Moving Forward to Meet Demand

Remarks by Thomas J. Eagar
CEO, North Carolina State Ports Authority
N.C. World Trade Association – Cape Fear Chapter
November 6, Wrightsville Beach, N.C.

In fiscal 2007, which ended June 30, North Carolina’s Ports continued to build on robust growth that began in 2004, even as the rate of growth was tempered by the slowdown in US housing and other changes in the market. Container volumes recorded a 17-percent compounded annual growth rate, while general cargo posted a more modest 6 percent growth rate.

Among the Ports' achievements in fiscal 2007:

• At the Port of Wilmington, the first phase of the container-terminal expansion was completed. Berth and dockside improvements were finished, and four new 100-foot gauge container cranes arrived in early February and went into service in April. The new cranes, along with nine new container handlers and the 42-foot deep Cape Fear River navigation channel signaled that the Port of Wilmington was ready to accommodate the largest container ships capable of transiting the Panama Canal. The Port's longtime container-shipping partner, the CKYH Alliance, responded by moving larger ships into the rotation of its south China service and adding a second weekly service, linking north China directly with North Carolina over Wilmington.
• At the Port of Morehead City, construction of a new 177,000 square foot warehouse on the northwest corner of the terminal began. A Port-wide rail-improvement project neared completion with new rail installed on the port and in the switchyard, and road crossings upgraded. The Port’s main access road has been repaved. Demolition and clearing of the hurricane-damaged port operations center nearly doubled outside storage capacity.
• Continuing the State's support for ongoing capital projects at the Ports, the North Carolina General Assembly appropriated $7.5 million for berth construction at the Ports of Wilmington and Morehead City. These projects are crucial to maintaining the Ports’ capabilities to continue to provide excellent service to North Carolina’s business community.

Business for the first quarter of this fiscal year is outperforming budget forecasts, with upticks in certain key commodities. Container volumes in Wilmington are growing, 22 percent over last year's performance. At Morehead City, rubber volumes are up 25 percent, reflecting a sustained rebound from the effects of last year’s strike at Goodyear. Wilmington has picked up new export business from local industries, Invista and Elementis. A new forest products customer is on the horizon for Morehead City.

Progress is being made in short-term expansion projects. A new terminal operating system is up and running in Wilmington’s container yard to facilitate a high-velocity operation and increase container throughput capacity.

Morehead City’s new warehouse is open for business, with fencing lumber moving in even as the Ports Authority Board of Directors cut the ribbon to officially open the facility. Designed to the demanding specifications of the paper, lumber and steel industries, the warehouse greatly enhances the Port’s service to general cargo markets.

Longer term expansion projects also moved forward such as the port development on Radio Island and the new N.C. International Port in Brunswick County. With completion of the initial permitting and design for the Radio Island terminal in Morehead City, the Authority is evaluating proposals from potential private-sector partners. A pro forma business plan for the proposed N.C. International Port, on the west bank of the Cape Fear River in Brunswick County, is being developed. And the Authority is working actively with the state's Congressional delegation to obtain funding for the US Army Corps of Engineers’ Reconnaissance Study – the first step in identifying national interests and support for the new Port. The Authority also has engaged in discussions with potential private-sector partners for the International Port, and with the N.C. Department of Transportation and the U.S. Department of Defense regarding road and rail infrastructure.

A key component of the International Port’s business plan will be an economic impact study, to quantify the thousands of jobs and millions of dollars in tax revenues that would result from first, construction, and then operation of the port. Activities at North Carolina's current ports supporting 85,000 jobs and $299 million each year in state and local tax revenues, and the State could realize significantly greater economic benefits from the International Port.

Ports' Contributions Validated

Recent reports validated the economic benefits derived from activities at the Ports of Morehead City and Wilmington. Separate studies issued by the Milken Institute in Los Angeles and by East Carolina University’s Bureau of Business Research underscore the Ports’ role as economic engines driving prosperity throughout the State.

Nationally, the Milken Institute’s 2007 Best-Performing Cities Index listed Wilmington as second in the nation on the list of 379 U.S. metropolitan areas it ranks. The rankings consider an area's economic performance and ability to create and keep the greatest number of jobs. Wilmington jumped up in the rankings from 59 last year and 117 the year before. The report stated that in Wilmington, “port-related activity contributed to growth in other sectors, such as business services and construction. Investments in port infrastructure have lead to improvements in cargo capacity, creating more opportunities for trade linkages and port-related business.”

Within days of the release of the Milken Institute findings came an East Carolina University Bureau of Business Research report, called “2006 County Rankings of Economic Progress For North Carolina.” Carteret and New Hanover counties – home to the Ports of Morehead City and Wilmington – both received “A”s in a summary of county rankings: Carteret County was ranked sixth out of 100 counties, while New Hanover County came in fourth. For a five-year period Carteret ranked second and New Hanover third, and over 10 years Carteret came in third and New Hanover second.

The ECU report goes on to rank both New Hanover and Carteret in the Top of the Composite rankings of Economic Progress in the one-year, five-year and ten-year changes.

In the near term, the forecasts of growth at the Ports will generate increased economic benefits as the Ports Authority completes the expansion of the Port of Wilmington container terminal and embarks upon expansion of the Port of Morehead City through the Radio Island terminal development. Looking further into the future, the development of the North Carolina International Port in Brunswick County will expand the Ports' already significant contributions to the state's economy – and North Carolina will finally occupy the place it deserves among its neighbors in the South Atlantic states.