Alabama's Gateway to World Commerce
Crucial expansions at Alabama’s state port in Mobile have laid the foundation for existing and future industry growth in the state.
Massive cranes hover over the waterway at the Alabama State Port Authority container terminal, operated by partner APM Terminals.
What do planes, trains and automobiles have in common? They all rely on the port at Mobile to help them move what needs to be moved.
Whether it’s a massive fuselage section for a soon-to-be-built-in-Alabama Airbus jet, or an already-built-in-Alabama-but shipped-from-elsewhere automobile, or even the train to connect inland industry to overseas suppliers and customers, the docks at the outflow of the Mobile River — for centuries Alabama’s connection point to world commerce — are ready to handle it or gearing up to make sure they’re ready when needed.
After a 10-year series of capital improvements — kicked off with an injection of state money that enabled borrowing, attracted private investment and boosted income — the Alabama State Port Authority could have settled back and watched the commerce float on in.
Instead, now readied to handle more containers and more coal than ever before, and enlarged to handle ships that are too big for the present configuration of the Panama Canal but will float right through after the isthmus waterway is widened in a couple of years, the port improved its steel handling capabilities, expanded its container capacity and is preparing to ship out one of the state’s biggest export items — automobiles — and to ship in a crucial new import, aircraft elements.
On the job already is the port’s new steel terminal. Three massive cranes unload steel slabs coming in from ThyssenKrupp’s Brazilian mill and store them till their number comes up. That number is neatly printed on the slab — a bar code that locates and identifies the slab via radio-frequency identification system (RFID). The coded number allows the mills just upriver in Calvert to get exactly the slab they want, the one with just the right metallurgical composition for the project at hand.
Ready for a load, ThyssenKrupp gives its order to the port where crane operators use the RFID to find the right slabs, lift them with electromagnets as if they were Lego blocks and load them onto a barge. Each slab weighs in at about 36 metric tons and each barge carries 70 of the slabs that measure roughly 40 by 8 feet and 10 inches thick.
Now in its third year of operation, the steel terminal handles some 5 million tons a year.
Many a port has a similar set-up, but the mechanics of the barge haul system that grabs an incoming barge and guides it into the optimal position so that three barges can be loaded at once, with barges and loading patterns independent of the others — that system is unique to Mobile.
In fact, it’s the quintessential designed-on-a-cocktail-napkin system, the result of some relaxed brainstorming time for Port CEO James Lyons and the engineer from Shaw GBB. Other ports routinely come to see the award-winning system in operation, says Port Vice President Judith Adams, but the exact mechanics are proprietary information — a trade secret.
Across the river is the port’s container terminal, now in the midst of an expansion and a key element in linking the state’s interest in planes, trains and automobiles.
The container facility is operated by a private partner, APM Terminals, which is funding expansion — more cranes, better paving, lighting, and a rail intermodal facility to ease transport.
Building that rail partnership requires “critical mass,” one of Lyons’ catchwords for port improvements. “We need enough critical mass to fill a train — a double-stack, 5,000-foot train,” says Lyons.
“Bigger ships will help.”
Hence improvements to enable bigger ships to call — a wider turning basin with a deeper channel and berths, new gantry cranes that can span the wider ships, and new bulk ship loaders and unloaders. Port officials hope their quick action to enlarge the port will bring extra trade, since many ports have not yet made the infrastructure improvements necessary for the bigger ships that can traverse the canal in 2015.
Neither improving ship capacity nor bringing in rail can happen independently, says Lyons. You can’t attract rail without big ships and you can’t attract big ships without rail. “You attract steamship lines by having enough stuff” to merit a port call, “well north of 100 boxes,” because each port call increases the cost of the voyage.
The cost of operating a steamship is some $50,000 a day, between the cost of ownership and fuel and such, and each port call adds another $15,000 a day, says Lyons. A voyage from Asia takes 20 or more days. And a shipper probably pays only $2,000 per container for the whole port-to-port trip. So ships need to carry a lot of freight to make it worth their while, and they won’t stop at a port where the volume of business doesn’t cover the cost of the stop, says Lyons.
Better rail and container should help lure more ships and that, in turn, is the key to shipping cars.
While many of the Alabama-produced cars are headed for American buyers, Mercedes has been the state export leader for several years running. But those exports have not shipped through Mobile. “We needed a dedicated car facility,” says Lyons. Such a facility would carry a price tag around $20 million and would require parking for 4,000 to 5,000 vehicles.
“No ship will call for 50 cars,” he says. “The number needs to be up to 1,000.”
Once the volume is here, the big ships will come, he predicts. Roll-on, roll-off ships, dubbed “ro-ro” in the industry, can handle not only cars but also big heavy items like the transformers built up north at Hyundai Heavy Industries or agricultural equipment — “anything that can be rolled on and rolled off.”
Improvements at the container facilities also are a key element in bringing Airbus to Mobile. The final assembly line receives a stream of imported fuselage elements to be crafted into an airplane at nearby Brookley Aeroplex. But while the finished product can fly out, it has to ship in.
Airbus didn’t need anything new at the port, he emphasizes, but needs the port. The company will be bringing in 24-foot by 70-foot fuselage units.
“You can’t put those on a highway,” he says, and train containers are generally 8 feet by 40 feet.
So Airbus needed a place to offload those units very close to their destination. The port has worked with the City of Mobile to create a route for the final delivery. To get a feel for the process, Lyons went to Germany and watched them load similar pieces for China.
The past decade and more has been a constant building process for the port, but that’s ordinary.
“Building ports is a long-term process,” he says.
Working from a $100 million commitment from the state in 2000, the port has completed some $700 million in projects — leveraging the original funding with public-private partnerships, borrowing power and operating revenues. Those funds translated into a container terminal, grain elevator, refrigerator cargo facility, enlarged turning basin — with the current work on intermodal rail, additional warehouses and expanded container capability part of an additional $350 million.
“We are heavily focused on what’s good for the state of Alabama,” Lyons says, connecting the state’s raw materials and products to the rest of the world.
But doing a good job for the existing business and industry of Alabama also brightened the future, he says.
“The fact that we’re here helps serve as a magnet for more,” says Lyons. Having a “vibrant, viable, competitive port is one more check mark on the list of reasons to choose Alabama.”
Nedra Bloom is the copy editor for Business Alabama.