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  • 7/29/2019 S46_Use of Containers to Carry Bulk & Breakbulk Commodities and Its Impact on Gulf Region Ports and International Trade_LTC2013

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    Use of Containers to Carry Bulk and Breakbulk

    Commodities and its Impact on Gulf Region Portsand International Trade

    The Panama Canal Expansion (PCE) WillIncrease the Containerization of Bulk and BreakbulkCargo and Significantly Impact International Trafficalong the East Coast of the US, in the Gulf, and at

    Louisiana Ports

    James R. AmdalAsaf Ashar, PhD.

    UNO Transportation Institute

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    Study Tasks

    1. Review Professional Literature, Daily News Briefs andRelated Source Materials on Container Traffic and

    International Trade within North, Central and South America

    2. Identify Related Infrastructure Projects and Timelines

    (Quantify Competitive Port Environment)3. Create an Advisory Task Force on Trade Lane Dynamics and

    Commodity Flow Volumes

    4. Identify Promising Commodities with Growth Projections

    5. Identify State Incentive Programs or Related Inducements

    to Grow Import and Export Volumes

    6. Final Report

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    Relevant Existing Conditions Affecting LA Ports and the MR.

    1. No significant traffic generator for containers using Mississippi River.

    2. Neither new transport technologies or enhanced landside infrastructurewill appreciably change this situation.

    3. North - South container trade flows are unbalanced with

    insufficient north bound traffic to support Container On Barge service.

    4. No Asian Service currently serves a MR port.

    5. Insufficient container traffic precludes the MR being considered as a

    viable National Marine Highway.

    6. Limited # of containers for shipment of LA agricultural commodities

    (rice to Houston, coffee to New Orleans)

    Consequently UNOTI is investigating the impact of the Panama Canal

    Expansion or other container trade generators on Gulf Coast import

    export flows and LA ports

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    The Panama Canal Expansion will double its existing

    capacity and add 5M new TEUs in the Gulf

    $5.2B construction complete mid 2015

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    Vessel Size Comparison

    Sector Existing Panamax Post Panamax

    Container Approx. 4,200 TEU Approx. 13,200 TEU

    Beam Limited Length Limited

    Dry Bulk Approx. 85,000 dwt Capesize in ballast

    Approx. 120,000 dwt laden

    Draft limited

    Tanker Approx. 80,000 dwt Suezmax in ballast

    Beam limited Approx. 120,000 dwt laden

    Draft limited

    Source: Professor Paul Stott

    at the Low Carbon Shipping Conference 2012

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    Port of New Orleans: Containers and International Trade

    1. Rapid growth in container trade:

    2011 TEUs 427,515 33% empties

    2010 TEUs 328,878 28% empties

    Existing Napoleon Avenue Container Terminal capacity = 640,000 TEUs.Phase 3= +200,000 TEU

    Max Build-out = 1.5M TEU (Sufficient capacity)

    2 Napoleon Avenue Container Terminal is served by MSC, CMA CGM, Maersk, Zim,

    Seaboard Marine, CSAV, Libra, Hapag-Lloyd & Hamburg Sud

    3. New Container Service to Central and South America by Hamburg Sud. Serves

    Cauceda, DR; Buenos Aires, Argentina; Montevideo, Uruguay; Rio Grande, Suape,

    Navegentes & Rio de Janeiro, Brazil

    4. 2011 LA exports top historic record (grew 45.6%)

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    What is the competitive environment for LA?

    Pacific Northwest Cluster: Seattle,

    Tacoma, Greater Vancouver andPrince Rupert, BC

    Los Angeles / Long Beach

    Lazaro Cardenas, Mexico

    New York / New Jersey Southeast Cluster: Baltimore,

    Charleston, Savannah, JAXPORT,

    Miami

    Gulf Coast: Tampa, Mobile, New

    Orleans, Houston

    Central / South America: Colon,

    Panama; Cartagena, Colombia

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    Detailed Project Inventory

    PANYNJ Increasing Height of Bayonne Bridge 64 = $1B

    Port of Charleston Harbor Deepening = $300M State Funds Only

    Port of Savannah Harbor Expansion = $652M ($181M from State)

    Environmental LitigationJAXPORT St. John River Dredging to 47 = $100 x (TBD)

    Port of Miami Channel Dredging to 50 = $180M, Rail Rehab = $50M

    New Truck Tunnel = $915M

    Port of Houston Channel Deepening from 40 to 45 = $112M2013 Terminal Upgrades / New Equipment = $228M

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    Recently retired PCA CEO Alberto Zubieta stated: the main

    beneficiaries of the PCE will be the East Coast and Gulf

    Coast of the United States. Mr. Zubieta believes that the PCE will make

    U.S. grain exports as well as crude oil and natural gas (derived from oilshale) more competitive on the world market. It will also increase U.S.

    coal shipments to China and Asia.

    He made no mention of the PCEs impact on the container trade but this

    is a topic of intense interest to ports in North, Central and South

    America. Most experts agree +5M new containers in Gulf.

    Opinions vary widely but all agree the PCE will impact world trade. They

    disagree on where and to what degree

    That is the $64B question we and our Advisory Committee are seeking

    to answer for LA.

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    Impact of Jones Act on US Coastal

    Shipping

    Asaf Ashar

    UNO Transportation InstituteNational Ports & Waterways Initiative

    www.asafashar.com

    February 19, 2013

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    Jones Act BackgroundThe Merchant Marine Act of 1920 is a federal statute

    that regulates maritime commerce in U.S. waters and

    between U.S. ports. Section 27 specifically deals with

    cabotage (coastal shipping) and stipulates that all goods

    transported by water between U.S. ports must becarried in U.S.-flag ships, constructed in the U.S., owned

    by U.S. citizens and crewed by U.S. citizens and U.S.

    permanent residents. When passed into law, the intent

    of this Act was to support the U.S. maritime industry.

    The following charts illustrate its effect.

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    Objective: Divert Freight to Marine Highway

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    AMH Initiative

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    US vs. Foreign Ship Costs

    Construction Cost

    US Containership $200 million, Foreign $35 million

    a 5.7 multiplier Operating Cost (Labor)

    US Containership $21,194/ Day, Foreign $9,583/Day

    a 2.2 multiplier Externalities

    Environment (Congestion, Hwy Maintenance, AirPollution)

    National Defense (Dual Use); more expensive ships(structure, speed, range)

    Hawaii Free Press, Jan 2012; DOT/MarAd 2011; Ashar 2012

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    Jones Act Waiver

    US Flag Remains Intact US CrewRemains, but Functional Crew

    Size is smaller

    US Built Temporary Waiver, Reflag ForeignBuilt

    Only Coastwise Routes for Containers/Trailers

    (no off-shore to Puerto Rico, Alaska, Hawaii) Precedent with Product Tankers

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    Selected Case Studies

    Domestic Short (500 NM) Inter-Regional, Nation-Wide

    Frequency 2+/week

    International Short(

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    Potential Service Routes

    CCDOT 2011; American Feeder Line 2012; Ashar 2012

    Domestic Routes Feeder Routes

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    Selected Ships for Case Studies

    Yonge, 2011; Kunkle; AFL; Ashar 2012

    Domestic Long: 285 53-ft; 25 k; CassettesDomestic Short: 100 53-ft; 18 k;

    Road Chassis

    Feeder: 992 TEUs, 53-ft; 14 k;

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    2,926 ships in 1960

    231 ships in 2010

    Remake a US Flagged Fleet

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