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Pier 6 aims for another 50

Fall 2013

Negonego at Pier 6
In September, M/V Negonego filled up with met coal bound for China at Norfolk Southern’s Pier 6, setting a U.S. record for most coal loaded on a single ocean-going vessel.

In about 20 years as a shiploader operator at Norfolk Southern’s Pier 6, Leo Carman never had loaded a ship as big as the M/V Negonego. The 984-foot collier was nearly as long as the Navy aircraft carriers based at nearby Norfolk Naval Station. It was so wide that he had to trolley the telescoping coal loader chute out to the end of its track. Even then, the barrel chute barely reached halfway across the vessel’s deep holds.

“It was huge, enormous, way out there,” said Carman, marveling at the sight from his perch inside the operator cab of the 18-story-tall loader.

During the 40 hours and 45 minutes the Negonego was at the pier, Carman worked two eight-hour shifts helping to fill the vessel’s nine holds with thick, dark metallurgical coal that some 11 NS trains had moved in 1,592 railcars from a Central Appalachian mine in southwestern Virginia. Because of the loader’s limited reach across the ship’s wide deck, Carman had to build up a wall of coal on the near side of the hold and then maneuver the chute’s rotary head so that the cascading coal rolled down the far side of the mound.

“We had to get creative,” said Carman, who has 34 years at the pier.

On Sept. 21, a Saturday, the Negonego, loaded with 168,977 net tons of coking coal, departed for a steelmaking plant in China. As it steamed away, employees had reason to celebrate: They set a U.S. record for coal loaded into a single ocean-going vessel. The typical collier calling on Pier 6 is 600 to 700 feet long and leaves loaded with 75,000 to 85,000 tons of coal.

“It was a challenge, but we got it,” Carman said. “To have worked on the vessel that broke the record for  the whole United States, yeah, it’s great. That’s a talking point.”

M/V Negonego is pictured at Pier 6
M/V Negonego is pictured at Pier 6 in September as it is loaded with a record-breaking 168,977 net tons of metallurgical coal. The ship, while massive, is not the largest ever handled by the pier.

A SUPERIOR FACILITY

Setting records at Pier 6 is nothing new. The pier began operating in 1963 as the largest coal transload facility in the Northern Hemisphere and the most technologically advanced in the world. It remains so today. In 1999, the pier became the first facility to load 1 billion tons of coal. Since then, it has handled 200 million more.

At Norfolk Southern’s celebration of the pier’s 50th anniversary in September, CEO Wick Moorman credited the ingenuity and boldness of those who constructed it.  NS predecessor Norfolk and Western Railway committed $25 million, the equivalent of $193 million in 2013 dollars, to take advantage of a growing overseas demand for U.S. metallurgical, or met coal.

“The people who built this pier didn’t make small plans,” Moorman said. “They had vision. They had foresight.”

Over the last five years, he noted, NS has invested around $43 million to upgrade the facility, including a major overhaul of its massive tandem coal dumpers and twin shiploaders. “It’s an indication that we believe in the future of this pier as well,” Moorman said. “We’re on our way to making sure it dumps 2 billion tons.”

That does not mean the railroad won’t face challenges. In the universe of export coal – affected by everything from weather, economic conditions, and global coal competitors – business historically has moved in feast and famine cycles. For example, a primary reason behind building Pier 6 was to supply Japan’s booming steel industry with coking coal. By the early 1980s, however, Japanese steel producers had shifted to Australian and Canadian coal. In a show of resiliency - and a reflection of Pier 6’s unique value in the global marketplace – NS shifted its marketing efforts to European and South American steel markets.

“To completely lose your customer base like that could have been devastating, but instead of folding the tent, NS redirected the pier to these other markets,” said Mark Bower, NS group vice president, export, metallurgical, and industrial coal marketing. “That’s something that ought to be in a Harvard Business Review case study. To me, that’s the huge success story of Pier 6.”

TAPPING NEW MARKETS

Since 1990, total annual coal tonnage moved through Pier 6 has ranged from an all-time high of 39.5 million tons to a low of 9.9 million. Presently, the market for U.S. export met coal is weathering economic doldrums in Europe and a drop in demand attributed to an abundant supply of low-cost Australian coal. In response, NS has moved aggressively to find new business opportunities for Pier 6, both for met coal and for thermal coal burned by utilities to generate electricity.

“At the end of the day, we’re working hand-in-hand with producers to find a home for U.S. coal,” said Kristopher Sandlin, NS system manager coal transportation. Sandlin works with coal producers and receivers to coordinate the flow of coal moving on NS trains from the mines to Pier 6.

During the past couple of years, Asia has emerged as a new market for met coal, while Europe has become an outlet for thermal coal. Through the first half of 2013, China has been the largest receiver of met coal from Pier 6, while Turkey and Morocco are top receivers of thermal coal.

To help secure business, David Lawson, vice president coal, said NS pitches Pier 6’s unique competitive advantage – its ability to precisely blend coal to meet steelmakers’ demanding specifications. Steelmakers have special blends to create their brand of products, and the pier handles more than 700 distinct classes of high-quality met coal from Central and Northern Appalachia, including more than 80 from one producer.

Pier 6 is the only coal transload facility capable of blending coal in units as small as a single railcar load. Lawson describes it as blending by the teaspoon.

“Our blending capability is one of the things that differentiates Lamberts Point from competitors and increases its value in the world market,” Lawson said.

The combination of the pier’s blending ability, its access to high-quality coals, and its location on the East Coast’s deepest shipping harbor are all reasons to be optimistic about its future, he added.

“Pier 6 is fundamental to our core business, it’s part of our heritage, and it’s part of our outlook,” Lawson said. “This asset is going to be around for a long time.”

Leo Carman, sits in the cab of one of Pier 6’s coal loaders
Leo Carman, loader operator, sits in the cab of one of Pier 6’s two 18-story coal loaders.
Tug boats position M/V China Pioneer at Pier 6
Tug boats position M/V China Pioneer at Pier 6 in mid-September. Pier employees loaded the vessel with 166,840 net tons of metallurgical coal, a record broken less than a week later by the M/V Negonego.