Understanding National Freight System Dynamics: State of Our...
Transcript of Understanding National Freight System Dynamics: State of Our...
US Chamber of Commerce National Chamber Foundation
Trade & Transportation: A Study ofNorth American Port and Intermodal Systems
Understanding National Freight
System Dynamics:
State of Our Port and Intermodal Freight Systems
Understanding National Freight
System Dynamics:
State of Our Port and Intermodal Freight Systems
John VickermanPrincipal
TranSystems CorporationNorfolk, Virginia
John VickermanPrincipal
TranSystems CorporationNorfolk, Virginia
Reliable Cargo Movement: State of Our Port and Intermodal Systems
U.S. Intermodal Freight Transportation System is an essential component of our
national commercial economy… this system is at risk.
U.S. Intermodal Freight Transportation System is an essential component of our
national commercial economy… this system is at risk.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
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” within their own individual areas of
interest with little or no true cross communication and collaboration.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
The North American Intermodal Paradox:
The nation’s ports and their inland intermodal linkages are experiencing the “best of times
and the worst of times” in terms of growth and demands on capacity
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Ports and their associated intermodal systems can no longer build their way out of capacity problems
The US Intermodal freight transportation system is now being operated in many areas at near the limits
of economically sustainable capacity
We lack a systematic program for freight Transportation planning and development that Focuses our critical scarce resources on key
system problem points.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
To Be Competitive Today...Marine/Intermodal
Terminals Must Reduce Throughput Cost &
Increase Cargo Velocity…Securely
To Be Competitive Today...Marine/Intermodal
Terminals Must Reduce Throughput Cost &
Increase Cargo Velocity…Securely
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Transportation Deregulation
Transportation Deregulation
Service Integration
and Optimization
Optimization of End to End Distribution and Cost in the Overall Logistics Chain
Service Integration
and Optimization
Optimization of End to End Distribution and Cost in the Overall Logistics Chain
Carrier Regulation
Governmental Limits on Destructive Competition and Sheltering of Emerging Modes
Carrier Regulation
Governmental Limits on Destructive Competition and Sheltering of Emerging Modes
Evolutionary Phases of U.S. Marine/Intermodal Freight Transportation
Evolutionary Phases of U.S. Marine/Intermodal Freight Transportation
Growth and
Diversification
Modal Refinement Dominated by Equipment Types and Infrastructure Development
Growth and
Diversification
Modal Refinement Dominated by Equipment Types and Infrastructure Development
Invention
Modally Oriented Services
Invention
Modally Oriented Services
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Poll of the Top 1000 “Blue Chip” Multinational Shipper PrioritiesPoll of the Top 1000 “Blue Chip” Multinational Shipper Priorities
38%Freight Rate
38%Freight Rate
43%ScheduleReliability
43%ScheduleReliability
12%Transit Time
12%Transit Time
Reliable Cargo Movement: State of Our Port and Intermodal Systems
The “Port”One of the Many Diverse Constituencies
in the Cargo Transportation Logistics Chain
The “Port”One of the Many Diverse Constituencies
in the Cargo Transportation Logistics ChainPort
Shipping Agents
Shippers
Carriers/NVOCCs
Stevedores/Terminal Operators
Longshore LaborGovernmental Regulation/Compliance
Railroads
Motor Carriers/Truckers
Freight Forwarders/Brokers
Customs Agencies
Warehousing/CFS Operators
Pilotage/Tuggage
PortPortShipping AgentsShipping Agents
ShippersShippers
Carriers/Carriers/NVOCCsNVOCCs
Stevedores/Stevedores/Terminal OperatorsTerminal Operators
Longshore LaborLongshore Labor
Governmental Regulation/Governmental Regulation/ComplianceCompliance
RailroadsRailroads
Motor Carriers/Motor Carriers/TruckersTruckers
Freight Forwarders/Freight Forwarders/BrokersBrokers
Customs AgenciesCustoms Agencies
Warehousing/Warehousing/CFS OperatorsCFS Operators
Pilotage/TuggagePilotage/Tuggage
Objective:A multimodal
“Seamless” integratedworld wide cargo
conveyance system.
Objective:Objective:A multimodalA multimodal
“Seamless” integrated“Seamless” integratedworld wide cargoworld wide cargo
conveyance system.conveyance system.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
At Current Productivity and Growth Levels by 2020 North American Ports & Their Associated
Intermodal Systems Will Be Severely Congested
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Today’s Logistics Truths:Today’s Logistics Truths:
“The customer wants more and is willing to pay less
for it.”
“The customer wants more and is willing to pay less
for it.”
