CONTAINER HANDLING

Global port congestion: No quick fix

Drewry Shipping Consultants Ltd, London, UK & Ingmar Loges, He ad of Globa l Shipping, HVB Group, Hamburg, Germany

Overview and background

G l o bal c o n t ai n er t rade h as i n creased every year si n ce t h e introduction of unitisation to deep-sea routes in the late 1960s. Si n ce 1980 , gl o bal c o n t ai n er p o r t h a n dli n g h as grow n a t a n average annual rate of 9.5%, a growth rate which has continually exceeded underlying trade growth by several percentage points.
The growth in container trade

The impact of growth on port congestion

World container trade is driven in the first instance by the growth of output and of consumption. However, in addition to economic growth there are several structural factors, which also impact upon global container trade, so that even in periods of economic difficulties the volume of container traffic can continue to rise. For the resilience in demand, the container shipping market has primarily to thank the globalisation process, with manufacturing moving away from high cost production areas to regions with a much lower cost base. This process has been ongoing over the past two decades. However, Chinas accession to the WTO at the beginning of 2002 and the resulting shift in manufacturing patterns provided a further boost to world container trade. Indeed, growth in world container handling activity has grown at double-digit rates over the past three years, by far surpassing the average growth rate witnessed over the past two decades. And whilst container carriers have been enjoying high vessel utilisation rates for the past three years, this situation has put existing port facilities under a considerable strain. Table 1 provides an overview of container activity by region si n ce 1995 , al o n g w i t h es t i m a t es f o r 2004 , w h ils t Table 2 t ra n sla t es regi o n al p o r t h a n dli n g vo l u m es i n t o year -o n - year growth on an historical basis. Table 3 ide n t ifies t h e p o r t s i n t h e wo rld w i t h t h e h ig h es t u t ilisa t i o n f o r 2003 . T h ere are key p o i n t s t h a t n eed t o be mentioned about these facilities: There is a good geographic spread most regions are included; Lower quality, with low volumes and capacity it takes far fewer containers for a small facility to become congested; M a ny o f t h e c o un t ries h ig h lig h t ed are i n devel o pi n g economies/regions; In most cases, these are not major container-handling ports.

Although the ports contained in Table 3 may be the ports with the highest utilisation levels, they are by no means the most important when talking about port congestion. For the purpose of this report, we have picked out the likes of Antwerp, Rotterdam, Los Angeles or Long Beach because of their size and as a consequence the severe impact which congestion there has on carriers service networks. They may have lower utilisation rates than the small o u t p o r t s w h ic h are m e n t i o n ed i n t h e leag u e t able, bu t t h e congestion there is causing havoc to all parties concerned. Arguably, 2004 was the worst year on record for congestion at the worlds container por ts and concer ns are growing that the 2005 peak season could be even more difficult. The congestion hotspots during 2004 were: Souther n Califor nia in the US Benelux and UK in norther n Europe Mediterranean, particularly the hub ports; Gioia Tauro, Piraeus and Marsaxlokk India West Africa and Durban in S o u t h Africa Brazil , par t ic u larly t h e s o u t h er n p o r t s o f Sa o Francisco do Sul and Santos. What set 2004s congestion apar t from that of previous years was that por ts in developed economies experienced the worst delays. Multi-million teu container por ts, such as Los Angeles, Long Beach, Vancouver (BC), Montreal, Rotterdam, Antwerp, S o u t h a m p t o n a n d Si n gap o re, l o n g la u ded f o r t h eir o n g o i n g investment in developing moder n cargo handling facilities, all experienced periods of extreme difficulty in handling cargo. I n ge n eral , c o n ges t i o n o cc u rred beca u se p o r t a u t h o ri t ies / ter minal operating companies failed to forecast and plan for the huge demand that would be placed on their infrastr ucture and res o u rces . I n par t ic u lar, t h e grow t h i n C h i n ese exp o r t s was severely un deres t i m a t ed a n d t h is is w hy t h o se leadi n g p o r t s i m p o r t i n g C h i n ese g oo ds , ie L o s A n geles , L o n g Beac h a n d Rotterdam, were some of the worst affected. Significantly, the first signs of vessels being delayed and por ts becoming gridlocked occurred as the peak-shipping season on the transpacific and Far East/Europe trade got underway (June/July). Elsewhere, an explosion in Brazils exports over the past two/three years combined with serious under-investment in its ports created
Sourc e: Drewry Sh i pp i ng Consu l tants Ltd

