Slide1: Presentation to the AASHTO Standing Committee on Water Transportation December 7, 2004 Alan Meyers, AICP Cambridge Systematics State Government Responsibilities and Options for Water Bottom-Line Report Development


Why a Water Bottom-Line Report?: Why a Water Bottom-Line Report? What could a Water Bottom-Line Report do that isn't being done already? Identify responsibilities, issues, and choices affecting states


State Responsibility for Marine Transportation: State Responsibility for Marine Transportation Statewide planning State Transportation Plans, Freight Plans Owned facilities Funding (FL, MS) Access Highway capacity and truck size/weight/hazmat regulation Rail, navigation channel, ITS initiatives Security Economic policy objectives Environment


Key Issues Affecting StatesGlobalization of the US Economy: Key Issues Affecting States Globalization of the US Economy States depend increasingly on world trade for shippers (access to markets) and consumers (access to goods)


Key Issues Affecting StatesMature Inland Waterway System: Key Issues Affecting States Mature Inland Waterway System Inland-water-freight system moved 1 billion tons valued at $138 billion over 540 billion ton-miles in 2000 -- Petroleum, Coal, Crude Materials, Food and Farm Products, Chemicals ...


Key Issues Affecting StatesPort Volumes are Forecast to Grow: Key Issues Affecting States Port Volumes are Forecast to Grow Function of world economy Positive growth in US consumer spending, high growth in China container, import-export imbalance Rapid growth in US container trades Most container and auto handling ports grew 5-10% annually over last decade -- west coast, east coast, gulf Most other commodities and inland waterway ports (which handle few containers) grew slower Future outlook (assuming capacity is available) 3.5% to 7.0% annual growth in containers and autos 0.5% to 2.0% in other commodities and inland Dampening effect of capacity constraints not yet addressed


Key Issues Affecting StatesChanging Logistics and Customer Needs: Key Issues Affecting States Changing Logistics and Customer Needs Just-in-time logistics reduces need for warehouse inventory, increases need for certainty in transportation system performance Increasing disruptions in port, rail, highway performance are leading to use of multiple load centers -- "port diversification" (Toys R Us, for example) All-water routes from Asia to US East Coast thru Panama "Walmartization" Big shippers are doing more to drive the logistics chain Shippers are demanding warehouse and distribution capability on or near ports for local and national markets Shippers are directing their suppliers to offshore their production to take advantage of differential labor costs


Key Issues Affecting StatesAdequacy of Container Terminals: Key Issues Affecting States Adequacy of Container Terminals Recent studies arguing that container terminals at capacity may be overstated Same conclusions were reached in 1990s -- since then, container ports have doubled or tripled their per-acre efficiency, along with expansion where practical May be more 'latent' capacity than thought -- conclusion of PANYNJ, POLB Concerns about access, environment, security, national policy seem to be eclipsing concerns about capacity


Key Issues Affecting StatesAdequacy of Container Terminals: Key Issues Affecting States Adequacy of Container Terminals Innovation will be needed to continue these gains 24-hour operations -- if partners cooperate Better terminal utilization by reducing on-terminal empties (offsite exchange) and on-terminal dwell time (better access, off-site storage opportunities) Potential for "inland ports" for off-site storage and transfer Improved on-terminal equipment and information systems (OCR, RFID, yard planning, etc.) Berth and yard rationalization Decline in on-port warehousing Expansion where needed


Key Issues Affecting StatesAdequacy of Container Terminals: Key Issues Affecting States Adequacy of Container Terminals New market opportunities may require different types of capacity Short-sea shipping Containerization on the inland waterways Regional barge -- PIDN Local barge traffic


Key Issues Affecting StatesAdequacy of Navigation Channels, Locks and Dams: Key Issues Affecting States Adequacy of Navigation Channels, Locks and Dams Most new container ships entering the world fleet and on order require 45-50' navigation channels -- major dredging completed or planned at most US container ports Aging locks and dams on the inland waterways -- benefits of improvement are being debated World constraints -- Panama Canal planned for expansion -- will especially impact Asia-US East Coast trades


