WILMINGTON – Global changes continue to shape Wilmington and its economy.
Governor Pat McCrory announced on Monday the new partnership of the North Carolina State Ports Authority (NCSPA) with Maersk Line and the Mediterranean Shipping Company (MSC), the first and second largest shipping container companies worldwide. The partnership will place the Port of Wilmington on Maersk’s TP10 route (which MSC calls the “Amberjack” route) connecting eastern coastal cities in the United States to major Asian shipping ports.
The city lost its direct shipping route to China and South Korea when the Hanjin Shipping Co. filed for bankruptcy at the end of August, terminating the AW1 shipping line that included Wilmington. About 7 to 8 percent of the N.C. State Port Authority’s revenue (approx. $3 million) came from the South Korean company, meaning the Port may have lost as much as $500,000 in September and October.
The new deal will be able to replace that revenue. Cliff Pyron, senior manager of external affairs at NCSPA, said the new deal provides for “weekly service, very similar to the AW1 service provided by Hanjin.”
The deal capitalizes on both international and local development projects. The new Maersk/MSC route takes advantage of the void left by Hanjin’s collapse. It is also part of an overall increase in shipping through the Panama Canal after the completion of a massive project to expand the Canal’s lock system. The expansion project was completed at the end of June.
Likewise, the Port of Wilmington also recently completed an expansion project, at the end of July, widening the turning basin from 1,200 feet to 1,400 feet. The Port’s expansion will allow it to accommodate the larger ships now traveling through the Panama Canal.
Despite expansions, the Port of Wilmington is still dwarfed by facilities elsewhere; the Port of Savannah, for example, handles over ten times the shipping cargo of Wilmington. However, the Ports Authority is focused less on competing with other ports in terms of sheer volume and more on providing the region with the port it needs.
“Our biggest thing is to really just better serve our base market,” Paul Cozza, NCSPA executive director, told the Journal of Commerce over the summer.
He added that the Ports were committed to “really serving the Carolinas better. There are products coming up from Georgia serving North Carolina [i.e. shipped into Savannah and delivered by truck or rail to the NC]. That’s crazy.”
The NCSPA is confident that developments around the globe and locally in Wilmington are aligning in a positive way, especially for tax revenue and jobs.
Pyron said, “As we continue to see our services, capabilities and capacity increase at North Carolina Ports we expect to have an even greater economic contribution on our State into the years to come.”
A recent study by the Institute for Transportation Research and Education at NC State University estimated the current contribution to the economy at $707 million annually, while also maintaining 76,000 job positions.