27 Annual Summer Ports, Waterways, Freight and ...onlinepubs.trb.org/onlinepubs/mb/2002Ports/06Vickerman.pdfIntegrating Ports Into The Nation’s Transportation Network Into The Nation’s

Integrating PortsInto The Nation’s

Transportation Network



M. John VickermanPrincipal

TranSystems CorporationReston, Virginia



June 25, 2002 Pittsburgh, PAJune 25, 2002 Pittsburgh, PA

27th Annual SummerPorts, Waterways, Freight and International Trade Conference

27th Annual SummerPorts, Waterways, Freight and International Trade Conference

US Chamber of Commerce Study onNorth American Port & Intermodal Systems


27th Annual TRB Summer Meeting Pittsburgh, PA

Copyright © 2002Copyright © 2002

To Be Competitive Today...Marine/Intermodal

Terminals Must ReduceThroughput Cost &

Increase Cargo Velocity…Securely

To Be Competitive Today...Marine/Intermodal

Terminals Must ReduceThroughput Cost &

Increase Cargo Velocity…Securely



Today’s Logistics Truths:Today’s Logistics Truths:

“The customerwants more and iswilling to pay less

for it.”

“The customerwants more and iswilling to pay less

for it.”



A NEXUS for Increased Productivity“System Wide Freight Transport”

A NEXUS for Increased Productivity“System Wide Freight Transport”

Port/MarineFreight

Operations

Port/MarineFreight

Operations

HighwayFreight

Operations

HighwayFreight

Operations

Intermodal Rail Freight

Operations

Intermodal Rail Freight

Operations

“A Strategic Opportunity for Improved

Freight Transportation”

“A Strategic Opportunity for Improved

Freight Transportation”



At Current Productivity and Growth Levels by 2020 North American Ports & Their Associated

Intermodal Systems Will Be Obsolete



2020 Truck Traffic Growth on Highways(Density of Incremental US Truck Tons)

Source: USDOT FHWA Freight Analysis FrameworkSource: USDOT FHWA Freight Analysis Framework



2020 Forecast of US Rail Traffic(By Origins in Millions of Tons)

Source: FHWA Multi-Modal Freight Analysis, Framework Project using Reebie Associates 1998 data

Source: FHWA Multi-Modal Freight Analysis, Framework Project using Reebie Associates 1998 data

00500500

1,0001,0001,5001,5002,0002,0002,5002,5003,0003,000

19801980 19851985 19901990 19951995 19991999 20102010 20202020

48% Increase48% Increase



World Bank’s“Global Economic Prospects 2001”

World Bank’s“Global Economic Prospects 2001”

00

World Output will Increase 33% in 10 yearsWorld Output will Increase 33% in 10 years

Trill

ions

$Tr

illio

ns $

1010

2020

3030

4040

20002000

$ 30 Trillion$ 30 Trillion

20102010

$ 40 Trillion$ 40 Trillion



0

3

6

9

0

3

6

9

12

15

12

15

1 2 3 4 5 6 7 8 9 10 11 12Rank 1 2 3 4 5 6 7 8 9 10 11 12Rank

18

TEU

s in

Mill

ions

TEU

s in

Mill

ions

Source: 2000 AAPA, Containerisation International Yearbook Source: 2000 AAPA, Containerisation International Yearbook

Kao

hsi u

ng

Shan

ghai

Ro t

terd

am

Bus

an

Ham

b urg

Ant

wer

p

18.118.1

Sing

apor

e17.117.1

8.28.2

7.07.0 6.46.4 6.36.3

4.24.23.73.7 3.63.6

Dub

ai

2.82.8 2.82.8 2.72.7

Man

ila

Hon

g K

ong

US Ports

World Container Gateways“The World’s Top 12 Gateways”

Hong Kong Alone is Equal to theTop Seven US Container Ports

NY/NJ

POLA + POLB



U.S. Containerized Tonnage ForecastU.S. Containerized Tonnage Forecast

Source: DRI/McGraw HillSource: DRI/McGraw Hill

0

20

40

60

80

100

0

20

40

60

80

100

1990 1995 2000 2005 20101990 1995 2000 2005 2010

CAGRCAGR

NE (Maine to Virginia)SE (NC to Tampa)Gulf (Mobile to El Paso)SW (San Diego to OaklandNW (Oregon to Alaska)

