Shipper works with N.C. Ports, Maersk to route textile supplies to Central America via Wilmington.
By Eric Johnson
Frontier Spinning Mills is one of the nation’s largest producers of yarn, and part of a wider textile industry in North Carolina that faces a vexing transportation problem.
Sanford, N.C.-based Frontier exports spools of yarn to Central American manufacturing locations, where finished goods are then sent back to the United States as imports. The trouble for Frontier has been that its export process was made more cumbersome by equipment constraints.
The textile companies in North Carolina have traditionally used 4-foot-by-4-foot pallets for the export leg of the process, with their mills built to accommodate this standardized pallet size.
The standard ISO container used by the shipping industry, however, can’t accommodate two 4-foot-by-4-foot pallets side by side, according to Maersk Line, which partnered with the North Carolina State Ports Authority to develop a solution to the problem.
Frontier, like other textile and apparel companies in the region, was forced to truck its spools of yarn to South Florida, where specialty carriers that service the Caribbean and Central American markets were set up to handle the wider pallet sizes side-by-side in one container.
The port authority convinced Frontier that by converting to a 4-foot-by-3-foot pallet, significant transit time and costs savings could be realized by moving goods through the state’s biggest port, Wilmington.
“The new routing has reduced the time to the port by one to two days when compared to a Florida port,” John Maness, executive vice president of Frontier Spinning Mills, told American Shipper
. “It has improved our ability to deliver on time. While I’m not at liberty to quote actual savings numbers, I can say that the savings are substantial and allow us to quote more aggressively and secure more business in the channel.”
Maness said the savings in transit times come purely from the domestic leg, with the ocean leg transits from Wilmington “about the same as alternate carriers.”
But he said an “additional unexpected benefit” of shorter trucking times is that “a shorter inland travel distance allows our product to arrive in better condition.”
Maness said the investment to switch one of its mills to the 4-foot-by-3-foot pallet size was in excess of $1 million, with the company aided not only by the port authority, but by the local Lee County Economic Development Corp. and Golden LEAF Foundation, which assists in the transformation of North Carolina’s economy away from tobacco.
“We recognized the need for a returnable packaging system for our product that would be universal,” Maness said. “That is to say it would fit both standard and extra-wide sea containers without hurting our internal economics or affecting load weights. It required some trial and error.”
Privately-held Frontier produces in excess of 400 million pounds of yarn annually, with more than 75 percent of that output exported, and primarily exported into the U.S.-Central American Free Trade Agreement region. The company operates four plants in North Carolina and one in Alabama.
The North Carolina port authority estimates textile and apparel companies in the region can save $600 to $900 in inland savings on a round-trip basis by shipping through Wilmington and eliminating the inland roundtrip from their mills to Southern Florida to reach Central America/Caribbean operations and back to North Carolina distribution centers.
The companies are also eligible for a $200 tax credit per container exported or imported that moves through Wilmington.
Frontier uses Maersk’s weekly SAE service, which links Norfolk, Wilmington, Savannah, and Miami to Santo Tomas, Guatemala and Puerto Cortes, Honduras. According to American Shipper
affiliate ComPair Data
, it’s currently the only direct service from Wilmington to the Caribbean or Central America. The service is operated with two 1,100-TEU vessels. Maness said a second sailing would aid shippers even further.
“Eighty percent of the Central America/Caribbean market is moving on ocean carriers that exclusively use Southern Florida ports,” said Peter Klaus, vice president of liner sales at the port authority. “We want the market to understand what the Port of Wilmington can provide their companies with reduced supply chain costs and reduction of the carbon footprint.”
Klaus said the port authority is making a push across several commodity sectors to grow volume at Wilmington.
Among them are temperature-controlled products (like exports of poultry and pork, and imports of fruit and seafood), as well as agricultural exports.
Both sectors are hindered by a lack of calls from carriers to the port. For instance, according to ComPair Data, only two services, both provided by the CKYH Alliance, connect Wilmington directly with China.
“North Carolina agricultural shippers report that they could ship much more than they currently send over North Carolina Ports,” Klaus said. “Limited space on carriers currently serving the Port of Wilmington plays largely into volume restrictions through the port. We actively solicit additional capacity through existing carrier services, as well as seek new carrier services that can benefit from Wilmington’s proximity to the North Carolina agricultural market.”
Klaus said the port is working with the North Carolina Department of Agriculture’s commissioner and international marketing department to increase ocean export cargoes. Aside from poultry and pork, other aquiculture commodities being targeted are cotton, soybeans, sweet potatoes, grain, forestry products, foodstuffs and wines.
Soybeans account for 10 percent of North Carolina’s agricultural exports, while North Carolina is the nation’s leading producer of sweet potatoes.
“Wilmington offers significant cost advantages to our North Carolina customer base,” Klaus said. “Due to the proximity of Wilmington to our North Carolina customers, we can offer substantial inland logistics savings together with the most competitive terminal costs in the South Atlantic.”
Klaus pointed to long-term deals CKYH members Hanjin and Yang Ming, as well as newer agreements with Maersk and ICL. He also said the state is focused on coordinating road, rail, and port movements, underscored by the state’s recent release of a maritime strategy study.
“We understand the potential growth opportunities at our ports,” he said. “Now is the time to work together to provide the assistance we can as a state to achieve that growth.”