The N.C. State Ports Authority expects to see some direct economic benefits from landing the larger ships visiting ports along the East Coast.
Last month, the authority made history with the largest container ship ever to visit the Port of Wilmington.
The MV Hyundai Hope’s trip to the port May 20 marked a significant step in developing economic opportunities for the region and state, said Paul Cozza, executive director of the N.C. State Ports Authority, also known as N.C. Ports.
“Taking in these larger vessels opens up the possibilities for new trade impacts. Directly, with these ships coming in, we’re going to expect some more volume connected with that, somewhere about 15% to 20% more,” Cozza said, adding that the indirect economic ripple effects from the big ships will be seen in the future as more come in.
Operated by Hyundai Merchant Marine (HMM), the nearly 14,000 TEU (20-foot equivalent unit) vessel is in a partnership with a large shipment group called THE Alliance, which for Wilmington, links the port to others in Asia and South America.
For every additional container service connecting North Carolina to Asia that N.C. Ports can attract, there’s a direct economic impact of $3.7 billion, Cozza said. North Carolina’s Wilmington and Morehead City ports combined contribute about $15.4 billion to the state’s economy every year.
The significant big-ship milestone in the authority’s history, however, comes amid the COVID-19 pandemic and its overall impact on the trade and transportation industry worldwide.
“We’re right now doing much better than ports around us on the container side,” Cozza said. “And what started as a supply-side issue has now turned into a demand issue.”
When COVID-19 cases began to be reported in China around the Lunar New Year in January, the impact of the manufacturing shut down there created a dip in overall shipping, which resulted in the canceled sailings at many U.S. ports this year.
Although manufacturing overall has since returned in China, restarting trade and shipping there, the impact still can be felt in the ports’ schedule.
Since March, N.C. Ports has had on its books a total of 14 scheduled canceled sailings, also called blank sailings, due to COVID-19 trade effects, with some of those cancellations happening through July.
But there is still uncertainty in the overall global market. And the authority has forecasted about an 8% to 9% revenue decrease in the next fiscal year, which starts July 1, Cozza said.
By the end of this fiscal year, however, N.C. Ports still expects to record-setting revenue numbers, he said.
The capability to bring in larger ships also puts N.C. Ports in direct competition with neighboring ports along the East Coast and opens the Port of Wilmington to more markets, Cozza said. More ocean carriers could come to the Port of Wilmington because of its added capabilities.
The pivotal moment in N.C. Ports’ history came following the completion of several projects in its $221 capital improvement plan: the purchase of three new neo-Panamax cranes; a second-phase turning basin expansion; major construction to its docks; and raising the height of power lines that cross over the Cape Fear River.
Each of the projects was geared towards luring 14,000 TEU vessels and growing the port’s capabilities to handle two such vessels at the port simultaneously.
The MV Hyundai Hope docked at the port a little more than one month after N.C. Ports completed the second phase of its turning basin expansion project, the final piece in its plan to get these big ships to the docks.
Still, more is in the capital plan for projects on land, including updating its terminal operating system and improvements to its gates.
“We know that we have an identifiable underserved market here in the Carolinas,” Cozza said.
Shipping companies putting larger vessels in-play offer more efficiencies that can help bring down costs and add service elements at the port, he said.
“All of that will come into play,” Cozza said. “N.C. Ports is very much now on par [with], if not better than, the competition around it. That then will bring additional economic contributions and development.”
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