Integrating Ports Into The Nation s Transportation Network
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1 27 th Annual Summer Ports, Waterways, Freight and International Trade Conference June 25, 2002 Pittsburgh, PA Integrating Ports Into The Nation s Transportation Network US Chamber of Commerce Study on North American Port & Intermodal Systems M. John Vickerman Principal TranSystems Corporation Reston, Virginia
2 To Be Competitive Today... Marine/Intermodal Terminals Must Reduce Throughput Cost & Increase Cargo Velocity Securely
3 Today s Logistics Truths: The customer wants more and is willing to pay less for it.
4 A NEXUS for Increased Productivity System Wide Freight Transport Port/Marine Freight Operations Intermodal Rail Freight Operations A Strategic Opportunity for Improved Freight Transportation Highway Freight Operations
5 At Current Productivity and Growth Levels by 2020 North American Ports & Their Associated Intermodal Systems Will Be Obsolete
6 2020 Truck Traffic Growth on Highways (Density of Incremental US Truck Tons) Source: USDOT FHWA Freight Analysis Framework
7 2020 Forecast of US Rail Traffic (By Origins in Millions of Tons) 3,000 2,500 2,000 1,500 1, % Increase Source: FHWA Multi-Modal Freight Analysis, Framework Project using Reebie Associates 1998 data
8 World Bank s Global Economic Prospects 2001 World Output will Increase 33% in 10 years Trillions $ Trillions $ $ 30 Trillion $ 40 Trillion
9 World Container Gateways The World s Top 12 Gateways 17.1 Hong Kong Alone is Equal to the Top Seven US Container Ports TEUs in Millions Hong Kong Singapore 8.2 Kaohsiung POLA + POLB Rotterdam 6.3 Busan 0 Rank Shanghai 3.7 Hamburg 3.6 Antwerp Source: 2000 AAPA, Containerisation International Yearbook Dubai US Ports NY/NJ Manila
10 U.S. Containerized Tonnage Forecast 1,000,000 Tons CAGR Total % 100 NE (Maine to Virginia) 6.3% 80 SE (NC to Tampa) Gulf (Mobile to El Paso) SW (San Diego to Oakland 6.6% 60 NW (Oregon to Alaska) 7.6% By 2020 Most US Container Port Gateways Will Double or Triple in Volume % Source: DRI/McGraw Hill
11 Global Terminal Productivity North American Ports Are Not As Productive As The Most Productive International Ports By a Factor Of More Than 5 To 1
12 Marine Terminal Productivity (Circa 1995) (Throughput in TEUs per Acre) Asian Ports 8,834 TEUs/Acre/Year European Ports 2,974 TEUs/Acre/Year United States Ports 2,144 TEUs/Acre/Year US West Coast Ports 3,567TEUs/Acre/Year US East Coast Ports 1,281TEUs/Acre/Year
13 2001 World Container Terminal Productivity Significant Transshipment Throughput per Gross Acre per Year 400% Increase 400% Increase US Ports TRANSSHIPMENT 1000s TEUs per Gross Terminal Acre Hong Hong Kong Kong Shanghai Shanghai Pusan Pusan Hamburg Hamburg Rotterdam Rotterdam Long Long Beach Beach Tacoma Tacoma Montreal Montreal Los Los Angeles Angeles Antwerp Antwerp Seattle Seattle Oakland Oakland Charleston Charleston New New York York
