Smart Rivers Conference 14 September 2011

1. Challenges with Evaluating Container Port Projects and the Corps of Engineers Smart Rivers Conference 14 September 2011 Kevin Knight Economist Institute for Water Resources U.S. Corps of Engineers

2. Trends in Containerized Trade • Containers on the Inland River System • Challenges with Evaluating “Container Gateway Ports” • Studies/Products aimed at Reducing the Uncertainties • Linkages to the Inland River System

3. U.S. Navigation System

6. Forecast Total World Container Trade2000 - 2024 • Doubled from 60 million TEUs in 2000 to about 120 million in 2008 • Slight decline forecast in 2009 • Renewed growth to about 260 million TEUs by 2024 • That is down 40 million TEU from earlier forecasts Million TEUs Declinefrom Previousforecast Source: IHS Global Insight, Inc. Dec 08

8. Source: Lloyds Register (2006), “Ultra-large containerships: the green ships of the future?

9. 17.7 7.4 5.1 Depth-Constrained Containership Calls in 2020, with and without Planned Harbor Projects(in thousands of ship calls) 14.0 4.5 3.8 Pacific Coast As of 2009: Construction / Design Funds Authorized – Funds Pending 2.5 Atlantic Coast 1.1 1.6 Study Funds Under Construction/ Study for Additional Improvements Gulf Coast

10. U.S. Waterborne Container Traffic by Port (2009) Source: Waterborne Commerce Statistics Center

11. Containers on the Coastal/Inland System • U.S. domestic COB services began about 30 years ago • Initially along Atlantic Coast and Columbia River system in Pacific Northwest • Few major COB services continue today • Columbia Coastal Transport (COB feeder services along Atlantic Coast), vessel capacities of 450 to 912 TEUs—weekly • James River Barge Line “I64 Express” (COB Norfolk-Richmond) - weekly • Osprey (Gulf Coast and Inland waterways) • Tidewater and Foss (Columbia River/PNW) • Sea Point – (trans-shipment site located at Mile 12 of the Mississippi River at Venice, Louisiana to reach design capacity by 2013) • Columbia-Snake COB (Lewiston, ID to Portland, OR) • Illinois-Gulf Marine Highway Initiative

12. MARAD Marine Highways Program • Unveiled in April 2010 • 18 corridors, 8 named projects and 6 initiatives for more study • Selected based on high freight volume, current truck/rail congestion, opportunities to improve air quality, and potential for future economic viability

13. Some Marine Highway Projects • James River Expansion Project • Expand frequency of existing COB services between Hampton Roads and Richmond, VA • Gulf-Atlantic Marine Highway Project • Support construction of vessels designed to serve COB market, focus on connecting Gulf and South Atlantic ports • Tenn-Tom Freight Project • A new COB service between the Port of Itawamba, MS and the Port of Mobile, AL • East Coast Marine Highway Initiative • Use existing and new vessels to provide COB services between Florida, Maryland and Massachusetts (I-95)

15. Challenges Associated with Container Port Studies • Panama Canal Expansion • Geopolitical Conflict (e.g., near Suez Canal) • Global Competition • Transhipment Centers • Extent of Shipper Behavior Change with a Project

17. Actions to Reduce Uncertainties & Increase Efficiency • Study on Factors which Influence Deployment • Guide to Incorporating Risk & Uncertainty in Container Port Improvement Projects • Containership Data and Tools • Port Capacity Analysis

18. Study on Factors which Influence Deployment • Analyzed existing container vessel deployment patterns • Identified Specific Deployment Factors: • Customer request • Infrastructure (including channel depth) • Intermodal connectivity • Terminal operations efficiency • Port costs • Port location • Cargo Volume

20. Guide to Incorporating Uncertainty into Container Port Projects • Identifies the key sources of uncertainty and variability in Various NED Benefits Modeling Components • Physical Conditions • Commodity Forecasts • Fleet Projections • Vessel Operating Practices • Provides suggested ways of dealing with uncertainty

21. Containership Data and Tools Approach: • Develop the tools and methods to combine available AIS and WCSC data into a the (modified) HarborSym simulation tool. • Develop the ability to identify world wide routes. Conduct empirical studies of vessel operations at ports. • Develop training material and users guides to immediately infuse tools into district studies.

22. Port Capacity Analysis: Key Questions • What are the near-term and long-term capacities of the major East Coast and Gulf Coast container ports? • What factors constrain the capacities of those ports? • How well is capacity currently utilized? • How well are the major ports prepared to handle larger vessels? • How do the smaller container ports or terminals fit into the picture?

23. Five Dimensions of Terminal Capacity STACKING HEIGHT CY DEPTH (AREA) OPERATING HOURS DRAFT BERTH LENGTH

24. Port Capacity Analysis: Key Findings • Overall, the North Atlantic, South Atlantic, and Gulf ports have substantial inherent capacity for near-term growth. • Most ports can handle larger vessels that the current average; few if any can handle super-post-Panamax vessels. • Growth can be achieved through more intensive use of existing terminals, cranes, and berths. • Reserve capacity is greatest at NYNJ, Charleston, and Savannah, but expansion projects will add terminal capacity elsewhere.

25. Other Products on the Horizon? • Panama Canal Expansion Studies • Toll Structure Analysis • Expansion of Port Capacity Analysis • Rerouting Cargo/Hinterland Analysis • Change in Shipbuilding Practices • Monitoring Manufacturing Centroid

26. Summary • Better understanding of port “gateways” lead to better decisions over port improvement projects • Better predictions of viability and container volume on inland system • Systems approach • Acceptability and Transparency

28. Questions? Kevin Knight Institute for Water Resources US Corps of Engineers 7701 Telegraph Road, Casey Building Alexandria, VA 22315 Ph: 1-703-428-7250 Kevin.P.Knight@usace.army.mil