Transcript Port Hinterland Divergence along the North American

The Atlantic Institute for Market Studies, Halifax, Nova Scotia
Gateways and Corridors:
Divergence along the North
American Eastern Seaboard
Jean-Paul Rodrigue
Department of Economics & Geography
Hofstra University, Hempstead, New York 11549, USA
Introduction
The Eastern Seaboard is going
through a phase of divergence…
… which does not benefit Halifax
2
Trimodal Container Terminal, Willebroek, Belgium
A. Globalization, Trade and Port Divergence in North
America
1. Factors of Port Divergence
•
What are the main processes behind divergence?
•
How containerization has evolved along the East Coast in
recent years?
2. Containerized Traffic Trends
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 Policy
Landlord vs. private port operators. Terminal
privatization. Choice of asset allocation.
Differences in terminal productivity.
Hinterland
Access to long distance transport corridors.
Access to the regional customer base.
Supply Chain
Management
Production and distribution requirements
(scheduling, frequency).
2. A Schematic Representation of the Eastern
Seaboard
St. Lawrence
Upper Range
Mid Range
Lower Range
“The Funnel”
Direct to the
bottleneck: Montreal
“The Empty Sink”
Weak handles:
Halifax and Boston
“The Full Sink”
Strong handles: New
York and Hampton
Roads
“The Filling Sink”
Strong center:
Charleston /
Savannah
Upper Range
St. Lawrence
Mid Range
Lower Range
2. Container Traffic at Eastern Seaboard Ports, 2007
Wilmington(NC)
0.19
Boston
0.22
Palm Beach
0.25
Philadelphia
0.25
Wilmington(DE)
0.28
4th Tier (Niche ports)
0.49
Halifax
0.61
Baltimore
3rd Tier (Regional Gateways)
0.71
Jacksonville
0.88
Miami
Divergence
Threshold
0.95
Port Everglades
1.36
Montreal
1.75
Charleston
2nd Tier (Gateways)
2.13
Hampton Roads
Articulation Gateway
2.60
Savannah
5.30
New York/New Jersey
0
1
2
3
4
5
6
Millions
3. Concentration of Containerized Traffic, 1985-2007
100%
Diffusion of Containerization
80%
Hinterland Effect
60%
40%
20%
0%
1985
1990
1995
2000
2007
Other
Top 5
B. Cargo Volume Growth and Shipping Services
1. Traffic trend among major East Coast Ports
•
From convergence to divergence?
•
What are the underlying factors?
•
How Landbridge and All Water Services compare?
2. The resurgence of All Water Services
3. Service routes and transit times
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
+0.28 M TEU
+3.02 M TEU
+2.01 M TEU
1. Strong Divergence: Montreal and Halifax
1,400,000
Halifax
Montreal
1,200,000
1,000,000
800,000
600,000
400,000
200,000
20
07
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
0
1. Strong Divergence: Montreal and Halifax
Convergence
45%
Divergence
35%
Zero-sum game?
25%
15%
20
07
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
5%
Halifax
Montreal
-5%
-15%
-25%
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
6
Charleston
Norfolk
New York
Savannah
5
4
3
2
1
0
Millions
1. From Convergence to Divergence: the American
East Coast
1. From Convergence to Divergence: the American
East Coast (Annual Growth Rates)
45%
Divergence
Convergence
Divergence
35%
25%
15%
Charleston
Norfolk
New York
Savannah
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
5%
-5%
-15%
-25%
2. The Resurgence of All Water Services to the East
Coast
Singapore
Colombo

“China Effect”
Kobe
Hong Kong
Shanghai
Jeddah
Pusan
E qu
a tor
Eastbound
Route
Gioia Tauro
Algeciras
Seattle / Vancouver

West Coast Congestion LA/LB
Landbridge Congestion
Landbridge
Westbound
Route
Growth in the Southeast
New Distribution Gateways
Panama
Route

