M. John Vickerman Principal Norfolk, Virginia

Port & Intermodal Development In the Face of The Impending Tsunami M. John Vickerman Principal Norfolk, Virginia

Trends Maritime : Current Course & Direction? Cargo Demands, Capacity, Funding, Productivity & Environmental Concerns North American Ports

and Vessel Cargo Handling Circa 1950

and Cargo Handling Circa 2005

and US Navy Fast Frigate Circa 2035

and What We Know Today... Will Be Surely Be Different Tomorrow!

and To Be Competitive Today... Marine/Intermodal Terminals Must Reduce Throughput Cost & Increase Cargo Velocity Securely as Environmental Stewards

and Functional Classification of Global Maritime Cargoes All Maritime Cargo General Cargo Break Bulk Neo-Bulk Sacks, Cartons, Crates, Drums, Pallets, Bags Lumber, Paper, Steel, Autos Bulk Cargo Containerized Containers, Lift On/Lift Off (Lo/Lo), Roll On/Roll Off (Ro/Ro) Liquid Bulk Dry Bulk LNG, Petroleum, Molasses, Chemicals, Vegetable Oil Grain, Sand & Gravel, Scrap Metal, Coal/Coke, Clinker, Fertilizer

Port & Intermodal External Industry Pressures

and The North American Freight Paradox: The Nation s Ports and Their Intermodal Linkages are Experiencing the Best of Times and the Worst of Times in Terms of Growth and Demands on Capacity

and At Current Productivity and Growth Levels by 2020 North American Ports & Their Associated Intermodal Systems Will Be Severely Congested

and We do not have an intermodal system as such. Rather we have an aggregation of multiple, private and public modes, each of which are stove-piped withir own individual areas of interest with little or no true cross communication and collaboration.

and Poll of the Top 1000 Blue Chip Multinational Shipper Priorities 38% Freight Rate 43% Schedule Reliability 12% Transit Time

and Today s Logistics Truth: The customer wants more and is willing to pay less for it.

Southeast Asian Manufacturing Centroid Shift and Current Inbound U.S. Cargo Flow U.S. Intermodal Rail Flow Western Centroid Shift Eastbound: All Water Flow Eastbound: US Intermodal Rail Flow

Southeast Asian Manufacturing Centroid Shift and Current Inbound U.S. Cargo Flow Western Western Centroid Centroid Shift Shift U.S. U.S. Intermodal Intermodal Rail Rail Flow Flow Westbound Westbound All All Water/Suez Water/Suez Flow Flow Westbound Westbound Intermodal Intermodal U.S. U.S. Flow Flow

and The Suez Canal Back Flow

and Ports Ports are are Experiencing Experiencing Dramatic Dramatic Surges Surges in in Seaport Seaport Security Security Costs Costs Port of Miami s Security Costs Today are 600% Higher Than that of 2001

International Maritime Cargo Demand Trends

and World Bank s 2010 Global Economic Prospects World Output will Increase 33% in 10 years Trillions $ 40 $ 40 Trillion 30 20 $ 30 Trillion 10 0 2000 2010

and World Container Forecast to 2024 in TEUs (186% Increase in Next 20 Years) Forecast Growth Rate (CAGR) 1994 to 2004: 8.3 % 243 M 85 M Growth Rate (CAGR) 2004 to 2014: 6.1 % 2014 to 2024: 5.0% Source: Global Insight, 2004

and North American International Flows Canada Europe Asia United States China Mexico Africa 446.6 South America U.S. Major Trading Partners Australia ($ in billions) 266.6 231.4 184 180.6 82.4 Canada Mexico China Japan Germany Source: USDOT/Global Insight, 2004 U.K.

and Global Market Economic Shifts (Country GDP Rank) 2000 #1 USA Japan 2010 2020 2030 2040 2050 USA USA USA USA CHINA #1 Japan CHINA CHINA CHINA USA #2 Japan Japan INDIA INDIA #3 Germany Germany UK UK Germany INDIA Japan Japan France CHINA UK Russia Russia Brazil #5 Italy France INDIA UK Brazil Russia #7 CHINA Italy France Germany UK UK #8 Brazil INDIA Russia France #9 INDIA Russia Italy Brazil France France Russia Brazil Brazil Italy Italy Italy Germany Germany Source: Global Insight, 2005

and 20 31 31 M M TEUs The World s Top 10 Container Gateway Ports TEUs 20.4 20.4 by by 2011 2011 18.41 Hong Kong Alone is Equal to the Top 15 US Container Ports 18 15 12 11.28 POLA + POLB 10.65 10.36 US Ports 8.84 9 Hamburg Antwerp 3 Rotterdam 2 Kaohsiung 1 Pusan 0 Rank 5.45 Shanzhen 3 6.17 Shanghai 6 S in g a p o re 7.11 Hong Kong TEUs in Millions 13.1 (2004) 4 5 6 7 8 9 10 Source: Port Engineering Management, Vol. 22- Issue 6 - December 2004

