major issues and trends facing the port and marine … · 2006-04-24 · • cover some mega-trends...
TRANSCRIPT
Major Issues and Trends Facing the Port and Marine Transportation Industry
Major Issues and Trends Facing the Port and Marine Transportation Industry
AAPA MTMTPCharleston, SC
4-24-06
AAPA MTMTPCharleston, SC
4-24-06
ObjectivesObjectives
• Cover Some Mega-trends• Discuss Transportation Industry Challenges• Touch on Some of the Nuts and Bolts• Assess Some of the Implications
• Cover Some Mega-trends• Discuss Transportation Industry Challenges• Touch on Some of the Nuts and Bolts• Assess Some of the Implications
Some Mega TrendsSome Mega Trends
March 21, 2006March 21, 2006
Hemispheric bulk cargo performance has been mixed over the past five years
Hemispheric bulk cargo performance has been mixed over the past five years
2000-2005 Americas' Bulk Cargo Growth
-60,000
-10,000
40,000
90,000
140,000
-4% -2% 0% 2% 4%
5 Year CAGR
5 Y
ear
Ton
nage
Cha
nge
(000
)
United StatesCanadaMexicoCaribbean BasinCentral AmericaSouth America
2000-2005 Americas' Bulk Cargo Growth
-60,000
-10,000
40,000
90,000
140,000
-4% -2% 0% 2% 4%
5 Year CAGR
5 Y
ear
Ton
nage
Cha
nge
(000
)
United StatesCanadaMexicoCaribbean BasinCentral AmericaSouth America
Note: Bubble size indicates 2005 tonnage
Mexico has lead the way in terms of growth in hemispheric container trade
Mexico has lead the way in terms of growth in hemispheric container trade
2000-2005 Americas Containerized Cargo Growth
-10,0000
10,00020,00030,00040,00050,00060,000
0% 10% 20% 30%
5 Year CAGR
5 Y
ear
Ton
nage
Cha
nge
(000
)
United StatesCanadaMexicoCaribbean BasinCentral AmericaSouth America
2000-2005 Americas Containerized Cargo Growth
-10,0000
10,00020,00030,00040,00050,00060,000
0% 10% 20% 30%
5 Year CAGR
5 Y
ear
Ton
nage
Cha
nge
(000
)
United StatesCanadaMexicoCaribbean BasinCentral AmericaSouth America
Note: Bubble size indicates 2005 tonnage
While almost all regions have contributed to overall growth in breakbulk cargoes
While almost all regions have contributed to overall growth in breakbulk cargoes
2000-2005 Americas General Cargo Growth
-1,0001,0003,0005,0007,0009,000
11,00013,000
-5% 5% 15% 25%
5 Year CAGR
5 Y
ear
Ton
nage
Cha
nge
(000
)
United StatesCanadaMexicoCaribbean BasinCentral AmericaSouth America
2000-2005 Americas General Cargo Growth
-1,0001,0003,0005,0007,0009,000
11,00013,000
-5% 5% 15% 25%
5 Year CAGR
5 Y
ear
Ton
nage
Cha
nge
(000
)
United StatesCanadaMexicoCaribbean BasinCentral AmericaSouth America
Note: Bubble size indicates 2005 tonnage
Trade Growth Will Continue to Increase the Pressure on Ports
Trade Growth Will Continue to Increase the Pressure on Ports
• At a 5% CAGR, trade doubles every 15 years
• At a 7.5% CAGR, trade doubles every 10 years
• In 2005, the major North American ports handled a reported 44+ million TEUs
• By 2010, this volume will approximate 60-65 million TEUs
• At a 5% CAGR, trade doubles every 15 years
• At a 7.5% CAGR, trade doubles every 10 years
• In 2005, the major North American ports handled a reported 44+ million TEUs
• By 2010, this volume will approximate 60-65 million TEUs
The next five years will see sustained growth across the hemisphere
The next five years will see sustained growth across the hemisphere
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
10.0%
2000-2005 2005-2010
Container Dry Bulk Liquid Bulk General Total
II. Define the ChallengesII. Define the Challenges
