Impact of Port Efficiency on the Last Mile 9 March, 2017 Tangier, - - PowerPoint PPT Presentation

Impact of Port Efficiency on the Last Mile

9 March, 2017 Tangier, Morocco

• Dr. Walter Kemmsies

Managing Director, Economist and Chief Strategist JLL Ports Airports and Global Infrastructure

3

The big themes

• If you have seen one port, you have seen one port
• Not all ports serve the same type of markets
• Some ports have different expansion opportunities
• Ocean carriers and e-commerce retailers are in conflict
• Ocean carriers want scale – larger vessels
• E-commerce retailers want flexibility – smaller vessels
• Re-think the gateway
• More on-dock transloading
• More intermodal
• More re-purposing

The “Grey Tsunami”

Source: Census Bureau , JLL

0% 10% 20% 30% 40% 50% 60% 1990 2000 2010 2020 2030 2040 2050 Japan Europe China Canada US Brazil Mexico India

Typical maturing developed economies Highest growth potential economies 33%

PROPORTION OF POPULATION OVER 55 YEARS OF AGE

International labor cost comparisons in 2001

LOCAL MANUFACTURING WAGES CONVERTED INTO USD AT PREVAILING EXCHANGE RATES IN 2001

Source: Government statistics agencies, Trading Economics. JLL

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000

1000 2000 3000 4000 5000 6000 7000 8000 9000 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Manufactures GDP Agricultural products Fuels and mining products

Global trade growth

WORLD REAL GDP AND TRADE INDEXES 1950-2015E

Source: WTO, JLL

Japan Korea, Taiwan China

Relative to GDP Growth GDP 3.7% 1.0 Manufactured Goods 7.0% 1.9 Fuels and Mining Products 3.8% 1.0 Agricultural Goods 3.5% 1.0 Total Trade 5.8% 1.6 1950 - 2015 CAGR

Ships continue to get larger

EVOLUTION OF CONTAINERSHIP SIZE

Source: Alphaliner, World Shipping Council

Big Ships - 18,000 TEU

Source: Moffatt & Nichol

230 positions above deck 230 positions below deck Up to 460 Container slots per Bay ~900 moves per bay per call 30 STS crane hours per bay

Photo Courtesy POLB

235 ft tall ~190 feet above water line 1312 ft long

Need ~55 foot water depth at berth

200,000 metric tons 190 ft beam

Workload and Traffic Generation for Each 18K TEU Service

Source: Moffatt & Nichol

18,000 TEU vessel

• 17,800 STS lifts
• About 39,000 yard crane lifts
• 65% truck / 35% on-dock rail

Peak waterside demand 280 mph Peak landside demand250 mph

• Gate

190 mph

• Rail

60 mph Traffic generated

• About 14,000 local truck roundtrips
• About 73,000 train feet each way = 9 – 8,000 ft trains each way

18,000 TEU Vessel 17,800 Lifts per Call Need 35,000 TEU Slots Generates 39,000 Yard Lifts Generates 14,000 Local One-Way Truck Trips Generates 9 – 8,000 Foot Trains Each Way 280 Peak Waterside Moves per Hour 250 Peak Landside Moves per Hour

530 Total Peak Yard Moves per Hour (Per Service)

200,000 400,000 600,000 800,000 1,000,000 1,200,000 Canada WC NWSA Oakland LA/LB NY/NJ Norfolk Charleston Savannah West Coast East Coast

Local Truck Trips

Annual Local Port Truck Trips per 18 K TEU Service

Congestion is a global problem that needs local solutions

PORT OF SHANGHAI, CHINA PORT TRAFFIC IN SOUTHERN CALIFORNIA TRUCK TRAFFIC IN ROTTERDAM

Shift in ports’ intermodal market reach

Source: Surface Transportation Board, Moffatt & Nichol, JLL

• 100,000

200,000 300,000 400,000 500,000 600,000 250 500 750 1,000 1,500 2,000 2,500 3,000 4,000

• 250

500 750 1,000 1,500 2,000 2,500 3,000

Carloads Distance (Miles)

NYNJ

07 14

• 20,000

40,000 60,000 80,000 100,000 120,000 140,000 160,000 250 500 750 1,000 1,500 2,000 2,500 3,000 4,000

• 250

500 750 1,000 1,500 2,000 2,500 3,000

Carloads Distance (Miles)

CHASAV

07 14

• 500,000

1,000,000 1,500,000 2,000,000 250 500 750 1,000 1,500 2,000 2,500 3,000 4,000

• 250

500 750 1,000 1,500 2,000 2,500 3,000

Carloads Distance (Miles)

LALB

07 14

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 250 500 750 1,000 1,500 2,000 2,500 3,000 4,000

• 250

500 750 1,000 1,500 2,000 2,500 3,000

Carloads Distance (Miles)

PNW

07 14

EAST COAST PORTS INCREASED THEIR INLAND REACH AT THE WEST COAST PORTS’ EXPENSE

Last Mile Intermodal Capacity May be Difficult to Achieve

PORT OF NEW YORK AND NEW JERSEY CONTAINER TERMINALS AND INLAND CONNECTIVITY INFRASTRUCTURE

ContainerTerminal Intermodal

Bayonne Bridge

International labor cost comparisons – then and now

LOCAL MANUFACTURING WAGES CONVERTED INTO US$ AT PREVAILING EXCHANGE RATES IN 2001 AND 2015

Source: Government statistics agencies, Trading Economics. JLL

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000

The largest global middle class ever

WORLD POPULATION AND OECD GLOBAL MIDDLE CLASS PROJECTIONS

Source: OECD, US Census Bureau

Selected On-Demand Company Fulfillment Time Estimates

Source: Mary Meeker @ KPCB

Supply chain/final delivery evolving and impacting retail strategy

ECOMMERCE SERVICE SUPPLIERS

Source: UPS presentation at Port of Long Beach Pulse of the Port event

• There are many

new entrants in the ecommerce market and potentially even more will join.

• Significant

evolution is the

• nly discernible

trend.

Re-think the gateway

Mason ICTF / HWY 307 Overpass (completed) Grange Road Upgrade

• Exp. completion: 2018

Brampton Road Connector

• Exp. Completion: TBD

Savannah International Airport Crossroads Business Center Savannah River International Trade Park

INTERSTATE CONNECTIVITY EASY ACCESS TO NEAR PORT WAREHOUSES

Jimmy Deloach Parkway Connector (completed) Gate 8

• Reduces traffic
• Cuts turn times
• GA allows 100K GVW Int’l container drayage

Jimmy Deloach Parkway Extension to I-16

Repurposing a port industrial complex in the ecommerce era

How can Mediterranean ports benefit from these trends?

CONTAINER VOLUME TRENDS IN WEST MEDITERRANEAN PORTS

Source: Inchcape Shipping Services

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Millions of TEU

Tanger-Med Algeciras Barcelona Valencia

21

The big themes

• If you have seen one port, you have seen one port
• Not all ports serve the same type of markets
• Some ports have different expansion opportunities
• Ocean carriers and e-commerce retailers are in conflict
• Ocean carriers want scale – larger vessels
• E-commerce retailers want flexibility – smaller vessels
• Re-think the gateway
• More on-dock transloading
• More intermodal
• More re-purposing

• Dr. Walter Kemmsies

Managing Director & Head of US Strategy – Port, Airport and Global Infrastructure JLL 500 East Pratt Street Suite 1250 Baltimore, MD 21202

• ffice: +1 443 451 2607

fax: +1 443 451 2601 jll.com/baltimore