Steel volumes were growing, fast, three years ago at the Port of Mobile. The Alabama State Port Authority had already built a terminal on Pinto Island for loading and unloading steel slabs on ships. As more and more steel coils, a circular spool of metal, were moving through the port, they needed someplace to put it all, reported AL.com.
Enter maritime service providers Tri-State Maritime Services and Richardson Stevedoring & Logistics. Both companies received the request for proposal issued by the Port Authority. Together, they formed Alabama Steel Terminals, which commemorated the opening of the new facility early Tuesday.
Alabama Steel Terminals, a 50-50 joint venture between the two companies, split the cost of construction, a total $36 million. They will also jointly manage the warehouse as well. For its part, the Port Authority contributed the land, which sits on the Mobile River.
The Port Authority has partnered with companies before to execute major infrastructure expansions. APM Terminals Mobile is one such agreement, and so is the steel handling facility on Pinto Island.
But never a warehouse facility, Port Authority Director Jimmy Lyons told an audience gathered for the dedication ceremony. “So It was a little bit of an experiment for us, but we have done successfully other public-private partnerships.”
After mulling over the particulars needed to build and operate the terminal — manpower, equipment and cash — Houston-based Richardson and Mobile-based Tri-State Maritime decided to partner, said Tom Adger, vice president of Tri-State Maritime.
Their decision to partner was based on “resources and the experience we had in steel market, particularly with handling of steel coils,” Adger said. “It was a balance between both parties.”
The Industrial Development Board for the city of Mobile agreed to abate taxes for the enterprise for 10 years. They plan to hire as many as 50 people, initially. Operations began in earnest this January.
The multimillion dollar warehouse sits at the north end of the port. Three 50-ton overhead bridge cranes hover over a field of steel coils inside the storage space. Revenue earned from wharfage fees will be split equally between the Port Authority an Alabama Steel Terminals.
On the export side of the business, Outokumpu Stainless USA and AM/NS Calvert are two of their key customers, who both send products to Mexico by ship, according to Mike Richardson, president of Richardson Stevedoring and Logistics.
“We do have some stuff going up to Michigan, but primarily we are servicing the South,” Richardson said. “A lot of it is for the auto grade, but most of the small coils will be used to make corrugated steel. Some is in appliances.”
In the last decade, carmakers have promulgated throughout the Deep South. Plants opened in places like Chattanooga, Tenn. where Volkswagen has operations, and the Toyota manufacturing facility in Tupelo, Miss. The automotive migration combined with a lively steel industry fueled the need for more space.
A majority of the coils are imported from Korea, Richardson said. When they reach Alabama, they’re shipped to various customers, the largest being Hyundai in Montgomery. “When the customer is ready for them they will leave either by truck or by rail,” he said.
There’s also opportunity for growth in other steel sectors.
“We hope to chase after a lot more of the appliance business — as you know –a refrigerator is not hard to dent up, so it starts here, Richardson said. “I know it looks like a big piece of steel, but you have to treat it like an egg.”
