Rail grade separations. Revamped locks and dams. Toll roads and bridges. Dredging. These components are some of the most "'glamorous parts of the infrastructure conversation in the U.S.," says Pierce Homer, the American Road & Transportation Builders Association's ports-and-waterways co-chairman and Moffatt & Nichol's transportation director.
Homer is not being tongue-in-cheek. The impending opening of the Panama Canal's third set of locks, new federal legislation requiring national freight councils, trends in import-export trade balances and other factors are coming together to thrust freight infrastructure to the forefront of the industry—a poster child for job-creating investment.
Its emerging presence is highlighted by scores of recent studies commissioned by the U.S. Army Corps of Engineers, soybean transport associations and others. The reports focus on what the third set of locks—and its ability to handle so-called post-Panamax ships that carry upward of 13,000 twenty-foot-equivalent units (TEUs), or containers—will mean for East Coast and Gulf Coast ports and, ultimately, for all aspects of the nation's freight transportation system.
The American Society of Civil Engineers also released a report this fall noting that, by 2020, investment needs of ports and inland waterways will total $30 billion, while planned investments are only about $14 billion. Congestion and delays will lead to a hike in the cost of goods, and "we are on course to lose more than one million jobs and more than $1 trillion in personal income by 2020," stated Andrew W. Herrmann, ASCE president.
In terms of congestion, the "last-mile connections—those are what are really lacking," says Aaron Donovan, spokesman for the American Association of Port Authorities, which recently formed a strategic partnership with ARTBA to advocate for investments in critical commerce corridors. "That last increment between the main arteries of cargo movement—often, it's like the off-ramp isn't there."
But will this new synergy of attention around freight infrastructure reap any results? "MAP-21 was like having someone come and pat you on the head and say, 'We think marine transportation is important,' " says Barry Holliday, president of the Dredging Contractors of America. "But we embrace the reality that at least there is a maritime bill."
East Coast ports located in major urban areas, like New York-New Jersey, Virginia, Charleston, S.C., and Savannah, Ga., are the big-league prospects to make the most out of potential increased container traffic from the canal. "The key issue for these ports is depth, depth, depth," says Patrick King, ports director with CH2M Hill.
The Port Authority of New York & New Jersey is in the final stages of a multiyear, 50-ft-deep main-channel dredging program and a $600-million intermodal rail program. It is also spending $90 million to repair Sandy-related damage and expand Greenville Yards, a 250,000-lift intermodal facility for a private terminal operator, says Richard Larrabee, the authority's port commerce director.
However, 80% of all cargo still goes on trucks, and so the port is spending $350 million on roadway improvements, Larrabee adds. The port's biggest project is the raising of the Bayonne Bridge to accommodate the passage of post-Panamax ships (ENR 8/27 p. 17). And a new strategic plan under way will go beyond actual port facilities to focus on potential construction of new warehouses and distribution centers, he says, adding, "Savannah has done a great job of attracting these, and we'd like to do the same."
The Port of Savannah is preparing for a $600-million program to dredge to 48 ft from 42 ft, increase capacity and bring in new post-Panamax cranes. Like the Bayonne bridge project, it has a pledge from President Obama's "We Can't Wait" program to expedite federal reviews. Its archrival in Charleston also received the same designation as it looks to dredge to 50 ft from 45 ft.
Charleston hopes to shave five years off its time line to meet a 2019 completion, says Allison Skipper, port spokeswoman. The port is also in a $1.3-billion capital program that includes upgrading its terminal operating system, developing an intermodal rail facility and building a $180-million port road connector to Interstate 26.
Roads, rail and inland ports are also vital pieces of the Port of Virginia's game plan, which already boasts a 50-ft-deep channel. "All the terminals are ready to go, and the cranes are in place," says Joe Harris, port spokesman. "But the race is never over." While in the midst of a 10-year plan to pump in and compact dredge material for a future 600-acre terminal site called Craney Island, the port "has been blessed by geography and Norfolk Southern completing the Heartland Corridor [ENR 9/18/06 p. 7], connecting us to Chicago," he adds. "And as we speak, CSX is chipping away at the National Gateway."
That multi-state public-private partnership (P3) effort to remove rail obstructions and permit seamless transport of double-stacked freight between northwest Ohio and East Coast ports is well under way, says Lauren Rueger, a CSX spokeswoman. An $850-million P3, with CSX committing $575 million, so far has eliminated 24 of 40 choke points between Ohio and Pennsylvania, she adds. They include building 10 tunnels, two bridges and eight grade separations. A $165-million tunnel project in Washington, D.C., is under environmental review, and CSX is working with Maryland to establish an intermodal terminal in Baltimore.
Such multi-regional, multi-modal planning is essential, says Anne Canby, director of the OneRail Coalition, noting that state agencies tend "to think only about their own modes of transportation. But freight moves on multiple modes, so it's got to be thought of as a whole system. That's beginning to happen."
The Virginia port is investing about $250 million in a $1.4-billion, 55-mile toll road. Scheduled to open in 2018, it will provide an expedited connection to U.S. 58 and I-295.
In Florida, the ports of Jacksonville and Miami also received "We Can't Wait" status for 50-ft dredging plans. "The Panama Canal widening has huge potential economic impact, but it's too difficult to estimate at this point," says Doug Wheeler, president of the Florida Ports Council. "But it's not just about that. Florida's ports have historically been for break-bulk cargo, aggregates, etc. Industry has shifted to containers, so we're doing some catching up."