14 Can North American Marine & Intermodal Terminals Handle the Forecasted Freight Volumes?...
15 Latin America Trade & Transportation Study (LATTS) March 2001 Predicts that Port and Intermodal Systems for the 13 Southern US States Will Reach Capacity in
16 NY/NJ Regional Container Forecast (TEUs) TEUs 15,000 12,000 9,000 6,000 Low (40' Channels) Base (45' Channels) High (50' Channels) 4X 3, Planning Year Current Capacity Source: PANY/NJ,
17 Ports of Los Angeles and Long Beach Container and Intermodal 2020 Forecast TEUs (000s) (Loaded & Empty) = 4.8% CAGR = 6.2% CAGR Cargo will quadruple, a 320% change 57% Imports Container Intermodal Rail 51% Intermodal Split 2X Current Capacity (Worse Case: Asian Crisis Steady-State)
18 San Pedro Bay Ports of Ports of Los Angeles and Long Beach Container Growth Implications: At current growth and per acre productivity, in 18 years the two Ports will require 3,624 new acres of container terminal * * Source: Port of Long Beach
19 P&O Nedlloyd s Mega Container Ship Southampton Class Current World s Largest Container Vessel: Hapag-Lloyd s Shanghai Express = 7,506 TEUs (2 nd of 4 Vessels, Each at 100,000 DWT) OOCL has 6 Vessels of the Same Design on Order for 2003 Capacity: 6,690 TEUs
20 AP Moller Odense Shipyard Ultra Post Panamax Vessels KNUD MAERSK In the Suez (Regina Class: 6,000 TEU) (Sovereign (S) Class: 6,600 TEUs) Total S Class Fleet = 31 vessels (Delivery 2004) Could the Last 10 may be Super-sized to 10,500 TEUs??
21 2002 World Cellular Containership Order Book 60 Vessel Size in TEUs # of Ships Over On Order 2002 On Order 2003 On Order 2004 Orders as of February 2002 Over 20% of the total
22 Mega Container Vessel Trends 1970 Industry Prediction: 3,250 TEU The Reality: Regina Maersk 6,000 TEU Sovereign Maersk 6,600 TEU 20-Wide Planned 8,000 TEU Near Term Possible: 10,000 15,000 TEU (Suez-Class)
23 Port Authority of New York/New Jersey Port Inland Distribution Network (PIDN) CA 400 Miles Lake Ontario NY VT NH ME Atlantic Ocean Legend Barge Route Rail Route Inland Truck Route Lake Erie Pittsburg Buffalo PA Rochester Syracuse Albany Reading Port of Camden Port of Philadelphia Camden Hanover Port of Wilmington NJ MA New Have n CT R I 75 Miles Brockton Fall River Quonset Point Port of Bridgeport Port of New York/ New Jersey
24 Emerging Viable Container On Barge Inland Intermodal Port Potential
25 High-Speed, Low Wake, Intermodal Float Technology
26 M USDOD Agile Port Technology Development
27 Agile Port Deployment IT Data/Information Integration Consist Data Consist Data Data/Info Management Container Vessel Double Stacked Train Major Terminal & Systems Benefits
28 USDOD Agile Port Technology Full Scale IT Demonstration Project Hyundai Terminal Washington United Terminals Port of Tacoma 4th Qtr 2002 Test Potential: Doubling the Terminal Capacity without Building Anything
29 NCF National Chamber Foundation US Chamber of Commerce: Study on North American Port & Intermodal Systems
30 USCOC Project Organization Chart U.S. Chamber of Commerce National Chamber Foundation TranSystems Corporation BLUE RIBBON PANEL 37 Private Sector CEOs & COOs Port & Intermodal Inventory Database Capacity and Operational Effectiveness Public Policy Issues International Shipping Landside Access & Mobility Economic Forecast International Commodity Flow TranSystems Corporation Texas Transportation Institute National Ports and Waterways Institute Norbridge Consultants University Transportation Centers
31 Canadian USCOC Ports Target Ports 1. Vancouver, Canada 2. Tacoma, Washington 3. Seattle, Washington 4. Oakland, California 5. Los Angeles, California 6. Long Beach, California 7. Houston, Texas 8. Mobile, Alabama 9 Galveston, Texas 10. New Orleans, Louisiana 11. Halifax, Canada 12. New York/New Jersey 13. Norfolk, Virginia 14. Philadelphia, Pennsylvania 15. Port Everglades, Florida 16. Charleston, South Carolina West Coast Ports Gulf Coast Ports East Coast Ports
32 Tasks Months Infrastructure Analysis Cargo Forecast Port date collection Port analysis Documentation 2. Intermodal Issues Information review Economic evaluation Synthesis Documentation 3. Land-side Congestion Information review Forecast review Synthesis Documentation 4. Fleet Technology June 1, 2001 Document fleet services Literature review Meetings with lines Def ports by type of services 5. Public/Private Sector Define priority issues Recommend solutions Public/private role Sources of financing Action plan 6. Final Presentation US Chamber Study Schedule USCOC Final Report TEA 21 Reauthorization USDOT C&P Report to Congress
33 NCF National Chamber Foundation Some Initial Findings
34 Growth in Containerized Cargo All 16 of the targeted ports in the study will experience a substantial 1/3 increase over their current container traffic volumes in the next ten years Fourteen of the 16 ports (88%) will experience at least a 50% increase in container traffic. Three of the 16 ports (19%) must double in container volume in the next ten years to maintain market share.
