The Port of Mobile finished a deepening project allowing it to become the first US Gulf Coast port capable of handling super-post-Panamax container ships. Mobile's deeper harbor could eventually vault it ahead of Houston as the first US call for more Gulf Coast services if it can further develop its inland franchise.
The Alabama Port Authority said last week final tests by the US Army Corps of Engineers and local ship pilots have determined Mobile's ship channel is now at a depth of 50 feet, adding an extra five feet from its previous depth and making Mobile the deepest port on the Gulf Coast.
The tests mark the end of a five-year, $366 million project to boost Mobile's ship capacity, which also includes widening three miles of its shipping channel by 100 feet to allow for two-way ship traffic. The port said a fully loaded bulk coal ship with a depth of just over 48 feet was the first vessel to transit the deeper harbor.
As for container ships, APM Terminals Mobile expects“ocean lines to begin upsizing ships in the near future”as a result of the deepening, according to the statement from the state port authority.
Mobile first, then Houston?
Its previous depth restrictions limited Mobile to handling post-Panamax container ships between 6,000 and 10,000 TEUs. Now, as the first deepwater port on the Gulf Coast, container lines may rethink how they deploy capacity and structure services.
As the region's biggest container market, Houston is still the first port of call for all five Asia services that also call Mobile. But even though Houston is widening its ship channel to handle more two-way traffic, most of its ship channel will remain at 45 feet.
That difference in channel depth translates to about 1,400 TEUs of extra capacity that carriers are foregoing by calling Houston first instead of Mobile, according to a source familiar with ocean carrier operations along the Gulf Coast. A larger ship could actually call Mobile first, lighten its load, then possibly call Houston with a shallower draft, he added.
“Carriers can really maximize on their allocation,”the source said.“Five feet of draft is significant for capacity.”
In addition to bringing in larger ships, Mobile is looking to position itself as the faster alternative from Asia, shaving off up to five days of ocean transit, the source said. Some of the time savings stem from Houston's episodic issues such as heavy fog or channel silting that periodically limit transits and ship capacity.
Houston is currently“managing draft restrictions at both Bayport and Barbours Cut container terminals”due to shoaling, the port said in a statement, with dredging expected to begin Tuesday.
Being a less busy port overall than Houston, which also handles major tanker and bulker traffic, also means Mobile can more quickly turn over container ships with fewer delays, the source said.
Houston and Mobile are on par with the relative number of container ships facing delays, according to data from Sea-Web, a sister company of the Journal of Commerce within S&P Global. Over the last 12 months, 24% of the container ships that call Houston have sat at anchorage, Sea-web data shows, compared with about 19% of similar calls to Mobile.
However, container ships spend 32 hours on average waiting at Houston's anchorage compared with about 13 hours at Mobile’s. Along with widening its ship channel for faster transits, Houston is adding berth capacity to handle more ships.
Mediterranean Shipping Co. has been the most frequent caller to Mobile, according to Sea-web. MSC-operated ships have made 83 of the 298 ship calls to Mobile over the past 12 months, bringing in an average vessel size of about 6,500 TEUs.
MSC and Zim Shipping Services, which made 17 calls over the same time, jointly operate one of Mobile's Asia services, while MSC also operates a standalone trans-Atlantic and Indian service.
One of those Asia services, the Lone Star-Zim Gulf Coast (ZGC) had previously been using Mobile as a first call, until it switched to Houston because of greater cargo demand there. The service has since been folded into another MSC-Zim Gulf Coast service.
CMA CGM is the second most frequent caller, with some 46 to Mobile since last October, Sea-web data shows. But as part of the Ocean Alliance, whose other members made 48 calls to Mobile, CMA CGM brings in larger capacity ships of about 9,000 TEUs through its Pacific Express 3 service.
Ocean Alliance members Cosco Shipping and Orient Overseas Container Line bring in 8,000-TEU ships on average as part of their expansion of the Gulf of Mexico Express Service.
More Midwest reach for Mobile
The addition of more ship capacity, though, will largely depend on how much Mobile's intermodal reach will grow. About 20% of the port's cargo volume is going inland, putting it more into competition with Savannah and Los Angeles for intermodal access.
CSX Transportation broke ground earlier this year on the Montgomery Inland port developed in conjunction with the state port authority. The site, which will serve the state's carmakers and other logistics hubs, is expected to be completed in the first quarter of 2027.
CSX is also reportedly looking at developing a site in Decatur, close to Huntsville, a major destination for intermodal cargo from Savannah. In that same vein, CSX is looking at developing intermodal access in Louisville and Cincinnati through Mobile, according to a source familiar with the railroad's plans.
In turn, Canadian National Railway, which offers service into Chicago, is looking at developing Memphis as a market for intermodal cargo from Mobile, according to carrier sources in the region.
Canadian Pacific Kansas City (CPKC) is considering an eastbound intermodal service from Mobile to Dallas, putting the port more into competition with Houston for that market, according to a source familiar with their plans.
While it did not comment on specific origin and destination pairs, CPKC and CSX entered a cooperative agreement in July on growing a joint service that connects the US Southeast and Mexico through Texas.
As for terminal capacity, APM Mobile is in the midst of its fourth expansion that will bring it to 1.1 million-TEU capacity by 2027. The state port authority is said to have recently approved a land acquisition that will eventually allow APM Mobile to add a third berth, although the timeline for the development remains unclear.