A planned $60 million roll-on/roll-off facility in Mobile, Alabama represents a major diversification for the nation’s 10th largest seaport by volume. But James Lyons, director of the Alabama State Port Authority, says it’s too soon to project which automakers will use it.
“Nobody will really talk to you until you have the facility built, so nobody’s going to guarantee that they will ship through us until they can see what we’ve got and what we’ve got coming through here,” Lyons says.
Two of the big players in the RO/RO business, however, are optimistic enough to take on the project, called AutoMobile International Terminal.
Terminal Zarate of Argentina built the first vehicle terminal in Latin America in Buenos Aires in 1996. The RO/RO facility handled 625,000 vehicles in 2017. The company is owned mostly by Grupo Murchison, which Lyons describes as primarily “stevedores and terminal operators with multiple locations in Argentina and one in Uruguay.”
SAAM Puertos S.A., a subsidiary of the Chilean multinational company Sociedad Matriz SAAM S.A. operates 11 ports in Chile, Mexico, the United States, Colombia, Ecuador and Costa Rica.
“They will get a long-term concession to operate the facility,” Lyons says of the two companies. “This doesn’t necessarily have anything to do with trade between Chile and Argentina. Our trade could be with Asia, with Europe, with Mexico.”
Grants were crucial to the putting the deal together as well. The Port Authority was awarded a $12.7 million Transportation Infrastructure Generating Economic Recovery (TIGER) grant and a $28.8 million grant from the Alabama Gulf Coast Recovery Council under the Restore Act resulting from the 2010 BP oil spill.
Construction on the new terminal should begin the fourth quarter and take about a year, so the terminal won’t be ready until 2019. Lyons says most of the property will be paved over for parking for hundreds of cars at a time.
How much Alabama auto manufacturing will benefit depends on who is exporting and which ships agree to use the Port of Mobile, he says. The cost benefit to the ships also depends on the number of vehicles per ship. “A ship is not going to come in here to pick up five automobiles.”
The chief RO/RO terminal competition is to the east.
“The two big auto ports that are in this region are in Brunswick, Georgia, and Jacksonville, Florida,” Lyon says. “They both have very large auto handling facilities and they’ve been in business for a long time. They have ships going in and out of there and they have ships going to a lot of places that Mercedes ships to.”
On the other hand, the Alabama port is much closer to Mexico, where Chrysler, Ford, General Motors and Mazda have a combined 11 auto or auto parts manufacturing plants. Ship transport would need to be more cost effective than rail for manufacturers, Lyons says.
“I think that’s a good possibility for us. If we do get ships going back and forth to Mexico I think there’s a very good chance that we can pick up automobile volumes and go back down to Mexico.”
Lyons predicts that AutoMobile will employ about 100 people but the number will go up when ships are in port. Longshoremen who already work the container ships will be in the RO/RO pool, and they can make $75,000 to $100,000 annually.
Jane Nicholes and Mike Kittrell are freelance contributors to Business Alabama. She is based in Daphne and he in Mobile.