Yesterday I talked about a story about Maersk continuing to move services away from Charleston and redistribute them elsewhere. Today, I wanted to briefly touch on the Port of Wilmington. As I mentioned yesterday, Maersk will be moving some of its services to the North Carolina port. What is interesting is that Maersk is not the only shipper to see the value in this location. Earlier in the week I mentioned that International Container Lines would be leaving the Port of Richmond. And where are they going? Yep, to the Port of Wilmington.
With the addition of both of these shipping lines to the Wilmington roster, the port is set to enjoy year over year growth of over 100%. Savannah will no longer be the “fastest growing port on the East Coast”. It is important to keep in mind the base that Wilmington is working from. Over the past 12 months, the port has handled approximately 200,000 TEUs. So, where Savannah would hardly notice a 100,000 TEU increase, it’s a major news story for Wilmington. However, the small river port does have some very good things going for it.
First, it is located along the Cape Fear River basin with a 42ft channel. Second, it is geographically very far east. It’s not quite as far east as Hampton Roads or NY/NJ, but it is farther than Charleston, Savannah or the Florida ports. For the US-Europe trade lanes, this can mean less steaming time and a cost savings. However, the slow river journey can mitigate those gains (see below). Third, the port offers convenient access to the State’s textile and apparel manufacturers. Fourth, the port has a multi-year expansion plan in place and is executing it. They also have new dock equipment that is in place and ready to be utilized. Finally, and this is often overlooked, the port is open on weekends. As part of the agreement with Maersk, the port agreed to maintain Saturday hours. Ships are expensive assets and they need to keep moving. They don’t have the luxury of taking the weekend off. If you, as a port operator, can offer weekend service you are providing a very valuable commodity to shippers.
There are two downsides that I see to the Port of Wilmington. The first is its connection with the hinterlands. While it appears very well located on a map, with 70% of the US population within a one day drive, getting to major interstate arteries is a challenge. Via I-40, it is just about 100 miles to I-95. If you head due west on Hwy 76, it is 80 miles to I-95. That will make it difficult for them to attract major distribution centers that help to bring more business. The second downside that I see is its position as a river port. It is a 26 mile steam from the ocean buoy to the terminal. That is time that is spent at significantly less than full speed and under the control of a harbor/river pilot ($$). As always, time is money and time spent poking up a river is time you could be spending being unloaded, steaming to the next port, etc.
Overall, this is great news for Wilmington. In this economy, any win is a HUGE win. It will be interesting to see if more shippers begin looking at the Port of Wilmington as a viable alternative. I’ll have to keep an eye on them.
