DeltaMHAP – Mobile SCOWT Presentation, Aug 17 2010

8/8/2019 DeltaMHAP – Mobile SCOWT Presentation, Aug 17 2010

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P R E P A R E D F O R :

M I S S I S S I P P I D E P A R T M E N T O F T R A N S P O R T A T I O N

P R E P A R E D B Y :R N O G R O U P

W W W . R N O G R O U P . C O M

A U G U S T 1 7 , 2 0 1 0

³MHy Delta´Delta Marine Highway



³ D E V E L O P A S U S T A I N A B L E C O N T A I N T E R O N

B A R G E O P E R A T I O N O N A S C A L E C O M P A R A B L E T O

A N Y M A J O R RA I L O R H I GH W A Y T RA DE

C O R R I D O R . ´

VISION



Europe, AsiaEurope, Asia USA USA

y COB services have existed almostas long as the container trade, pre-dominantly in Europe and inChina/Hong Kong.

y COB services are also in existencein the United States, particularly inthe northwest, the Gulf Coast andalong the eastern sea-board.

COB Services are Tried and Proven



Cross Sector Subsidy Cross Sector Subsidy Economics of Ubiquity Economics of Ubiquity

y COB services in the region arecurrently subsidized by the bulk transportation services sector.

y The region¶s most sustainable COB services are integrated into larger bulk operations, thereby benefitingfrom the economies of fleet scaleand vessel ubiquity.

y Container barges used on theMississippi are standard openhopper river barges used for a wide variety of cargoes and are easily integrated into a conventional bulk fleet.

y Ubiquity results in limited need forrepositioning, saving the bargeoperator a great deal of money andtime.

Fleet Integration Offers Sustainability



DeltaMarineHighway Action Plan

This point in thedevelopment of container capacity inthe Gulf is a

convergence of trends,and an opportunity toinfluence the modechoice decision process; With the shipper, theforwarder/agent, third-party service provider,

port terminaldevelopers andoperators, and thecarriers.

Convergenceof Trends



D E V E L O P I N G A D D I T I O N A L C O N T A I N E R

C A P A C I T Y N E A R T H E B A S E O F T H EM I S S I S S I P P I R I V E R I S A N A T I O N A L

I M P E R A T I V E

R egional Gateway Port Strategy



America¶s Heartland is a WatershedRegion for Internat¶l Trade Flows

East Coast

Port Markets

West Coast

Port Markets

a = % US 2008 port container traffic; b = % 2009 US population

50% 30% 44%26% 7% 43%

a b a b a b



America¶s Heartland is a WatershedRegion for Internat¶l Trade Flows

The addition of a thirdalternative mode of landside transport, inaddition to truck andrail, reduces the growthin truck traffic

Every 1 million TEUs in

additional port capacity at the base of theMississippi could cut thegrowth in truck trips by 172 thousand trips, and63 million trucks miles

East Coast

Port Markets

West Coast

Port Markets

a = % US 2008 port container traffic; b = % 2009 US population

50% 30% 44%26% 7% 43%

a b a b a b

Strategic

Imperative



A System of

ContainerGateway Ports

Port of Gulfport ± Plansexpand to over 1 millionTEUs

Port of Mobile ±R ecently built a800,000 TEU terminal, with likely plans toexpand further

Port of New Orleans -Currently at 330,000

TEUs, plans to expandto 1 Million TEUs

Seapoint ± Plannedship-to-barge porthandling 900k TEUs



Phase I:ContainerGateway Ports

V olumes -Development of

significant container volumes at and aroundthe base of theMississippiR iver, New Orleans to Mobile.

Mode Share -

Enhanced mode-shareincentives will need to be implemented so as toencourage modediversion.

Inter-Gateway S

ervices - High-speedcontainer services between the ports willallow for the re-positioning of loads inco-ordination with linerschedules.Sea

¡ ¢ £

¤

¥ ¡ ¦ ¢ § e

Gulf ̈

©

New Orlea£



Phase II: Vicksburg toMemphis

A s the container volumes start to buildat the gateway ports,line-haul servicesshould begin to evolvealong the Mississippi

and Ten-Tom waterway on either side of theState. The gateway ports are positioned insuch a way that thegrowth of COB services will be possible on

either side of the State.