TABLE 1: CO NTA I NER ACTI V ITY BY REG I O N (000 TEU O F P O RT H A ND LI NG , I NCL UD I NG EM PTIES A ND TR A N S H IP MENT)
1995 North Americ a Western Europe North Europe South.Europe Far East South East Asi a Mid East Lat in Americ a Carib/C.Am South Americ a Oc e a ni a South Asi a A fri c a Eastern Europe World 22,160 32,016 21,562 10,454 41,178 20,975 6,703 10,015 5,319 4,697 3,397 3,231 4,670 797 145,142 1996 22,813 35,304 23,172 12,131 44,899 23,353 7,243 10,893 5,852 5,041 3,583 3,824 5,049 908 157,868 1997 24,935 40,136 25,689 14,447 48,999 26,119 8,050 12,961 6,794 6,167 3,870 4,365 5,592 959 175,986 1998 26,401 44,381 27,331 17,049 52,192 28,020 8,849 15,112 8,206 6,907 4,155 4,661 5,707 978 190,456 1999 28,454 47,236 29,300 17,935 60,697 30,227 10,060 16,222 9,127 7,095 4,657 5,077 6,360 955 209,944 2000 30,824 51,707 31,661 20,047 71,096 34,320 11,092 17,802 9,925 7,877 5,019 5,481 7,150 1,080 235,571 2001 31,212 52,805 31,991 20,814 75,126 36,906 12,328 18,793 10,371 8,422 5,312 5,830 7,613 1,438 247,364 2002 34,212 57,350 34,403 22,947 87,541 41,105 13,642 19,212 10,464 8,749 6,023 6,586 8,454 1,726 275,850 2003 37,469 62,702 37,337 25,365 103,285 45,436 16,125 21,313 11,493 9,820 6,483 7,158 9,661 2,076 311,709 2004 (e) 40,357 69,467 41,301 28,166 121,254 52,112 19,378 24,569 12,472 12,097 7,037 7,646 11,271 2,523 355,612

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North Americ a Western Europe North Europe South.Europe Far East South East Asi a Mid East Lat in Americ a Carib/C.Am South Americ a Oc e a ni a South Asi a A fri c a Eastern Europe World

1995 7 . 6% 8 . 7% 6 . 3% 14.2% 10.3% 13.7% 10.3% 16.6% 9 . 8% 25.5% 9 . 4% 9 . 0% 18.3% 29.9% 10.7%

1996 2 . 9% 10.3% 7 . 5% 16.1% 9 . 0% 11.3% 8 . 1% 8 . 8% 10.0% 7 . 3% 5 . 5% 18.4% 8 . 1% 13.9% 8 . 8%

1997 9 . 3% 13.7% 10.9% 19.1% 9 . 1% 11.8% 11.1% 19.0% 16.1% 22.3% 8 . 0% 14.2% 10.8% 5 . 7% 11.5%

1998 5 . 9% 10.6% 6 . 4% 18.0% 6 . 5% 7 . 3% 9 . 9% 16.6% 20.8% 12.0% 7 . 4% 6 . 8% 2 . 0% 1 . 9% 8 . 2%

1999 7 . 8% 6 . 4% 7 . 2% 5 . 2% 16.3% 7 . 9% 13.7% 7 . 3% 11.2% 2 . 7% 12.1% 8 . 9% 11.5% -2.3% 10.2%

2000 8 . 3% 9 . 5% 8 . 1% 11.8% 17.1% 13.5% 10.3% 9 . 7% 8 . 7% 11.0% 7 . 8% 8 . 0% 12.4% 13.0% 12.2%

2001 1 . 3% 2 . 1% 1 . 0% 3 . 8% 5 . 7% 7 . 5% 11.1% 5 . 6% 4 . 5% 6 . 9% 5 . 8% 6 . 4% 6 . 5% 33.2% 5 . 0%

2002 9 . 6% 8 . 6% 7 . 5% 10.2% 16.5% 11.4% 10.7% 2 . 2% 0 . 9% 3 . 9% 13.4% 13.0% 11.0% 20.0% 11.5%

2003 9 . 5% 9 . 3% 8 . 5% 10.5% 18.0% 10.5% 18.2% 10.9% 9 . 8% 12.2% 7 . 6% 8 . 7% 14.3% 20.3% 13.0%

