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30 East Coast, the Port of Norfolk, Virginia, has aggressively been 3.7 Deepwater Ports upgrading the facility to handle larger intermodal ships. Measuring the performance of intermodal facilities is key The structure of the U.S. maritime industry, including its to understanding possible improvements to productivity and domestic waterways component, is complex. The industry efficiency at such locations. Intermodal facility performance involves multiple public and private interests that operate measures can be placed into two categories: those measures under business models and public institutional models to related to movement to or from a facility and those related to support global and domestic commerce that keep the U.S. economy and the nation secure. Ports are the intermodal goods movement between modes (44). nodes of these operations and experience congestion to vary- In the first category, FHWA (44) suggests that the condi- ing degrees depending upon factors related to physical, oper- tions on the connector roadways between the NHS and the ational, and regulatory constraints. intermodal facility should be measured. Such measures might Physical Infrastructure: Terminal acreage on which operators include average travel time between the facility and the NHS, can work ships and store and move inbound and outbound average travel rates along the connector (this would include cargo is a baseline indicator of the "on-the-ground" volumes an average of all hours, as well as breakouts by time of day, any one terminal can handle. The length of wharf and the depth peak vs. non-peak, weekend vs. weekday, etc.), the reliability of a berth limit the size of a vessel that can be accommodated of movement on connectors, and total hours of delay experi- at that port. The number of cranes and type of yard equip- enced on a connector. ment affect efficiencies--the more cranes that can work a The second category, which focuses on the measurement vessel at once and well-utilized equipment systems in a yard, of activity within an intermodal facility, is referred to by the better operational speed. The most recent information on FHWA as "freight transfer time between modes" (44). Exam- U.S. ports' infrastructure is found on their websites. ples include: Whether rail is on-dock or near the vessel or the cargo requires handling first by a short-line railroad to a place Transfer time outside the terminal where large trains are built by larger Wait times/queuing at facilities railroads is a physical differentiator, as the latter increases Turning radius or mobility within facility (which is related time and cost. The number of gates through which trucks to delay and transfer times) pass to drop off and pick up cargo can restrict operations if Volume-to-capacity ratios within a facility (including capac- there is insufficient capacity for peak hour traffic and trucks ity measures specific to railroad, truck, ship, or air) (69). back up onto local roads. More recently, national port sec- urity requirements call for container x-rays and there appear Table 13 shows the top five commodities moved by mul- to be more visual inspections taking place at ports for in- tiple modes (intermodal) in terms of tonnage and value. bound cargo. These are derived from the 2008 updates to the FAF com- U.S. ports that handle bulk, break bulk, and containerized modity O-D database for domestic movements. The "Other cargo develop plans and capital improvement programs work- intermodal" category includes movements involving the ing with the terminal operators and other stakeholders includ- water mode. ing the public and government agencies to deliver physical infrastructure improvements at the port. One group of ports must work within a well-defined and limited footprint (usually Table 13. Top five commodities moved intermodally in an urban area) and the other group has available land near (2008) (52). the port for expansion. A third type of port facility is a "green- Mode Rank In Terms of Tonnage In Terms of Value field" port developed on land away from urban areas with 1 Machinery Electronics little to no existing port infrastructure. 2 Electronics Machinery Air & Truck 3 Chemical products Precision instruments Industry Segments: Major segments within the industry 4 Textiles/leather Misc. mfg. prods. are delineated within the context of type of cargo and type 5 Other agric. products Transport equipment 1 Cereal grains Motorized vehicles of vessel. The internationally accepted descriptions of cargo 2 Coal Chemical products types are listed below (70): Truck & Rail 3 Other agric. products Other foodstuffs 4 Waste/scrap Waste/scrap 5 Other foodstuffs Mixed freight Bulk: Homogeneous cargo that is stowed loose in the hold 1 Coal Electronics of a ship and is not enclosed in a shipping container or box, 2 Metallic ores Misc. mfg. prods. bale, bag, cask, or the like Other Intermodal 3 Cereal grains Precision instruments 4 Fuel oils Pharmaceuticals Break Bulk: Conventional, non-containerized cargo that is 5 Gravel Machinery shipped in units of one (such as non-containerized machin-

