Center for Secure and Resilient Maritime Commerce Developing a - - PowerPoint PPT Presentation

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Center for Secure and Resilient Maritime Commerce Developing a - - PowerPoint PPT Presentation

Oct 28, 2023 396 likes •896 views

Center for Secure and Resilient Maritime Commerce Developing a Resiliency Framework for Regional Freight Platforms T. Wakeman, H. Gajjar, J. Ramirez-Marquez, and H. Salloum Stevens Institute of Technology Center for Secure and Resilient

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Center for Secure and Resilient Maritime Commerce

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Developing a Resiliency Framework for Regional Freight Platforms

  • T. Wakeman, H. Gajjar, J. Ramirez-Marquez,

and H. Salloum Stevens Institute of Technology Center for Secure and Resilient Maritime Commerce

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Trade & Transport Trends

  • Continuing global population/trade growth
  • MTS consolidation (liner services merging)
  • Global supply chain integration
  • Changing trade patterns and markets
  • Expanding economies of scale/scope
  • Business driver of service reliability
  • Emerging regional freight platforms (RFP)
  • Are RFPs a resiliency strategy?
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31 Oct 2011 - 7 Billion ~2026

World Population Growth 1950 to 2050 (projected)

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Shipping Grows with Trade

(Source: Kaluza, Kolzsch, Gastner, and Blasiusu (2010) “The complex network of global ship cargo movements” J. Royal Society: Interface)

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Global Seaborne Shipping 1968-2008

(Source: http://www.marisec.org/shippingfacts/worldtrade/volume-world-trade-sea.php)

TRIPLED in 40 years!

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Trade & Transport Trends

Continuing global population/trade growth

  • MTS consolidation (liner services merging)
  • Global supply chain integration
  • Changing trade patterns and markets
  • Expanding economies of scale/scope
  • Business driver of service reliability
  • Emerging regional freight platforms (RFP)
  • Are RFPs a resiliency strategy?
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SLIDE 8

Marine Transportation System

The Marine Transportation System (MTS) consists of vessels, waterways, ports, and intermodal landside connections, which allow the various modes of transportation to move people and goods to, from, and on the water... and its character is changing.

Source: After MTSNAC: http://www.mtsnac.org

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Global Terminal Acquisitions

Date Terminal Acquirer Price ($million) Volume (TEUs) Price TEU Multiple Sept 04 CSX World Terminals DP World 1,142 3,300,000 $346 14 Jan 06 P&O Ports DP World 6,800 22,500,000 $302 16 Nov 06 OOIL Terminals Ontario Teacher’s Pension Plan 2,400 2,570,000 $935 27 Dec 06 Halterm Macquarie 157.5 210,000 $750 23 Feb 07 Montreal Gateway Morgan Stanly 409.5 995,000 $515 23 Mar 07 Maher Terminals Deutsche Bank 2,300 (?) 1,900,000 $1,053 ~40 (?)

Source: After B. Cashon, Oct. 2010, AAPA Terminal Conf.

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Carrier Consolidation from 1970 to 2010

NYK Line Showa Nippon Liner

NYK Line

CP Ships Canmar Lykees Lines Contship Avaran Lines ANZDL

CP Ships Hapag Lloyd

CMA CGM Australia National Lines

CMA CGM

NOL APL

APL

Evergreen Lloyd Triestino Uniglory Hatsu Marine

Evergreen

P&O Containers Nedlloyd Lines Blue Star Lines Farrell Line

P&O Nedlloyd Maersk

Maersk Line Sea-Land Safmarine SCL Line/CMBT

Maersk/ Sealand

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Trade & Transport Trends

Continuing global population/trade growth MTS consolidation (liner services merging)

  • Global supply chain integration
  • Changing trade patterns and markets
  • Expanding economies of scale/scope
  • Business driver of service reliability
  • Emerging regional freight platforms (RFP)
  • Are RFPs a resiliency strategy?
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Integration of Supply Chain Relationships

Traditional Supply Chain Model Logistics Network Model

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From “Point-to-Point” Movement to Continuous Flow Pipelines

  • Freight transportation

is a “systems” issue and must be seen from a regional/national mobility perspective.

  • The “logistics system”

include waterways and terminals as well as landside access and distribution centers.

