Ken Orski at Innovation Briefs wrote this interesting essay on the future of investment in US ports infrastructure.
Until now, most of the debate about the need to expand public infrastructure has centered on highwaysâ€“ partly because growing congestion on the nation's highways has highlighted the need to increase road capacity, and partly because a highly publicized event â€“ the collapse of the I-35 bridge in Minneapolisâ€“ has focused public attention on the need to reconstruct many of our aging roads and bridges.
A December 3-5 conference in Coral Gables, Florida, organized by Infocast, has thrown a spotlight on another class of infrastructure assets, namely ports and intermodal facilities. Judging by the large number of senior executives from port authorities, shipping concerns and the financial community taking part in the conference, the challenge of expanding port and intermodal infrastructure is resonating strongly with operators, shippers and investors alike. A keynote address by former Transportation Secretary Norman Mineta and the presence of senior officials from U.S. DOT underscored the importance which the public policy community attaches to the ports issue.
The conference took place against a background of forecasts that predict a veritable "tsunami" of maritime cargo swamping U.S. port facilities in the years ahead. In the past 5 years container trade in North America has increased at an annual rate of 6.8%. As a consequence of the rapidly expanding global trade, maritime cargo is predicted to soar by 50% by 2015, from 48 million TEUs in 2005 to 72 million in 2015. (TEU stands for "twenty-foot equivalent unit," a standard measure of container capacity). By 2020 North American ports and their associated intermodal systems will be severely congested, with demand exceeding current capacity by as much as 200% assuming current productivity and growth levels, predicts John Vickerman, a well-known and respected expert in the planning and design of port, intermodal and freight logistics facilities.
How should U.S. ports respond to this challenge? Some observers suggest that the capacity problem could be alleviated if port authorities placed operations on a 24/7 basis, as many foreign ports do. But there are good reasons why that would be impractical in the case of U.S. ports, claims Brooks Royster, former director of the Port of Baltimore. These constraints include local regulation and work rules limiting hours of operation, inadequate labor pool of longshoremen, and the need for some slack time to perform routine maintenance. Only Asian ports (notably Singapore and Hong Kong) exceed the productivity of our own ports, Royster contends, and then only because many of them are transshipment ports that do not have to move containers "through the gate" as is the case with destination ports like ours.