The Asian Import Challenge

and China North American Maritime : Constant Bearing-Decreasing Range The Perfect Storm : Asian/China Imports

and China-US: Twin Engines of the World Population: US: 298 million China: 1,307 million (1/5 World) The number of Chinese children in elementary school is equivalent to the total US population.

and China US 25 Year Growth (Billions US $) $40.8 B 1,532 % Increase $2.5 B 1979 2004

and China is Leading a Global Economic Rebound becoming the World s Manufacturing Powerhouse Global manufacturing is now centered in China. China will double its GDP by 2010 and quadruple it by 2020. By 2008 China will be the second largest global trading country. China s cargo, including Hong Kong loadings accounts for 70% of the total Pacific cargo flows. China s container volumes will increase from 60 million TEUs to over 100 million TEUs by 2010.

and Mainland China Container Growth (CAGR) 25.9 % 27.3 % 35.4 % 17.1 % 30.1 % 5 Yr Average = 27.2% Increased Volume

and China s Ministry of Railways Signed a 5 year Cooperation Agreement with the US BNSF Railroad for Intermodal Rail Development Develop China s high volume efficient intermodal network $242 billion program to 2020 On-dock & near-dock intermodal transfer yards at ports Ministry to build 18 mega-terminals with 7 at seaports, 40 smaller Intermodal terminals

and Shanghai International Shipping Center Yangshan Deep Port & Logistics Park New Port City New Logistics Park 20 Mile New Port Access Bridge 54 New Berths

and Shanghai International Shipping Center Shanghai Close-Port New City New Port City LINGANG CITY Yangshan Deep Port Logistics Park New Port City A new city Integrating global freight logistics

Shanghai Lingang Logistics Park Intermodal Facility Maximum Annual Capacity = Up to 5.6 Million TEUs (Approx. Equal to 1.5 times current PA NY/NJ Throughput Source: Source: TranSystems TranSystems Data Data

and

and Major West Coast Mexican Port Developments Planned To Avoid Port of LA/LB Congestion Ensenada Ensenada Punta Punta Colonet Colonet Lazaro Lazaro Cardenas Cardenas $1. 2 Billion in Port Infrastructure

and Can North American Marine Terminals Handle the Forecasted Freight Volumes?...

and U.S. Containerized Tonnage Forecast Total 100 1,0 0 00,0,0 000 0 To n s 80 60 79.2 119.5 188.7 236.6 355.6 CAGR 7.8% 6.3% NE (Maine to Virginia) SE (NC to Tampa) Gulf (Mobile to El Paso) SW (San Diego to Oakland NW (Oregon to Alaska) 6.6% 7.6% By 2020 Most US Container Port Gateways 7.2% Will Double or Triple in Volume 40 20 0 1990 1995 2000 2005 2010 Source: DRI/McGraw Hill

and U.S. Maritime Container Growth Current and Future 15,835 1,776 2,557 4,478 Seattle NY/NJ 1,798 4,396 1,809 Tacoma 2,043 3,382 5,566 Virginia 59,420 6,639 1,860 Oakland Charleston 13,101 (TEUs in thousands) 2004 2020 9,420 1,662 6,165 LA/LB 1,437 Houston Savannah 1,010 2,152 Miami Source: USDOT (Forecast figures based on 6 year linear regression)

and 2010 Projected Public Port Capacity Shortfall Capacity Shortfall 75% of the 16 Ports Studied will have Significant Capacity Problems by 2010

and Port Authority NY/NJ Long Range Regional Container Forecast (TEUs) 15,000 Low (40' Channels) TEUs 12,000 Base (45' Channels) High (50' Channels) +212% 9,000 6,000 Current Capacity 3,000 0 1995 2000 2010 2020 2030 2040 Planning Planning Year Year Source: Source: PANY/NJ PANY/NJ -- TranSystems TranSystems Data Data

and ++ 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

and Explosive Southern California Port Container Growth Forecasted 35 million TEUs Source: California Goods Movement Action Plan Jan 2005 Draft

and Capacity vs. Demand Bottom Line: Balancing Capacity and Demand is Both a Public and Private Issue ½ ½ E F Capacity E F Demand Our nation s future economic and environmental health is at risk as a result of declining transportation efficiency and reliability.

