Future Trends and Challenges of the MTS Future Trends and Challenges of the MTS Future Trends and...

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  • Copyright © 2007Copyright © 2007

    Future Trends and Challenges of the MTS

    Future Trends and Challenges of the MTS John Vickerman Norfolk, VirginiaJohn Vickerman Norfolk, Virginia

    JW Marriott Hotel Pennsylvania Avenue, March 21, 2007, Washington DC

  • Copyright © 2007Copyright © 2007Copyright © 2007Copyright © 2007

    • External Industry Pressures • International Cargo Demand Trends • The Asian Import Trade Challenge • North America Forecasted Cargo Volumes • North American Port & Intermodal Capacity • International Port Productivity Comparisons • Vessel Technology Trends • Environmental Concerns for Vessel Emissions

    • External Industry Pressures • International Cargo Demand Trends • The Asian Import Trade Challenge • North America Forecasted Cargo Volumes • North American Port & Intermodal Capacity • International Port Productivity Comparisons • Vessel Technology Trends • Environmental Concerns for Vessel Emissions

    Today’s AgendaToday’s Agenda

  • Copyright © 2007Copyright © 2007

    Port & Intermodal External Industry

    Pressures

    Port & Intermodal External Industry

    Pressures Copyright © 2007Copyright © 2007

  • Copyright © 2007Copyright © 2007

    North American Port Gateways

    North American Port Gateways

    Global Trade: Current Course & Direction?Global Trade: Current Course & Direction?

    Cargo Demands, Capacity, Funding, Port Productivity &

    Environmental Challenges

    Cargo Demands, Cargo Demands, Capacity, Funding, Capacity, Funding, Port Productivity & Port Productivity &

    Environmental ChallengesEnvironmental Challenges

  • Copyright © 2007Copyright © 2007

    Vessel Cargo Handling Circa 1950

  • Copyright © 2007Copyright © 2007

    Cargo Handling Circa 2005

  • Copyright © 2007Copyright © 2007

    US Navy Fast Frigate Circa 2035

  • Copyright © 2007Copyright © 2007

    What We Know Today... Will Be

    Surely Be Different Tomorrow!

    What We Know Today... Will Be

    Surely Be Different Tomorrow!

  • Copyright © 2007Copyright © 2007

    To Be Competitive Today... Marine/Intermodal

    Terminals Must Reduce Throughput Cost &

    Increase Cargo Velocity Securely and as Stewards of

    the Environment

    To Be Competitive Today... Marine/Intermodal

    Terminals Must Reduce Throughput Cost &

    Increase Cargo Velocity Securely and as Stewards of

    the Environment

  • Copyright © 2007Copyright © 2007

    Functional Classification of Global Maritime Cargoes

    Functional Classification of Global Maritime Cargoes

    All Maritime Cargo

    General Cargo Bulk Cargo

    All Maritime Cargo

    General Cargo Bulk Cargo

    Containers, Lift On/Lift Off (Lo/Lo), Roll On/Roll Off (Ro/Ro)

    Lumber, Paper, Steel, Autos

    Grain, Sand & Gravel, Scrap Metal, Coal/Coke, Clinker, Fertilizer

    Grain, Sand & Gravel, Scrap Metal, Coal/Coke, Clinker, Fertilizer

    LNG, Petroleum, Molasses, Chemicals, Vegetable Oil

    LNG, Petroleum, Molasses, Chemicals, Vegetable Oil

    Containers, Lift On/Lift Off (Lo/Lo), Roll On/Roll Off (Ro/Ro)

    Lumber, Paper, Steel, Autos

    Sacks, Cartons, Crates, Drums, Pallets, Bags

    Sacks, Cartons, Crates, Drums, Pallets, Bags

    Break Bulk Neo-Bulk Containerized Liquid Bulk Dry BulkBreak Bulk Neo-Bulk Containerized Liquid Bulk Dry Bulk

  • Copyright © 2007Copyright © 2007

    The “Port” One of the Many Diverse Constituencies

    in the Cargo Transportation Logistics Chain

    The “Port” One of the Many Diverse Constituencies

    in the Cargo Transportation Logistics Chain Port

    Shipping Agents

    Shippers

    Carriers/ NVOCCs

    Stevedores/ Terminal Operators

    Longshore Labor Governmental Regulation/ Compliance

    Railroads

    Motor Carriers/ Truckers

    Freight Forwarders/ Brokers

    Customs Agencies

    Warehousing/ CFS Operators

    Pilotage/Tuggage

    Port Shipping Agents

    Shippers

    Carriers/ NVOCCs

    Stevedores/ Terminal Operators

    Longshore Labor Governmental Regulation/ Compliance

    Railroads

    Motor Carriers/ Truckers

    Freight Forwarders/ Brokers

    Customs Agencies

    Warehousing/ CFS Operators

    Pilotage/Tuggage

    Objective: A multimodal

    “Seamless” integrated world wide cargo

    conveyance system.

