Port as State Economic Plan
The capital plan of the Alabama State Port is an economic game plan — accommodating new industries like Airbus and ThyssenKrupp and anticipating emerging enterprises like roll-on/roll-off automotive service through an expanded Panama Canal.
The $600 million Airbus final assembly line in Mobile will move its first fuselage units through the Alabama State Port in the spring of 2015.
Each unit can be as large as 24 by 70 feet, which will later be constructed into an airplane.
“The only way to get those pieces here is to bring them in through the Port,” says Jimmy Lyons, director and CEO of the Alabama State Port Authority. “We worked closely with Airbus and the city to make sure we could safely and efficiently get those pieces in the Port and to the Airbus complex.”
The company’s first complete airplane delivery is scheduled for 2016, to JetBlue.
Lyons is confident that, while Airbus’ movement through the Port will start off slow, it will ramp up significantly in 2015.
“The company has very openly said that, while starting, they may only be doing one or two shipments a month, they do plan on building that to as many as eight a month,” Lyons says.
When the shipments begin, Airbus will join the hundreds of other companies already served by the Port Authority, including those in steel, automotive, agribusiness and other Alabama industries.
According to Lyons, the port generates more than 127,500 direct and indirect jobs for workers in Mobile and throughout the state and has a total economic value of more than $18.5 billion.
“We serve companies on a national scale, although the higher percentage of what we do supports Alabama companies,” Lyons says. “That’s our primary mission.”
Airbus will make primary use out of existing upgrades to the container facilities at the port, but major investments have been made in dockside facilities specifically for other Alabama companies as well, Lyons says.
“We work closely with local and state economic development components to address any transportation needs companies or potential companies coming to Alabama may need from our port,” Lyons says.
On more than 4,000 acres of land near Mobile Bay, the port regularly imports and exports heavy lift and oversized cargo, containers, coal, iron, steel, lumber, plywood, wood pulp, roll and cut paper and chemicals. It also handles aluminum, copper, fence posts, veneers and cement imports, and OSB laminate, flooring, frozen poultry and soybean exports.
In the last 15 years, revenue at the port has gone up from $60 million to approximately $160 million, and Lyons expects that trend to continue.
“The business of the port is ongoing and long term,” Lyons says. “We are very deliberate with our investments and generally embark on projects and improvements that help our existing clients or position us well for the future.”
The port has invested more than $700 million in upgrades since the year 2000. Those funds have translated into the completion of its container facility, grain elevator and refrigeration warehouse, upgrades to the steel and coal terminals and expansion of the turning basin that allows bigger vessels to call at the Port of Mobile, Lyons says.
Currently, the Alabama State Port Authority is working on an intermodal container transfer facility, which focuses on the development of additional intermodal rail lines to support import-export and domestic containerized cargo shipments, Lyons says. The project is under way and should be complete by the end of 2015. Phase II of the container terminal project, designed to expand the marine terminal to meet containerized cargo growth, also is under way.
APM Terminals operates the container facility as a private partner and is funding the expansion, which will include more cranes, better paving and lighting, in addition to the upgraded rail facility.
Many of the projects at the port have been completed or started with the help of public/private partnerships. “It’s a model that works for us,” Lyons says. “We’ve done several smaller-scale projects in that way, including our grain elevator and our freezer facility. We’ve got a good track record of working that way.”
According to Lyons, the port was instrumental in ThyssenKrupp moving its billion dollar steel operations to Alabama. The Port invested in the construction of a $110 million steel terminal. While ThyssenKrupp sold its Calvert facilities, the port continues to serve the steel industry in Alabama and continues to use the state-of-the-art RFID system to move steel slabs up the river for use.
In fact, the port has embarked on an additional $36 million steel coil handling warehouse and terminal to support the state’s steel and auto industries. This expansion should be operational by the end of this year, Lyons says.
The port director is confident that, similar to past projects, existing construction projects will match volume projections down the road — particularly as the expansion of the Panama Canal is completed to allow more supervessels into the region.
“We think we will see an even greater increase in larger ships calling in Mobile, which will allow even more ways for us to serve Alabama companies,” Lyons says.
The Panama Canal expansion was originally scheduled to be complete in October of 2014, but the $5.25 billion project has been plagued by setbacks. The project is now scheduled for completion sometime in late 2015 or early 2016. The project will double the capacity of the Panama Canal by creating two new locks and widening existing channels to accommodate more and larger ships.
“One of the large ships that will be able to navigate the Panama Canal already calls this port now,” Lyons says. “It’s the same size ship, and started calling here from Asia. We expect others will as well.”
The shipping industry will benefit directly from the expansion project as global consumers and companies can benefit from the greater capacity and efficiency of the expanded canal.
Alabama’s automotive industry could benefit from larger ships at the port, says Lyons. Mercedes has been the state export leader for several years, but a dedicated “roll-on/roll-off” terminal is needed to
support that industry further.
In 2012, the port, along with private sector partners, put in place a long-range capital plan to construct a dedicated facility that would allow vehicles of all kinds to be driven on and off large ships. Lyons expects preliminary engineering plans to begin within the next two years.
“The facility will be a dedicated automotive terminal that will essentially look like an interior parking garage, which will support imports and exports of finished automobiles and other rolling vehicles,” he says.
Lyons estimates the cost for Phase I of the project at $54 million.
The Alabama State Port Authority was proactive and deliberate in its preparation for the expanded capacity offered by the Panama Canal expansion, Lyons says.
“Better facilities including expanded infrastructure for bigger ships and better facility services should help lure more ships and larger ships to call in Mobile,” Lyons says. “Which in turn allows Alabama companies to do more business in the port.”
Alysha Schertz is a freelance writer for Business Alabama. She lives in Mobile.