and A Sustainable Intermodal Transport Network can only be Achieved Through True Partnerships on a National Perspective Now is the time for a National Balanced Port Planning Policy Including: Comprehensive Economic & Goods Movement Cost/Benefit & Growth Analysis Using Real Data Comprehensive Environmental & Public Health Mitigation Planning

International Port Productivity Comparisons

and Global Port Terminal Productivity North American Ports Are Not As Productive As The Most Productive International Ports By a Factor Of More Than 4 To 1 Source: Source: TranSystems TranSystems Data Data

and Global Marine Terminal Productivity Growth (Circa 1995 to 2003) (Throughput measured in TEUs/Acre/Year) 1995 2003 5YR CAGR Asian Asian Ports Ports European European Ports Ports United United States States Ports Ports 8,834 18,500 19.9% 2,974 6,800 9.2% 2,144 3,900 9.0% US US West West Coast Coast Ports Ports US US Gulf Gulf Coast Coast Ports Ports US US East East Coast Coast Ports Ports 3,567 2,816 1,281 1,281 4,300 4,000 3,300 10.9% 3.7% 10.3% Source: 1995 & 2003 CI Yearbooks, Seaports of the Americas, Port Data

and 2003 International Port Productivity Top 10 Ports in Millions of TEU Throughput Source: Computed from Seaports of the Americas 2003, Containerization International Yearbook - 2003 and port-provided data bases/interviews

and 2003 US Port Productivity Top 10 Ports (in TEUs of Throughput) Source: Source: Computed Computed from from Seaports Seaports of of the the Americas Americas 2003, 2003, Containerization Containerization International International Yearbook Yearbook -- 2003 2003 and and port-provided port-provided data data bases/interviews bases/interviews

Maritime Vessel Technology Trends

and April 26, 1956

and World Container Ship Evolution TEU Capacity 1,700 TEU Ideal Ideal X X 1st Generation (Pre-1960-1970) 2,305 TEU Full Full Cellular Cellular 2nd Generation (1970-1980) 3,220 TEU Panamax Panamax 3rd Generation (1985) Post Post Panamax Panamax 4th Generation 4,848 TEU (1986-2000) Super Super Post Post Panamax Panamax 5th 5th Generation Generation 8,600 8,600 TEU TEU (2000 (2000 -- 2005) 2005) Source: Source: TranSystems TranSystems Data Data

and Madison Maersk (3,928 TEUs) Panama Canal (Current Max Panamax = 5000 TEUs)

and Today s Mega Ships - Measuring Up Eiffel Tower 990 feet Regina Maersk 1043 Ft, 140 Ft wide, 6000+ TEUs Source: Source: TranSystems TranSystems Data Data

and Today s Mega Ships - Measuring Up How Wide, How Deep? Pre-1970 1970-1980 1985 1986-2000 2000-2005 2,305 TEU 3,220 TEU 4,848 TEU 8,600+ TEU 10-11 Containers Wide 11-13 Containers Wide 13-17 Containers Wide 17-24 Containers Wide 1,700 TEU <10 Containers Wide SEA LEVEL Source: Source: TranSystems TranSystems Data Data

and 2003 New Build Orders Expansion of World Post-Panamax Container Fleet 63% Mega Ships 5,000+ TEUs 4,000 4,999 TEUs 3,000 3,999 TEUs 2,000 2,999 TEUs 1,000 1,999 TEUs <1,000 TEUs 0 50 100 150 Number of Orders 200 Source: 2004 Containerisation International Yearbook

and 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: 12,000 15,000 TEU (Suez-Class)

and 2005 COSCO Orders Four 10,000 TEU Vessels LENGTH OVERALL BREADTH MAX. DRAFT OPERATING SPEED 349 M (1145 FT.) 45.6 M (149.6 FT.) 17.2 M (56.4 FT.) 25.8 KNOTS Source: ss Register, Lloyd Source: Lloyd Lloyd Register, February February 2005 2005

and The 15,000 TEU Containership the ship is a flight of fancy but such a ship is with current state of the shipbuilder s art R. G. McLellan, P&O Containers

and The 15,000 TEU Containership LOA. = 400 m (1,312 ft.) Draft = 14 m (46 ft.) BEAM = 69 m (226 ft.) 6-7 above deck 10-11 below deck 28 28 Wide Wide 28 Across 13 13 Wide Wide Panamax Dimensions Source: Source: TranSystems TranSystems Data Data

and Container Ship-in-a-Slip Concept Source: Source: TranSystems TranSystems Data Data

and The 18,000 TEU Malaccamax Reported Predictions/Benefits By 2010 on Asia-Europe Route 30% Cheaper than 4800 TEU Panamax Vessel, primarily due to Economies of Scale US$40/TEU Savings Source: Source: Dynamar Dynamar Consultancy, Consultancy, Rotterdam Rotterdam

