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Global Supply Chains, Maritime Transportation and the Caribbean Transshipment Market: The Challenges of Growth and Rat

Global Supply Chains, Maritime Transportation and the Caribbean Transshipment Market: The Challenges of Growth and Rationalization. Jean-Paul Rodrigue Associate Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA

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Global Supply Chains, Maritime Transportation and the Caribbean Transshipment Market: The Challenges of Growth and Rat

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  1. Global Supply Chains, Maritime Transportation and the Caribbean Transshipment Market:The Challenges of Growth and Rationalization Jean-Paul Rodrigue Associate Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA Van Horne Researcher in Transportation and Logistics, University of Calgary, Canada

  2. Non academic title: The Panama Canal Expansion: What’s up Doc?

  3. Factors Impacting North American Freight Distribution in View of the Panama Canal Expansion Operational Factors Competitive Factors Macroeconomic Factors Aggregate demand changes Supply chain diversification and differentiation Response from East and West coast ports Economies of scale in shipping Structure of production changes Response from railways Shipping costs structure New gateways Slow steaming Response from Suez Canal and Med transshipment hubs

  4. Container Traffic at North American Ports, 1980-2009: This was supposed to be impossible…

  5. Main Export-Oriented Regions and Shipping Routes Servicing North America Southeast Asia South Asia Indifference Point East Asia Westbound Route Eastbound Route Landbridge PanamaRoute

  6. At the Crossroads… Which Value Proposition for the Caribbean? 1) Strong margins, but many not large enough to justify dedicated services 3) East coast capacity issues 4) Last segment in import-based supply chains - + 2) Interlining between the America’s coastal systems

  7. What Drives Supply Chain Management? Control Freaks Added Value Efficiency Control Offshoring Costs / time / reliability Internalize efficiency

  8. Diversification: Routing Options between Pacific Asia and the American East Coast Pacific Asia / American East Coast Intermodal (60%) All Water (40%) Western Canada (5%) Via Suez (5%) Pacific Northwest (20%) Via Panama (95%) Pacific Southwest (75%) Mexico(?%)

  9. Share of the Northeast Asia – U.S. East Coast Route by Option: Transition Already Completed?

  10. Supply Chain Differentiation: Pick Your Preference

  11. Slow Steamin’: What Hath You Brought Us? Prince Rupert 12 Transit Times from Shanghai and North American Routing Options (in Days) Vancouver 4 13 8 5 Seattle / Tacoma Toronto Oakland 5 3 26 Chicago New York 13 Los Angeles 25 Norfolk Atlanta 5 14 Dallas Savannah/Charleston 5 25 Slow Steaming: More WC transloading More inventory in transit 28 Houston 8 19 Lazaro Cardenas 22 Panama

  12. The Toll Conundrum: Potential Diversion between Intermodal and AWR for Asian Imports The Toll Conundrum: Financial pressures versus maritime shipping pressures Current Expansion (unconstrained) Expansion (constrained) Toll increases have already captured 40% of the potential savings of the expansion. The appeal of revenue maximization (NOT traffic maximization). Yield management? Adapted from A. Ashar (2009)

  13. Shipping Rate from Shanghai for a 40 Foot Container, Mid 2010 Vancouver Montreal $2,300 $2,110 $4,040 $3,950 New York $3,700 $1,830 Los Angeles $2,620 $1,400 Inbound rates: function of distance Outbound rates: function of trade imbalances Houston $3,510 $2,560 Inbound Outbound $1,300 $2,100

  14. The North-American Container Port System and its Multi-Port Gateway Regions 4 Multi-port gateway regions 1. San Pedro Bay 2. Northeastern Seaboard 3. Southwestern Seaboard 4. Puget Sound 5. Southern Florida 6. Gulf Coast 7. Pacific Mexican Coast 2 1 3 6 5 The Caribbean Gateway? (RIMS) 7

  15. Selected MOU between the Panama Canal Authority and American Gulf and East Coast Ports

  16. Governance Changes in Port Authorities Conventional Port Authority Expanded Port Authority • Planning and management of port area. • Provision of infrastructures. Landlord Landlord Cluster Governance • Service Efficiency • Logistical Integration • Infrastructure and Growth Management • Terminal-City Integration Regulator Regulator • Planning framework. • Enforcement of rules and regulations. Operator Operator • Cargo handling. • Nautical services (pilotage, towage, dredging). Terminal Operator(s)

  17. Added Value Activities Performed at an Extended Gateway

  18. Major Rail Corridors Improved since 2000

  19. Conventional Direct NorthAtlantic Central Atlantic South Atlantic / Gulf Transshipment Circum-Equatorial NorthAtlantic NorthAtlantic Central Atlantic Central Atlantic South Atlantic / Gulf South Atlantic / Gulf Caribbean Transshipment Triangle

  20. Emerging Global Maritime Freight Transport System

  21. The Caribbean Transshipment Market The “curse of economies of scale” Jones Act + 24 hour rule Anchoring footloose traffic

  22. Conclusion: The Complexities of Divergence Operational Factors Macroeconomic Factors Aggregate demand changes, structure of production Supply chain diversification and differentiation, economies of scale, Slow steaming Panama Canal Expansion No expansion: High impact (trend reversal) Expansion: Maintaining existing trends (AWR) Response from East and West coast ports, hinterland factors, tolls Competitive Factors

  23. Asia Europe USA Caribbean Canal Panama

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