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Four Mega-Trading Blocks

Russia China India Europe

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Two Mega-Trading Blocks

North America South America

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Trade & Transport Trends

Continuing global population/trade growth MTS consolidation (liner services merging) Global supply chain integration Changing trade patterns and markets

  • Expanding economies of scale/scope
  • Business driver of service reliability
  • Emerging regional freight platforms (RFP)
  • Are RFPs a resiliency strategy?
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1996 Generation “Regina” & 2006 Generation “Emma”

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Economies of Scale

As quantity of production increases from Q to Q2, the average cost of each unit decreases from C to C1.

http://en.wikipedia.org/wiki/File:Economies_of_scale.PNG

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Cost of Construction

Cost/DWT per DWT Bulkers

100 200 300 400 500 600 700 800 900 50,000 100,000 150,000 200,000 DWT Cost/DWT ($/ton)

Source: Tradewinds Sales and Purchase Data, November 2009

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14k Ship with Eight Gantry Cranes

Source: DPW_Daniela_14k.jpeg

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Bigger Ships Mean Bigger Infrastructure - New $5B Panama Canal Expansion Opens in 2014

Total excavation = 133 MCM Original 1914 construction = 205 MCM

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Cost Advantage Comparison with 4000/8000 TEU Ships

(Source: Worley Parsons, Richard West)

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East Coast ports reportedly investing more than $6 billion for expansions…

  • Demand for increased capacity
  • Driven by ships/expansion of the Panama Canal
  • Port & intermodal infrastructure issues

–Availability of deep water and air draft –On-dock intermodal container transfer facilities –Seamless road and rail connectivity to nation –Access to warehouse & logistics centers

  • Increasing business focus on system reliability
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Trade & Transport Trends

Continuing global population/trade growth MTS consolidation (liner services merging) Global supply chain integration Changing trade patterns and markets Expanding economies of scale/scope

  • Business driver of service reliability
  • Emerging regional freight platforms (RFP)
  • Are RFPs a resiliency strategy?
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National Export Initiative

  • In 2010, President Obama launched the

National Export Initiative (NEI), which aims to double exports over the next five years.

  • This initiative is envisioned to significantly

increase the volume of American products entering the global marketplace.

  • Beyond the export of service sector products,

these exports include agricultural goods, manufactured products, and natural resources.

  • The President declared that exports are

important to boost the U.S. GDP, reduce the trade deficit, and help stimulate job creation.

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U.S. Exports Transport Cost from Midwest to Northern Europe

2000 1000 900 800 700 600 500 400 300 200 100 50 40 30 20 10

32% 20 %

1.4 % 10 % 6 % 10 % 2 % 12 % .5 % .75 % 2 % 100 %

$

U.S. INLAND U.S. PORT U.S. EMPTY POSITIONING EQUIP P/D OCEAN TRAN EU PORT EU EMPTY POSITIONING EU INLAND CLAIMS FF FEE AGENT TOTAL

US 63.4% Cost EU 24% Cost

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Cargo Owners’ Demands from their Logistics Networks

  • Competitive costs
  • Velocity to the point of sale
  • Reliability in cargo delivery

...and Reliability is KING!

If cargo moves from its current route because of poor performance to a new route, it almost never returns.

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Trade & Transport Trends

Continuing global population/trade growth MTS consolidation (liner services merging) Global supply chain integration Changing trade patterns and markets Expanding economies of scale/scope Business driver of service reliability

  • Emerging regional freight platforms (RFP)
  • Are RFPs a resiliency strategy?
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Planning for International (Import and Export) & Domestic Freight Movement

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Economies of Scope

  • r “Bigger is Better”
  • Regional Freight Platforms serve expanded

geographic scopes beyond historic tributary cargo flows to gain logistic efficiencies.

  • These transport and distribution networks have

redundant infrastructure and distribution capabilities available to enable the existing supply chain to absorb a shock or disruption without crippling the chain’s ability to meet regional customer’s needs.

  • There will be competition among components.
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Formation of a “Port Pole”

  • A “Port Pole” is a Regional Freight

Platform of collaborating ports that attract cargo because of their combined capacity, enhanced resiliency to shocks, and ability to contribute value through economies of scope and scale.

