Opponents of the proposed container port at Quonset Point cite numerous reasons to reject the idea, from environmental concerns to skepticism about the number of jobs the development would produce. But on the other side is Quonset Point Partners, the private firm which hopes to develop a port that will give Rhode Island one of the major ports of call on the East Coast. President Martin Grasso is optimistic QPP can attract container ships to Quonset. And one of the principal reasons for his optimism is the development of a new trading route by shipping companies that goes through the Suez Canal.
The new route for transporting cargo from Asian ports to the United States is part of the reason more container traffic will be coming to the East Coast in the future – and why Quonset stands to gain from that business, Grasso and others at QPP assert.
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“It’s kind of like a gusher ready to be tapped,” said David Preston, a QPP spokesman.
Until recent years, most container ships coming from Asia went to the West Coast ports. Their cargo was then transported to the East Coast by rail. But now, shipping companies are starting to take cargo through an all-water route that was first used in Roman times but has been closed off for most of the 20th Century because of war and political turmoil. It is only in the past five years that the shipping companies have been able to access the new route, which begins in Hong Kong or Singapore, heads west to the Indian subcontinent, tracks through the Red Sea, the Arabian Gulf and through the Suez Canal, makes a stop at a Mediterranean Sea port, then heads west into the Atlantic Ocean, making one stop in the South Atlantic, one stop in the North Atlantic, and then turns around and goes back.
QPP hopes that one day, one of those stops will include Quonset Point.
Shipping companies have come to favor this new route for several reasons, Grasso said. For one, today’s large-load ships need to be constantly sailing and dropping cargo off at major distribution centers to be profitable. With the financial crisis that has swallowed Asia for the last two years, Asian exports have far exceeded imports. That means ships carrying cargo to ports in Los Angeles, for example, have been going back to Asia without loading up again with more cargo.
This cuts into profits, Grasso said. And it has forced the shipping industry to think of other alternatives. That’s why the new route has emerged, he said.
To be sure, the Suez Canal route is slower for Asian exporters. It takes as much as one extra day to move a container from Hong Kong to New York via the Suez than it takes to get it there through Los Angeles. But QPP argues that the all-water route is cheaper, costing just $551 per container, compared the $987 cost of bringing that same container through Los Angeles.
But the real benefit, according to QPP, is that shipping companies traveling from Asia to the United States through the Suez can stop at major ports in Europe, the Middle East, and the Indian Subcontinent on the way. And on their way back they can bring cargo from the United States to these trading centers.
“It’s all geography,” Grasso said. “You have a four-fold better chance that that container is going to go back to Asia with a revenue-bearing load. Full.”
Quonset has proximity to the railroad and Route I-95 which gives it good access to large population centers, Grasso said. He added that the brand-new infrastructure of the port will make Quonset competitive, especially compared to the older ports on the East Coast.
“Certainly, U.S. ports are way behind European and Asian ports in (terms of) state-of-the-art infrastructure and superstructure,” he said.
New England’s “frozen” infrastructure, in fact, is one of New England’s limitations in terms of what it can accomplish in the international arena, said Michael Gallis, a consultant for the Rhode Island Economic Policy Council. And New England seems unwilling to make the changes to its infrastructure it needs to better connect itself to the global network. The consequence will be higher prices for goods, Gallis predicts.
“This region is almost immobile, and that represents a clear and present danger to New England,” he said. “We’re losing connection to the global network. That’s the real issue.”
Developing the port is part of the solution to this problem, Gallis said. But he added that New England’s leaders seem to be reluctant to make major changes that would unfreeze its infrastructure and help New England regain its global connection. The Big Dig in Boston is not the answer, he said.
QPP will submit its official proposals to develop Quonset Point to the Rhode Island Economic Development Corp. by June 30. Part of the proposal will include dredging down to 45 feet in the first phase of the project. In the second phase, if the economic demand is there, the area would be dredged down to 52 feet, Grasso said. This would allow the port to compete with other deep-water ports on the East Coast. The deepest port in the country is in Los Angeles, which is 60 feet deep. In an effort to attract the large-load ships, the Port of New York and New Jersey has plans to dredge down to about 50 feet, though it is still just a proposal.
Grasso believes 52 feet will be deep enough for Quonset. Past experiments made by shipping companies to build super-tankers that draw even more than a 50-foot port can support were unsuccessful. Thus, future ship construction will stay in that range, he said.
How much dredging QPP actually does will be determined when the project is going through its environmental permitting phase. But even if the project can earn its requisite permits, Grasso said, it will not go forward unless QPP can line up the business for the port.
“We’re very focused on not building it until we have the cargo to justify it,” he said. “Private money won’t do that.”
