Talking Business Series Installment #65
Bigger ships are presenting bigger business opportunities at Boston Harbor
A new key report gives our nation's infrastructure a D+. What does that mean for our ports and harbors?
By Doug Bailey
In this fourth installment of our series on local infrastructure, on the heels of a new report from the American Society of Civil Engineers that gave the nations infrastructure a D+, Boston Harbor Director Lisa Wieland shares where local commercial harbors fit in the big picture of international shipping - and how Boston is capitalizing on it.
Infrastructure improvement means different things to different people. The highway commissioner thinks of smooth roads and sturdy bridges. The business commuter dreams of modern railway systems and comfortable buses. The frequent flyer conjures images of sparkling terminals, swift-moving lines, planes that leave on time, and ample parking.
Then there’s Lisa Wieland, who, when the topic of infrastructure comes up, talks about harbor dredging, nine-foot tidal swings, dedicated freight corridors, and 300-feet-tall ship-to-shore cranes.
Wieland is Port Director for the Massachusetts Port Authority, a vital yet perhaps unrecognized cog in the region’s economic engine. Ships carrying tons—nearly 20 million tons last year—of everything from liquified natural gas and highway salt to expensive wines and Christmas Tree Shop chachka, come into Boston Harbor everyday to the Conley Container Terminal or other offloading sites, helping generate $4.6 billion in economic activity annually. If the 7,000 workers around the port all reported to the same boss, the Port of Boston would be the City of Boston’s sixth-largest employer. More than 1,600 regional companies depend on Boston’s port to connect them to the global economy and it offers New England’s only full-service container terminal.
“We have a thriving, growing port that businesses need and many people are employed by,” says Wieland.
Yet as commercial harbors go, Boston is a tiny blip in a big ocean. Ranking somewhere in the mid-30s on a list of the 100 largest ports in the country, Boston barely does half the business the ports of Baltimore and Port Arthur, Texas, do in terms of annual cargo volume, to say nothing of the giant ports of Louisiana, Houston, and New York/New Jersey that collectively loaded and unloaded more than 560 million tons of cargo last year.
“We’re not on the scale of New York, New Jersey, and even Long Beach,” Wieland said. “But many of the investments we have to make follow the investments that those larger ports are making. So in order for us to stay competitive and just retain the business we have, we must have the infrastructure that keeps up with New York/New Jersey.”
With multiple ports dotting the east coast, cargo and container ships could easily go elsewhere if access was slowed or turnaround times grew.
“We're fortunate that our harbor is situated the way it is, but we’re pretty much maxed out,” she said.
The Port of Boston has some unique characteristics that keep it competitive but also some one-of-a-kind obstacles that present unusual challenges.
Eight months ago, nine-year-old Margarita Rivas Silvera reached into a metal box at the headquarters of the Panama Canal and pulled out a ticket with the name of the first giant container ship that would travel through the canal’s newly expanded locks.
The $5 billion lock project to make the canal much longer, wider, and deeper than when originally built in 1917 now allows for the mega-vessels, called New Panamax ships, to safely navigate Panama’s system of locks. The new ships hold three times as many containers—13,000—as ones that were allowed through before and drastically reduce the number of trips and ships commercial maritime companies need to transport their cargo. Almost immediately, shipping companies, most notably those based in Asia, began using the new behemoths.
Thankfully, Boston is just one of 17 U.S. ports that can accommodate the new vessels, with one notable quirk: They can come and go only at high tide.
“Starting last July, one month after Panama opened the new locks, we had ships that were 40 to 60 percent larger than we had ever seen,” Wieland said. “We were fortunate that we could accommodate them, but they have to wait for high tide to come in and then they have to wait for high tide again to go out. So that’s quite challenging and it can slow them down.”
That’s why it’s critical, Wieland said, that $850 million in infrastructure improvements be completed. . Beginning next month, is the first phase of the $350 million Boston Harbor dredging project keep the harbor open more often to big cargo ships, particularly those transporting fuels, like LNG, heating oil, propane, diesel, and salt.
“That will restore the inner harbor to its authorized depth, really removing the speed bumps that limit usage at the moment,” Wieland said.
Phase two of the project to deepen and widen the harbor so the big ships can ignore the tidal limits may begin next year.
On the land side, Wieland says the terminal needs new, larger cranes, a new deeper berth and wants to complete a dedicated freight corridor around the Conley Terminal so trucks going in and out won’t have to rely on the public streets for access, a move that will ease congestion and reduce pollution.
“The Army Corps of Engineers estimated that once the dredging and berth are complete and we can get more of the larger ships in here, it will reduce the number of truck miles by 20 million annually,” Wieland said.
Boston Harbor’s infrastructure problems are not unique. Ports around the country are confronted with critical trends that will impact the performance of marine links in our transportation system, according the the U.S. Dept. of Transportation.
Moreover, there is a need to keep and expand ports like Boston in order to avoid congestion and disruption at the country’s major ports. Just three ports in the U.S.—Los Angeles, Long Beach, and New York/New Jersey—handle nearly 50 percent of all foreign containerized trade entering and exiting the country. The top 10 ports account for 85 percent of the trade. This concentration, the DOT says, presents a vulnerability to delays from natural disasters or security incidents. At the same time, container ships will continue to expand their capacity, potentially leading to increases in containerized freight movement. If not adequately accommodated and planned for, this increase could also lead to delayed shipments, congestion at intermodal transfer points, increased transportation costs, intensifying pollution, and other negative consequences.
“Our ports, rivers, waterways, and coastal routes remain a critical piece of our intricate transportation network, and continued investment is essential to keep up with increased globalization and technology advancements,” the DOT said in a draft report “Beyond Traffic,” released earlier this year. Among other things called for are a nationwide strategy to improve capacity at all U.S. ports to accommodate larger container ships and investing in more infrastructure to reduce congestion and environmental impacts from trucks on U.S. roadways.
With the Trump administration making infrastructure improvements a stated priority, ports like Boston are optimistic that federal and state money, and even private investment, can continue to come in to keep modernization and improvement projects on the table. They are especially buoyed by the new Secretary of Transportation Elaine Chao, who hails from a maritime background.
Wieland is gratified by the recognition the Port of Boston has received, winning the second biggest U.S. DOT FASTLANE grant awarded to a U.S. port. The Journal of Commerce awarded it as the most improved port in the U.S. and cargo volumes and productivity have skyrocketed in the last two years. Trucks can get in and out of Conley in about 32 minutes compared to hours at other U.S. ports.
“People are recognizing that you can’t always dump all this cargo in New York, New Jersey, LA, or Long Beach and expect it to get it to where it needs to be efficiently and effectively,” she said. “That’s why it’s critically important to get these infrastructure projects completed.“