NE (Maine to Virginia)SE (NC to Tampa)Gulf (Mobile to El Paso)SW (San Diego to OaklandNW (Oregon to Alaska)

6.3%

6.6%7.6%

7.2%

6.3%

6.6%7.6%

7.2%

1,00

0,00

0 To

ns1,

000,

000

Tons

Total 79.2 119.5 188.7 236.6 355.6 7.8%Total 79.2 119.5 188.7 236.6 355.6 7.8%

By 2020 Most US Container Port GatewaysWill Double or Triple in Volume



Global TerminalProductivity

North American Ports Are Not As ProductiveAs The Most Productive International Ports

By a Factor Of More Than 5 To 1



Marine Terminal Productivity(Circa 1995)

(Throughput in TEUs per Acre)

Marine Terminal Productivity(Circa 1995)

(Throughput in TEUs per Acre)

Asian PortsEuropean PortsUnited States Ports

Asian PortsAsian Ports 8,8348,834 TEUs/Acre/Year TEUs/Acre/Year European PortsEuropean Ports 2,9742,974 TEUs/Acre/Year TEUs/Acre/Year United States PortsUnited States Ports 2,1442,144 TEUs/Acre/Year TEUs/Acre/Year

US West Coast PortsUS East Coast PortsUS West Coast PortsUS West Coast Ports 3,5673,567 TEUs/Acre/Year TEUs/Acre/Year 3,5673,567 TEUs/Acre/Year TEUs/Acre/Year US East Coast PortsUS East Coast Ports 1,2811,281 TEUs/Acre/YearTEUs/Acre/Year1,2811,281 TEUs/Acre/YearTEUs/Acre/Year



002.52.5557.57.5

101012.512.5151517.517.5202022.5

Hong Kong

Hong KongShan

ghai

Shanghai

Pusan

Pusan

Hamburg

Hamburg

Rotterdam

Rotterdam

Long Beach

Long Beach

Tacoma

Tacoma

Montreal

Montreal

Los Angele

s

Los Angele

sAntw

erp

Antwerp

Seattle

Seattle

Oaklan

d

Oaklan

dCharl

eston

Charles

tonNew

York

New York

2001 World Container Terminal Productivity “Significant Transshipment”

2001 World Container Terminal Productivity “Significant Transshipment”

Throughput per Gross Acre per YearThroughput per Gross Acre per Year

1000

s TE

Us

per G

ross

Term

inal

Acr

e

1000

s TE

Us

per G

ross

Term

inal

Acr

e US Ports

TRANSSHIPMENT

400%Increase

400%Increase



Can North AmericanMarine & IntermodalTerminals Handle the

Forecasted Freight Volumes ?...

Can North AmericanMarine & IntermodalTerminals Handle the

Forecasted Freight Volumes ?...



Latin America Trade & Transportation Study(LATTS) – March 2001

Latin America Trade & Transportation Study(LATTS) – March 2001

Predicts that Port and Intermodal Systems for the 13 Southern US States

Will Reach Capacity in 2008 - 2012



NY/NJ Regional Container Forecast(TEUs)

NY/NJ Regional Container Forecast(TEUs)

0

3,000

6,000

9,000

12,000

15,000

0

3,000

6,000

9,000

12,000

15,000

1995 2000 2010 2020 2030 20401995 2000 2010 2020 2030 2040

Low (40' Channels)Base (45' Channels)High (50' Channels)

Low (40' Channels)Base (45' Channels)High (50' Channels)

Source: PANY/NJ, Source: PANY/NJ

TE

Us

TE

Us

Planning YearPlanning Year

4X4X

CurrentCapacityCurrentCapacity



Ports of Los Angeles and Long BeachContainer and Intermodal 2020 ForecastPorts of Los Angeles and Long Beach

