Port Hinterland Divergence along the North American Eastern Seaboard - PowerPoint

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Port Hinterland Divergence along the North American Eastern Seaboard - PowerPoint Powered By Docstoc
					                            International Congress on Ports in Proximity:
                            Competition, Cooperation and Integration
                            Antwerp / Rotterdam, December 5 – 7 2007




Port Hinterland Divergence along the
North American Eastern Seaboard
Jean-Paul RODRIGUE
Department of Economics & Geography
Hofstra University, Hempstead, New York 11549, USA

Changqian GUAN
Intermodal Transportation & Logistics Program, Department of Marine
Transportation, U.S. Merchant Marine Academy, Kings Point, New York,
USA
Ports in Proximity along the Eastern Seaboard

  A. Globalization, Trade and Port Divergence in North
       America
  B.   Cargo Volume Growth and Shipping Services
  C.   Port Regionalization and Potential Port Hinterland
       Divergence
  D.   Conclusion: From Divergence to Convergence?
A. Globalization, Trade and Port Divergence in
North America
  1. Factors of Port Divergence
    •   What are the main processes behind divergence?
  2. Containerized Traffic Trends
    •   How containerization has evolved along the East Coast in
        recent years?
  3. Traffic Concentration
    •   What is the extent of the divergence taking place?
1. Factors of Port Divergence

  Site             Conventional factor (modal access and
                   accessibility). Reinforced by new generations of
                   containerships.
  Ocean Carriers   Choice of port calls and frequency of service.
                   Choice of network structure.

  Port Operators   Choice of asset allocation. Differences in
                   terminal productivity.
  Policy           Port governance and public funding. Landlord
                   ports and privately developed ports. Shape of
                   private / public partnerships.
  Hinterland       Access to long distance transport corridors.
                   Access to the regional customer base.
  Supply Chain     Production and distribution requirements
  Management       (scheduling, frequency).
2. A Schematic Representation of the Eastern
Seaboard
  St. Lawrence           Upper Range            Mid Range          Lower Range
    “The Funnel”       “The Empty Sink”        “The Full Sink”    “The Filling Sink”
     Direct to the       Weak handles:      Strong handles: New    Strong center:
bottleneck: Montreal   Halifax and Boston    York and Hampton       Charleston /
                                                   Roads             Savannah




                  Upper Range                               Lower Range
                                    Mid Range

  St. Lawrence
2. Container Traffic at Eastern Seaboard Ports,
2006


                  4th Tier (Niche ports)




                           3rd Tier (Regional Gateways)

                                                 Divergence Threshold


                                           2nd Tier (Gateways)

                                                          Articulation Gateway
3. Concentration of Containerized Traffic, 1985-
2006


     Diffusion of Containerization



                                     Hinterland Effect
3. Concentration of Containerized Traffic, 1985-
2006 (Lorenz Curve)




                                 Divergence

                                Convergence
B. Cargo Volume Growth and Shipping Services

  1. Traffic trend among major East Coast Ports
    •   From convergence to divergence?
  2. The resurgence of All Water Services
    •   What are the underlying factors?
  3. Service routes and transit times
    •   How Landbridge and All Water Services compare?
1. Change in Container Traffic at Eastern
Seaboard Ports
                 0.77 M TEU 8.36 M TEU
                                            7.19 M TEU


   1.31 M TEU




                +0.04 M TEU
                              +3.02 M TEU   +2.01 M TEU

  +0.28 M TEU
1. Strong Divergence: Montreal and Halifax
1. Strong Divergence: Montreal and Halifax


             Convergence        Divergence

                           Zero-sum game?
1. From Convergence to Divergence: the
American East Coast
1. From Convergence to Divergence: the
American East Coast (Annual Growth Rates)


          Divergence   Convergence   Divergence
2. The Resurgence of All Water Services to the
East Coast
                        Singapore
                                          Colombo


             “China Effect”
                                    Hong Kong
                               Shanghai
                      Kobe     Pusan                           Jeddah

               Eastbound
                 Route
                                                              Gioia Tauro

                                                                Algeciras


                               Seattle / Vancouver
                                                          Westbound
                                                            Route
                           LA/LB
      West Coast Congestion
       Landbridge Congestion Landbridge                       Growth in the Southeast
                                                              New Distribution Gateway
                                                     Panama
                                                      Route                 
3. Service Routes and Transit Times: Far East to
New York

