Port eyes new fuel for growth

Don’t let the small mountain of coal overlooking the Port of Providence fool you.
Coal is not what it used to be.
Pushed to the side by inexpensive natural gas, what was once the dominant power source in New England, covering docks across the Providence waterfront, is now used relatively sparingly.
Good news for the environment perhaps, but the diminishment of coal is a challenge for the Port of Providence, where it’s been a leading commodity for decades and helped the terminal thrive even as most places suffered in the recession.
In 2008, the Port of Providence handled 1.2 million tons of coal on the way to a record 3.2 million-ton total cargo volume for that fiscal year.
In fiscal 2014, however, coal shipments will have dropped to between 300,000 and 500,000 tons, according to Chris Waterson, general manager of Waterson Terminal Services LLC, which runs the port.
“Coal was by far our biggest cargo, and now coal, salt and scrap metal are all around the same level,” Waterson said. “One of our biggest goals is to diversify even more by replacing what coal once was.”
The coal pile itself is a sign of the trend. It belongs to a power plant that purchased it in anticipation of burning it during surges of high summer electricity usage that never materialized.
The port’s search for new customers to supplement coal already has brought a few new commodities and products across the docks.
Copper slag, which is used in shingles and blasting abrasives, has been imported on its way to a New Hampshire company.
A fuel made out of shredded ties by a Massachusetts company has been shipped on a trial run for eventual export to India.
Looking to the future, Waterson said the port has identified a European buyer for wood chips and is looking for a New England supplier to export them.
“Our strategy is to locate two companies, one who needs something and one who supplies something and be part of a logistics chain in the middle,” Waterson said. “We use data from customs that track flows of cargoes and see what might make sense and what we should be targeting.” Once farmland and then a popular waterfront recreation spot, the Fields Point area of Providence now home to the port was gradually industrialized during the 20th century.
In 1994, the city entered into a partnership with a private management company, which purchased the 105-acre marine terminal for $16.5 million and placed it within the newly created nonprofit holding company ProvPort Inc. ProvPort agreed to pay taxes on the land and share a percentage of port revenue with the city. Its operating right runs through 2036.
In 2007, Public Asset Management merged with Waterson Stevedoring Inc., which had been handling ProvPort cargo, to form Waterson Terminal Services LLC, which manages the port and leases land to tenants.
ProvPort specializes in bulk cargo, commodities such as coal, salt, oil and scrap metal, and also handles a lesser amount of break-bulk cargo, larger items that need to be handled individually, such as logs and junk cars.
Tenants who operate within the port include International Salt, scrap metal recycler Schnitzer Steel Industries, Lehigh Northeast Cement and chemical distributor Univar Inc.
Since reaching 3.2 million tons of cargo in 2008, ProvPort is down to “around 2 million tons,” Waterson said.
As cargo volume has fluctuated, so has ProvPort revenue. The port brought in $6.5 million in fiscal 2009 revenue, which rose to $7 million in 2010 and $7.9 million in 2011 before dropping to $6.3 million in 2012, according to the nonprofit’s most recent financial filings.
During that time, revenue remitted to the city, excluding taxes, has fluctuated between $257,818 in fiscal 2011 and $216,154 in fiscal 2012. In 2007 ProvPort paid about $770,000 in local taxes, according to a 2009 presentation.
Waterson Terminal Services annual fee in fiscal 2012 was $3.7 million, down from $4.4 million in fiscal 2010. Fiscal 2013 numbers are not yet available.
Waterson said in fiscal 2014, which ended June 30, revenue jumped 18 percent over 2013 as cargo volume rose 42 percent. Coal and salt were the main drivers of the 2014 increases, Waterson said. In 2010, ProvPort secured a $10.5 million U.S. Department of Transportation grant to buy two new mobile harbor cranes to replace old equipment.
Since their arrival in 2011, the cranes have handled 500,000 tons of cargo.
For more than a decade, Providence’s working waterfront has been a subject of intense debate, mostly regarding whether land north of ProvPort should be opened to nonindustrial uses.
ProvPort has mostly stayed out of the rezoning debate, as Fields Point has never been included in discussions to allow nonindustrial uses.
“Our biggest concern is space,” Waterson said. “We are working on almost 100 percent land utilization.”
In discussions about growing port business, attracting container shipping has periodically been raised, but still appears some way off.
Both ProvPort and the Port of Davisville have the capability to handle containers, but the network of East Coast short-sea shipping that many hoped would materialize hasn’t.
“Could containers happen? Yes, we have capacity,” Waterson said. “It will take a change in the way things are handled. Trucks are still cheaper than barges. When gas prices were creeping up to $5 per gallon maybe, but at $3.50 per gallon it doesn’t make sense.”
Down the bay at Davisville, which has at times been considered a potential container port, the Quonset Development Corporation is using its new federally funded harbor crane for moving “project cargo,” large, irregular items that can’t be easily trucked.
QDC Managing Director Steven J. King said since the new crane was installed at the end of 2012, it has been used “a handful of times” to handle cargo, including large generators for Toray Plastics (America) Inc., wind-turbine components for a project in North Kingstown, some large wooden pilings from South America and classified military equipment.
Quonset is also still waiting for the start of offshore wind-farm construction, which was a primary driver for acquiring the crane. •

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