Reliable Cargo Movement: State of Our Port and Intermodal Systems
World Bank’s 2010 “Global Economic Prospects”
World Bank’s 2010 “Global Economic Prospects”
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
Reliable Cargo Movement: State of Our Port and Intermodal Systems
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…
Just to Maintain Current Market Share
North American Prosperity is Driven by Cargo Imports and Exports
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Global Port Terminal Productivity
North American Ports Are Not As ProductiveAs The Most Productive International Ports
By a Factor Of More Than 4 To 1
Discounting Major “Transhipment Ports” The Factor is Almost 2 To 1
Reliable Cargo Movement: State of Our Port and Intermodal Systems
North American Intermodal Rail Freight Movement Trends
North American Intermodal Rail Freight Movement Trends
The photo of the chemical train
going over a bridge goes here.
The photo of the chemical train
going over a bridge goes here.
35% less track32% fewer locomotives
27% fewer railcars60% fewer employees
The Railroad Industry…Since the Staggers Act:The Railroad Industry…Since the Staggers Act:
But:well over 50% more freight!
Reliable Cargo Movement: State of Our Port and Intermodal Systems
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
Reliable Cargo Movement: State of Our Port and Intermodal Systems
A 10,000 TEU Mega-Container Vessel Can Produce High Intermodal Rail Volumes (One Weekly Vessel Call)
A 10,000 TEU Mega-Container Vessel Can Produce High Intermodal Rail Volumes (One Weekly Vessel Call)
75% Intermodal Split
Double Stacked TrainsDouble Stacked Trains
EXPORTEXPORTEXPORT
13.4
Vessel Capacity Vessel Capacity 10,000 TEU(5,892 Units)(5,892 Units)
10,000 TEU Vessel10,000 TEU Vessel
IMPORTIMPORTIMPORT
Double Stacked TrainsDouble Stacked Trains13.4
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Can North American Marine & Intermodal
Terminals Handle the Forecasted
Freight Volumes ?...
Can North American Marine & Intermodal
Terminals Handle the Forecasted
Freight Volumes ?...
Reliable Cargo Movement: State of Our Port and Intermodal Systems
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
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Ports of Los Angeles and Long Beach Container 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% Intermodal Split57% 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
Reliable Cargo Movement: State of Our Port and Intermodal Systems
San Pedro Bay Ports ofPorts of Los Angeles and Long Beach
Container Growth Implications:
San Pedro Bay Ports ofPorts 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”*
“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* Source: Port of Long Beach
Reliable Cargo Movement: State of Our Port and Intermodal Systems
NY/NJ Regional Container Forecast (TEUs)By Channel Depth (40ft, 45ft, 50ft)
NY/NJ Regional Container Forecast (TEUs)By Channel Depth (40ft, 45ft, 50ft)
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
Planning YearPlanning Year
4X4X
CurrentCapacityCurrentCapacity
TEU
sTE
Us
Reliable Cargo Movement: State of Our Port and Intermodal Systems
00 5050 100100 150150 200 DAYS200 DAYS
Current DOD Target: 75 Days
Combat power ~ 6 Divisions
(~ 2 Corps)
Combat power ~ 6 Divisions
(~ 2 Corps)
Combat power~ 5 Divisions
Combat power~ 5 Divisions
Gulf War: 180 Days
Chief of Staff’s Goal: 30 Days
Source: Adapted from briefing by William Lucas, MTMC, to TRB Annual Meeting, Jan. ‘00
Source: Adapted from briefing by William Lucas, MTMC, to TRB Annual Meeting, Jan. ‘00
The USDOD Logistics Mandate: Army’s Strategic Mobility Requirements
(The Military’s Goal is to Reduce Deployment Time by 80 Percent…Without Disrupting Commercial Ports)
The USDOD Logistics Mandate: Army’s Strategic Mobility Requirements
(The Military’s Goal is to Reduce Deployment Time by 80 Percent…Without Disrupting Commercial Ports)
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Container Ship EvolutionContainer Ship EvolutionTEU CapacityTEU Capacity
1st Generation (Pre-1960 - 1970)1st Generation (Pre-1960 - 1970)1,700 TEU1,700 TEU
2nd Generation (1970 - 1980)2nd Generation (1970 - 1980)2,305 TEU2,305 TEU
3rd Generation (1985)3rd Generation (1985)3,220 TEU3,220 TEU
4th Generation (1986 - 2000)4th Generation (1986 - 2000)4,848 TEU4,848 TEU
5th Generation (2000 - 2005)5th Generation (2000 - 2005)
7,598 TEU7,598 TEU
Reliable Cargo Movement: State of Our Port and Intermodal Systems
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)
Reliable Cargo Movement: State of Our Port and Intermodal Systems
The 15,000 TEU ContainershipThe 15,000 TEU ContainershipLOA. = 400 m (1,312 ft.)Draft = 14 m (46 ft.)LOA. = 400 m (1,312 ft.)Draft = 14 m (46 ft.)