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31 ery or trucks) or whipped in units or packages (such as pal- The ports and waterways maritime industry is driven by letized or boxed cargo) private-sector companies and public port authorities that Containerized: Cargo placed within a container, i.e., a enter into contractual business arrangements with each other single rigid, sealed, reusable metal box in which merchan- to move in-bound and out-bound cargo through a port. In dise is shipped by vessel, truck, or rail the United States, deepwater public port authorities fall into General: Products or commodities that are not conducive two categories: the landlord port or the operating port. The to packaging or consolidation e.g., timber, rolled newsprint, AAPA defines these as follows: agricultural equipment Refrigerated: Perishable cargo such as food or pharma- Landlord port. At a landlord port, the port authority ceuticals shipped in a refrigerated, temperature controlled builds the wharves, which it then rents or leases to a ter- container, commonly referred to as a "reefer" minal operator (usually a stevedoring company). The Roll-on, roll-off (RO/RO): Cargo that rolls on wheels operator invests in cargo-handling equipment (forklifts, onto vessels specifically designed to accommodate such cranes, etc), hires longshore laborers to operate such lift movements. machinery, and negotiates contracts with ocean carriers (steamship services) to handle the unloading and load- This list is not all encompassing but is sufficient for the ing of ship cargoes. purposes of understanding the general industry segments. Operating port. At an operating port, such as Charleston, Generating Economic Benefits and Economic Security: As South Carolina, the port authority builds the wharves, owns MARAD has reported, the trade activity of the Port of Los the cranes and cargo-handling equipment, and hires the Angeles and the Port of Long Beach alone created 3.3 mil- labor to move cargo in terminal storage sheds and yards. A lion jobs across the nation in 2005, a 200 percent increase stevedore hires longshore labor to lift cargo between the from 1994. Nationwide, state and local taxes generated from ship and the dock, where the port's laborers pick it up and trade activity grew from an estimated $6 billion in 1994 to bring it to the storage site (71). more than $28 billion in 2005 (46). According to the Amer- ican Association of Port Authorities (AAPA), in 2007, "port Recently, private-sector companies have invested in termi- activity contributed more than $3.15 trillion to the Gross nal development and have worked with the port authorities Domestic Product (GDP), while 13.3 million Americans worked in port-related jobs that generated nearly $650 billion to privatize port development opportunities. It is widely rec- in annual personal income and $212.4 billion in Federal, ognized that for every public port authority in the United state, and local taxes (71). States, there is some slightly different factor in how they are International trade drives the ports and waterways indus- structured, the level to which they are directly a government- try and as the nation's GDP grows, so do international trade run agency, or how they generate revenue and what they can volumes. MARAD states that the combined value of foreign do with that revenue. trade (imports and exports) represented 13 percent of GDP Shipping Trends: The number of vessel calls is an indicator in 1990 and by 2006 it had risen to 22 percent. Should this of the capacity of an individual port to accommodate a level trend continue, the value of U.S. foreign trade could reach of business over a year. By comparing year over year statistics 35 percent of the nation's GDP in 2020 and perhaps 60 per- along with the type of vessel making the call, variations can cent in 2030. Since currently 95 percent of foreign trade by indicate growth or decline in the deepwater business in the weight is moved by ship, the nation's ports and waterways United States. will continue to play a critical role in our national economy In 2007, 6,867 oceangoing vessels made 63,804 calls at U.S. and our national economic security. The American water- ports. Vessel calls were up 13 percent from 5 years earlier. Of ways network is used to move more than 2.3 billion tons of the 2007 calls, 34 percent were by tankers, 31 percent were domestic and foreign cargo each year, primarily using private by container ships, 17 percent were by dry bulk vessels, and terminals for bulk products and commodities (71). 10 percent were by RO/RO vessels. Also in 2007, 88 percent of Deepwater Port Operating Structure: There are currently 121 the tanker calls were by double-hull tankers, up from 58 per- deepwater U.S. ports, including those in Hawaii, Alaska, and cent since 2002. Liquid natural gas (LNG) carriers accounted Puerto Rico, on Lloyd's Maritime list. This list excludes inland for less than 1 percent of the calls, but were the fastest grow- ports and Great Lakes ports. The deepwater ports handle all ing segment over the last 5 years (72). types of cargo in containers, in bulk vessels, on break bulk or Foreign Waterborne Commerce Tonnage and Value: The total general cargo ships, and in RO/RO vessels. Liquid and dry bulk value of U.S. foreign waterborne commerce, counting both cargo is shipped in large vessels and therefore a large amount imports and exports, was $1.393 billion in 2007, an increase of tonnage is reflected at those ports at which they call. of 9 percent over the 2006 amount of $1.275 billion. This was