Sea P

le

G ! lfpo " t

New O " leans

Vicksburg

Yazoo County

Roseda le

Greenville

Claiborne County

Natchez Adams County

Itawamba

Yellow Creek

Amory

Aberdeen

Clay County

Lowndes County



Phase III:Complete theLoop

Notwithstanding theneed for gateway densities, thedevelopment of inlandcontainer traffic alongthe Mississippi or

Tenn-Tom waterways will be driven by thelocation of inlandconsumer/producermarkets.

Se#

Po$ %

t

Mo & ' le

G ( lf ) ort

New Orle0

1 s

Upper

M ' ss ' ss ' pp '

Oh $ o River

Re2

io 1

Cai ro/Pad ( cah



Mode Shift Tactics atGateway PortsMode Shift Tactics atGateway Ports

Inland Mode Sharesat the Port of RotterdamInland Mode Sharesat the Port of Rotterdam

y

ModalS

hift (% tons on waterways)y R evenue (# of ships calling at port)

y Economics (# of jobs created)

Cargo TypeInland Mode

Barge Rail Pipe Truck Total

Liquid Bulk 39% 1% 1% 9% 3%

Dry Bulk % % % 9% 30%

Container 33% 1 % 0% 1% 1 %

General Cargo % 3% 0% 91% 13%

Total % % 1% % 100%

Mode Shift Tactics at Gateway Ports

The Port of R otterdam uses the tenantlease process to secure modaldiversity. They include mode share,specifically waterway mode share, as atenant ranking criteria:



T H E S I N G L E L A R G E S T P R O J E C T T H A T H A S A

M A J O R I M P A C T O N T H E D E V E L O P M E N T O FC O N T A I N E R C A P A C I T Y O N T H E G U L F C O A S TI S T H E E X P A N S I O N O F T H E P A N A M A C A N A L

MHy Delta in theContext of the Panama Canal

Expansion Project



West Coast Ports Handle Most of Asian Container Traffic

The west coast handles

approx 75% of A siantrade with the UnitedStates. The bulk of theremaining 25% ishandled by the east coastports, via the PanamaCanal.



Bulk of Asian Container Trade is Actually Land-Bridged

Three quarters of A sian

container trade volumesare land-bridged acrossthe US interior and thruthe Panama Canal.



Panama Canal¶s Role as aLand-Bridge is Fast Changing

The A sia-East Coast lane

represents 57% of Panama Canal trade. When the canal expands,the share of A sia trade tothe West coast will drop,increasing the east coastport traffic through the

Canal. The result is asignificant increase incontainer traffic throughthe Gulf of Mexico. Thegrowth increment in the A sia-East Coast tradelane will be highly

contestable by wellpositioned Gulf coastports.



Gulf Coast will Contest the Diverted West Coast Asian Container Flows

The Panama Canal

expansion presents anopportunity foradditional containercapacity to be developedalong the Gulf coast to better serve theheartland region. Based

on port expansion plans,the base of theMsCoBISC will accountfor 6% of US containergateway volumes by 2020.

Ea t Coa t

Port Market

Gulf

Coa t

Port

Mkt .

We t Coa t

Port Market

3%

c

6%

d

7%

e

c = % S 2020 port container traffic thru Gulf Coa t port

d = port at ba e of Mhy Delta, e = re t of Gulf Coa t port



K ey Role in Accommodating CanalRelated Container Growth

The MHy Delta comes at

a crucial time. TheCanal project isestimated to becompleted in 2014. TheGulf Coast containerport expansion plans arelargely to be completed by 2020.

In order to successfully serve its role inaccommodating theCanal expansioncontainer growth

impact, the MHy Delta will need to beimplemented over thecourse of the next 4-6 years.