Container and Intermodal 2020 Forecast

0

5

10

15

20

25

1996 2000 2005 2010 2015 20201996 2000 2005 2010 2015 2020

Intermodal RailIntermodal Rail

ContainerContainer

51% IntermodalSplit

51% IntermodalSplit57% Imports57% Imports

1996 - 2000 = 4.8% CAGR2000 - 2020 = 6.2% CAGR

“Cargo will quadruple, a 320% change”

1996 - 2000 = 4.8% CAGR2000 - 2020 = 6.2% CAGR

“Cargo will quadruple, a 320% change”

TEU

s (0

00s)

(Loa

ded

& E

mpt

y)TE

Us

(000

s) (L

oade

d &

Em

pty)

(Worse Case: Asian Crisis Steady-State)(Worse Case: Asian Crisis Steady-State)

CurrentCapacityCurrentCapacity

2X2X



San Pedro Bay Ports of Ports of Los Angeles and Long Beach

Container Growth Implications:

San Pedro Bay Ports of Ports of Los Angeles and Long Beach

Container Growth Implications:

“At current growth and per acreproductivity, in 18 years the two Ports

will require 3,624 new acres ofcontainer terminal”*

“At current growth and per acreproductivity, in 18 years the two Ports

will require 3,624 new acres ofcontainer terminal”*

* Source: Port of Long Beach* Source: Port of Long Beach



Capacity: 6,690 TEUsCapacity: 6,690 TEUs

P&O Nedlloyd’s Mega Container ShipP&O Nedlloyd’s Mega Container Ship

Southampton ClassSouthampton Class

Current World’s Largest Container Vessel:Hapag-Lloyd’s Shanghai Express = 7,506 TEUs

(2nd of 4 Vessels, Each at 100,000 DWT)OOCL has 6 Vessels of the Same Design

on Order for 2003



AP Moller Odense ShipyardUltra Post Panamax VesselsKNUD MAERSK In the Suez(Regina Class: 6,000 TEU)

(Sovereign (S) Class: 6,600 TEUs)

AP Moller Odense ShipyardUltra Post Panamax VesselsKNUD 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 ??

Total S Class Fleet = 31 vessels (Delivery 2004)Could the Last 10 may be

Super-sized to 10,500 TEUs ??



2002 World Cellular Containership Order Book

0

10

20

30

40

50

60

# of Ships

On Order2002

On Order2003

On Order2004

500-9991000-19992000-29993000-39994000-49995000-5999Over 6000

Vessel Size in TEUs

Over 20% of the total

Orders as of February 2002

1321

24



Mega Container Vessel TrendsMega Container Vessel Trends

The Reality:

Regina Maersk 6,000 TEU

Sovereign Maersk 6,600 TEU

20-Wide Planned 8,000 TEU

The Reality:

Regina Maersk 6,000 TEU

Sovereign Maersk 6,600 TEU

20-Wide Planned 8,000 TEU

1970 Industry Prediction: “3,250 TEU”1970 Industry Prediction: “3,250 TEU”

Near Term Possible: 10,000 – 15,000 TEU(Suez-Class)



Port Authority of New York/New JerseyPort Inland Distribution Network (PIDN)

Port Authority of New York/New JerseyPort Inland Distribution Network (PIDN)