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32 80 70 Los Angeles/Long Beach 60 Metric Tons (millions) 50 New York/ 40 New Jersey 30 Seattle/Tacoma 20 10 Savannah Houston 0 2002 2003 2004 2005 2006 2007 Figure 10. Tonnage of freight through top five U.S. ports (50). the case even though 2007 total tonnage of 1.375 million met- all goods entering the United States come via waterborne ric tons declined 0.5 percent from the 2006 figure of 1.382 met- commerce. Table 14 lists the top five commodities shipped ric tons (71). in 2008 as either imports or exports regardless of the type of According to the 2008 updates to the FAF2 O-D database vessel. These figures represent all waterborne foreign trade (52), the volume of international imports (measured in tons and include containerized, bulk, break bulk, and all other of freight) through seaports has grown by about 14 percent types of cargo. between 2002 and 2008 while exports decreased by about For the containerized trade in 2007, Table 15 lists the top 1 percent during the same period. This increase in volume of five import commodities and the top five export commodi- imports is expected to continue and has operational and envi- ties by tonnage, 20-foot equivalent units (TEUs) and value ronmental implications for drayage practices. Truck drayage in U.S. dollars. With containerized cargo, large volume and is an integral part of the intermodal freight transportation net- weight do not necessarily mean high value. The highest im- work and the demand for short-haul trucking continues to rise port value on the import table, for example, is in furniture, with the growing trend of cargo freight. mattresses, supports, lamps, and lighting fitting, while the Containerized Cargo: Containerized cargo is generally made total tonnage is less than the number one commodity in ton- up of goods of higher value than bulk cargo. The ports through nage, non-metallic mineral products. However, the volume which containers travel are critically important to getting this in TEUs for furniture, mattresses, supports, lamps, and light- high value cargo to its destination on time, safely, and without ing fitting is the highest on the list. This is one reason why damage or loss. From 2002 through 2007, U.S. foreign con- tainer trade increased by 51 percent and in 2007, the top ten ports alone accounted for 89 percent of U.S. container trade. Table 14. Top five commodities moved Figure 10 shows the variation of the tonnage in million met- by water (2008) (52). ric tons of container freight for the top five seaports in the United States. Rank In Terms of Tonnage In Terms of Value Types of Freight: The U.S. Army Corps of Engineers (USACE) 1 Cereal grains Crude Petroleum receives data from the Department of Homeland Security 2 Crude petroleum Basic chemicals (DHS) that is collected from manifest information provided 3 Gravel Cereal grains to U.S. Customs and Border Protection as cargo is imported to 4 Fuel oils Other agric. products or exported from the United States. By weight, 95 percent of 5 Gasoline Gasoline

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33 Table 15. U.S. container trade--top five commodities ranked by tonnage (73). Imports Exports Rank Million Thousand Billion Million Thousand Billion Commodity Tons TEUs $ Commodity Tons TEUs $ Non-metallic 1 mineral 10.1 933.7 6.36 Waste and scrap 14.1 1,472.9 8.40 products Furniture, mattresses, Plastics and 2 8.6 1,872.1 23.03 9.7 1,342.2 18.95 supports, lamps, rubber lighting fitting Paper and Metallic ores 3 7.6 551.3 11.68 Paperboard and 4.6 568.4 4.01 and concentrates Products Base metal in Gravel and 4 primary or semi- 6.8 791.1 20.40 4.6 342.8 0.86 crushed stone finished forms Animal Feed and Alcoholic 5 6.6 486.5 12.28 products of 4.4 435.4 1.72 beverages animal origin container ports in the United States report their volume sta- are increasingly emphasizing their roles in facilitating veloc- tistics principally in TEUs, as it has become a common way ity flows through to the supply chain's ultimate destination. of comparing themselves with competitive container ports Whether containers enter the United States through West worldwide. Coast or East Coast ports or from Canada or the U.S. Gulf Performance Measures: In 2003, MARAD conducted a sur- Coast, it is usually a race to provide rail and roadway connec- vey to gauge international carriers' perceptions of "mainstream tions