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Cruise Ports: The Big Issue

Ports turn their attention to LNG and low-sulfur fuel availability as IMO 2020 kicks in.

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By Tom Peters 04-02-2020 08:04:14

On January 1 the International Maritime Organization’s global regulation to reduce harmful sulfur oxide (SOx) emissions from ships came into effect. IMO 2020 reduced the global limit of sulfur content in fuel oil from 3.5 percent to 0.5 percent.

The cruise industry was well prepared. About 70 percent of cruise ships are equipped with scrubbers while the remainder rely on low-sulfur marine gas oil. According to Kelly Craighead, President & CEO of the Cruise Lines International Association (CLIA), the environment is now “the big issue” with CLIA members already investing over $22 billion in new energy-efficient, waste-reducing technologies.

In its recently released “2020 State of the Cruise Industry Report,” CLIA further noted that 44 percent of newbuild capacity will be powered by liquefied natural gas (LNG) and 88 percent will be able to hook to electric shore power.

With all the changes in ships’ size and technology going on, coupled with ever-increasing environmental demands, ports are transforming themselves to meet the new realities of the industry.

New Master Plans

The Port of Galveston, now the fourth busiest cruise port in the U.S., has a major focus on new infrastructure, says Rodger Rees, Port Director & CEO.

Galveston surpassed one million passengers in 2019 and recently signed a contract with Royal Caribbean Cruise Lines for construction, beginning in April, of a new 170,000-square-foot terminal at the port’s Pier 10. The terminal will include 2,000 new parking spaces. Rees says the port recently adopted a new Strategic Master Plan, which includes the new cruise terminal plus an extensive infrastructure program.

It also includes construction of a new road network inside the port with Phase 1 already underway. The idea of the road network is to reintroduce what the port calls the “old industrial port boulevard,” which served the port prior to development of Harborside Drive, now the port’s main thoroughfare.

This road is going to be about two miles that bisects the port and will serve new and old cruise terminals plus take cargo traffic off Harborside Drive,” Rees says.

Passenger numbers and traffic will continue to grow as Galveston recently signed a 10-year contract with Disney providing for a doubling of ship calls – to 25 or 26 – over the next five years. Carnival and Royal Caribbean also homeport certain vessels out of Galveston, so collectively the three lines have scheduled 313 calls in 2020 and approximately 339 in 2021.

Moving forward with fuel innovation, Galveston has good proximity to LNG facilities (it’s in Texas, after all) and has “been approached,” according to Rees, to develop an LNG bunkering facility. The port has plenty of low-sulfur fuel capacity as well. On the technology front, facial recognition will be featured in the new terminal and likely be added to the older terminals as renovations take place.

Port Everglades, one of the busiest cruise ports in the world, is preparing for 2020 and beyond with cruise facility investments to improve traffic flow, turnaround times and guest satisfaction. The port updates its 20-year Master/Vision Plan every two to four years.

The Master/Vision Plan is our roadmap for the future,” notes Glenn Wiltshire, Port Everglades Acting Chief Executive & Port Director. “As cruise lines build more technologically advanced and environmentally sustainable cruise ships and want the flexibility to do quicker turns, we need to be ready with modernized cruise terminals that will meet their needs.”

According to market projections, Port Everglades has the potential to increase passenger volumes from just under four million in 2019 by more than 50 percent by 2038. Everglades is presently building a parking garage to serve cruise Terminals 2 and 4 securely. The new 1,888-space garage will be completed later this year. It will feature an air-conditioned bridge with moving walkways to deliver guests to Terminal 2.

Consultants will complete a traffic study of the port’s interior roads and the roadways in the surrounding community to make improvement recommendations. Upgraded terminal signage and passenger transit options from Fort Lauderdale-Hollywood International Airport plus remote check-in, security screening and baggage-drop for cruisers are also being considered.

Port Everglades has plenty of low-sulfur fuel available and anticipates initial LNG fueling will be by bunker barge.

