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Hurricane Florence May Have Blown a Hole in Port's Coal Exports for September

 

 

By Robert McCabe


September 16, 2018 - What a strange sight: a port with no ships.


Travelers crossing the Chesapeake Bay Bridge-Tunnel may be so used to the sight of coal ships anchored off Cape Charles that they don’t even register anymore.


That panorama changed dramatically this past week as Hurricane Florence threatened and the Coast Guard closed the port to commercial traffic. Any vessels anchored there were ordered to head for open seas.


At midafternoon Friday, MarineTraffic.com, a website that tracks ocean-going vessels worldwide, showed nary a vessel of any kind in the port, except maybe some tugs and Navy reserve vessels.


While the port reopened early Saturday morning, the delays and resulting backlogs that Florence generated are going to take days to work through.


“It’s going to be a mess for awhile,” said David Host of Norfolk-based T. Parker Host Inc., the largest ship agent in the nation for vessels carrying coal and other dry-bulk cargo.


In addition to being home to the world’s largest naval base and the third-largest container port on the U.S. East Coast, Hampton Roads is also the largest coal-exporting port in the country.


Colliers from all over the globe call on three terminals: Norfolk Southern Corp.’s Pier 6 at Lamberts Point, and Kinder Morgan’s Pier IX and Dominion Terminal Associates, or DTA, both in Newport News. There, they pick up millions of tons of coal for transport to the Mediterranean, Asia and South America.


On top of the port shutting down, Norfolk Southern and CSX Corp. – the railroads that serve the two Newport News coal terminals, suspended their coal service to the port last week.


CSX resumed service at DTA on Friday morning and planned to resume service at Pier IX on Saturday morning, a CSX spokeswoman said Friday.


Norfolk Southern anticipated a resumption of service by midafternoon Saturday, pending the Coast Guard’s reopening of the port.


Before the port can get back into full swing, harbor pilots along with the Coast Guard and the Army Corps of Engineers will have to survey the port’s buoys to ensure they’re properly situated, Host said. The railroads will have to inspect their tracks, he added.


The coal ships that previously had been waiting to load up at the terminals will be joined by others that were making their way here before the call to move out.


“Vessel queues that were already around 18 ships prior to the storm will likely grow in the aftermath as shipping resumes,” according to a report Friday in Inside Coal, a trade-industry publication.


Once the port is open for business again, a kind of pecking order coordinated by the pilots will determine which ships get to enter the port and when Navy vessels get top priority, followed by container ships and then coal and other bulk ships.


“Obviously, the port can’t handle all of them at the same time,” Host said. “We don’t have enough tugs to handle all of those ships.”


The hurricane threat came amid an ongoing surge in coal exports from Hampton Roads and will have an impact on shipping volume.


Last month, the port’s coal terminals moved about 44 percent more coal than it did in August 2017, exporting about 4.1 million tons, up from 2.8 million tons a year ago, according to T. Parker Host.


From January through August, the port’s coal exports were up 32 percent from the same period a year ago.


Much of the coal that moves through Hampton Roads is “metallurgical,” or “met” coal, used in steelmaking, along with some steam or “thermal” coal used in electrical power plants.


Norfolk Southern and CSX trains haul much of the coal to the port from northern and central Appalachia, the source of some of the highest-grade met coal in the world.


Last week, the hurricane threat and its feared impact on exports caused a further spike in met coal prices, which have surged 15 percent since August, according to the online business website Seeking Alpha.


Hampton Roads’ three coal terminals account for more than half of all U.S. coal exports.


While the hurricane may not have caused much damage throughout the rest of Hampton Roads, the delays and supply-chain headaches it has generated are likely to show up in coal-volume numbers for September.


“You’re going to see bad September numbers for exports because of this disruption,” Host said, adding that it could result in a reduction of as much as 1.2 million tons.

 

Florence’s impact on this month’s export numbers could put it on par with the winter storm in January that was dubbed the “bomb cyclone,” according to a report Thursday from Doyle Trading Consultants.