    Objective: A multimodal

    “Seamless” integrated world wide cargo

    conveyance system.

  • Copyright © 2007Copyright © 2007

    The Global Container Industry Continues to Consolidate…

    The Global Container Industry Continues to Consolidate…

    5,053

    2,244 1,479

    8,180

    4,850

    2,674

    9,763

    6,881

    4,027

    0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

    10,000

    1995 2000 2005

    5,053

    2,244 1,479

    8,180

    4,850

    2,674

    9,763

    6,881

    4,027

    0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

    10,000

    1995 2000 2005

    44.4%

    70.5%

    Th ou

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    s of

    T EU

    S lo

    ts in

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    an d

    on O

    rd er

    Th ou

    sa nd

    s of

    T EU

    S lo

    ts in

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    pe ra

    tio n

    an d

    on O

    rd er

    Total number of slots Slots controlled by top 20 carriers Slots controlled by 4 global alliances

    Total number of slots Slots controlled by top 20 carriers Slots controlled by 4 global alliances

    59.3%

  • Copyright © 2007Copyright © 2007

    The North American Freight Paradox: The Nation’s Ports and Their Intermodal

    Linkages are Experiencing the “Best of Times and the Worst of Times”

    in Terms of Growth and Demands on Capacity

  • Copyright © 2007Copyright © 2007

    At Current Productivity and Growth Levels by 2020 North American Ports & Their Associated

    Intermodal Systems Will Be Severely Congested. In Today’s Supply Chain

    Congestion Can’t be an Excuse…

  • Copyright © 2007Copyright © 2007

    Poll of the Top 1000 “Blue Chip” Multinational Shipper Priorities Poll of the Top 1000 “Blue Chip” Multinational Shipper Priorities

    38% Competitive Freight Rate

    38% Competitive Freight Rate

    43% Schedule

    Reliability & Consistency

    43% Schedule

    Reliability & Consistency

    12% Transit Time

    & Speed

    12% Transit Time

    & Speed

  • Copyright © 2007Copyright © 2007

    Today’s Logistics Truth:Today’s Logistics Truth:

    “The customer wants more and is willing to pay

    less for it.”

    “The customer wants more and is willing to pay

    less for it.”

  • Copyright © 2007Copyright © 2007

    Today: Global Trade is an Intermodal SystemToday: Global Trade is an Intermodal System

    0

    10

    20

    30

    40

    50

    60

    1968 1973 1978 1983 1988 1993 1998 2003

    Rail Ocean

    43 Days Transit Time Reduction (-72%) in 35 years

    Typical Transit Days: Hong Kong to New York

    Source: Kansas City Southern RailroadSource: Kansas City Southern Railroad

  • Copyright © 2007Copyright © 2007

    We do not have an “intermodal system” as such. Rather we have an aggregation of multiple,

    private and public modes, each of which are “stove-piped” within their own individual areas of

    interest with little or no true cross communication and collaboration.

  • Copyright © 2007Copyright © 2007

    Ports are Experiencing Dramatic Surges in Seaport Security Costs Ports are Experiencing Dramatic Surges in Seaport Security Costs

    Port of Miami’s Security Costs Today are 600% Higher

    Than that of 2001

    Port of Miami’s Security Costs Today are 600% Higher

    Than that of 2001

  • Copyright © 2007Copyright © 2007

    US Port Security Breach: Supply Chain Disruption

    US Port Security Breach: Supply Chain Disruption

    $50 Billion Loss$50 Billion Loss

    Cargo Backlog Cleared in 60 DaysCargo Backlog Cleared in 60 Days

  • Copyright © 2007Copyright © 2007 Source: TranSystems

    Equipment and Technologies Security Container Inspection

    100% Radiological Inspection Regime

    Equipment and Technologies Security Container Inspection

    100% Radiological Inspection Regime

    Gamma-Ray ScanGamma-Ray Scan

    SAIC ConfigurationSAIC Configuration

  • Copyright © 2007Copyright © 2007

    A radiation portal monitor is a detection device that provides Customs and Border Protection (CBP) with a passive, non-intrusive means to screen containers and trucks as well as other conveyances for the presence of nuclear and radiological materials.

    A radiation portal monitor is a detection d