Ports America focuses on expansion, preparing for future

By: | at 08:00 PM | Channel(s): Ports & Terminals  

Turnaround on imports seen for second half of 2009By Peter A. Buxbaum, AJOTPorts America is by now well known as a major terminal operator in North America. But its current incarnation came about only earlier this year, when AIG Highstar Capital, the investment fund which owns Ports America, Inc., MTC Holdings and Amports, Inc., combined the first two under a single management structure and put all three companies under the umbrella of the Ports America Group.
That made Ports America Group, which is headquartered in Iselin, N.J., the largest terminal operator and port services provider in North America, operating at 97 terminals in 50 ports on the US Atlantic, Gulf, and Pacific coasts as well as in Mexico. The company also operates a single facility in Chile. All told, the group handles over 12 million TEU, 2 million vehicles, 3 million tons of general cargo, and one million cruise ship passengers, and has annual revenues of $1.6 billion.
If the name AIG Highstar sounds familiar, it is because it is related to the insurer AIG, which recently felt the brunt of the recent financial meltdown, and was bailed out with an $85 billion line of credit from Uncle Sam. AIG Highstar specializes in infrastructure investments and has led or co-led $10 billion of investments in power, water, natural gas, waste management—in addition to transportation, logistics, and port—since 2000.
Ports America is not expected to be impacted by the problems of one if its investors, according to group president Stephen Edwards. “AIG Highstar is a $3.5 billion infrastructure investment fund, organized as a limited partnership, less than nine percent of which is owned by AIG,” said Edwards, in an exclusive interview with the AJOT. “The other investors, including over 80 limited partners, are a diverse lot which includes pension funds, endowments, and family investments.”
Ports America’s expansion activities in recent years have emphasized increasing the portfolio of its services offered at its existing locations. Looking to the future, that trend is likely to continue as AIG comes to grips, less with the financial meltdown, than with the levels of international trade expected in the foreseeable future. Ports America is planning for continued strong exports from the United States, while imports are looking flat, at best, through the first half of 2009.
Ports America operates in four main segments: containers; automobiles and ro/ro cargo; general cargo, such as breakbulk steel, project cargoes, and timbers; and cruise line stevedoring, in descending order of revenue generation. “The fastest growing segment at the moment is export ro/ro and project cargoes,” said Edwards. “The largest increase in exports from the United States are from the US gulf coast and are related to oil industry projects. Export chemicals, resin, paper products, and other commodity-type products are also strong. The biggest increases in incoming cargo are wind energy equipment imports.”
The port of Baltimore is one area where Ports America has expanded its level of services in recent years, while Tampa, New Jersey, and Oakland, are among the locations where Ports America is looking to expand its footprint. The company is also seeking additional sites in Mexico, primary on the Pacific Coast, at which to expand.
In 2007, Ports America expanded its operations at the Dundalk Marine Terminal in Baltimore to facilitate expanded container and ro/ro operations. “We are largely handing con/ro type of tonnage at Dundalk,” said Edwards, “in which containers are carried on deck and ro/ro cargo below the deck. That business has been strong for us through 2007 and 2008.”
Ports America Baltimore also recently expanded its portfolio of capabilities with the opening of a packaging operation in its Dundalk facility on November 1. This operation is Ports America’s first on-dock packaging and warehousing facility to serve general cargo, autos, boats, steel, and containers.
“This facility provides a full range of specialized on-dock packi

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Peter Buxbaum has been writing about international trade and transportation, as well as security, defense, technology, and foreign policy, for over 20 years. Besides contributing to the AJOT, Buxbaum's work has appeared in such leading publications as [em]Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly[/em]. He was educated at Columbia University.