Quonset steering to import records

BY LAND, VIA SEA: In the nearly 30 years since North Atlantic Distribution Inc. began operating in North Kingstown, its annual car shipments have grown from 35,000 to an expected 250,000. Above, Subaru XV Crosstreks arrive at the Port of Davisville. / PBN PHOTO/MICHAEL SALERNO
BY LAND, VIA SEA: In the nearly 30 years since North Atlantic Distribution Inc. began operating in North Kingstown, its annual car shipments have grown from 35,000 to an expected 250,000. Above, Subaru XV Crosstreks arrive at the Port of Davisville. / PBN PHOTO/MICHAEL SALERNO

At the Port of Davisville in North Kingstown, 250,000 cars will arrive by ship, rail and truck from major auto manufacturers this year, making it one of the nation’s top unloading spots for auto imports.
Bentley, Audi, Porsche, Subaru and Volkswagen, Ford and now, the newest arrival, Honda, are sending new cars from Europe, Japan and Mexico.
While most arrive by ship, Fords come by train from the Midwest and Canada, and some of the Subarus arrive by rail from Lafayette, Ind.
Honda, a substantial addition to the Port of Davisville’s portfolio, shipped its first cars to the Rhode Island port on March 31. About 18,000 Hondas are expected to arrive in Rhode Island by the end of the year.
“When we started at Davisville in 1986, we had 35,000 cars coming in,” said Michael Miranda, owner, president and CEO of North Atlantic Distribution Inc., or NORAD, which processes and distributes new automobiles for the manufacturers.
“We contact the manufacturers, negotiate the deals and bring in the customers,” said Miranda. “Our pricing has to be very competitive, and our quality has to be the best.”
Turnaround time for processing has to be fast, often just a few days, and then cars are sent by truck to 22 states.
The map tells the story. Competition is mainly from New York and Baltimore, as well as New Jersey, Philadelphia and Wilmington, Del.
“We have to do a super job because the market is mostly New York and south, that’s where the volume is,” said Miranda.
NORAD has a long-term lease for land at Quonset, a key element in making the port competitive, said Miranda.
“We have 170 acres just for automobiles,” he said. “We’re one of the largest importers of new vehicles in North America.”
The Port of Davisville has had four consecutive record-breaking years of auto imports, reaching 215,000 in 2013, according to Miranda. About 173,000 of those autos arrived by sea.
“We’ve been growing about 20 percent per year for several years,” said Miranda.
“We really expanded in 2002 when we acquired VW and Audi,” he added. “Growth really took off when we put in rail about six years ago. To be a world-class processor, you have to have rail.”
The 250,000 vehicles expected to arrive by the end of 2014 are part of a continuing push to grow that segment of Rhode Island’s economy.
“We’re working on a couple of other customers, and we’re close to closing deals,” said Miranda. “If we get one more auto manufacturer, we’ll be [more than] 300,000 cars by next year. “ Longshoremen drive the cars from the ships to piers, then NORAD takes possession of the vehicles for processing. NORAD, which has about 300 employees, does finishing work on accessories, such as heated seats, leather interiors, tinted windows, mud flaps or trailer hitches. Then the cars are shipped by truck to the dealers.
The growing auto-import business at the Port of Davisville supports many jobs, in addition to NORAD, longshoreman and truckers, he said. Local pilots, for instance, board the ships and guide them into the terminals.
“I would attribute the success of our auto-import business, the record-breaking years, to NORAD,” said Steven J. King, managing director of Quonset Development Corporation. “They have a lot of good relationships and do a great job and have been growing their business, which, in turn, grows our business.”
NORAD is one of the major businesses at the Port of Davisville, which is operated by Quonset Development Corporation. The development corporation operates Quonset Business Park, a quasi-state entity in North Kingstown. The business park is home to more than 175 companies employing approximately 9,500 people.
Based on an economic-impact study using 2012 data, the Port of Davisville accounts for 1,500 direct and indirect jobs in the economy, with an economic impact of $317 million in Rhode Island, said King.
And while NORAD is responsible for much of that direct activity, its growth does not limit opportunity for other businesses looking to move cargo, insists QDC spokesman Ted Kresse.
“There are 58 acres of public terminal area within the Port of Davisville, which is available for a variety of uses on a short-term basis,” he said.
A new mobile harbor crane is also used by businesses located within the park and outside of it.
“The crane offers users another capability to handle more project cargo at the port and help us diversify the businesses” there, Kresse said.
“One of the major strategic advantages we have is that our port, our terminals and our cargo are not subject to the federal Harbor Maintenance Tax that’s assessed by U.S. Customs on imports,” said Evan Matthews, port director for Quonset Development Corporation. “So with high-value cargo like automobiles, that’s a major advantage to the importer. I think we’re the only major auto port that’s not subject to the tax.” That advantageous position is because the Port of Davisville does not have a federal channel maintained by the U.S. Army Corps of Engineers, said Matthews.
“Our channel was not in their maintenance program, along with a handful of other ports, so we were exempt from that tax, because we did not need federal funds to dredge,” he said.
According to federal requirements, the tax was imposed if federal funds were used to improve harbors or channels after 1977, “and that was not the case here,” said King.
Quonset Development Corporation, with the approval of the General Assembly, issued through the former R.I. Economic Development Corporation a revenue bond for $7 million for maintenance dredging in the turning basin and at the ship berths, which was done from October 2012 to January 2013.
Quonset Development is paying the debt service on that, said King.
The Port of Davisville has a depth of 32 feet, which should continue to be enough for auto imports, said Matthews.
The Port of Davisville is in the top 10 in the U. S. for auto imports, he said.
“The other auto terminals tend to be in very urbanized, congested areas,” said Matthews. “The way we compete is that we’re very much aware of our rate structures, and we support our processor NORAD,” said Matthews. “We also maintain our road access and our infrastructure. We feel we have a very uncongested, safe and efficient portside-landside infrastructure that allows the processor and auto companies to get the cars to the dealerships more quickly, without damage or loss.”
A foreign trade zone has been in existence for many years and available for other cargo to provide tax advantages, but it was recently activated for auto imports, said Matthews.
“We’re poised to go after Halifax for their auto business,” said Matthews. “We can process those cars here and rail them to Canada. We’re about half the distance to Toronto and Montreal as Halifax is. We’ve gone through all the necessary activation and certifications with customs.”
The more cars that roll in at Davisville, the more solidified their role becomes at the port.
Said King: “I would say auto importing is the heart and soul of our port business.” •

No posts to display