Marine Log - July 2008 - (Page 14)

ICE CLASS TANKERS fuel efficiency in the transportation system. HOW IT WORKS At Horizon, we group the Marine Highway into three core freight market segments: • Inland Waterways, mainly served by barge and small craft; • Coastwise Ro/Ro Truckload, served by small Ro/Ro ships as a long-haul highway alternative; • The Coastwise Container Feeder market, served by smaller fast vessels moving containers from gateways to regional ports closer to shipment destination. Our efforts are focused on establishing the foundation for a viable Coastwise Container Feeder Network. We see this as a “safety valve” that will help relieve volume pressure building at our primary gateway ports. As ships get larger and trade grows, our gateway ports will come under increasing pressure to handle growing container volumes. While port terminals may be able to handle the load and discharge, the intermodal connections to these terminals—railroads and highways—will not. Like a release valve on a pressure cooker, a Coastwise Container Feeder Network will move traffic from gateway ports to smaller regional ports before containers enter the intermodal network. With minimal impact on terminal land capacity, feeder vessels can be loaded with onward containers, relieving pressure and moving work to ports with ready capacity and less congested connections to rail and highway infrastructure. If we look at port capacity on the East Coast, we see the challenge taking shape. According to industry analysts, the major East Coast ports in Savannah, Charleston, Virginia and New York will all reach 90% capacity or higher in 2012 given expected container trade growth rates. Savannah and Charleston will see traffic exceed maximum port capacity, as the chart shows. Looking at regional ports, such as Philadelphia, Wilmington, N.C., and Jacksonville, we see room to grow and efficient connections to the intermodal rail and highway network. We can move container traffic to these regional ports using the feeder network to improve the overall efficiency of the entire marine transportation system. One of the key measures of port terminal productivity is dwell time, or how long a container sits on the terminal 14 MARINE LOG JULY 2008 after discharge before moving on to the final destination by truck or rail. Dwell times on the East Coast have improved recently due to the general slowing in trade from Asia. But as trade grows at steady rates, as ships get larger, as more ships travel through the Suez Canal and a widened Panama Canal, East Coast ports will struggle to keep dwell times down. This can cause a spiral effect of inefficiency, as port terminals become bogged down by a growing surge of boxes hinterland location via long-haul truckload and rail? If we could move these shipments from the major gateways to smaller ports closer to destination with better connections, could this help to reduce congestion and improve efficiency? At Horizon Lines, we believe it will. Our initial discussions with international container carriers are encouraging. We have the assets already in place to start a feeder network. Raymond: “The U.S. Marine Highway will take trucks off the road, help ease traffic, reduce emissions and increase overall fuel efficiency in the transportation system” from large containerships on one side and surge of trucks calling for pick-ups on the other. A while back I was flying over Newark airport with former Secretary of Transportation Norm Mineta. He asked why there were a large number of stacked containers in the port facilities. I remarked: The dwell time is too long, and you can liken it to a situation where every passenger coming into our major airports on the East Coast disembarked the plane and then waited five days in the airport before getting a taxi. This is the situation confronting our ports. And we expect it to get worse. The issue is not at the port terminals but at the intermodal connections. In New York, for example, getting into and out of Port Newark is becoming increasingly difficult. Even with new initiatives underway, the highway and rail infrastructure will not be able to handle additional large volumes of trade. Building new roads or adding rail lines is not an option due to a lack of available land and the high cost of construction. If we look at a map of highway congestion in the United States, it is no surprise that the worst areas are around our major ports. Where we have the most people commuting to work, we also have the most trucks competing for highway to move the nation’s goods. Many of the shipments entering the ports are destined for the surrounding consumer markets. But what about the shipments that are destined for other There is no need to build new terminals. We have the vessels and the experience to test the waters. In fact, we are already providing coastwise service on the West Coast, offering southbound feeder service from Tacoma to Oakland for a major container carrier. We are eliminating dozens of truckload moves a week on California highways in an efficient and reliable service. We are confident it can work on a larger scale and we know we have customers that are eager to explore the opportunities. We need only the freedom from HMT to begin expanding the feeder network, starting on the East and Gulf Coasts first. WHAT WILL IT TAKE? Our efforts will be focused on achieving four goals in 2008 so that we are ready to provide service as soon as Marine Highway legislative reform is reality. Our goals are to: 1. Develop a viable labor model, working with maritime unions that will ensure a competitive coastwise service and further job growth for the U.S. maritime industry. We are working with labor now and their support for our efforts is strong. 2. We will fight to include the U.S. Marine Highway Initiative in both presidential candidates’ election platforms. 3. We will identify strong legislative sponsors in both the Senate and the House to drive Marine Highway legislawww.marinelog.com http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - July 2008

Marine Log - July 2008 Contents Editorial Second Thoughts Update Inside Washington Coastal Shipping Communications Paints & Coatings WISTA’s Jeanne Grasso Showcase Newsmakers Tech News Contracts Events Website Directory ML Buyer's Guide ML Marketplace Tech Talk Gulf Coast Headliner

Marine Log - July 2008

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