CA

NY

PA

VT NH

BrocktonMA

RINew

Haven

Syracuse

RochesterBuffalo

Camden

Reading

Atl

an

tic

Oce

an

Albany

Pittsburg

FallRiver

Port of Camden

Port of Philadelphia

Port of Bridgeport

HanoverPort of

Wilmington

Lake Onta

rio

ME

Lake Erie

CTQuonset

Point

400 Miles400 Miles

75 Miles75 Miles

Port ofNew York/

New JerseyNJ

LegendBarge RouteRail RouteInland Truck Route



Emerging Viable Container On BargeInland Intermodal Port Potential

Emerging Viable Container On BargeInland Intermodal Port Potential



High-Speed, Low Wake,Intermodal Float Technology

MM

USDODAgile Port TechnologyDevelopment

USDODAgile Port TechnologyDevelopment



Agile Port DeploymentIT Data/Information Integration

Agile Port DeploymentIT Data/Information Integration

Data/InfoManagement

Data/InfoManagement

Consist DataConsist Data Consist DataConsist Data

Major Terminal & Systems BenefitsMajor Terminal & Systems Benefits

ContainerVessel

ContainerVessel Double Stacked

TrainDouble Stacked

Train



USDOD Agile Port TechnologyFull Scale IT Demonstration Project

USDOD Agile Port TechnologyFull Scale IT Demonstration Project

Hyundai TerminalWashington United Terminals

Port of Tacoma4th Qtr 2002 Test

Potential: Doubling theTerminal Capacity without

Building Anything



US Chamber of Commerce:Study on North American

Port & Intermodal Systems

US Chamber of Commerce:Study on North American

Port & Intermodal Systems

NCFNational Chamber Foundation



USCOC Project Organization ChartUSCOC Project Organization Chart

University Transportation CentersUniversity Transportation Centers

Capacity andOperational

Effectiveness

Port &IntermodalInventoryDatabase

Public Policy Issues

InternationalShipping

LandsideAccess &Mobility

TranSystems Corporation

Texas Transportation Institute

National Ports and Waterways Institute

Norbridge Consultants

TranSystems Corporation

Texas Transportation Institute

National Ports and Waterways Institute

Norbridge Consultants

EconomicForecastInternationalCommodity Flow

BLUE RIBBON PANEL37 Private Sector

CEOs & COOs

U.S. Chamber of CommerceNational Chamber Foundation

TranSystemsCorporation



USCOCTarget Ports

USCOCTarget Ports

1. Vancouver, Canada2. Tacoma, Washington3. Seattle, Washington4. Oakland, California5. Los Angeles, California6. Long Beach, California7. Houston, Texas8. Mobile, Alabama9 Galveston, Texas10. New Orleans, Louisiana11. Halifax, Canada12. New York/New Jersey13. Norfolk, Virginia14. Philadelphia, Pennsylvania15. Port Everglades, Florida16. Charleston, South Carolina

1. Vancouver, Canada2. Tacoma, Washington3. Seattle, Washington4. Oakland, California5. Los Angeles, California6. Long Beach, California7. Houston, Texas8. Mobile, Alabama9 Galveston, Texas10. New Orleans, Louisiana11. Halifax, Canada12. New York/New Jersey13. Norfolk, Virginia14. Philadelphia, Pennsylvania15. Port Everglades, Florida16. Charleston, South Carolina

West CoastPorts

West CoastPorts

Gulf CoastPorts

Gulf CoastPorts

CanadianPorts

CanadianPorts

East CoastPorts

East CoastPorts



1. Infrastructure AnalysisCargo ForecastPort date collectionPort analysisDocumentation

2. Intermodal IssuesInformation reviewEconomic evaluationSynthesisDocumentation

3. Land-side CongestionInformation reviewForecast reviewSynthesisDocumentation

4. Fleet TechnologyDocument fleet services Literature reviewMeetings with linesDef ports by type of services

5. Public/Private SectorDefine priority issuesRecommend solutionsPublic/private roleSources of financingAction plan

6. Final Presentation

Tasks Months 1 2 3 4 5 6 7 8 9 10 1112 13 14 15 16 1718 1 9

June

1, 2

001

June

1, 2

001

US Chamber Study ScheduleUS Chamber Study Schedule

2001200120022002 20032003

20022002

USCOC Final ReportUSCOC Final Report

USDOT C&PReport to Congress

USDOT C&PReport to Congress

2003 TEA 21Reauthorization

2003 TEA 21Reauthorization



Some Initial FindingsSome Initial Findings




Growth in Containerized CargoGrowth in Containerized Cargo• All 16 of the targeted ports in the study will

experience a substantial 1/3 increase over theircurrent container traffic volumes in the next tenyears

• Fourteen of the 16 ports (88%) will experienceat least a 50% increase in container traffic.

• Three of the 16 ports (19%) must double incontainer volume in the next ten years tomaintain market share.

• All 16 of the targeted ports in the study willexperience a substantial 1/3 increase over theircurrent container traffic volumes in the next tenyears

• Fourteen of the 16 ports (88%) will experienceat least a 50% increase in container traffic.