Motor Carrier ChallengesMotor Carrier Challenges
Several factors have driven productivity gains
Several factors have driven productivity gains
Trucking
• Trailer size increased from 40’ to 53’• Truck engine and maintenance cycles lengthened• Truck engine fuel efficiency increased• Empty miles were reduced• Unionized carriers share down• Improved technology and processes
However, many of these productivity opportunities may be reaching their end
However, many of these productivity opportunities may be reaching their end
• Equipment Gains
• Fuel Efficiency Gains
• Labor Gains
Trucking
• 53’ to 57’ Unlikely
• Environmental Regulations
• Hours-of-Service Regulations
In addition to slower productivity gains, the infrastructure is reaching its capacity
InhibitorArea of Improvement
Highway infrastructure is facing significant constraints
Highway infrastructure is facing significant constraints
Percent of Peak-Period Travel at Congestion Level
1982
Percent of Peak-Period Travel at Congestion Level
2002
Source: Texas Transportation Institute at Texas A&M University
Extreme20%
Uncongested33%
Moderate13%Heavy
14%
Severe20%
Extreme5%
Uncongested70%
Moderate10%
Heavy8%
Severe7%
Rail Industry ChallengesRail Industry Challenges
Note: 1980 and 1981 Salaries & Wages Data reflect AAR’s estimate of 95% of total payroll expenses. In comparison year (1982), this measure differs from the 1975,1982-2002 methodology by 0.4%.Sources: AAR “Railroad Ten-Year Trends.” (various ed.); AAR “Analysis of Class 1 Railroads.” (1981); AAR “Railroad Facts” (various ed.).
$0.000
$0.005
$0.010
$0.015
$0.020
$0.025
$0.030
$0.035
1975
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
1982
$/R
TM
Salaries and Wages/RTM Fuel/RTMOther Materials & Supplies & Misc. Expenses/RTM Loss & Damage, Injuries & Insurance/RTMDepreciation/RTM Hire of Equiptment & Joint Facility Net Rent/RTM
Deregulation
Railroads have more than halved their cost/revenue ton-mile since deregulation
Rail
Railroad Expenditures per Revenue Ton-Mile (1982$)
Productivity gains have contributed to the decreasing cost/revenue ton mile
Productivity gains have contributed to the decreasing cost/revenue ton mile
Rail
• Labor requirements declined• Networks and track were rationalized
following mergers• Engine fuel efficiency increased• Railcars increased to 286,000 lb. gross
rail load• Many railcar types were improved
Productivity Improvements
For railroads, some of these productivity opportunities may have reached their limits
For railroads, some of these productivity opportunities may have reached their limits
• Equipment Gains
• Labor Gains
• Fuel Efficiency Gains
Rail
• 315,000 GTW Unlikely
• Adding Employees
• Future Locomotive Environment Regulations?
In addition to slower productivity gains, the infrastructure is reaching its capacity
InhibitorArea of Improvement
Port Industry ChallengesPort Industry Challenges
Port Region Container Capacity SummariesPort Region Container Capacity Summaries
Southport expansion, terminal reconfiguration, higher density and lower dwell should accommodate growth
South Florida
Bayport, Choctaw and some combination of Tampa, Texas City, Corpus Christi, Brownsville, Millennium Port will likely generate surplus capacity
Gulf
North Atlantic, particularly with the AMPT-Portsmouth terminal should provide adequate capacity. The South Atlantic will need to improve density and reduce dwells. A significant increase in Suez services would pose challenges.
