Ports of Virginia and Charleston put up strong numbers to start 2019, but regional Fed warns that slowdown could be approaching.
U.S. Southeast ports are seeing record container volumes to start this year as their earlier expansion projects start paying off. The Port of Virginia reported that its container volumes for January were up 9 percent from a year ago, its highest January growth rate since 2017, reaching 240,111 twenty-foot equivalent units. To the south, the Port of Charleston saw its best January ever with 12.5 percent growth of container volumes, reaching 205,689 teu.
The ports are able to handle more volume thanks to projects they undertook to handle more cargo and relieve the congestion plaguing some of the larger U.S. import gateways. The Port of Virginia credits a $320 million project at the Virginia International Gateway that saw it expand truck gates, berth size, container stack yard and rail operations for the ability to handle more freight.
With the project nearly complete, the Port of Virginia said the expansion brought down average truck turn times from just over 65 minutes at the Gateway to an average of 50 minutes. Virginia Port Authority John F. Reinhart, the CEO and executive director of the Virginia Port Authority said the faster turn times for drivers “is the result of daily progress we’re making on our expansion projects – even as we continue to handle high volumes.”
For the Port of Charleston, it is crediting the investments made in inland ports for the growth in volumes. The SCPA opened Inland Port Dillon last year for taking containers from the Port to inland distribution centers via CSX (Nasdaq: CSX) rail service. Harbor Freight Tools is among the large shippers utilizing Dillon.
Dillon comes after the earlier success the SCPA had with its Inland Port Greer development, which now supports shippers such as Dollar Tree (Nasdaq: DLTR) and BMW. SCPA said Dillon’s January volume of 3,100 rail moves was the highest since its opening while Greer’s 12,000 rail moves were the highest since 2017. “January was an exceptionally strong month for our Port, helping drive container volumes well ahead of our financial plans,” said Jim Newsome, SCPA president and chief executive officer.
The results mirror the last outlook from economists at Federal Reserve Bank of Richmond, which said the Southeast ports were seeing “robust activity” at the start of 2019. While auto exports appear to be softening, import volumes from China continue to rise due to orders being made early to avoid possible tariff hikes.” But those volumes are likely to soften in the coming months, the economists warned. A survey of manufacturers in the Southeast said they were starting to see declines in shipments and new orders due to slowing global demand and seasonality.