APM Terminals and CMA CGM are building a container terminal that's scheduled to open in the fourth quarter of 2008. The Alabama State Port Authority is finishing work on a $26 million rail terminal for International Shipholding Corp.'s CG Railway, which runs two double-decked rail ferries between Mobile and Coatzalcoalcos, Mexico, carrying railcars full of paper products, chemicals, metals and steel.

And most recently, the port authority committed to building a $115 million cargo terminal to handle slab steel imports that will feed the new $3.7 million rolling mill that Germany's ThyssenKrupp plans to build in Mobile County, about 40 miles north of the port.

The new container terminal won't be a day too soon," James K. Lyons, the port authority's director and chief executive, said in an interview. "We're already seeing a broad base of cargoes coming into our area just with the limited container services we have now." The port authority's existing 20-acre terminal, which consists of one berth at Pier 2, is operating beyond its theoretical capacity of about 75,000 20-foot containers. "We're on pace to do about 114,000 TEUs this year. We've got a good cargo base that continues to broaden as we begin to identify prospects for the new terminal," Lyons said.

When the joint APM- CMA CGM container terminal opens on 135 acres in the port next year, it will have an initial capacity of 350,000 TEUs. It will expand to 800,000 TEUs in Phase 2, when it gains additional land and its yard system is converted from reach-stacker cranes to rubber-tire gantry cranes. It will have 2,000 feet of berth that has already been built, with a water depth of 45 feet. The container yard will be paved this month, and the ship-to-shore cranes are due for arrival in mid-February.

Lyons believes that East and Gulf Coast ports will draw container volumes away from the West Coast as the ports add capacity because "the West Coast is becoming less of a friendly place, with labor discord and talk of additional fees of trucking that will elevate costs, and the fact that the communities where the ports are located really don't want any more container ships."

He said that would help boost Mobile's volumes. "We're getting a lot of carrier interest," Lyons said. "I think they can open the new terminal with four to five vessel calls a week."

The new terminal, in which APM has an 80 percent stake and CMA CGM 20 percent, will not only serve Maersk Line and CMA CGM. "Maersk is certainly a possible customer, but we had long discussions with APMT about our desire that the terminal be a third-party terminal, and they had to convince us through the process that they would be actively and aggressively going after third-party business," Lyons said. "What we wanted out of this terminal was service on as many different trade routes as we could get for our constituency in Alabama and the broader region we serve.

"We've got enough Far East business to support easily two carriers and enough trans-Atlantic and north-south business in the Caribbean to support at least another carrier," he said.

Mobile is picking up a lot of project-cargo volume generated by the construction of many new auto and industrial plants in the region. Lyons said he expects to see more cargo starting in January as construction of a 150,000-ton-a-year spiral pipe plant gets under way.

And Mobile will handle even more project cargo by the end of 2008 when construction of the ThyssenKrupp steel mill begins. The German company plans to build a mill with a capacity of 5 million tons a year by 2010 that will roll steel slabs from Brazil. The material will be imported through a new terminal the port authority plans to build on Pinto Island in Mobile. "Our steel numbers are going to jump," Lyons said.

The plant will produce hot-rolled, cold-rolled and galvanized steel coils for automotive and other uses. ThyssenKrupp will also build an adjacent, 1 million-ton-a-year stainless steel plant with the provision for construction of a second plant with the same capacity. "The footprint of the plant will be around 1,700 acres, which makes it one of the largest industrial plants to be built in the U.S. in quite a while," Lyons said.

The plant will produce carbon steel for the many new auto plants that have been built in the region. "We're seeing a lot of growth in that area. If you look at all the cars produced by plants in our state and surrounding states, they number at least a couple of million a year," Lyons said.

More plants are being built. Kia is building a new auto plant on the Alabama-Georgia line that Lyons said would have significant volumes. Nissan's new Mississippi plant is in operation north of Jackson. Toyota is building a new plant in northeast Mississippi, and Paccar is building a truck engine assembly plant in Columbus, Miss.

Source: Journal of Commerce