Since the onset of the pandemic, we’ve all experienced the cargo woes — shortages of toilet paper or hand sanitizer or masks or food; a vast absence of computer chips leaving smart cars with short-term memory loss; images of container ships offshore just waiting.
But — knock wood, a key commodity in South Alabama — it hasn’t been like that at the Port of Mobile.
“Even through the pandemic, we had very little of the vessel delays … of getting cargo in and out,” says John Driscoll, director and CEO of the Alabama State Port Authority. “We were impacted, but not like Southern California and the East Coast.”
While the port has seen its share of blips, “it never came to anything like gridlock here,” says Driscoll, who came to Alabama from the Port of Oakland California in 2020, just in time for the pandemic.
Even at its worst, a year or so ago, problems at the port were “relatively minor compared to what others were experiencing,” he says.
The port took advantage of its ability to handle incremental volumes and actually saw some cargoes shift here from other ports to take advantage of Mobile’s access to destinations like Memphis.
The result — a record-setting year, with 39.7% growth in the container sector over 2021.
“The port’s container intermodal transfer facility posted 112.6% growth in April compared to April 2021 volumes handled,” the port reported in May, “and refrigerated cargo also maintained its double-digit growth, posting a 57.9% gain over April 2021 volumes. This report follows eight-straight months of container volume growth at the Port of Mobile.”
And yes, Driscoll notes, increases are calculated by percentage, but still, “We have been the fastest growing container port in the U.S. for six years.”
The secret is what Driscoll calls “fluidity,” adding, “that comes through partnerships. We’re a landlord.” And the tenants provide services that draw customers.
The terminal services, provided by APM Terminals, a subsidiary of A.P. Moller-Maersk, has done a great job of handling cargo surges, Driscoll says. The firm has invested some $550 million and just finalized a fourth phase — a $72 million project increasing capacity by 50%.
More than enough?
“We’re trying to keep ahead of the curve,” says Driscoll, “because if you don’t…”
Also key to growth is intermodal rail capability. Though the port is served by five Class 1 railroads — as many as any seaport in the U.S. — it lags in intermodal options. That answer — a new intermodal facility in the works in Montgomery in partnership with CSX. “It’s the first volley for us into intermodal,” says Driscoll. Right now, that cargo goes by truck up a sometimes-congested Interstate 65. “This will take some of those containers off I-65 and onto rail,” he says.
“It extends what we have here on the water to Montgomery,” with plans to extend on to Birmingham and beyond.
Intermodal plans allow the port to build more on one of its biggest advantages — of the nation’s seven Class 1 railroads, five touch the Port of Mobile. “But currently only one offers intermodal through this gateway. Their business is booming — up 38% year over year.
“We see that we have a huge capacity to handle interstate intermodal business,” Driscoll says.
Federal funds have been awarded to boost those intermodal capabilities with $58 million earmarked for the Montgomery projects and another $38 tagged for an interterminal bridge connecting the marine terminal, intermodal rail and logistics park plus related work.
All the expansion builds on improvements financed through federal funding enabled by Sen. Richard Shelby’s commitment to the port, Driscoll says. Some $366 million has been dedicated to deepening and widening the channel from the Gulf of Mexico to the port. Phase 1 started last year, near the mouth of Mobile Bay. Phase two ran into difficulties with pipelines, so the project jumped to Phase 3, which is now 87% complete, while Phase 4 is out for bid. Managed by the U.S. Army Corps of Engineers, the project is under budget and ahead of schedule, Driscoll says, and should be complete by the first quarter of 2025.
What difference does a deeper and wider channel make?
Containers, steel and coal are well served by longer and deeper vessels, which cut costs for shippers — and all three cargoes are important in Mobile.
But while coal remains a mainstay, even that is changing, Driscoll says.
For several decades, Mobile exported metallurgical coal to fire steel furnaces abroad and imported thermal coal to power electric plants here. To accommodate that, the port built a two-way coal transport system at McDuffie Island with conveyors that went ship to shore and shore to ship. Now, though, most of the electric plants have converted to natural gas. Yet another project is underway at the port to convert coal handling capabilities from an import/export mix to 100% export. And that will, once again improve the port’s fluidity, Driscoll says.
Despite the changes, he expects a record year for coal.
The main docks, which handle lumber, kraft liner board, wood pulp and such, have strong volumes both inbound and outbound. During the pandemic, outbound lumber shipping dropped as Americans jumped on do-it-yourself projects that had been waiting for the do-ers to have time. As the pandemic wanes, however, export lumber is back to normal, he says, and import has increased.
The port also handles parts for Airbus — another item seeing an increase. And GE is importing wind turbines for western Florida, not the blades but all the rest.
Rail ferry service — ships that allow loaded rail cars to roll on and off — is now served by bigger faster ships. They’re 20% larger and three times faster, says Driscoll, so trade with Veracruz, Mexico, has increased.
And the new roll on/roll off terminal, designed especially for auto makers and finished just last year, is likely to have a customer shortly, Driscoll predicts. Automakers are coming back to normal and their multi-year contracts through other ports are coming for up for renegotiation. And Driscoll hopes that leads to automotive RO/RO business by year’s end. That facility represents yet another port partnership. Terminal Zarate S.A., a Grupo Murchison company headquartered in Buenos Aires, Argentina, and Neltume Ports, headquartered in Santiago, Chile, manage the operations.
And the main docks — “they’re chockablock,” he says. “We need more warehouse space.”
But as the port continues to attract federal funds and the cargo numbers bring good business news, he’s confident the port can continue its good service. “People want to work with us,” he says.
Nedra Bloom is writer/editor for Business Alabama, working from the Mobile office.
This article appeared in the June 2022 issue of Business Alabama.
