14


Issue 9 2018 - FBJNA


///RO-RO Jacksonville is one of the nation’s


busiest ports for total vehicle handling. (JAXPORT photo.)


Ro/Ro vehicle trade shiſts into neutral gear


By Karen E. Thuermer


A report released last year by


PriceWaterhouseCoopers


identified the global auto industry as being more challenged than most people realize. “On the surface,


performance is strong. Worldwide sales reached a record 88 million autos in 2016, up 4.8% from a year earlier, and profit margins for suppliers and auto makers (OEMs) are at a 10-year high,” the report states. “Nonetheless, viewed through the lens of two critical performance indicators, the industry is in serious trouble.” This could be an ominous


warning for American seaports. Yes, the industry is complex. But the trade is also highly competitive among seaports that vie to attract or


retain this important


commodity. Not only are distribution models and sourcing changing, shipping lines are exploiting economies of scale, over capacity is driving down rates; and cost cutting measures are critical.


For seaports, roll-on/roll-off (ro/ro) offers diversity; creates good jobs; and is critical for the economic welfare of the seaports and the regions they serve.


OEM indicators


In the US, OEMs remain concentrated in strategic locations such as Michigan, Indiana, Ohio, Kentucky, and the US Southeast. Looking at site selection indicators, Mexico is expected to remain a major manufacturing force given that it is the fastest growing


market in North


America. Mexico has raised its global profile in recent years as a result of large investments made there by Asian and European


manufacturers,


mainly Japanese and German, in the country’s South-Central region. This area encompasses the states of Aguascalientes, Guanajuato, Queretaro, Puebla and San Luis Potosi. As a result of the influx of large amounts of capital


into the Mexican automotive sector, the country has recently ascended to the ninth position in terms of volume of passenger vehicle production in the world and is the sixth largest vehicle exporter, reports Tecma. Recently, Mexico overtook Canada as North America’s number two auto producer, and currently produces one of every six vehicles


in North America.


According to Tecma, this ratio will increase by one in four by the year 2020. While vehicle exports out of Mexico have been strong,


Terminal operators handle up to four vehicles per driver/hour. (JAXPORT photo.)


that nation’s domestic market is expected to see a strong rate of growth as rising disposable incomes in Mexico allow for more people to purchase Mexican made cars. Canada


is record the expected slowest to overall


growth until 2020. Meanwhile, the fact the


Trump Administration has increased tariffs on imported steel and aluminum, has engaged in a trade war with China, and renegotiated the terms of NAFTA – now dubbed USMCA, leads only to speculation how these moves might transfer to the US auto trade. Seaport executives make few comments on the later


and only emphasize their advantages for vehicles moving through their terminals. Given these scenarios, here’s FBJNA’s most recent roundup of where this trade stands at various seaports in the United States.


Port of Baltimore


The Port of Baltimore continues to see strong growth in the handling of automobiles. Maryland Port Administration (MPA) spokesman Richard Scher reports that through August, the numbers at Baltimore state-owned marine terminals showed that the port handled 418,029 autos, up 8.5% from last year. Officials state that the


port handled 65,281 cars and light trucks


in August, the


highest monthly amount on record ever. The August mark surpasses the previous record set earlier this year in May of 61,058 cars and light trucks. “The Port of Baltimore


continues to be a leading economic engine for our state, supporting thousands of hardworking men and women who ensure the safe handling of record-breaking amounts of cargo each year,” said Governor Larry Hogan. “The port’s continued success further demonstrates that Maryland, and the Port, are open for business.” MPA officials are optimistic


for Baltimore’s future in the ro- ro trade. Regarding President Trump’s new trade policies regarding China and the impact the USMCA might have on ro- ro shipments in general, Scher states: “We do not anticipate a big impact on our autos/light trucks business. “ In September, Governor


Hogan and the Maryland Board of Public Works approved a contract that will complete the fill in of a wet basin at the port’s Fairfield Marine Terminal. This will create more land in a prime location adjacent to the piers to help handle the port’s surging auto cargo. Scher points out that


Baltimore’s markets for autos imports and exports are North Europe, the Med, Mideast, South America, Oceania, Far East, China, Korea, and Mexico. “That’s just about everywhere,” he states. “We also export pov’s to West Africa and elsewhere.” He


adds:


“The Port of


Baltimore handles more cars than any other US port. We have nearly every brand coming here. We also welcome all ocean carriers as well.” The biggest advantage to the


Port of Baltimore is the fact it’s the closest port to the Midwest markets. “It costs less to get the cars to the Midwest and less to move them here if it is for export,” Scher says. “We also are located right off Interstate 95,


15 >>


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24