The seventeen maritime and transportation officials quoted earlier were just a sampling of the many comments submitted to the Journal. The fact that so many took the time to provide answers to the Journal’s questionnaire is an indication of the severity of the conditions in the intermodal chain and the sincere interest each has in the industry’s search for a panacea. Here are more excerpts.
“Despite the growth of the European Union, the U.S. remains the world’s largest consumer market, and the U.S. West Coast is its major gateway. The fact that the ports there have become bottlenecks, rather than funnels, should be a significant concern and a priority issue to solve in the immediate future.”
— Capt. S.Y. Kuo, Vice group chairman, Evergreen Group
“While radio-frequency identification will continue to dominate the headlines, most logisticians will face more immediate and critical challenges, such as finding ways to secure trucking capacity and overcome port delays.”
— Adrian Gonzalez, Director, Logistics Executive Council, ARC Advisory Group
“In 2004, strong American demand for Asian-made products increased trade by more than 10% at the ports of Long Beach and Los Angeles. The prospect of still more cargo growth in the years ahead, and trade’s impact on highway traffic and on air quality have many people in Southern California wavering in their support for further trade growth.”
— Richard D. Steinke, Executive Director, Port of Long Beach
“It’s the time for creative, consensus solutions. Southern California’s advantages as a distribution hub are threatened by its own success and from an ever-growing consumer population. We must take a realistic look at short- and long-term solutions, even those discounted earlier … Solutions are the product of new alliances and strong leadership.”
— Bruce E. Seaton, Interim executive director, Port of Los Angeles
“Shipowners, liner operators and port operators can hardly cope with the volumes. Ships from Asia are full. Congested terminals, especially in Europe and the U.S., have delayed ships and disrupted the tight schedules of usually well-oiled weekly loops. This is a challenge for 2005.”
— Capt. Yann Le Gouard, Consultant, BRS – Alphaliner
“The days of keeping stockpiles of empty containers and fields of chassis are over. Planning for labor requirements to load and unload ships, operate equipment and provide necessary clerical services must move in step with terminal capacity planning, as must the road, feeder and rail facilities for moving cargo to and from the terminals. Close partnership between carriers, major shippers and ports will ensure that terminals have the labor, equipment, terminal space, and rail, feeder and road infrastructure in place in an orderly fashion.”
— Michael A. Leone, Port director, Port of Boston
“The marine intermodal drayage industry faces two important issues: the shrinking pool of available owner-operators, and congestion at ports, railyards and customer facilities. Solving the congestion problem would have a positive effect on driver capacity, but there are a number of other contributing factors that affect the industry’s ability to recruit and retain independent owner-operators. We estimate that more than 50,000 drivers – roughly one-third of the total – have left the profession since 2002. Inadequate income is the top cause. A competitive environment has kept the base pay rates low since the 1980s. When, with our customers’ support, we were able to raise drivers’ base rates in many lanes, we immediately saw a corresponding increase in the number of new owner-operators contracting with us, and in the retention of contracts with existing owner-operators.”
— Clark E. Brown, President, Bridge Terminal Transport Inc.
“The emphasis on international trade will affect the entire intermodal supply chain, including steamship lines, port terminal operators, trucking companies and railroads. The key to fluidity will be attaining full use of the available capacity of each link in the chain. That will mean doing business differently; at some ports, for example, moving to 24-7 operations and achieving higher production standards.”
— Matt Rose, Chairman, president and chief executive, Burlington Northern Santa Fe Corp.
“The volume increases that we are experiencing are taxing the infrastructure in place to accommodate it. This growth has presented challenges in terminal design, labor availability and intermodal capabilities amid heightened environmental concerns … Our industry in 2005 is experiencing a call to arms. The challenges are enormous, the solutions not simple. Valid arguments on all sides of an issue mandate that compromise be a necessary part of every solution. Compromise with all due deliberate speed will allow us to achieve solutions well before we gridlock the system.”
— Thomas J. Simmers, President and chief executive, Ceres Terminals Inc.
“ Two million TEUs of containers entered the intermodal stream this year. Assuming similar growth in 2005, congestion will reach epic proportions. Factor in additional security requirements atop this growth, and we could be headed for port gridlock. Can we accept delays of a week or more to unload container ships? Manufacturers, distributors and retailers increasingly view the marine-intermodal supply chain – particularly with larger vessels – as their warehouses for just-in-time products. But limited port and docking space, not to mention handling facilities, will place an enormous burden on our ports. Are we ready, willing and able to confront this reality before it is too late? Perhaps it’s too late already!”
— Henry F. White, President, Institute of International Container Lessors
“West Coast ports, particularly the Los Angeles-Long Beach basin, are in need of operational plans for the future. Growth is a key to prosperity and plans need to be laid for that growth. Proper coordination between the various parties involved, including management and labor, is needed to secure this region’s future. Issues such as productivity and investment are high on everyone’s agenda. Other West Coast ports also need to plan for future expansion and development that reflects increased vessel size and container volume.”