Key Issues Affecting StatesAdequacy of Highway Access: Key Issues Affecting States Adequacy of Highway Access Ports, shippers and receivers depend on highway access, but highways will be increasingly stressed through 2020


Key Issues Affecting StatesAdequacy of Highway Access: Key Issues Affecting States Adequacy of Highway Access Container trucks impact specific corridors, but less system-wide impact than general trucking Relationship between container trucks and non-container trucks (through warehouse/distribution) is important


Key Issues Affecting StatesAdequacy of Highway Access: Key Issues Affecting States Adequacy of Highway Access Needs Last-mile connectors Major intraregional connectors Major through-region corridors Strategies Mode shift -- long-haul rail, short-haul rail, barge -- PIDN Time shift -- off-peak utilization of highways -- congestion surcharges Displacement -- move the points where cargo turns into a truck trip -- inland ports, "virtual ports", chassis pooling Separation -- truck only lanes (Tchapitoulas Corridor, I-710 proposal), LCV or OS/OW corridors


Key Issues Affecting StatesAdequacy of Highway Access: Key Issues Affecting States Adequacy of Highway Access Truck operations Driver shortages and availability Cost of port congestion (longer lines, slower transfer) Penalties for late delivery Matching right box and right chassis Community pressures Where is future truck capacity coming from? National issue "Let trucks be trucks" -- not do in-terminal operations, shuttle empties, match boxes and chassis; minimize in-terminal wait time Appointments, off-hours incentives


Key Issues Affecting StatesAdequacy of Rail Access: Key Issues Affecting States Adequacy of Rail Access Ports, shippers and receivers depend on rail access for intermodal traffic


Key Issues Affecting StatesAdequacy of Rail Access: Key Issues Affecting States Adequacy of Rail Access Ports, shippers and receivers depend on rail access for carload (chemicals, wood and food products, etc.) traffic Tons (millions)


Key Issues Affecting StatesAdequacy of Rail Access: Key Issues Affecting States Adequacy of Rail Access Some ports, shippers and receivers also depend on rail access for unit train (coal, grain, etc.) traffic Tons (millions)


Key Issues Affecting StatesAdequacy of Rail Access: Key Issues Affecting States Adequacy of Rail Access Challenges Truck-rail interfaces Mainline capacity -- national system showing strain Railroad performance -- labor and equipment shortages Raiilroad business strategy Opportunities Greater use of on-dock and near-dock rail Short haul rail -- Port of Oakland CIRIS, Port of Los Angeles, PANYNJ


Key Issues Affecting StatesEnvironment: Key Issues Affecting States Environment Increased focus on ports Congestion, air quality, water quality, noise, vibration, equity More litigation, even for environmentally beneficial projects More legislative mandates -- queue times, emissions "Green port" initiatives Mode shifting, time shifting, displacement, separation Clean fuel terminal equipment Storm water treatment Emissions Management Strategies -- queue reduction, appointments, off-terminal equipment exchanges, cold-ironing, 2006 diesel emissions standards


Key Issues Affecting StatesEnvironment: Key Issues Affecting States Environment Economic benefits of ports are at risk Costly environmental review and compliance BANANA communities Freight Happens Ports are generally the most efficient, least VMT, least impact strategy to get international cargo in and out of metropolitan regions Growth will happen even if ports do nothing -- freight transportation is a private business operation If not by port, then by some other means Education and outreach Need to redouble efforts


Key Trends Affecting StatesSecurity: Key Trends Affecting States Security Mandated procedures Point of termination vs. point of origin Non-invasive (X-ray, "secure shipper" clearance) Invasive (physical inspection of X% of cargo) Consistency of standards Different ports, terminals have different approved plans Need for minimum/benchmark standards? Level playing field Non-container security --- bulk tankers and barges Future impacts unknown Hope to maximize security with minimum impact


