SAVANNAH, Ga. — U.S. seaports in the Southeast need up to $5 billion to deepen their shipping channels so they can trade with supersized cargo ships expected to arrive soon through an expanded Panama Canal, a federal agency said Thursday in a report to Congress.
Lawmakers asked the U.S. Army Corps of Engineers to examine improvement needs of the nation’s ports as local governments scramble for federal funds to deepen their harbors to make room for a growing fleet of giant commercial ships. The East Coast only has three ports – New York, Baltimore and Norfolk, Va. – with waterways deep enough to accept the fully loaded ships regardless of tides.
The Southeast, forecast for the nation’s heaviest growth in population and trade, remains too shallow from Virginia to south Florida and across the Gulf to Texas.
The need for expanding port capacity “is likely to be most critical along the U.S. Southeast and Gulf coasts,” the report said. That’s because the region has no shipping channels that are at least 50 feet deep, the target depth for the giant ships – mostly from China and other Asian countries – that will begin using the Panama Canal after a major expansion is completed by the end of 2014.
The Corps said those so-called post-Panamax ships make up only 16 percent of the world’s container fleet, but have nearly half its carrying capacity.
“Those numbers are projected to grow significantly over the next 20 years,” Maj. Gen. Michael J. Walsh, the Army Corps’ deputy commanding general for civil works, said in a statement Thursday.
Savannah, Ga., Charleston, S.C., and Miami as well as several ports in the Gulf are already undertaking harbor deepening projects, though none have advanced beyond studies.
Florida port officials hope to have a $150 million deepening of Miami’s port finished by 2014.
In April, the Corps completed a 14-year study on the Port of Savannah – the nation’s fourth busiest container port – which wants $652 million in taxpayer funds to deepen more than 30 miles of river.
The Corps said 17 such projects are being studied overall, and the cost of harbor expansions across the Southeast would likely be $3 billion to $5 billion.
“Strategically, we need to find a bucket of money to fund the projects that need to happen to keep our nation competitive,” said Curtis Foltz, the executive director of the Georgia Ports Authority, which is seeking final permits and funding to start deepening the Savannah harbor next year.
Jim Newsome, the CEO of the South Carolina State Ports Authority, said he was pleased that the Corps “recognizes that the Southeast region’s ports are of special importance in a national planning strategy.”
The deepening projects singled out by the Army Corps represent just a fraction of the money U.S. ports are spending to upgrade their docks, ship-to-shore cranes and other infrastructure. The American Association of Port Authorities released a survey last week showing U.S. ports plan to spend at least $46 billion on improvements in the next five years.
Still, the Corps’ report cautioned that “uncertainty will persist” for several years after the Panama Canal expansion is finished as to how many supersized ships will call on U.S. ports, which ones they’ll frequent and how full their cargo decks will be.
Giant ships sailing through Egypt’s Suez Canal have already begun making trips to the East Coast, where high tides give them enough of a boost to reach ports such as Savannah and Charleston.
The budget crisis has made federal funding for port projects extremely tight, especially since Congress and President Barack Obama for the past two years have sworn off so-called “earmark” spending that was used to fund such projects in the past.
The Army Corps report said current funding levels for port improvements won’t cover all the projects that should be done. If Congress won’t increase the agency’s funding for harbor projects, the report said, then perhaps state governments and private companies such as shipping lines should be required to pay a greater share.
Another alternative would do away with the current cost-sharing system. Ports would include the cost of deepening in the fees they charge shippers and could borrow from a federal infrastructure bank for major projects.
“As long as every port and every federal waterway is treated fairly, then I think anything’s probably on the table,” said Foltz, Georgia’s ports chief. “But we need to find a funding source to make sure our ports remain competitive.”
The report warned that as trade shifts to Southeast ports, making room for bigger ships will carry environmental costs associated with deepening harbors and building more port infrastructure.
“Deepening channels in estuaries can allow saline water to penetrate deeper into freshwater ecosystems where it may damage wetlands and contaminate water supplies,” the report said. “Rising sea level associated with global warming may worsen these effects.”
The report did not make any recommendations on which specific projects should be ranked before others. Environmental groups and other critics have said the federal government should play a larger role in coordinating which ports get deepened to focus on those that would yield the greatest benefits for the least amount of money and environmental damage.