Mhy Deltetw



FOCUS CONT A INER

CA P ACITY A T POR TS

W ITH ACCESS TO

TR IPLE PL A Y MODES:

RA IL

B AR GE

HIGHW A Y

TR IPLE PL A Y National Container Port Policy

MhyDel ae o



F O C U S E D O N T H E S U S T A I N A B I L I T Y O F S E R V I C E S .

G I V E N T H A T T HE M H Y D E L T A W I L L ES S E N T I AL L Y B E A P R I V A T E S E C T O R E N D E A V O R , I T I S C R I T I C A L

T H A T T H E P R O P O S E D A P P R O A C H B E B A S E D O NO P E R A T I O N A L P L A N S T H A T H A V E S H O W N S O M EL E V E L O F S U C C E S S O N T H E M I S S I S S I P P I R I V E R .

Proposed Operational Plan



Line HaulSegmentation

The Mississippi R iver isassociated with longdistances and disparatemarkets, relative to theshort legs along theR hine¶s tightly spacedmarkers.

The most likely operations plan is atiered service structure

that is dictated by thedistances and marketreach of individual line-haul segments.

The proposedoperational plan has athree-tiered structurethat is based on existingservices that have worked thus far in theGulf region.



Tier I ± RegularFixed ScheduleServices

R un between two pointson a fixed regular basis;For example, once a week, on Wednesday,departing at 6pm. They work best alongsegments connecting with international portsserving ocean shippinglines operating on afixed schedule basis.

The service is also most viable along segments with the highestcontainer potential.They operate almostindependent of the bulk fleet schedules, exceptto rely on the supply of barges and tows fromthe bulk fleets.

Sea P 3 int

4 3 5 ile

Gulf 6 3 7

t

New 8 7 leans

Tier 9

@ egularFixed

Schedule Service

Cairo/Paducah

U6 6 er

Mississi6 6

i

8 hio A iver

Reg ion



Tier II ± Regular Weekly Services

R un at least once a week, without aparticular time or day established. This typeof service offers greaterflexibility for balancingdemand with supply,and is best applied tosegments that do notconnect with a COB gateway port.

This service is moredependent on the bulk fleet schedules, as wellas the supply of bargeequipment.

Sea Point

Mobile

Gulf B ort

New C rleans

Tier D D

RegularWeekly

Service

Tier E

RegularFixed

Schedule Service

Cairo/Paducah

UB B er

MississiB B

i

C hio River

Reg ion





Start with Bulk FleetIntegrationStart with Bulk FleetIntegration

Long Term GrowthStrategy is Also NeededLong Term GrowthStrategy is Also Needed

y The Mississippi bulk oriented barge fleet approach to

transportation service delivery isnot the most ideal for providing acontainer barge service.

y Nonetheless, what theMississippi bulk barge loses inspeed it makes up in fleetintegration and adaptability.

y A barge operator can provide asustainable container bargeservice using bulk equipment, if it integrates the COB service intoa larger bulk barge fleet

y In order to develop a full-scaleCOB service, comparable to

major rail and highway corridors,the service will likely have togrow out from the shadow of the bulk operation.

y Incentives should be introducedto encourage alternative vesseltechnologies to the industry.

V essel Operations Plan



MHy Delta is a Multi-Jurisdictional ProjectMHy Delta is a Multi-Jurisdictional Project

Identify a Multi-Jurisdictional Entity Identify a Multi-Jurisdictional Entity

y There are many aspectsthat impact the success of the project that are not

within the jurisdiction of the State of Mississippi. Coordination of Gateway

Port Investment Decisions C

ooperation of EnhancedMode-Share Strategies Fleet Integration and

ConversionStrategies National Security

y There are several options forpursing a multijurisdictional

approach. 1) State of Mississippi to

coordinate among all theentities, and across all theseissues.

2) Use an existing entity

that is already recognizedas a multijurisdictionalentity and that receives itsfunding from multipleentities. AA SHTO?

Proposed Institutional Plan



Documents

DeltaMHAP – Mobile SCOWT Presentation, Aug 17 2010