and Emergence of North American Fast Feeder Short-Sea Coastal Vessels Lo : r s e b i t u n H o t r n F e w m e ip N h e s Th rans T s c i t s i g 3,000 TEU Feeder Ship 10,000 to 15,000 TEU Mega Ship

and Emerging Viable Container On Barge Coastal Shipping Concepts & Inland Intermodal Port Potential

and High-Speed, Low Wake, Intermodal Float Technology

North American Domestic Truck Growth

and Future US Truck Traffic Growth Today 2020 Source: Source: USDOT USDOT FHWA FHWA Freight Freight Analysis Analysis Framework Framework

and 2020 Truck Freight Flows High-Value & Time Sensitive Products Source: Source: USDOT USDOT FHWA FHWA Freight Freight Analysis Analysis Framework Framework

and 2020 NAFTA US Truck Traffic Flows US/Mexico Truck Traffic US Highway Network (Tons) US/Canada Truck Traffic US Highway Network (Tons) Source: USDOT FHWA Freight Analysis Framework

and Source: Source: Port Port of of Portland, Portland, Oregon Oregon

North American Class I Rail & Intermodal Growth

and North American Intermodal Rail Freight Movement Trends

The Railroad Industry Since the Staggers Act: The photo of the chemical train going over a bridge But: goes well over 50% here. more freight! 35% less track 32% fewer locomotives 27% fewer railcars 60% fewer employees

and Future US Rail Traffic Flows Today 2020

and 2020 Forecast of US Rail Traffic (By Origins in Millions of Tons) 3,000 2,500 2,000 48% Increase 1,500 1,000 500 0 1980 1985 1990 1995 1999 2010 2020 Source: Source: FHWA FHWA Multi-Modal Multi-Modal Freight Freight Analysis, Analysis, Framework Framework Project Project using using Reebie Reebie Associates Associates Data Data

and Weekly Eastbound Double-Stack Services April 1984 (1 Set) 1 Chicago LA/Long Beach Source: Source: Mercer MercerManagement ManagementConsulting Consulting

and Weekly Eastbound Double-Stack Services April 1993 (241 Sets) Seattle/Tacoma/ Portland Montreal 51 New England Toronto Detroit 34 New York Chicago Salt Lake City Oakland 62 Kansas City Cincinnati Columbus St. s St Loui Louis Charlotte LA/Long Beach 45 Memphis 44 Dallas Hampton Roads Charleston Savannah New Orleans 5 Atlanta Baltimore Jacksonville Houston Mexico City Miami Source: Source: Mercer MercerManagement ManagementConsulting Consulting

and Emerging New North-South Double Stack Intermodal Rail Corridors 2.2 Seattle Boston 0.1 Salt Lake City 1.4 Oakland 4.1 Los Angeles/ Omaha Chicago Chicago St. Louis Kansas City Dallas/ Dallas/ Ft. Ft. Worth Worth Existing Port Intermodal Volumes 4.1 Millions of TEUs Atlanta CN/IC Atlanta New Houston Orleans 0.4* Existing Rail Flow * for the region Hampton Hampton Roads 0.9 Memphis Long Beach New York/ York/ Baltimore Baltimore 2.1 Charleston/ Charleston/ Savannah Savannah 0.8 Miami/ Miami/ Everglades Everglades 0.3 NS/CSX/CONRAIL Source: Double-Stack Container Systems: Implications for U.S. Railroads and Ports, U.S. DOT/VZM/TranSystems

and U.S. Double-Stacked Train System East-West 10,000 ft Train Bypass

and A 10,000 TEU Mega-Container Vessel Can Produce High Intermodal Rail Volumes (One Weekly Vessel Call) EXPORT IMPORT 10,000 10,000 TEU TEU Vessel Vessel Vessel Capacity 10,000 TEU (5,892 (5,892 Units) Units) 13.4 Double Stacked Trains Double Stacked Stacked Trains Trains 13.4 Double 75% Intermodal Split

Container Dwell: The Average Length of Time an Average Container Remains on the Terminal U.S. Marine Container Terminal Dwell: 6 to 8 Days (Average)

U.S. Intermodal Rail Terminal Dwell: 1 1/2-2 Day (Average) When You Reduce Terminal Dwell by One Half You Double the Terminal Throughput without Building!

and Port Competitive Mandates Ports & intermodal linkages must change the current cost versus value relationship logistics chain. Become Value Added Multipliers... Successful ports & intermodal terminals next decade must invest in and leverage technology to improve terminal productivity, cost, effectiveness and reliability for all modes of transportation securely as environmental stewards.

Port & Intermodal Development In the Face of The Impending Tsunami Thank You