Officials at Jacksonville, Mobile, Virginia ports eye intermodal growth in 2023, but expect challenges
12/8/2022
By Grace Renderman, Associate Editor
As 2023 approaches, so, too, do hopes that the supply chain will work out its kinks and return to some semblance of normalcy.
While it’s uncertain when or if the global economy will return to its pre-pandemic self anytime soon, there are signs that U.S. export and import volumes will continue to grow, though not quite at the heightened rate they did during COVID, several port leaders from across the country believe. Some of the nation’s ports are positioning themselves for slower — but still substantial — container volume growth. To accommodate that growth, these ports will need to continue expanding capacity, and making technology and infrastructure improvements, their leaders say.
For example, officials at the Jacksonville Port Authority (Jaxport) are anticipating cargo gains in 2023. Several rail-related infrastructure projects are on the books that will enhance intermodal capabilities to “maximize rail” at multiple terminals, says Alberto Cabrera, the port’s director of cruise and cargo development.
“We’ve seen significant growth in this area in the last two years and it’s something we’d like to continue growing,” he says. “It’s drawn more attention [from] our senior leadership team, and they’re supporting whatever we can do to grow it.”
The Port of Virginia’s capacity expansion plans include a semi automation-focused renovation campaign at the north side of Norfolk International Terminals. Virginia Port Authority One of those projects involves increasing space at the Talleyrand Intermodal Container Transfer Facility (ICTF) and yard, which offers on-dock rail service and direct connections to CSX, Norfolk Southern Railway and the port-owned Jacksonville Port Terminal Railroad. Terminal tenant Crowley Maritime Corp., which provides logistics services, has also invested in new container handling equipment to help load and unload containers from rail cars, Cabrera says.
The catch? While the port is “always optimistic” about boosting cargo volumes, the state of the global supply chain and economy have knocked down Jaxport’s ability to project specific growth rates multiple years into the future, Cabrera says. Before COVID, Jaxport officials consistently projected cargo volumes three to five years out, but now, they’re barely able to project more than a year in advance due to all the uncertainty.
“It's not as steady a flow, where it’s manageable. Just seems like one day, volumes will shoot up, and the next two days, there’s nothing moving,” he says. “It’s just a matter of the pipeline and how it’s been interrupted.”
And since the port’s projections are based on its own customers’ data, it shows that shippers and other logistics companies are just as hesitant to predict too far into the future.
“We have to see how this shakes out,” Cabrera adds.
The ‘Virginia model’
Officials at the Port of Virginia are also waiting for some shaking to occur. As of early December, the port was “not committing to any forecasts” for 2023, says Joe Harris, director of media relations.
“We believe that it won’t look like the growth of the last two years,” he says. “There’s just too many variables at play.”
For now, the port’s biggest priority is to “keep it sticky” — meaning to keep the cargo in Norfolk and not enable customers to move it out of another port.
“It’s a great opportunity to prove the value of the Virginia model,” Harris says. “We’re one of few ports where we own and operate all of our assets … so we can make decisions that benefit [both] the customer and us in short order, and there remains real value in that because it allows us to be nimble.”
The port has already begun to benefit from a general shipping shift that has put the East Coast in the driver’s seat ahead of the traditionally busier West Coast ports, Harris says. While ports like Los Angeles and Long Beach have struggled to process a massive backlog of dwelling containers both on- and off-shore, the East Coast has recently become a more attractive option for shippers, whose deliveries have been severely delayed by supply-chain hiccups in the West.
Meanwhile, the port plans to invest in infrastructure improvements to the tune of $1.4 billion spread across six years. Some of those improvements include renovating the north side of Norfolk International Terminals (NIT) to be semi-automated, mirroring the recently completed renovation of the south side of the terminal, and dredging channels to 55-foot depth. One-third of the port’s cargo is moved by rail through the Central Rail Yard, which cuts in between the north and south sides of NIT.
“What we're focused on is bringing these big capital projects across the finish line so that we’re prepared for the next wave of cargo, whenever it may come,” Harris says.
Boosting port capacity a priority
Meanwhile, the Port of Mobile plans to aggressively pursue more projects to increase container capacity and upgrade intermodal facilities, making intermodal expansion a primary goal. Specific to rail operations, this year, the port boasts intermodal rail growth of 143% compared to 2021, according to port data, with much of that growth attributed to connections to Chicago and other Midwestern markets. One goal is to increase overall port capacity by 50% within the next three years, says John Driscoll, the port’s director and CEO.
“People are using this gateway more and more,” Driscoll says. “We have the deep water, we have the facilities — it's less than three days’ transit time [to Chicago].”
As it is, the port has additional capacity with its existing footprint, and when the new projects come online, it'll “be able to grow that much more,” Driscoll adds.
Projects include the fourth expansion of the port’s 134-acre container facility since it came online in 2008, which will add 32 acres under a $104 million project, bringing total throughput capacity to 1 million 20-foot equivalent units. The expansion is expected to come online by early 2025. There’s also a $366 million federally funded project to deepen the Mobile harbor to 50 feet, which will allow the port to handle the largest of container ships, Driscoll says.
The Port of Mobile also has worked closely with CN to improve intermodal service. Port officials have collaborated with the Class I, ICTF operator APM Terminals and Terminal Railway Alabama State Docks, the port’s terminal switching railroad, to transform Mobile into a deep-water and intermodal destination supported by a robust rail network. Port officials anticipate more than 10% growth in its intermodal business in 2023, Driscoll says.
The port is also working with multiple Class Is — NS, CSX and Kansas City Southern, in particular — to create a connection with a new container facility in Montgomery, about 170 miles north of Mobile. Truck drayage takes about 2.5 hours; Driscoll hopes to move some of those containers from road to rail using an “intermodal gateway” that could later connect to other container facilities, like in Birmingham, where one is currently in the works and planned to be operational by early 2025.
“We’d like to have three viable intermodal facilities within the state to connect with other parts around the country,” he says. “It’s really just the beginning.”