Key Trends Affecting StatesEconomic Impacts: Key Trends Affecting States Economic Impacts Revenue streams Some public ports make a profit, many do not There are other benefits besides revenue Non-Revenue Benefits Direct jobs from port operations and improvements Indirect jobs (transportation, warehouse/distribution, and value-added processing) Producer benefits (access to international and domestic markets, ability to construct global logistics chains, lower cost compared to other modes) Consumer benefits (access to more goods at reduced costs)


Key Trends Affecting StatesEconomic Impacts: Key Trends Affecting States Economic Impacts International transportation efficiencies have structural impacts on state economies Some loss of manufacturing (garment, toys, etc.) blamed on availability of international transportation Can also work in reverse -- case study of BMW plant in Greer, SC, which builds roadsters for export through the Port of Charleston Competition Ports, regions, states compete for port-related jobs and economic benefits Shared versus individual interests


Key Trends Affecting StatesEconomic Impacts: Key Trends Affecting States Economic Impacts The "Bottom-Line" has not yet been quantified How does having ports affect the need for capacity in other modes? How would not having ports affect the cost of the entire transportation system? What does it cost to meet all the needs? Who benefits? Who pays?


Key Trends Affecting StatesInvestment Needs vs. Funding Availability: Key Trends Affecting States Investment Needs vs. Funding Availability Ports can meet some, but not all, of the need For the few ports that make money, need to resist pressure to siphon off funds for other uses For the ports that don't make money (most), need to supplement revenue streams State roles Direct investment state role in ports -- dedicated funds Direct investment in port-serving improvements Indirect and in-kind investment Coordination of investments (Port, City, MPO, State, Federal) Inform national policy -- Harbor Maintenance Tax, Jones Act, availability and levels of federal funding


Key Trends Affecting StatesNational Policy Guidance: Key Trends Affecting States National Policy Guidance MarAd MTS AAPA


Why a Water Bottom-Line Report?: Why a Water Bottom-Line Report? What could a Water Bottom-Line Report do that isn't being done already? Identify responsibilities, issues, and choices affecting states Support state planning, policy, and investment Best practice inventory and case studies Guide for integrating multimodal planning and investment Guide for preparing State Transportation Plans, Freight Plans Guide for multi-state planning and investment


Why a Water Bottom-Line Report?: Why a Water Bottom-Line Report? What could a Water Bottom-Line Report do that isn't being done already? Identify responsibilities, issues, and choices affecting states Support state planning, policy, and investment Practice inventory and case studies Guide for integrating multimodal planning and investment Guide for preparing State Transportation Plans, Freight Plans Guide for multi-state planning and investment Fill gaps Addition to AASHTO's Bottom-Line series of reports Bridge between national-level studies and individual state/MPO/port studies Define what states need from public and private partners and set a larger action agenda Get the message out!


Preparing a Water Bottom-Line Report: Preparing a Water Bottom-Line Report Who Led by AASHTO SCOWT Partnership with USDOT, USACE and other agencies Partnership with key industry groups (AAPA, Inland Waterways, etc.) How Utilize wealth of existing data and studies, filling in gaps where necessary Focus new effort on policy choices and implications, emerging directions, and effective communication Take a systems perspective


States Have Different Needs, but Shared Interests, in the Nation's Waterways: States Have Different Needs, but Shared Interests, in the Nation's Waterways Some have deepwater ports, some have inland ports, some have no ports but accommodate significant port-related through traffic Some have ownership responsibilities, some do not, but all have planning responsibilities Some have formal structures for port planning and funding (FDOT, MS), most do not, but the costs of port operations -- transportation impacts, environmental issues -- impose direct and indirect state costs A Water Bottom-Line Report could be used to: Define shared state interests, needs, and strategies Fill the current policy void