The Floridian port is ready to launch a second round of investment – this time with the goal of increasing capacity and service levels within the container yard.
After recently completing nearly $1.3 billion in infrastructure upgrades aimed at improving vessel, truck and rail access to its container facility with the help of public and private partners, PortMiami is ready to launch a second round of investment – this time with the goal of increasing capacity and service levels within the container yard.
A switch to rubber-tired gantry cranes for denser stacking of containers, a modernized gate system for trucks, and a nearby “inland port” to serve as a relief valve are all on the near-term drawing board, Deputy Director Kevin Lynskey said in a phone interview. The port authority also plans to buy more giant ship-to-shore cranes to work bigger vessels, he added.
The state of Florida is assisting PortMiami with some $33 million in grants awarded over the past couple of years. The grants come directly from the Florida Department of Transportation or through the Florida Seaport Transportation Economic Development Council, which determines which port projects around the state get funded from an annual pool of $25 million.
PortMiami’s container volumes grew 2 percent to a record 1.03 million TEUs for the fiscal year ending Sept. 30, 2016. On a calendar-year basis, container volumes for the first three quarters inched up 1.4 percent to 781,180 TEUs compared to the same period in 2015. The meager growth is nonetheless positive, both given the current weakness in global trade that has impacted ports and because it shows Miami is holding onto freight from a 2015 bounce-back that followed several years of volume declines.
PortMiami is no doubt benefitting from the June opening of the expanded Panama Canal, which enables much larger vessels to transit from Asia and the west coast of South America to the U.S. East Coast. The South Florida port is already receiving ocean services that include vessels with capacities of more than 8,000 TEUs. Also contributing to the recent growth is the opening of trade in certain fruits from South America following the U.S. Department of Agriculture’s approval of the use of cold-treatment for pests. This allows for direct shipment to Florida, rather than routing the produce through northern ports. A rise in Latin American and Caribbean trade, as well as U.S. exports, is also driving higher container traffic.
In the summer of 2015, the U.S. Army Corps of Engineers finished a huge dredging project to deepen PortMiami’s harbor to 50 feet, the depth required to handle fully loaded super post-Panamax and neo-Panamax vessels. Miami is now one of only three ports on the East Coast with a 50-foot draft served by multiple berths – the other two being Norfolk and Baltimore.
A year earlier, state and local officials opened a tunnel connecting the port directly to the interstate highway system, so drayage trucks, automobiles with cruise passengers and other vehicles can bypass crowded downtown streets. The Florida East Coast Railway also built an on-dock rail facility for intermodal moves, opening new business opportunities to Central Florida, the Southeast and beyond via interchanges with Class I railroads in Jacksonville.
PortMiami has a constrained footprint of about 250 acres, sitting on a man-made island just off shore. The tight quarters put a premium on efficiency as volumes increase, and port officials say new technology, equipment and terminal layout are necessary to improve turn times and customer service for shippers.
Earlier this year, port officials decided to move ahead with a system of rubber-tired gantry cranes to replace the current top-pick operation used to stack boxes and transfer them to trucks. RTGs have the advantage of being able to straddle multiple lanes of containers and reach higher, allowing containers to be grouped in bigger piles and thereby conserving space in the container yard. Some ports with the appropriate layout have gone to rail-mounted gantry cranes to achieve even greater density.
The choice of cargo handling equipment was based on interviews with shipping lines and a study of traffic patterns that identified RTGs as the system best suited for dealing with the growing challenge of cargo surges, or “peaking,” associated with big vessels, Lynskey said. In recent years, Panamax vessels that could fit through the original Panama Canal offloaded about 750 to 1,000 containers at PortMiami, but the larger vessels are beginning to deliver between 1,500 to 2,000 boxes per visit as carriers move toward more consolidated port rotations. And this new dynamic is placing more pressure on terminals across the country, not just in Miami.
The RTGs will be used in the terminals operated by the South Florida Container Terminal (SCFT), a joint venture between ocean carrier CMA CGM and APM Terminals, and the Port of Miami Terminal Operating Co. (POMTOC). Vessel and container efficiency would be further increased if the terminals were merged into one large operation, but whether the private operators decide to participate in some sort of shared facility remains to be seen. Nonetheless, the layout will be designed so that the RTGs can operate as one contiguous system if the two yards wish to merge the physical real estate, Lynskey said.
