coast ports. Ports such as Savannah, Miami, Charleston and others whose depths need to be increased to a level of 50’ have all
been declined federal funds to undertake the dredging needed to
accommodate the larger, fully loaded vessels. With the opening
now just 3 years away, the clock is ticking for financing solutions
to be found.
One possible approach may be the formation of public-private
partnerships, a formula used successfully in international airport
and seaport markets to attract capital investment from the same
sources that traditionally invest in industrial and commercial
real estate. Already, the ports of Baltimore, Norfolk, Charleston,
Jacksonville, Portland and Mobile, have all ether entered into or
have begun to look to some form of “P3” public-private partnership in lieu of taxpayer backed bond financing commonplace in
the previous generation of port investment.
Railroads, such as Warren Buffett’s Burlington Northern Santa
Fe LLC and Union Pacific Corp., which haul goods from West
Coast ports to the rest of the country, are also working overtime
to minimize any decline to their profit margins from the expanded
canal. Some experts believe this could result in lowered pricing to
keep their volumes growing, another benefit the canal expansion
may hold to the supply chain customer. Conversely, other railroads, such as CSX Corp. in Jacksonville, Florida, and Norfolk
Southern Corp., based in Norfolk, Virginia, stand to benefit from
any increase in container traffic via the all-water route to East
Coast ports.
The lines between commercial real estate and port infrastructure are becoming blurred as stakeholders in both camps recognize
the co-dependency which exists between U.S. ports and vertical
real estate development. With capacity issues becoming a critical
topic as volumes steadily increase from the low point of 2008-
9, and the prospects of a spike in traffic from the 2014 opening
of the new Panama Canal, the topic of conversation in maritime
circles has shifted from that of “port capacity” to one of “
through-put” capacity. Through-put speaks to the sweeping of containers
off port terminal in order to ready the docks for the next arriving
vessel. This requires not only port efficiency in terms of personnel and systems, but also to the near-dock and inland real estate
needed to house cargo once arrived in the U.S. Through-put, to
the SIOR, can be interpreted as meaning: real estate. Afterall, all
import and export cargo, at some point in time ends up in a building, somewhere along the line. Recognizing this, we all become
a direct link to the future success of the expanding Panama Canal
and an integral part of the ever growing global supply chain.