Atlantic
Tacoma has largest expansion potential although port-rail and continued PSW diversions pose challenges
PNW
LA/LB face significant capacity challenges during the next five years. Environmental regulation, enforcement and associated costs are key drivers. Oakland will likely have adequate capacity
PSW
Comments2010Net
Position
2005Net
Position
The Port Industry challenge is multi-dimensional and modal
The Port Industry challenge is multi-dimensional and modal
• Harbor deepening• Environmental• Labor efficiency and effectiveness• Berth utilization• Reducing dwell times/increasing velocity:
breakbulk as well as container • Port-rail interface• Regional transportation infrastructure
• Harbor deepening• Environmental• Labor efficiency and effectiveness• Berth utilization• Reducing dwell times/increasing velocity:
breakbulk as well as container • Port-rail interface• Regional transportation infrastructure
The ChallengesThe Challenges
Funding shortfalls
Modally focused
Environmental challenges
Maritime visibility
Maritime Industry: Fragmented approach
Finding the Common Ground
Needs are increasing
Cover Some Nuts & BoltsCover Some Nuts & Bolts
The Big Ships-Where Are They Deployed?The Big Ships-Where Are They Deployed?
6,000 + TEU Vessels by Deployment
0%
20%
40%
60%
80%
100%
6,000-6,999 7,000-7,999 8,000-8,999 9,000+
Asia-Europe China-USWC Pendulum SEAsia/China-Europe SEAsia/China-N Europe Asia-Pacific Coast N Asia-Pacific Coast
Note: Analysis includes 80% of all vessels over 6,000 TEU currently deployed
Big Ship Realities in a Load Center PortBig Ship Realities in a Load Center Port
• 6,300 moves• 26+ to 50 berth working hours at 25-40
moves per hour and six cranes• 18 to 32 sorts
– 3 to 4 load ports to 6 to 8 destinations• 2,500 to 3,200 rail moves
– 10 to 13 double stack trains
• 6,300 moves• 26+ to 50 berth working hours at 25-40
moves per hour and six cranes• 18 to 32 sorts
– 3 to 4 load ports to 6 to 8 destinations• 2,500 to 3,200 rail moves
– 10 to 13 double stack trains
TEUs per Gross Terminal Acre for the World’s Top Ports excluding Major Transshipment Ports
2005
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Shenze
n-4
Guangzh
ou-23Qingd
ao-14
Tokyo-17
Ningbo-22
Busan
-5
Port K
lang-12
Tianjin
-21
Tanjung
Pelepas
-16Sha
nghai-3
Dubai-
11
Tanjung
Priok-2
4Man
ila-25
Rotterd
am-8
Bremen
/Brem
erhav
en-18
Laem C
haban
g-19Ham
burg
-9
Los Angele
s-7Antw
erp-10
Long B
each
-13NY/N
J-15
2003
TEU
's p
er G
ross
Ter
min
al A
cre
Port name followed by 2003 world gross throughput rank
Estimated Average TEUs per Gross Terminal Acre by Coastal Range*
Estimated Average TEUs per Gross Terminal Acre by Coastal Range*
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
TEU
s/G
ross
Ter
min
al A
cre
NANA USSA USG USPSW NAPNW Carib ECCA ECSA0
5001,0001,5002,0002,5003,0003,5004,0004,5005,000
TEU
s/G
ross
Ter
min
al A
cre
NANA USSA USG USPSW NAPNW Carib ECCA ECSA
*For a sample of the larger container ports in each coastal range for which comparable data exists
2004
Operating Realities of 3,000 TEUs per Gross Terminal Acre Per Year
Operating Realities of 3,000 TEUs per Gross Terminal Acre Per Year
11
18
27
0
5
10
15
20
25
30
Ave
rage
Dw
ell T
ime
Operating Mode
WheeledToppickRTG_medium
11
18
27
0
5
10
15
20
25
30
Ave
rage
Dw
ell T
ime
Operating Mode
WheeledToppickRTG_medium
Operating Realities if the average dwell time is 7 days
Operating Realities if the average dwell time is 7 days
4,380
7,300
10,950
0
2,000
4,000
6,000
8,000
10,000
12,000
Thr
ough
put p
er G
ross
T
erm
inal
Acr
e
WheeledToppickRTG_medium
4,380
7,300
10,950
0
2,000
4,000
6,000
8,000
10,000
12,000
Thr
ough
put p
er G
ross
T
erm
inal
Acr
e
WheeledToppickRTG_medium
The Port Industry Faces Significant Challenges in Financing Capital Investment
