mississippi Gulf Coast be able to compete or will it fall further behind other ports in the Southeast. It appears there will be no progress towards deepening the channel for the Port of Gulfport. The Sun-Herald reported in July:
A deeper ship channel has been scrapped as part of a study on future expansion at the state port, the U.S. Army Corps of Engineers has confirmed.
The Corps undertook an expansion study in 2011 that was modified in 2013 to include deepening the ship channel from 36 feet to 42-47 feet. Channel deepening is seen as a key to port growth. Without a deeper channel, the port will be unable to compete for cargo being hauled on larger ships that require drafts deeper than Gulfport can offer. What's more, the port is spending about $30 million on three, rail-mounted gantry cranes designed for bigger vessels.
"The cranes are being built with an eye toward the future with a deeper channel," port Executive Director Jonathan Daniels said. "If we needed to get additional cranes after deepening the channel, we would be chastised for not being forward-thinking. In addition, the cranes are not used exclusively for container handling. With the longer reach, it allows for us to work barges that may be rafted up alongside a vessel to allow us to go from ship, to an outer reach and directly into barge."
Pat Robbins, legislative and public affairs chief for the Corps in Mobile, said channel deepening was removed from the study because state port officials learned the state would have to pay the entire cost for the deeper channel, plus cover perpetual maintenance, because Congress did not authorize or fund the study.
The other essential transportation element for an expanded port -- a north-south connector road between the port and Interstate 10 -- has been stalled by litigation.
The process to secure federal funding for a deeper channel optimistically takes at least 10 years, and involves environmental and economic studies. Congress must authorize and fund each step.
Port Executive Director Jonathan Daniels said the state port still plans to pursue a deeper ship channel. The Army Corps study still includes adding 200 acres, 160 of it on the West Pier. The remaining 40 acres would square off the north harbor for additional docking and open storage, Daniels said.However, the New York Times questioned in 2012 whether ports should deepen their channels to handle the post-Panamex ships:
The Corps' timeline called for a draft of its study to be completed in early 2014, but Robbins said removal of channel deepening has slowed the process. Robbins said the draft should be finished in the next couple of months.
Meanwhile, the port is already spending $570 million on West Pier expansions the Corps previously authorized. The federal funding, provided as Hurricane Katrina relief, requires the port to create 1,300 full-time jobs. The latest federal report shows 98 full-time jobs created, but the port still has fewer workers than it did before Katrina. Daniels said jobs have been created despite ongoing construction on the West Pier that will not be finished until 2017..... Rest of article.
The big ships will also come via places beyond Panama: many are expected to come from Southeast Asia through the Suez Canal, and from South America’s eastern ports. But more fundamental questions have been raised about the real benefits of the coming trade, and especially the effects of the new canal traffic.Moving goods by water is generally cheaper than moving them by land because of the economies of scale of moving so many containers on those big ships, said John Martin, a ports consultant in Lancaster, Pa. So that would suggest canal routes will offer lower-cost shipping to the East Coast and Midwest through the canal.But, he said, containers loaded on the West Coast, which has built up its container yards and highway and rail infrastructure, can outrun those that travel to the East Coast by water, and that can make the difference when speed and dependability are more important than cost alone. Besides, he added, costs and fees can shift; Panama can be expected to raise rates for canal passage, and “the railroads are not going to sit idly by” and let the water route undercut their business.Scudder Smith, a consultant with the engineering consulting firm Parsons Brinkerhoff, said that a water passage, “all things being equal, will cause cost reductions — but all things are not equal,” he added, and so “I’m not at all confident in any numbers.”That could be why J. Christopher Lytle, executive director of the Port of Long Beach, does not sound a bit worried. “There’s just not going to be a huge movement of cargo from the West Coast to the East Coast,” he said....After talking up port projects in ways that sound a bit like the overblown economic predictions about new stadiums and convention centers in recent years, some officials are now scaling back their claims. After Hurricane Katrina, Gov. Haley Barbour of Mississippi trumpeted plans for a “port of the future” at Gulfport with a 50-foot-deep channel, redirecting some $600 million in federal housing disaster funds on a project he pledged would spur the economy and create bountiful jobs. A state official at the time called it “the single largest economic-development project in the state’s history,” and officials predicted that it would surpass the Port of Los Angeles.Today, Mississippi and the port are being more modest. The port recently noted that it is not pursuing the announced plans to dredge the channel to 50 feet, and because of lapsed maintenance, the channel does not even reach the depth of 36 feet authorized by law. The port is now focused on improving what it has instead of expanding greatly, and plans focus more on the cascade effect as smaller ships are crowded out of the major ports by the new superships..... Rest of article.
Kingfish note: The purpose of this post is to start a discussion of whether Mississippi should take more action regarding the study and deepening of the channel. Should funds from the BP settlement be directed towards at least a study of deepening the channel? Is this a a worthy economic development project? It was the Gulf Coast that suffered from the BP disaster. It is the Gulf Coast who should get the majority of the settlement even though legislators are scheming to steal the money. The Kingfish is woefully ignorant on this subject and welcomes any discussion as it is an interesting problem for Mississippi.
However, the state has blown money on stupid experimental energy projects such as Kior, Twin Creeks, and Stion while the port of Gulfport focuses on a table-scrap future- taking the leftovers from other ports. Mississippi, the table scrap economy. It has a nice, revolting ring to it, doesn't it?
Explanation of different levels of container ships in The Geography of Transport Systems