• Three of the 16 ports (19%) must double incontainer volume in the next ten years tomaintain market share.



Year 2010 Port Capacity ShortfallsYear 2010 Port Capacity Shortfalls• By 2004, the start of the Reauthorization of

TEA-21, six of the 16 ports (38%) must addsubstantial capacity in order to maintainminimum levels of acceptable service

• In five years, one quarter of all North Americanport gateways will experience a 25% shortfallin containerized cargo capacity.

• In less than nine years (2010), twelve of the 16ports (75%) must add extensive new terminalcapacity.

• By 2004, the start of the Reauthorization ofTEA-21, six of the 16 ports (38%) must addsubstantial capacity in order to maintainminimum levels of acceptable service

• In five years, one quarter of all North Americanport gateways will experience a 25% shortfallin containerized cargo capacity.

• In less than nine years (2010), twelve of the 16ports (75%) must add extensive new terminalcapacity.



2020 Vessel Size PredictionsPanama Canal Widening Sensitivity Analysis

2020 Vessel Size PredictionsPanama Canal Widening Sensitivity Analysis

020,00040,00060,00080,000

100,000120,000140,000160,000

Car

ryin

g C

apac

ity p

er

Wee

k (T

EU)

1,500 3,000 4,500 5,500 7,500 10,000Vessel Capacity (TEU)

Year 2001 Year 2010 Scenario 1 Year 2010 Scenario 2

020,00040,00060,00080,000

100,000120,000140,000160,000

Car

ryin

g C

apac

ity p

er

Wee

k (T

EU)

1,500 3,000 4,500 5,500 7,500 10,000Vessel Capacity (TEU)

Year 2001 Year 2010 Scenario 1 Year 2010 Scenario 2

Scenario 1 = Panama Canal is widenedScenario 2 = Panama Canal is NOT widened Scenario 1 = Panama Canal is widenedScenario 2 = Panama Canal is NOT widened



Port Landside Access Concerns Port Landside Access Concerns• For twelve of the 16 ports (75%), the level of

service for truck cargo delivery is already belowacceptable competitive levels.

• Typical terminal entrance gate truck congestion isworse than that experienced in our mostcongested freeways during rush hours.

• In ten years marine and intermodal terminalentrance gate truck congestion at our keygateways will see even worse truck congestionthan that experienced at our most congestedNAFTA border crossings today.

• For twelve of the 16 ports (75%), the level ofservice for truck cargo delivery is already belowacceptable competitive levels.

• Typical terminal entrance gate truck congestion isworse than that experienced in our mostcongested freeways during rush hours.

• In ten years marine and intermodal terminalentrance gate truck congestion at our keygateways will see even worse truck congestionthan that experienced at our most congestedNAFTA border crossings today.



Emerging US PolicyThemes

Emerging US PolicyThemes




Theme #1: Although we currently have a semblance ofan intermodal system of freight transport in NorthAmerica, there is substantial room for improvement inour Port & Intermodal Transportation System Efficiencyand Productivity.

Theme #1: Although we currently have a semblance ofan intermodal system of freight transport in NorthAmerica, there is substantial room for improvement inour Port & Intermodal Transportation System Efficiencyand Productivity.

• We must develop a consistent measurement of systemperformance to prioritize our intermodal transportationsystem improvements.

• We must understand how the benefits of systemManagement/Operating and Information Technologies(IT) can increase port and intermodal terminalproductivity.

• We must develop a consistent measurement of systemperformance to prioritize our intermodal transportationsystem improvements.

• We must understand how the benefits of systemManagement/Operating and Information Technologies(IT) can increase port and intermodal terminalproductivity.



Theme #1: Continued…Although we currently havesemblance of an intermodal system of freighttransport in North America, there is substantial roomfor improvement in our Port & IntermodalTransportation System Efficiency and Productivity.

Theme #1: Continued…Although we currently havesemblance of an intermodal system of freighttransport in North America, there is substantial roomfor improvement in our Port & IntermodalTransportation System Efficiency and Productivity.

• On a national basis, we need to develop a better real-time freight data tracking system.

