Mobile’s moment

The port of Mobile in the southeastern United States may have been one of the country’s smaller ports in terms of containerised cargo, but with investments by APM Terminals Mobile, and a close cooperation with public authorities to attract more business interest, the region is drawing in large employers and much-needed jobs. 

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A close collaboration between elected officials, public authorities and APM Terminals has helped make Mobile, Alabama more attractive to investment from companies like Walmart. Brian Harold, Managing Director APM Terminals Mobile, Jimmy Lyons, Director and CEO Alabama State Port Authority and Barry Westbrooks, General Manager Walmart. Photo: APM Terminals

For the past year, everyone around Mobile, Alabama, has been talking about the large plot of land that was cleared off Highway 10, just fifteen minutes from the port.

In the Spring, Walmart ended the speculation, announcing it was the buyer of the 2.6 million square foot site – equivalent to 45 football fields – and would begin building its single largest regional distribution centre there. The new USD 135 million centre brings 600+ new jobs and an economic boost to the entire region.

The retail giant is just the latest large company to make the Gulf Coast port city its home. Last year, Airbus completed its Brookley Aeroplex in Mobile, the company’s first American manufacturing plant, right next to the port.

The growing attraction of the Port of Mobile can be attributed to the cooperation of many parties, including APM Terminals Mobile, the Alabama State Port Authority and state and local legislators. Together they sought to improve Mobile’s attractiveness to trade with infrastructure investments and economic incentives for business that are giving Mobile a reputation as a reliable regional supply chain hub.

Close cooperation boosts business

“Mobile may have been a smaller port for containerised cargo but it’s certainly emerging as a viable gateway, with a very good location on the US Gulf and the infrastructure to support large markets throughout the Southeast and Midwest,” says Brian Harold, Managing Director of APM Terminals Mobile.

The port handled more than 270,000 TEU in 2016, a 20% increase over the previous year and has plenty of opportunity to grow even more. One reason is the expansion of the Panama Canal and the shift in trade it will bring to US East Coast ports. Regional and local cargo is another big opportunity: Harold estimates there are 100,000 containers per year that currently come into or go through Alabama which do not currently use the port of Mobile.

Our excellent working relationship with APM Terminals Mobile extends beyond that of a landlord. Brian Harold and his team work proactively with the Port Authority on economic development initiatives, like recruiting Walmart’s new international distribution centre to Mobile.  These types of projects bring jobs and increase business through the port”

Jimmy Lyons, CEO, Alabama Port Authority

To catch this cargo and more, Harold teamed up with Doug Morgante to bring some ideas for improving usage of the port as well as boosting the local economy to legislators. “We began working closely with local and state lawmakers and port officials to find ways to make it more attractive for companies to use the port of Mobile for their cargo but also to invest in the community with infrastructure and jobs,” says Morgante, Senior Director for Government Relations with A.P. Moeller – Maersk.

The result is the Alabama Renewal Act. Signed into law in April, it offers companies which build or expand a distribution centre in Mobile – with $20 million minimum investment and 75 new jobs – three years of tax credits based on cargo volume passing through the port of Mobile. It also offers existing companies tax credits if they increase their use of the port of Mobile.

“These kinds of public - private partnerships are crucial for Alabama’s continued economic growth, and the Port Authority’s relationship with A.P. Moller-Maersk is a perfect example of how these partnerships work for the people of Alabama,” says Greg Reed, Majority Leader of the Alabama Senate.

Ready for the big time

The expected volume boost in annual container volume from the Walmart import cargo coming into APM Terminals Mobile en route to the new distribution centre is in the range of 20,000–40,000 containers annually, or roughly 15-25% of the port’s 2016 volume.

However, Walmart’s cargo isn’t the only volume coming Mobile’s way in the coming months. With the newly widened Panama Cana, the US East Coast ports are preparing for the arrival of larger ships (13-14,000 TEU) carrying additional volume from Asia that before would have gone to U.S. West Coast ports and then travelled east by rail and truck.

We began working closely with local and state lawmakers and port officials to find ways to make it more attractive for companies to use the port of Mobile for their cargo but also to invest in the community with infrastructure and jobs”

doug-morgante

Doug Morgante, Senior Director for Government Relations with A.P. Moeller – Maersk. Photo: APM Terminal

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Estimates vary about how much cargo will shift from West to East Coast ports as a result of the Canal’s expansion, but Mobile is ready. The port has invested USD 50 million in two Super Post Panamax ship-to-shore cranes and a 20-acre expansion of its container yard.

Meanwhile, to make it easier for Walmart and others to get their cargo inland, the State Port Authority of Alabama has built a USD 55 million intermodal container transfer facility in the port (operated by APM Terminals) that links the port directly to rail links and a menu of inland U.S. and Canadian destinations.

“As the operator of the port, APM Terminals has a big responsibility to help grow the business in a way that also helps the local and regional economy of Mobile and the State of Alabama,” says Brian Harold.

“We have a great partnership with the entire port community in Mobile as well and the local municipalities and State Government. We’ve had to work together closely and I think the latest investments and legislative achievements clearly show the relationships and trust we have developed here and thus the potential Mobile has to become a premier south-eastern supply chain hub.”