Officials are still developing a cost estimate for the project, which will be influenced by the amount of infrastructure changes that have to be made. The plan is to convert the terminal in stages, with the first phase of 10 acres to be ready in 2018, the deputy director said. Following the first phase, the port will likely convert parcels five acres at a time. Eventually, the port plans to use hybrid-electric RTGs instead of diesel machines.
“We’re pretty lucky in that a bright port planner a quarter century ago put all the light poles in the proper position for RTG systems. So it looks like we won’t have to redo a lot of infrastructure,” Lynskey said. Money will have to be spent, however, to install high density running pads – reinforced concrete that can support the weight of the heavy gantry systems better than asphalt pavement – as well as underground running bars connected to the electric grid.
Lynskey said port managers also plan to build a new automated gate system for SCFT that could also accommodate POMTOC if the two yards wish to merge their gate operations. The third terminal, operated by regional carrier Seaboard Marine, is non-union and likely to continue with its own separate gate, he explained.
The gate system is estimated to cost between $12 million and $14 million, but that figure could be significantly reduced if engineers are able to reuse some existing infrastructure, Lynskey said. The automated gate system will include the latest technologies, like optical character recognition to identify container numbers, radio frequency identification to identify tractors, and camera systems for making any damage assessments. The existing gates were built by the terminal operators, and the software was never fully integrated with the port’s terminal operating system. As a condition for having the port authority co-design the gate, terminals will now be expected to utilize its full capabilities, Lynskey added.
“The port is committed to servicing the truckers much more efficiently,” he said.
PortMiami also plans to order three or four super post-Panamax cranes in addition to the six already on the wharf at a cost of about $33 million.
Meanwhile, port officials are working with the Florida Department of Transportation, the town of Medley and others on plans to develop a depot for empty containers and an overnight parking lot for shuttle trucks on a large piece of property located about a dozen miles to the west on a former landfill. The site, in the heart of the region’s primary warehouse district, would serve as an extension of the port.
About 25 percent of the container moves in and out of PortMiami are associated with empty containers, and at least half of them are double moves that are shuttled to warehouses, returned to the port empty, and then picked up again when a customer needs a box to fill with exports, Lynskey explained.
Cruise ships at berth in PortMiami’s Main Channel.
Having an “inland port” would free up space at the marine terminals and enable logistics companies to make quick truck trips to drop or pick up empties. In 10 years, the vision is for the facility to also be used to store inbound containers that are quickly shuttled off the docks during peak periods.
Lynskey said about 120 acres on the site are relatively flat and could be brought into service rather quickly. Another 100 acres are available on plateaus that would need further development.
Engineering studies are currently underway, and the port authority plans to submit an application to the U.S. Department of Transportation for a FASTLane discretionary freight grant, he said. The freight grant program held its first funding round in 2015 and PortMiami’s application was rejected, along with many others.
Preliminary cost estimates for a full-scale inland port exceed $200 million, with the state, Miami-Dade County and the port all contributing money.
Lynskey said there is no concrete timetable for launching the project, but even if PortMiami is unsuccessful in the upcoming FASTLane round, “we think we can bring 30 acres online 18 months from now as an empty depot.” Most of the work would involve adding pavement for the empty containers.
The Florida East Coast Railway is very supportive of the inland depot because any steps that increase capacity on port property will help the intermodal rail operations there, Robert Ledoux, the railroad’s senior vice president, told American Shipper.
The FECR would be a potential option for hauling the empties to the depot since it already runs trains to its yard in nearby Hialeah. The railroad would have to run a short piece of track to connect its yard to the inland depot, but it would not be a major project, according to Ledoux. He speculated that trucks would do the initial transport until the railroad was able to obtain the necessary permits and build the extension.
Other locations are also being considered in case the Medley site does not work out, Lynskey said.
Inland ports have become fashionable in the Southeast during the past five years, but they are usually much further inland and designed to handle full import, export and empty containers. The South Carolina Ports Authority, for example, operates a facility in western South Carolina and recently announced plans for a second rail-served facility that essentially brings the Port of Charleston closer to shippers. The Georgia Ports Authority also utilizes two inland ports and has plans for a third facility. Virginia pioneered the concept with its inland port in Winchester more than two decades ago. And ports in Southern California, in an effort to deal with cargo peaks, have also opened off-dock depots where containers can be quickly moved by short-haul truckers for pick-up by other motor carriers that will deliver specific containers to customers further away.