• Labor productivity and terminal operating practicesshould be evaluated, and if necessary, pragmaticallyenhanced to meet the future needs of our nationalfreight transport system.

• On a national basis, we need to develop a better real-time freight data tracking system.

• Labor productivity and terminal operating practicesshould be evaluated, and if necessary, pragmaticallyenhanced to meet the future needs of our nationalfreight transport system.



Theme #2: Port & Intermodal TransportationSystem Security has become a public/privatenational priority issue.

Theme #2: Port & Intermodal TransportationSystem Security has become a public/privatenational priority issue.

• Improved productivity and transportation systemsecurity are not mutually exclusive.

• Promising emerging Information Technologies (IT)could play a key role in enhancing cargo security.The deployment of these technologies could havesignificant system performance benefits for theintermodal transportation system as a whole.

• Improved productivity and transportation systemsecurity are not mutually exclusive.

• Promising emerging Information Technologies (IT)could play a key role in enhancing cargo security.The deployment of these technologies could havesignificant system performance benefits for theintermodal transportation system as a whole.



Port Security& Port

Productivity… Are Not Mutually

Exclusive!

Port Security& Port

Productivity… Are Not Mutually

Exclusive!



Theme #3: Funding for needed Port & IntermodalFreight Transportation Infrastructure should becontingent on finding Smart IT Solutions with bothcommunity and environmental benefits and support.

Theme #3: Funding for needed Port & IntermodalFreight Transportation Infrastructure should becontingent on finding Smart IT Solutions with bothcommunity and environmental benefits and support.

• Congress must renew & extend our national freightpolicy mandate & vision – They must take a leadershiprole 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 forfreight projects.

• Congress must renew & extend our national freightpolicy mandate & vision – They must take a leadershiprole 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 forfreight projects.



Theme #4: New Cross-Cutting SystemicPlanning & Implementation Strategies areneeded to guide the future of port andintermodal transportation freight development.

Theme #4: New Cross-Cutting SystemicPlanning & Implementation Strategies areneeded to guide the future of port andintermodal transportation freight development.

• Rising social costs and heightened environmentalconcerns-mitigation strategies necessitate nationalleadership on freight transportation issues.

• The nation’s failure to accommodate the growingvolume of freight transportation needs, will negativelyimpact all levels of our economy and national collectivequality of life… Jobs, Wages, Taxes

• Rising social costs and heightened environmentalconcerns-mitigation strategies necessitate nationalleadership on freight transportation issues.

• The nation’s failure to accommodate the growingvolume of freight transportation needs, will negativelyimpact all levels of our economy and national collectivequality of life… Jobs, Wages, Taxes



Theme #4:Continued… New Cross-CuttingSystemic Planning & Implementation Strategiesare needed to guide the future of port andintermodal transportation freight development.

Theme #4:Continued… New Cross-CuttingSystemic Planning & Implementation Strategiesare needed to guide the future of port andintermodal transportation freight development.

• It is essential that Congress consider a NationalFreight Transport Research Development Program witha fully collaborative freight operations and managementprogram of pragmatic applied research.

• Multi-State and Jurisdictional Trade Corridors and tradearea Multi-modal Transport Consortia should be createdto ensure that investment in the national infrastructureis carried out in a rational, nationally beneficial and costeffective manner.

• It is essential that Congress consider a NationalFreight Transport Research Development Program witha fully collaborative freight operations and managementprogram of pragmatic applied research.

• Multi-State and Jurisdictional Trade Corridors and tradearea Multi-modal Transport Consortia should be createdto ensure that investment in the national infrastructureis carried out in a rational, nationally beneficial and costeffective manner.









June 25, 2002 Pittsburgh, PAJune 25, 2002 Pittsburgh, PA

27th Annual Summer Ports, Waterways, Freight and International Trade Conference

27th Annual Summer Ports, Waterways, Freight and International Trade Conference



Documents

27 Annual Summer Ports, Waterways, Freight and ...onlinepubs.trb.org/onlinepubs/mb/2002Ports/06Vickerman.pdfIntegrating Ports Into The Nation’s Transportation Network Into The Nation’s