for on-time delivery to the heartland business centers in container services." Twenty-one of the 22 carriers serving the Chicago and other major cities. trade responded. The respondents were asked to evaluate U.S. Stakeholders: Ports in urban areas in particular are feeling ports in comparison to Canadian ports according to 14 fea- the pressure from competing land uses for ferry systems, tures common to most container ports. Several of the indica- cruise terminals, "gentrification" housing, retail develop- tors mentioned in project interviews were related to physical ments, and cultural attractions. The unique challenges faced and operational constraints. These included the following: by these ports mean that an array of stakeholders beyond those in the shipping business have a "stake" in future port Security operations. Use of technology Table 16 lists stakeholders that have an interest in how ports Vessel turnaround time operate, how they are regulated, what impacts they have on Rail access away from the terminal the community, and what businesses and labor they require to Hours of operation support their operations. These stakeholder interests relate Road access at the terminal to terminal activities waterside, "inside the fence" meaning Road access away from the terminal "on-terminal," "outside the fence" meaning in the immedi- Cost per move ate surrounding and further inland areas, and internationally Truck gate time, queuing lanes (74). as the United States complies with international standards and requirements that are so critical to global trade. There is constant competition among carriers, terminal New Technologies: U.S. companies and international busi- operators, and ports to increase volume over previous years nesses are constantly developing new technologies and ways and to maximize profits. The Georgia Ports Authority (75) to enhance the movement of cargo not only from port to port noted that U.S. ports are well aware of this and have increas- but also throughout the point-to-point intermodal supply ingly hired persons with work experience in the railroad, chain. This has meant an increase in jobs for Americans in trucking, global marketing, and warehousing and logistics shipyards, on port terminals, in related warehousing indus- industries. tries, and in logistics management to cite just a few interre- Given the emergence of significant competition from newly lated job-generating centers that are needed to keep freight developed or planned ports in Canada and Mexico, U.S. ports flowing throughout the country.

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34 Table 16. Stakeholder groups and their locational focus of interest for U.S. deepwater ports. U.S. Deepwater Ports Outside the Stakeholder Groups Waterside Inside the Fence Fence International Federal Agencies and Elected Officials X X X X State Agencies and Elected Officials X X X Local Agencies and Elected Officials X X Public Citizens and Neighborhood X X X X Organizations Port Authorities X X X X Terminal Operators X X X X Carriers X X X Shippers X X X Labor--Unionized X X X X Labor--Non-Union X X Railroads X X Trucking Companies X X Customs Brokers X X X Logistic Providers X X X X Insurance Providers X X X X Warehousing X Fuel Suppliers X X Maintenance Companies X Engineers X X Security Firms X X Technology Firms X X X X Maritime Exchange Organizations X X Pilots X Tribal Organizations X X Established structural and operational relationships among Human Resources: From 2002 through 2007, 16,300 jobs supply chain service providers are rapidly changing in a highly have been added in the water transportation and port ser- technology-driven society. Forces of change in the intermodal vice industries (Table 17). In 2007, transportation accounted transportation environment are driving new and emerging for about 39 percent of the combined employment, up from technologies and regulations related to vessel size and opera- 36 percent in 2002 (50). tions, the environment, security, and safety. As these dynamic Table 17 breaks out the employment figures between those forces bring challenges to bear upon the ports and waterways that work in the port services area and those that work in operators to provide sufficient capacity and regulatory com- the inland waterways. These 2007 figures show a total of pliance, they must ever strive to provide their customers with 99,800 jobs for port services, of which a little less than half or greater system efficiencies and less cost. 45,200 are in cargo handling jobs. For the water transporta- Table 17. Employment in water transportation and port services, 20022007 (Thousand Jobs) (50, 76). % Change Segment 2002 2003 2004 2005 2006 2007 2002-2007 Transportation 52.6 54.5 56.4 60.6 62.7 64.3 22.2 Ocean, Coastal & Lakes 32.3 33.7 35.2 37.3 39.1 40.0 23.8 Inland 20.3 20.8 21.2 23.3 23.6 24.3 19.7 Port Services 95.2 93.8 91.5 93.9 99.3 99.8 4.8 Cargo Handling 39.6 40.8 40.8 42.8 45.6 45.2 14.1 Other 55.6 53.0 50.7 51.1 53.7 54.6 -1.8 TOTAL 147.8 148.3 147.9 154.5 162.0 164.1 11.0