The Port of Miami's 50-ft-depth plan has just taken off with solicitation of bids by the Army Corps of Engineers. Construction is scheduled to begin in early 2013 and be completed by early 2015.
But questions about how to optimize U.S. freight infrastructure go beyond the canal's effect. For example, the Port of Corpus Christi is preparing for an uptick in exports with over $400 million in rail expansions and bulk terminal upgrades. The game changer: the Eagle Ford shale-gas developments. "For the past 40 years, we were dominated by imported oil," says John LaRue, the port's director. "In the last 18 months, that's changed." Thanks to shale, the port is contracting with companies such as Occidental Petroleum for billions in new facilities.
Beyond the Canal
Overseas demand for coal and grain were expected to be the main driver for growth, but drought and dropping coal prices have delayed that, he adds. "Right now, coal costs are too low to ship overseas. But that won't last forever, and the [widened] Panama Canal will make the coal going to Asia more competitive."
The coal issue forced Canadian Pacific to mothball construction of 235 miles of track west of the Powder River Basin, says John Unsworth, CP's structures director. CP is looking at shale-related opportunities in North Dakota and in the Port of Vancouver's plans to siphon Asia business from West Coast ports in the U.S. "But the Chinese economy is slowing down, so that might slow us down," he adds.
But investing in the ability to handle heavy cargoes, including agricultural goods, across the nation is vital no matter what, says Walter Kemmsies, chief economist for Moffatt & Nichol. "We have to invest in export infrastructure and compete for a world market," he says. "Incomes will rise, and tax revenues will grow automatically. That's how critical it is."
The Port of Toledo knows that. In the mid-2000s, it began major capital plans, due to the changing dynamics on the St. Lawrence Seaway. "It no longer is about steel in, grain out," says Joe Cappel, director of cargo development for the Toledo-Lucas County Port Authority. "Now it's about blades and towers for wind industry, natural-gas pipelines, nuclear transformers." Two new mobile cranes and a large materials handler renders Toledo capable of handling any future containerized shipping that will traverse the St. Lawrence Seaway.
"Does every U.S. port need to handle these larger ships, or should we take a more strategic approach to systems, including St. Lawrence, and ask what markets can we best serve?" Cappel says.
The Waterways Council is lobbying for bipartisan support of a capital plan to fund 25 out of 26 inland water projects; the Olmsted Dam so far has taken up all the funding, says President Mike Toohey. "Export grain producers anticipate a great opportunity to expand, and they rely on the inland waterway system."
Moreover, "not every East and Gulf coast port is focused on expanding," says Jeffrey Schechtman, ports and intermodal market leader with Parsons Brinckerhoff. "It's a wait-and-see approach. There may be opportunities that don't entail those huge ships." Adds Scudder Smith, principal consultant with PB Consult, "Smaller ports with shallower depths are still looking at what the overall change in the freight network might look like. For example, transshipments—that is a pattern that may be evolving."
In a study released this year, the National Association of Development Organizations (NADO) noted,"Regions along the coasts and connected inland areas can analyze their infrastructure and economic opportunities … to capitalize on new cargo transportation patterns." It stated that even landlocked regions such as the Appalachians and Kentucky's Purchase region, which sits at the confluence of the Mississippi and Ohio rivers, have conducted planning to determine future infrastructure possibilities.
But the West Coast giants aren't resting. "The West Coast ports aren't going out of business anytime soon," says CH2M Hill's King. "There might be some limited shifts in terms of who feeds the heartland."
"We needed to be at the top of our game, and we're spending more than $1 million per day on infrastructure right now to have the premier facilities in the world," says Tony Gioiello, chief harbor engineer for the Port of Los Angeles (POLA), which handles over 60% of all waterborne imports from Asia."We're spending almost $1 million per day over the next three years on construction, upgrading and maintenance."
The projects include channel and berth deepening, a $100-million rail facility, shallow-water habitats and a staggering amount of electrical and mechanical work. As part of its Clean Air Action plan, POLA, like its neighbor in Long Beach (see p. 34), has been modifying container berths so that ships can plug into shore power. "This was a $150-million infrastructure investment," Gioiello says. "By 2013, we will have completed work on 27 berths. This is the largest wharf electrification of a container terminal in the world." As for channel deepening, a 15-year, $370-million project, including eco-friendly re-use of dredge material, will be completed in 2013.
Peter McGraw, a Port of Seattle spokesman, notes that tenant SSA Marine has cranes that can handle the largest ships coming on line. "In the past several years, we have made a lot of investments in the surrounding road infrastructure, especially the grade separations outside our terminals. But he adds, "We are just as concerned about the Suez Canal. A number of East Coast ports have upped their cargo import game, and shippers continue to look at Canada and Mexico."
Wally Baker, president of Beat the Canal, an alliance of Southern California freight interests, says that, with the coming competition from East Coast ports' investment in more capacity, prices for shippers will drop. "I would be trying the same thing," he says. "We have everything to lose. Infrastructure is so important."
That's why so many eyes are on MAP-21's baby step of a national freight policy. Industry officials say they want to see a policy that includes a repeal of a domestic harbor maintenance tax and bipartisan support of dedicated freight funding.
"A national policy is very much of interest to us, and that includes all modes," says inland waterways advocate Toohey.
Adds Carrie Kissel, an author of the NADO report, "If planning is broadly aligned and public and private stakeholders come together, regions will see benefits from freight investments whether or not it's from the Panama Canal."