  • Examples of existing port poles include the

LA(16)-LB(17) port complex, ports of Rotterdam(9)-Antwerp(13), and ports of Hamburg(11)-Bermerhaven(19).

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Creating a New Port Pole ...or RFP

  • Collaborations among

the Port of New York and New Jersey with the Delaware River Ports of Wilmington- Philadelphia-Camden could form a new port pole that serves the Northeast, Midwest and the nation.

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Two Gateways – One Port

  • North Port (PANYNJ) is the import

gateway... moving containerized goods quickly into the region and the hinterlands... and connects to:

  • South Port (W-P-C) is the bulk cargo and

container export gateway... making use of available local land and labor resources in Wilmington, Philadelphia and South Jersey region to increase efficiency.

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New Jersey Freight Flows

  • 199 Million Tons entering

the State

  • 126 Million Tons moving

through the State

  • 131 Million tons moving

within the State

  • 165 Million Tons leaving

the State

More than 600 million tons!

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New Jersey’s Proposed Marine Highway & Regional Freight Platform

  • Upper New York Bay (Jersey

City Hub)

  • Newark Bay (Elizabeth Hub)
  • Edison/Linden

(Raritan/Linden Hub)

  • Camden/Gloucester/

Paulsboro (C/P Hub)

  • Salem (Salem Hub)
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Trade & Transport Trends

Continuing global population/trade growth MTS consolidation (liner services merging) Global supply chain integration Changing trade patterns and markets Expanding economies of scale/scope Business driver of service reliability Emerging regional freight platforms (RFP)

  • Are RFPs a resiliency strategy?
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DISRUPTIONS!

MSC Chitra, Mumbai, India (2010) USS Cole – Oct. 12, 2000 Earthquakes: Port Au Prince Car Float, 2009

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Maritime Transportation System Terminals Ships Waterway Intermod al Users Port Security Protection (Detect, Deter, Defend) Resilience (Consider, Mitigate) Technological

  • Sensors
  • Networks

Physical

  • Guns
  • Gates
  • Guards

Reactive Approach

  • After

disruption Proactive Approach

  • Before

disruption requires

MTS

Vessels Waterways Terminals Intermodals Users

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Balancing Security from Disruptions and Free Movement of Cargo at Ports

Most Protection No Danger Stops all Movement How to achieve the

  • ptimum?

No Protection No Cost Extremely Vulnerable

If you cannot afford to protect it, what can you do to make it resilient?

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What is Resilience?

Resilience is the ability of a system to provide and maintain an acceptable level of service in the face of various major disruptions and challenges to normal operations.

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Resiliency Curve

Operational Capacity Time

Preparation Disruption Recovery Time Lost Performance Zone

Baseline Resilience Option

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Proactive and Reactive Resiliency Strategies

Proactive Resiliency Strategies Reactive Resiliency Strategies

Disruption / Catastrophic Event

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Developing a Modeling Framework

  • Define the system

– Delineate network boundary – Identify Unit of Benefit and FOM

  • Scenario Analysis

– Define baseline conditions of current state – Determine business model – Identify possible disruptive scenarios

  • Determine action measures and effects
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Selecting Model Parameters

  • Unit of Benefit

– Cargo Throughput

  • Figure of Merits

– Cargo Security – Redundant Capacity (and hence Resiliency) – Capacity Alternatives – Job creation/retention – Reduction in congestion – Reduction in emissions – Asset utilization – Highway safety – Public-private partnership – Profits

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Assessing Impact of RFP on Business and Security

Economic Importance Resilient System Low Medium High Low Medium High 1 Cargo security Redundant capacity Job creation Public profits Political obstacles Congestion & Emission reduction Highway safety Environmental requirements Community resistance Asset Utilization Adequate infrastructure Adequate equipment Highway & Railway maintenance Public-Private Partnership Available Finance 2 3 4 5 1 2 3 4 5

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Trade & Transport Trends

Continuing global population/trade growth MTS consolidation (liner services merging) Global supply chain integration Changing trade patterns and markets Expanding economies of scale/scope Business driver of service reliability Emerging regional freight platforms (RFP) ? Are RFPs a resiliency strategy in NJ?

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Answer: YES

Any Questions?