3. Service Routes and Transit Times: Far East to New
York
-1
23
24
Singapore
Hong Kong
18
Kaohsiung
+4
22
25
18
Shanghai
23
16
Tokyo
14
Busan
14
0
5
10
15
Land Bridge
+7
26
21
20
All Water
+7
+12
+7
25
30
3. Service Routes and Transit Times: Far East to
Norfolk, Virginia
-1
23
24
Singapore
Hong Kong
18
Kaohsiung
+4
22
25
18
Shanghai
24
16
Tokyo
14
Busan
14
0
5
10
15
Land Bridge
+8
26
23
20
All Water
25
+7
+12
+9
30
3. Service Routes and Transit Times: Far East to
Savannah, Georgia
25
Singapore
Hong Kong
18
Kaohsiung
19
Shanghai
18
Tokyo
Busan
0
5
10
15
Land Bridge
22
+3
22
+4
25
14
20
All Water
28
+3
21
24
16
-3
25
+8
+11
30
3. The Resurgence of All Water Services to the East
Coast
Zone of Contestability
NY
Savannah
E qu
Eastbound
Route
a tor
New Direct Links
17 (2002)
26 (2007)
New York (1):
75% (2005)
60% (2020)
3
1
Landbridge
2
Westbound
Route
New York (2+3):
25% (2005)
40% (2020)
Panama
Route
3. Service Time Reliability to the EC: All Water
Services vs. Transpacific / Landbridge
Port congestion
Offshore transshipment
Transloading
Unit train assembly
Rail congestion
Transmodal operations
Road congestion
Transpacific /
Landbridge
18 days
Port congestion
Offshore transshipment
Panama / Suez Delays
All Water
Services
NY: 22 days
Savannah: 21 days
Beware of Future Expectations: The Fallacies of
Linear Thinking; Smoking Crack
Beware of Future Expectations: The Fallacies of Linear
Thinking (Projected TEU Traffic, Port of NY/NJ)
12
Million TEUs
10
Real (- 2007)
Projection (2002)
8
6
4
2
0
1990
2000
2010
2020
2030
2040
2050
2060
3. Monthly Inbound Traffic (loaded containers), Port of Los
Angeles (TEUs)
450,000
400,000
350,000
300,000
2004
2005
2006
2007
2008
250,000
200,000
150,000
100,000
50,000
Au
gu
st
Se
pt
em
be
r
Oc
to
be
r
No
ve
m
be
r
De
ce
m
be
r
Ju
ly
Ju
ne
y
Ma
Ap
ril
rc
h
Ma
Ja
nu
ar
y
Fe
br
ua
ry
0
C. Port Regionalization and Potential Port Hinterland
Divergence
1. The reemergence of the “hinterland factor”
•
How the maritime / land interface is being modified?
•
How specific gateway ports are improving their regional
hinterland access?
2. Port regionalization strategies
1. The Reemergence of the “Hinterland Factor”
Hinterland
Harbor
New York
Hampton Roads
Charleston
Channel deepening (50 New Craney Island
Construction of a new
feet). On dock rail
Container Terminal ($2.2 1.4 million TEU terminal
(Expressrail).
billion; 2017). APM
($600 million; 2013).
terminal in Portsmouth. Channel deepening (47
feet; $148 million).
Port Inland Distribution
Network (North Kearny,
NJ, South Kearny, NJ,
Port Elizabeth terminal,
NJ, Port Newark
terminal, Croxton, NJ,
and New York Container
Terminal, NY)
Savannah
New berth at Garden
City Container terminal.
Join with Charleston to
develop a new container
terminal at the bank of
Savannah River.
Virginia Inland Port.
CSX – Charleston, SC. Georgia Port Authority,
Heartland project. (CSX NS - Charleston, SC
Savannah, GA,
– Portsmouth Marine
Savannah ICTF, GA.
Terminal, VA, Norfolk
International Terminal,
VA, Newport News
Marine Terminal, VA).
1. The Reemergence of the “Hinterland Factor”: Rail
Gateways and Metropolitan Freight Centers
New York
• 85% are local cargo
• 14% is distributed by rail
• Less than 1% is distributed by water
Hampton Roads
• Over 47% of cargo originates or is destined for
locations within Virginia
• 53% of cargo are hinterland bound
North American Rail System
26
Major Rail Corridors Improved since 2000
2. The Terminalization of Supply Chains
■ Terminalization
• Growing influence of transport terminals in the setting and
operation of supply chains in terms of location, capacity and
reliability.
Type
Nature
Concept
Challenge
Outcome
28
Bottleneck-derived
Terminal as a constraint
Rational use of facilities to
maintain operational
conditions
Storage space, port call
frequency, gate access
Volume, frequency and
scheduling changes
Warehousing-derived
Terminal as a buffer
Incorporating the terminal as a
storage unit
“Inventory in transit” with
“inventory at terminal”
Reduce warehousing
requirements at distribution
centers
2. Terminalization in a Supply Chain Context
Suppliers
DC
Hinterland
DC
Customers
Foreland
Bottleneck
Extended Gate
Buffer
Extended Distribution Center
DC Distribution center
Port regionalization and the creation
Inland containerized goods flow
of a Regional Load Center Network
Inland non-containerized goods flow
Maritime container flow
29
2. Inland Terminals and Terminalization of Supply
Chains
Gateway Port
Inland corridor
Inland Terminal
Satellite Terminal
On call delivery
DC
30
Low dwell time
Low
High dwell time
Degree of Gateways Synchronization
High
Extended Distribution Center
D. Conclusion: Challenges and Opportunities of the
New Panama Canal (New Panamax – 12,000 TEU)
Singapore
Colombo
Hong Kong
Shanghai
Kobe
Jeddah
Pusan
E qu
Suez
a tor
Gioia Tauro
Algeciras
Eastbound
Route
Westbound
Route
LA/LB
Kingston
Panama
D. Conclusion: Challenges and Opportunity for
Arctic Routes
Vostochny
Oakland
Harbin
Long Beach
Un ite
d
S tate
s
Salt Lake City
Tacoma
Vancouver
Lianyungang
Beijing
Port
Gauge Change
El Paso
Zabaykalsk
Rail Terminal
Canada
China
Ulaanbaatar
Arctic Bridge
Irkutsk
Northern Sea Route
Lanzhou
Mongolia
Northwest Passage
Houston
Kansas CIty
Russia
Minneapolis
Chicago
Urumqi
Novosibirsk
Lokot
Savannah
New York
Astana
Montreal
New York
Yekat erinburg
Perm'
Halifax
Archangel'sk
Haparanda/Tornio
Oulu
Vologda
Vainikkala
St. Petersburg
Moscow
Maritime Segment
Rail Main Trunk (Broad Gauge)
Rail Main Trunk (Standard Gauge)
Azimuthal Equidistant Polar Projection
Rotterdam
Brest
Presnogorkovka
Kazakhstan
Druzhba
Potential Impacts of High Oil Prices on
Transportation: How Halifax Fits into the Picture?
Usage level
Modal shift
P
Q
A/B
P
Q(A/B)
Price
Service area changes
Price
Gateway / Hub selection
B
R(B)
Cost
A
A
B
2
1
Range
Network configuration
Supply chain propagation
Rail
Road
Raw
Materials
Manufacturing
Distribution
Centers
Retailers
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.