6-7 above deck
10-11 below deck
6-7 above deck
10-11 below deck
28Across
28Across
BEAM = 69 m (226 ft.)BEAM = 69 m (226 ft.)
Panamax DimensionsPanamax Dimensions
28 Wide28 Wide 13 Wide13 Wide
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Emerging Viable Container On Barge Inland Intermodal Port Potential
Emerging Viable Container On Barge Inland Intermodal Port Potential
Reliable Cargo Movement: State of Our Port and Intermodal Systems
High-Speed, Low Wake, Intermodal Float Technology
USDOD Agile Port Information Technology
(IT) Developments
USDOD Agile Port Information Technology
(IT) Developments
Reliable Cargo Movement: State of Our Port and Intermodal Systems
The Agile Port Concept is not a new technology…
The Agile Port Concept is not a new technology…
…It is a way of managing and organizing information to reduce container port terminal dwell time
& increase terminal capacity.
…It is a way of managing and organizing information to reduce container port terminal dwell time
& increase terminal capacity.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
IT Freight Data/Information IntegrationIT Freight Data/Information Integration
Data/InfoManagement
Data/InfoManagement
Consist DataConsist Data Consist DataConsist Data
Major Terminal & Systems BenefitsMajor Terminal & Systems Benefits
Container Vessel
Container Vessel
Double Stacked Train
Double Stacked Train
Reliable Cargo Movement: State of Our Port and Intermodal Systems
USDOD Agile Port Technology Full Scale IT Demonstration Project
USDOD Agile Port Technology Full Scale IT Demonstration Project
Hyundai TerminalWashington United Terminals
Port of Tacoma22-29 June 2003
Potential: Doubling the Terminal Capacity without
Building Anything
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Study Approach & RecommendationsStudy Approach & Recommendations
Reliable Cargo Movement: State of Our Port and Intermodal Systems
USCOC Target Ports
USCOC Target 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
Reliable Cargo Movement: State of Our Port and Intermodal Systems
North American Port & IntermodalPublic Policy Themes
North American Port & IntermodalPublic Policy Themes
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Projected Capacity Shortfall
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Theme #1: Although we currently have a semblance of an intermodal system of freight transport in North America, there is substantial room for improvement in our Port & Intermodal Transportation System Efficiency and Productivity.
Theme #1: Although we currently have a semblance of an intermodal system of freight transport in North America, there is substantial room for improvement in our Port & Intermodal Transportation System Efficiency and Productivity.
• On a national basis, we need to develop a better near real-time freight data tracking system and make rational “system” decision based on this data.
• We must develop a consistent measurement of “system” performance to prioritize our intermodal transportation system improvements.
• On a national basis, we need to develop a better near real-time freight data tracking system and make rational “system” decision based on this data.
• We must develop a consistent measurement of “system” performance to prioritize our intermodal transportation system improvements.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Theme #2: Port & Intermodal Transportation System Security has become a public/private national priority issue.
Theme #2: Port & Intermodal Transportation System Security has become a public/private national priority issue.
• Improved productivity and transportation system security are not mutually exclusive.
• Promising emerging Information Technologies (IT)could play a key role in enhancing cargo security. The deployment of these technologies could have significant system performance benefits for the intermodal transportation system as a whole.
• Improved productivity and transportation system security are not mutually exclusive.
• Promising emerging Information Technologies (IT)could play a key role in enhancing cargo security. The deployment of these technologies could have significant system performance benefits for the intermodal transportation system as a whole.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Port Productivity & Port Security
Are Not Mutually Exclusive
Port Productivity & Port Security
Are Not Mutually Exclusive
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Theme #3: Funding for needed Port & Intermodal Freight Transportation Infrastructure should be contingent on finding Smart IT Solutions with both community and environmental benefits and support.
Theme #3: Funding for needed Port & Intermodal Freight Transportation Infrastructure should be contingent on finding Smart IT Solutions with both community and environmental benefits and support.
• Congress must renew & extend our national freight policy mandate & vision – They must take a leadership role 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 for freight.