The Port Industry Faces Significant Challenges in Financing Capital Investment
Competition
Buyers’Market
Pace of technological change
Regulatory Requirements
Construction Lead Times
In addition, a significant portion of port capital investments do not generate revenues and have long investment lead times
In addition, a significant portion of port capital investments do not generate revenues and have long investment lead times
• Dredge spoil disposal areas• Landfill• Environmental remediation
(cleanup)• Mitigation• Road and rail connections• Grade separations• Retention ponds• Rail marshaling yards• Utility rights of way
• Dredge spoil disposal areas• Landfill• Environmental remediation
(cleanup)• Mitigation• Road and rail connections• Grade separations• Retention ponds• Rail marshaling yards• Utility rights of way
Port-Rail Interface ChallengesPort-Rail Interface Challenges
Port Productivity ConferencePort Productivity Conference
Chicago
Memphis
Dallas
40s20s
Reefers
Ist Generation
2nd Generation
3rd Generation
The PortThe Port--Rail Interface: Mastering RubikRail Interface: Mastering Rubik’’s Cubes Cube
The Port-Rail Interface: The Choice ChallengeThe Port-Rail Interface: The Choice Challenge
OHOH100100
8,0008,000
2,0002,0002,0002,000
ChicChic1,0001,000
MemMem700700
DFWDFW300300
NYNY250250
ATLATL300300
4,0004,000
Rail ImpRail Imp Rail ExRail Ex
ChicChic1,0001,000
PortPort250250
RegReg650650
MemMem700700
DFWDFW300300
The Port Rail Interface: Train EquivalentsThe Port Rail Interface: Train Equivalents
00.5
11.5
22.5
33.5
4
8,000' DST Equivalents
Chic Mem DFW
EBWB
The Port Rail Interface: Integrating the Players’Needs & Practices
The Port Rail Interface: Integrating the Players’Needs & Practices
Carrier
• Vessel schedule• Vessel stow• O/Ds• Equipment type• Service Requirements
Railroad
• Network structure• Network capacity• Traffic balance by lane
• Car fleet• Domestic traffic• Blocking requirements
• Schedule
Port
• Landlord or operating
• Rail terminals– On dock– Contiguous– Centralized or decentralized
• Load tracks: #, length, config
• Support tracks: #, length, config
Assess Some of the ImplicationsAssess Some of the Implications
A Systemic Approach is RequiredA Systemic Approach is Required
What Does It Mean?• Focus is on the system,
not a link or node• The objectives are clearly
defined• The responsibilities are
mutually established• Quantifiable measures are
established and used
What Does It Mean?• Focus is on the system,
not a link or node• The objectives are clearly
defined• The responsibilities are
mutually established• Quantifiable measures are
established and used
What Does It Require?• A3 Information
– Available– Accessible– Accurate
• Cooperation• An emphasis on velocity• Flexibility to adapt• Contingencies
What Does It Require?• A3 Information
– Available– Accessible– Accurate
• Cooperation• An emphasis on velocity• Flexibility to adapt• Contingencies
What Are Some of the ToolsWhat Are Some of the Tools
24/7 for everyoneJust in system time
Not my time or your timeMinimum free time, ideally measured in hours on peak days Peak pricingChassis pools & gray boxesVirtual CYsAppointment systemsReal time information tools across the supply chainAn acceleration in adaptation of world class work rules and practices to the U.S . waterfront
24/7 for everyoneJust in system time
Not my time or your timeMinimum free time, ideally measured in hours on peak days Peak pricingChassis pools & gray boxesVirtual CYsAppointment systemsReal time information tools across the supply chainAn acceleration in adaptation of world class work rules and practices to the U.S . waterfront
Major Issues and Trends Facing the Port and Marine Transportation Industry
AAPA MTMTP
Major Issues and Trends Facing the Port and Marine Transportation Industry
AAPA MTMTP
April 24, 2006April 24, 2006