The "East Coast Gateway Terminal Agreement" planned between the two port authorities "encourages voluntary cooperation in the areas of operational and supply chain efficiencies, safety, communications and customer service," the port authorities said. "Additional areas of cooperation between the GPA and VPA include acquisition and utilization of joint marketing materials and sharing best practices in areas such as terminal operating systems, training, cargo handling, access, turn-times and infrastructure, as well as supporting the promotion of all-water routes from the U.S. East Coast to the international marketplace via the Panama Canal.”
Unless the FMC asks for additional information, the agreement will go into effect April 10.
The agreement is being proposed during a time in which large container shipping carriers are going through a period of rapid mergers and acquisitions, and carriers are on the cusp of consolidating four mega-alliances on the east-west trades into three such groupings.
GPA Executive Director Griff Lynch and VPA CEO and Executive Director John Reinhart said in a joint statement, “The U.S. East Coast continues to see larger vessels and cargo exchanges since the opening of the expanded Panama Canal last year. Increasingly, our customers are seeking gateway ports on the East Coast that can leverage sufficient landside infrastructure to ensure the free flow of cargo. The states of Georgia and Virginia have made the necessary investments to prepare for this new era in global trade. The East Coast Gateway Terminal Agreement is an innovative collaboration that will allow us to find new ways to become more efficient and effective.”
The two ports straddle North and South Carolina. Interestingly, SCPA President and CEO Jim Newsome was one of the first to suggest that the industry might see ports join together in response to container carrier consolidation.
In 2013, the world’s three largest container carriers - Maersk Line, Mediterranean Shipping Co. and CMA CGM - planned to form the P3 Alliance on east-west trades, but the plan was eventually dropped in the wake of objections by Chinese regulators.
However, Newsome had noted in December 2013 how ports can file cooperative agreements with the FMC, and suggested that ports in close proximity might file cooperation agreements with the Commission to create "a reasonable countervailing power."
Newsome told American Shipper in 2013 that will bigger and perhaps fewer ships, he predicted "a lot of pressure on and competition between ports." Therefore, he said ports may want to respond to that in a bit more of a proactive way.
“We have some talking agreements today," he said at the time, "but I suspect that you will see ports in regionally similar locations want to intensify some of that." He said ports might be able to jointly contract.
In 2015, the ports of Seattle and Tacoma decided to put their marine terminals under common management, under what they call the Northwest Seaport Alliance.
Meanwhile, in December 2016, APM Terminals, DP World, Hutchinson Port Holdings, PSA International, Shanghai International Port (Group) Co., and the Port of Rotterdam Authority filed a “Global Ports Group Agreement” with the FMC.