LNG Port

The distinction of being North America’s first LNG cruise port, however, goes to Port Canaveral, about 200 miles up the coast from Port Everglades. “Port Canaveral is America’s first LNG cruise port with waterside LNG bunkering operations set to begin in November 2020,” states Captain John Murray, Port Director & CEO, adding that there is plenty of low-sulfur fuel available as well.

Canaveral, which had over 4.6 million passengers in 2019, committed to a major investment when it broke ground last March for a new Cruise Terminal 3 (CT3) complex following approval of a new 25-year operating agreement with Carnival Cruise Line.

The terminal will be the year-round home of Carnival’s newest and most innovative cruise ship,the 180,000-ton Mardi Gras,the first cruise ship powered by LNG to be homeported in North America. The $163-million CT3 project features a futuristic design inspired by nearby Kennedy Space Center and will be substantially complete by May 2020.

A new 20-year deal with Disney Cruise Line, the port’s original tenant, was signed last year to expand terminal operations in preparation for homeporting two of Disney’s three new cruise ships, also to be powered by LNG and expected to be delivered in 2021, 2022 and 2023. More than $46 million will be invested in waterside and landside improvements to Cruise Terminals 8 and 10.

On the technology side, Murray said several cruise lines are implementing facial recognition technology to speed the process for guests to clear immigration.

Big Apple Rising

The “Big Apple” played host to over a million cruise passengers in 2019, and predictions are that number is only going to increase.

To handle the growth, “The New York City Economic Development Corporation (NYCEDC) is currently in the early stages of planning for long-term capital improvements at the Manhattan Cruise Terminal,” says Chris Singleton, the corporation’s Senior Project Manager, Public Affairs. “We are slated to begin a capital improvements project at the Brooklyn Cruise Terminal early this year, which will result in an upgraded interior, boarding bridges and an extended apron. We continue to think about the future and are open to innovative ways to improve the passenger experience at NYC’s cruise terminals, including implementing technology upgrades when and where we can.”

Environmentally, Singleton says, “We’re interested in supporting the industry as it explores lower emissions fuels and will continue to evaluate the possibilities of supporting LNG through our long-term planning exercise. We’ve installed a fixed shore power connection at our Brooklyn terminal and are aiming to install a mobile solution in the near term to accommodate additional ship calls.

Seasonal Business

At the Port of San Diego, cruise is a seasonal business with the busiest period between September and May. The 2020-2021 season could mark a milestone as the port expects to welcome a half million passengers arriving on 138 ship calls. Like other ports, San Diego is experiencing bigger ships and greater passenger numbers, and obviously port officials want that trend to continue.

Improvements to the B Street Cruise Ship Terminal would be the most effective way to continue building appeal for San Diego,” says Adam Deaton, the port’s Senior Trade Account Representative. “Currently, the port is in the conceptual phase of developing improvements for the passenger experience at the terminal. We wouldn’t be able to move forward with a major improvement to the terminal unless there was both a financial and technical collaboration with our cruise partners.”

San Diego has no present plans to install LNG facilities but helped ease smokestack emissions way back in 2010 with the installation of shore power. The port can only use shore power on one vessel at a time but is working to install additional capacity by 2021. Meanwhile, the Voluntary Vessel Speed Reduction Program, another anti-emissions initiative, encourages cruise and cargo customers alike to reduce their speeds when entering San Diego’s harbor.

Hello Haifa!

While North American ports enjoy the bulk of global cruise growth, international ports are also getting in on the action. At the Port of Haifa, Israel, for example, cruise is “booming,” says Zohar Rom, Haifa Port’s Head of Cruises & Tourism. The port hosted 130 ship calls in 2019 and expects that number to hit 153 this year and over 200 in 2021.

To deal with the growth, “We are expanding the outbound passenger area of the cruise terminal to make it suitable for 2,500 passengers,” he says. “In 2021 we will transform a 1,475-foot general cargo pier to a big cruise pier. That way we’ll be able to serve four ships simultaneously and meet the rising demand anticipated that year.”

Haifa is also upgrading its technology, employing biometric and facial recognition systems. The port has yet to work out its issues with LNG but says local refineries will start delivering low-sulfur fuel during 2020.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.