Ted Prince, one of the nation's leading maritime supply chain consultants, calls Virginia his home. But Prince's recent comments about the ability of the Port of Norfolk to compete in the new world of an expanded Panama Canal is unlikely to win him many friends among his state's port interests.
In remarks made Tuesday at the SMC3 annual winter meeting in Atlanta, Prince, who runs a Richmond-based consulting firm, said Norfolk is not well positioned to compete with other East Coast ports for container traffic that will transit the widened and deepened canal when it opens for business in the summer of 2014.
Prince told the gathering that most vessels that will sail through the expanded canal en route to East Coast ports will call at either the Port of New York and New Jersey in the Northeast United States, or at Charleston, S.C., or Savannah, Ga., in the Southeast. The reason, Prince explained, is that New York in the North, and the two Southeast ports can serve vast and densely populated areas. Norfolk's service area may lack the population density of the other ports, Prince said.
Vessel owners operating the large, expensive containerships capable of transiting the expanded canal will likely be able to serve just one U.S. port if they want to achieve economies of scale. The expanded canal can handle ships with a maximum capacity of 12,600 twenty-foot equivalent unit containers (TEUs), nearly tripling the existing maximum container capacity.
"Efficiency is only achieved when the ship is moving, not when it is sitting in a port," Prince said. Gone will be the days when a vessel sailing from, say, China to the United States could call on more than one U.S. port, he added.
Prince said there is no vessel that currently uses Norfolk as its first port of call. "If you are not the first port of call today, why would you be the first port of call tomorrow?" he said.
Not the "odd port out"
Prince's comments sparked a sharp response from the Virginia Ports Authority, which runs the state's ports, including Norfolk.
Port officials maintain that, as the only East Coast port with 50-foot channel depths capable of accommodating the large container vessels, Norfolk has a natural leg up over its East Coast rivals. Norfolk is one of only two East Coast ports—the other being Savannah—that is served by the two Eastern Class I railroads, Norfolk Southern Corp. and CSX Corp.
Port spokesman Joe Harris said the authority has been in "serious discussions with several ship lines" that may adjust their East Coast port rotations to call at Norfolk first. "One ship line has gone so far as to weigh the option of a double call in Virginia: first in and last out," Harris said in an e-mail to DC Velocity.
Harris declined to identify the lines but said an announcement about a change in vessel rotations could come as early as mid-March.
"Given those developments, the fight for precious federal dollars for dredging, a pressing need for deep water, and the overall expansion of the rail operations here, we think we will be anything but the odd port out," Harris said in his e-mail.
In the meantime, the New York/New Jersey port authorities are working on a $1 billion project to raise the 151-foot-tall Bayonne (N.J.) Bridge connecting New York and New Jersey by an additional 64 feet to provide adequate clearance for the mega-containerships expected to transit the expanded canal. The work is scheduled to be completed by 2016. The project is part of a multibillion dollar effort that will include deepening the port's channels to 50 feet from their current depth of 45 feet.
Charleston, with a channel depth of 47 feet, and Savannah, with a depth of 42 feet with the hopes of deepening its channel to 48 feet, are not expected to reach 50-foot depths for the foreseeable future.