• Congress must renew & extend our national freight policy mandate & vision – They must take a leadership role 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 for freight.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Theme #4: New Cross-Cutting Systemic Planning & Implementation Strategies are needed to guide the future of port and intermodal transportation freight development.
Theme #4: New Cross-Cutting Systemic Planning & Implementation Strategies are needed to guide the future of port and intermodal transportation freight development.
• Rising social costs, heightened environmental concerns and evolving mitigation strategies necessitate national leadership on freight transportation issues.
• The nation’s failure to accommodate the growing volume of freight transportation needs, will negatively impact all levels of our economy and national collective quality of life… Jobs, Wages, Taxes
• Rising social costs, heightened environmental concerns and evolving mitigation strategies necessitate national leadership on freight transportation issues.
• The nation’s failure to accommodate the growing volume of freight transportation needs, will negatively impact all levels of our economy and national collective quality of life… Jobs, Wages, Taxes
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Study RecommendationsStudy RecommendationsA National Freight Policy is Needed:A National Freight Policy is Needed:
No longer can freight transportation programs of “national significance”be relegated solely to local authority
or focused at the MPO level. We must take a systemic view of the
intermodal freight system.
No longer can freight transportation programs of “national significance”be relegated solely to local authority
or focused at the MPO level. We must take a systemic view of the
intermodal freight system.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Study RecommendationsStudy RecommendationsClearly Define the Freight Program Within the USDOTClearly Define the Freight Program Within the USDOT
The USDOT Office of Intermodalism must be given the mandate, the
authority, and the funding to function as a unifying element between the modal
administrations.
The USDOT Office of Intermodalism must be given the mandate, the
authority, and the funding to function as a unifying element between the modal
administrations.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Study RecommendationsStudy Recommendations
Create a National Intermodal Planning and Development Initiative
Create a National Intermodal Planning and Development Initiative
A Federal Freight Advisory Committeecomprised of private freight industry
executives, appointed by the President, to provide regular and informed interaction
between USDOT and the freight community.
A Federal Freight Advisory Committeecomprised of private freight industry
executives, appointed by the President, to provide regular and informed interaction
between USDOT and the freight community.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Study RecommendationsStudy RecommendationsA Coherent Environmental
Regulatory Process is EssentialA Coherent Environmental
Regulatory Process is Essential
• Streamlined Permitting
• Brownfields Conversion
• Freight Land Banking
• Streamlined Permitting
• Brownfields Conversion
• Freight Land Banking
Reliable Cargo Movement: State of Our Port and Intermodal Systems
Study RecommendationsStudy RecommendationsLabor Must Be Integrated Into
National Freight PolicyLabor Must Be Integrated Into
National Freight Policy
In March 2003 The ILWU President and The ILWU Coast Committee
Agreed to become a Key Stakeholder in and active participant of:
The Agile Port Demonstration ProjectPort of Tacoma
In March 2003 The ILWU President and The ILWU Coast Committee
Agreed to become a Key Stakeholder in and active participant of:
The Agile Port Demonstration ProjectPort of Tacoma
Representatives from the major transportation unions must be engaged in the Cooperative Freight Research Program
Representatives from the major transportation unions must be engaged in the Cooperative Freight Research Program
… to ensure that new technologies can be implemented by the existing work force.… to ensure that new technologies can be implemented by the existing work force.
Reliable Cargo Movement: State of Our Port and Intermodal Systems
North American Competitive Freight Transport MandatesNorth American Competitive Freight Transport Mandates
• Ports & intermodal linkages must change the current costversus value relationship in the logistics chain. Become Value Added Multipliers... Through Innovative Public Private policy initiatives, expanded funding options and inspired labor & management partnering.
• Successful ports & intermodal terminals in the next decade must invest in and leverage technology to improve terminal productivity, cost, effectiveness and reliability for all modes of transportation…securely.
• Ports & intermodal linkages must change the current costversus value relationship in the logistics chain. Become Value Added Multipliers... Through Innovative Public Private policy initiatives, expanded funding options and inspired labor & management partnering.
• Successful ports & intermodal terminals in the next decade must invest in and leverage technology to improve terminal productivity, cost, effectiveness and reliability for all modes of transportation…securely.
US Chamber of Commerce National Chamber Foundation
Trade & Transportation: A Study ofNorth American Port and Intermodal Systems
Understanding National Freight
System Dynamics:
State of Our Port and Intermodal Freight Systems
Understanding National Freight
System Dynamics:
State of Our Port and Intermodal Freight Systems
John VickermanPrincipal
TranSystems CorporationNorfolk, Virginia
John VickermanPrincipal
TranSystems CorporationNorfolk, Virginia