35 Year 2010 Port Capacity Shortfalls By 2004, the start of the Reauthorization of TEA-21, six of the 16 ports (38%) must add substantial capacity in order to maintain minimum levels of acceptable service In five years, one quarter of all North American port gateways will experience a 25% shortfall in containerized cargo capacity. In less than nine years (2010), twelve of the 16 ports (75%) must add extensive new terminal capacity.
36 2020 Vessel Size Predictions Panama Canal Widening Sensitivity Analysis Carrying Capacity per Week (TEU) 160, , , ,000 80,000 60,000 40,000 20, ,500 3,000 4,500 5,500 7,500 10,000 Vessel Capacity (TEU) Year 2001 Year 2010 Scenario 1 Year 2010 Scenario 2 Scenario 1 = Panama Canal is widened Scenario 2 = Panama Canal is NOT widened
37 Port Landside Access Concerns For twelve of the 16 ports (75%), the level of service for truck cargo delivery is already below acceptable competitive levels. Typical terminal entrance gate truck congestion is worse than that experienced in our most congested freeways during rush hours. In ten years marine and intermodal terminal entrance gate truck congestion at our key gateways will see even worse truck congestion than that experienced at our most congested NAFTA border crossings today.
38 NCF National Chamber Foundation Emerging US Policy Themes
39 Theme #1: Although we currently have a semblance of an intermodal system of freight transport in North America, there is substantial room for improvement in our Port & Intermodal Transportation System Efficiency and Productivity. We must develop a consistent measurement of system performance to prioritize our intermodal transportation system improvements. We must understand how the benefits of system Management/Operating and Information Technologies (IT) can increase port and intermodal terminal productivity.
40 Theme #1: Continued Although we currently have semblance of an intermodal system of freight transport in North America, there is substantial room for improvement in our Port & Intermodal Transportation System Efficiency and Productivity. On a national basis, we need to develop a better realtime freight data tracking system. Labor productivity and terminal operating practices should be evaluated, and if necessary, pragmatically enhanced to meet the future needs of our national freight transport system.
41 Theme #2: Port & Intermodal Transportation System Security has become a public/private national priority issue. Improved productivity and transportation system security are not mutually exclusive. Promising emerging Information Technologies (IT) could play a key role in enhancing cargo security. The deployment of these technologies could have significant system performance benefits for the intermodal transportation system as a whole.
42 Port Security & Port Productivity Are Not Mutually Exclusive!
43 Theme #3: Funding for needed Port & Intermodal Freight Transportation Infrastructure should be contingent on finding Smart IT Solutions with both community and environmental benefits and support. Congress must renew & extend our national freight policy mandate & vision They must take a leadership role in defining a new national freight agenda. Ports and Intermodal terminals are no longer able to build their way out of congestion & capacity problems Expansion of ALL federal aid program eligibility for freight projects.
44 Theme #4: New Cross-Cutting Systemic Planning & Implementation Strategies are needed to guide the future of port and intermodal transportation freight development. Rising social costs and heightened environmental concerns-mitigation strategies necessitate national leadership on freight transportation issues. The nation s failure to accommodate the growing volume of freight transportation needs, will negatively impact all levels of our economy and national collective quality of life Jobs, Wages, Taxes
45 Theme #4:Continued New Cross-Cutting Systemic Planning & Implementation Strategies are needed to guide the future of port and intermodal transportation freight development. It is essential that Congress consider a National Freight Transport Research Development Program with a fully collaborative freight operations and management program of pragmatic applied research. Multi-State and Jurisdictional Trade Corridors and trade area Multi-modal Transport Consortia should be created to ensure that investment in the national infrastructure is carried out in a rational, nationally beneficial and cost effective manner.
46 27 th Annual Summer Ports, Waterways, Freight and International Trade Conference June 25, 2002 Pittsburgh, PA Integrating Ports Into The Nation s Transportation Network US Chamber of Commerce Study on North American Port & Intermodal Systems M. John Vickerman Principal TranSystems Corporation Reston, Virginia
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