— Zhang Bing, President, China Shipping North America
“Sometimes I think we are stuck in the 20th century – making today’s decisions on the basis of our understanding of the world then. We find ourselves falling behind and moving in directions that will not serve us well in this century. Why? Because we – transportation providers, operators, users and government – don’t always speak plainly, understand or listen to one another, or respond to the reality before us. We have not paid enough attention to funding and improving the assets that are needed to deliver goods. Active national policies to encourage global trade are out of balance with our passive transportation supply policies.”
— Lillian C. Borrone, Chairman, Eno Transportation Foundation
“As sophisticated as we are in world commerce today, transacting nearly $ 10 billion of commerce each second, there is still plenty of money on the table. Much of the world’s liner shipping continues to be done haphazardly and with little planning by service suppliers. The supply chain is not well-linked – it is generally a series of actions taken by parties, often in response to the previous person’s actions … Generally in container transportation today, no one in the supply chain is alerted to his role until it is his turn to act.”
— Charles G. Raymond, Chairman, chief executive and president, Horizon Lines
“The backlog of import boxes stranded on the U.S. West Coast and in European terminals, plus the parking lot lookalike 8,000 TEU vessels awaiting berths in Los Angeles-Long Beach and Seattle, are a clear sign that our facilities are overtaxed. Our inland infrastructure is NOT capable of handling the influx of containers. And our ports, too, look frail. We do not have enough truckers or skilled laborers on the waterfront.”
— Jim Poon, Chairman, Hong Kong Liner Shipping
“Carriers introduced the 8,200-TEU mega-vessels to assist in delivering improved service reliability and economies of scale, but any benefit gained was quickly negated by land and terminal infrastructures that could not support the increased volumes. These bottlenecks caused disruptions and added costs to the customers’ supply chain pipeline-distribution channels as well as to container carriers due to berthing delays, terminal congestion, diversion costs and decreased productivity.”
— Frank J. Baragona, President, CMA CGM (America) Inc.
“I believe the most important issue facing us is how to deal with the record trans-Pacific volumes while facing serious congestion at West Coast ports and on railroads. Many carriers have addressed the ballooning volume by building larger vessels … Even with the extra tonnage being deployed, volume has overwhelmed ports and railroads, in one of the longest peak seasons we have ever seen. Ocean carriers are always pleased to see an increase of volume, but if your vessels can’t get into port and your containers are backed up at the terminal, the supply chain is seriously affected.”
— Zhang Liyong, President, Cosco Americas Inc.
“A negative consequence of growth has been severe congestion at the ports. However, the growth has not been and will not be the only cause for the congestion. Labor shortages, a crowded intermodal rail network and an influx of mega-ships are all contributing factors. Unfortunately, port congestion will persist as a nagging problem into 2005.”
— J.Y. Park, Chairman, Hyundai Merchant Marine
“The shipping industry faced unprecedented challenges last year with the severe port congestion in Southern California, coupled with historically high vessel-operating costs. These two areas will have a major impact on shippers and carriers in 2005. We will undoubtedly continue to experience major infrastructure problems at the ports of Los Angeles and Long Beach, which have led to recurring congestion and long delays for shippers … These slowdowns are plaguing global supply chains, forcing shippers to change the way they manage the transportation process for the time-sensitive delivery of global goods.”
— Sergey Kozlov, Vice president container lines, Fesco
“The infrastructure development is not keeping pace with the increase in world trade, creating numerous bottlenecks at ports, terminals and railroads, mostly in the U.S., but also now developing in some European locations, and approaching in Asia. We must work to develop port and rail capacity to cope with the rising volume requirements. Terminal capacity, already stretched to the limits, needs to be expanded. Where this is not possible through horizontal growth, different “vertical” solutions must be found, and procedures allowing for improved efficiencies must be developed to deal with volume increases.”
— Rudy Mack, President, Hapag-Lloyd (America) Inc.
“As international trade continues to grow, the ability of customs brokers to expedite the delivery of shipments will be challenging. Problems with lack of infrastructure reached elevated levels during 2004, and prospects for 2005 are not much brighter. Larger container vessels, scarcity of acreage for terminal expansion, insufficient labor supply and shortage of truck drivers at insufficient wage levels will continue to put a strain on supply-chain reliability.”
— Peter H. Powell, Sr., Chairman, National Customs Brokers & Forwarders Association
“Historically, terminal operators have proved to be very flexible in rising to the occasion and finding ways to deal with challenges. However, the experiences in 2005 will most likely underscore a fact that has become increasingly apparent: The congestion problem cannot be solved with fixes that occur solely within terminals. In particular, inbound cargo can be moved off the terminals only at the rate that the supporting road and rail infrastructure will permit, and the capacity of that network is nearing its limit in many areas. Think of a backyard pool; it will empty only as fast as its drainpipe allows.”
— Michael J.S. Seymour, President, Americas, P&O Ports
“As international trade continues to grow at an ever-increasing pace, one of the most pressing problems facing the transportation industry is congestion – port congestion, rail congestion and highway (truck) congestion.”
— Paul F. Richardson, President, Paul F. Richardson Associates
[The spokeswoman and the 21 spokesmen above echo the plaints and admonitions of the 17 we quoted in our Article 5 commentary. A quick assessment of this website and the contents of the “Trends & Developments” segment will convince these concerned officials that our container yard systems will assure the transportation industry of a trouble-free future.]