                                               -1

                                               +4

                                               +7

                                               +7

                                               +12

                                               +7
3. Service Routes and Transit Times: Far East to
Norfolk, Virginia

                                               -1

                                               +4

                                               +7

                                               +8

                                               +12

                                               +9
3. Service Routes and Transit Times: Far East to
Savannah, Georgia

                                                   -3

                                               +3

                                               +3

                                               +4

                                                   +8

                                               +11
3. The Resurgence of All Water Services to the
East Coast
        Zone of Contestability       NY

                          Savannah



                Eastbound
                  Route
                                                                          New Direct Links
                                                                          17 (2002)
                                                                          26 (2007)



             New York (1):                                  3   Westbound
             75% (2005)                                           Route
             60% (2020)
                                              1             New York (2+3):
                                                            25% (2005)
                                          Landbridge        40% (2020)
                                          2            Panama
                                                        Route
3. Service Time Reliability to the EC: All Water
Services vs. Transpacific / Landbridge
                                             Port congestion
        Transpacific /
                                             Offshore transshipment
        Landbridge
                                             Transloading
                                             Unit train assembly
                                             Rail congestion
                                             Transmodal operations
                                             Road congestion
                         18 days

          All Water                          Port congestion
          Services                           Offshore transshipment
                                             Panama / Suez Delays




                         NY: 22 days
                         Savannah: 21 days
3. Monthly Inbound Traffic, Port of Los Angeles (TEUs)
3. Summary

  Supply chain management
    • Landbridge is critical for high value cargo from East Asia
      due to its short total transit time.
    • The 7 day difference is quite critical.
  Inland areas cargo (e.g. Chicago)
    • Landbridge still has an overall advantage.
  Hong Kong and Singapore
    • Points of equilibrium between landbridge and all water
      service has a slight advantage in terms of transit time.
  South Atlantic ports
    • All water service is very competitive.
    • South Atlantic ports are in a good position to compete with
      North-Mid Atlantic ports for hinterland markets.
C. Port Regionalization and Potential Port
Hinterland Divergence
  1. Port Infrastructure Development and Intermodal
     Services
    •   What are the major infrastructure projects?
  2. The reemergence of the “hinterland factor”
    •   How the maritime / land interface is being modified?
  3. Port regionalization strategies
    •   How specific gateway ports are improving their regional
        hinterland access?
1. Port Infrastructure Development and
Intermodal Services

     New York       Hampton Roads          Charleston          Savannah
   Dredging (50’)     APM Terminal        New Terminal         New berth
    On-dock rail      Craney Island          (2013)        Improved rail yards
       PIDN          Terminal (2017)    Terminal upgrade
                    Heartland Project    Dredging (47’)
2. The Reemergence of the “Hinterland
Factor”: Rail Gateways and Metropolitan
Freight Centers




  New York                                 Hampton Roads
  • 85% are local cargo                    • Over 47% of cargo originates or is destined for
  • 14% is distributed by rail             locations within Virginia
  • Less than 1% is distributed by water   • 53% of cargo are hinterland bound
2. The Reemergence of the “Hinterland
Factor”: Inland Corridors
2. Heartland Corridor Project, Virginia /
Chicago


                                         Current Double Stack Route
                                          (1,264 miles to Chicago)




                                     Virginia Inland Port
           Heartland Corridor
        (1,031 miles to Chicago)


             28 Tunnels Modified
             to a 20’ 3” Clearance
D. Conclusion: Challenges and Opportunities
of the New Panama Canal (New Panamax –
12,000 TEU)     Singapore
                                     Colombo
                            Hong Kong
                          Shanghai
               Kobe       Pusan                          Jeddah
                                                         Suez


                                                        Gioia Tauro

           Eastbound                                      Algeciras
             Route


                                                      Westbound
                                                        Route

                  LA/LB


                                           Kingston
                                  Panama
D. Conclusion: Challenges and Opportunity for
Arctic Routes
D. Conclusion: From Divergence to Convergence?

   There is a divergence favoring a specific number of
    ports
     • Site: Limited number able to accommodate larger ships.
     • Ocean carriers: Emergence of all water services as a new
         dimension of standard port calls.
     •   Port operators: Allocation of capital investment.
     •   Policy: Ongoing privatization, albeit at a slower pace.
     •   Hinterland: Development of rail corridors, particularly
         towards the Chicago hub.
     •   Supply chain management: A stronger factor than
         accounted.

				
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