2004 (e) 7 . 7% 10.8% 10.6% 11.0% 17.4% 14.7% 20.2% 15.3% 8 . 5% 23.2% 8 . 5% 6 . 8% 16.7% 21.5% 14.1%

serious problems throughout the country, with Itajai, Santos and Sao Paulo experiencing some of the worst congestion. In addition, several ports/ter minal operators appear to have not satisfactorily geared themselves up for handling the increased number of super-generation container vessels entering service. T h ese vessels spe n d l o n ger i n p o r t as t h e i m p o r t / exp o r t / t ra n s h ip m e n t exc h a n ges are mu c h grea t er a n d t h is ca n p u t pressure on both the berth and on yard space. On the face of it this seems a strange situation, as the ocean carriers are in most cases the o pera to rs o f the ter mi nals . T here is no respi te here either, with an estimated 140 super-post-Panamax vessels (capable of loading 7,500 teu and over) aggregating 1.13 million teu on order for delivery over the next three and a half years. Whereas congestion in Europe was largely infrastr uctural in nature, in the US a shortage of labour was the single biggest issue. At times during the summer, the por ts of Long Beach and Los Angeles were repor ting gang shor tages of 40 / 50 per day. This resulted in fewer cranes being assigned to individual ships and led to slower tur naround times and extended stays at the berth.
Sourc e: Drewry Sh i pp i ng Consu l tants Ltd

In both Europe and Nor th America, por t congestion was compounded by problems landside, with gate capacity limited, rail capacity under pressure, highways crowded and truck drivers in short supply. This resulted in interruptions to the nor mal flow of cargo through the terminals, eventually causing a gridlock in the yard.

Implications
Co n ges t i o n sl ow s ec o n o m ic ac t ivi t y a n d red u ces a c o un t rys overall competitiveness in inter national markets. Quite simply, if there is a delay getting the container moved away from the port (or to the por t if an expor t load) then the whole distribution network or logistical system put in place is negatively impacted this will ultimately lead to a for m of gridlock.
Congestion surcharges

TABLE 3 . LEA GUE TABLE O F TO P 20 P O RTS BA SED O N 2003 UTILIS ATI O N LEVELS I N %
Country Bahamas Trinidad US (Gul f) Angol a China US (Gul f) Madeira F R Gu i a n a Myanmar UK Argent ina Tahi t i Algeri a Indonesi a Benin Ma l ta Philippines Costa Ric a Chile Lebanon Port Nassau Point Lisas Freeport Luanda Dan Dong Gul fport Funcha l Degrad Des Cannes Yangon Dart ford Vill a Const i tuc ion Papeete Skikda Samarinda Cotonou Va letta Dumaguete Ca lderas Antof agasta B e i ru t Ut ilisat ion % 561.7 546.5 538.0 445.5 432.0 399.8 385.6 333.3 306.0 305.8 300.0 288.7 283.9 275.4 272.8 254.0 232.3 229.1 228.0 226.6 Throughput Teu 40,446 98,368 67,784 178,200 216,000 199,897 115,685 125,000 229,500 152,880 30,000 64,950 70,983 156,989 98,226 45,724 23,233 57,275 60,423 305,933 Capa c i ty Teu 7,200 18,000 12,600 40,000 50,000 50,000 30,000 37,500 75,000 50,000 10,000 22,500 25,000 57,000 36,000 18,000 10,000 25,000 26,500 135,000

Shippers are often penalised as a result of ocean carriers imposing congestion surcharges on cargo moved through the congested ports. T hese vary acc o rdi ng t o t he le ng t h o f delays a nd t he overall response of the port authority/ter minal operating company to deal with the problem. Consequently, the Trans-Atlantic Conference Agreement imposed a congestion surcharge of US$400/200 per feu/teu on cargo routed through Los Angeles and Long Beach in the latter part of 2004. Within Europe, members of the Portugal and Vigo Conference introduced an accessorial charge of Euro 50 / t e u d uri ng t he s ummer mo nt hs o f 2004 o n carg o moved through the ECT-controlled facilities in Rotterdam. This was to recover costs associated with the rising levels of congestion at the facility. Even if special surcharges are not imposed, the increased costs associated with congestion are clawed back, wherever possible, in increased freight rates. Significantly, members of the Transpacific Stabilisation Agreement, the Far Easter n Freight Conference and the Trans-Atlantic Conference Agreement have all cited congestion as influencing their 2005 rate recovery programmes, with cost recovery factors driving the planned increases.
Longer increase in turnaround times

Note: 2004 port data not available .

At the height of the problems in souther n Califor nia, more than 90 ships were either at the berth or at anchorage awaiting a berth. This compared with a daily nor m of between 35 and 50 ships. Such a situation led to significantly longer vessel tur naround times. In the September/October period, ships were at anchorage/in port for between 8 and 10 days compared with an average 2/3 days in nor mal circumstances. Such delays prove very costly. A 6,000 teu ship, for instance, costs as much as US$45,000 per day to operate and so another 6 / 8 days of non-productive time in por t was a direct cost to the operator of US$360,000. In addition, ocean carriers were forced to sail ships at full service speed to try and make up the lost time. For a 6,600 teu class vessel this meant
www.p o r t t e c h n o l o g y. o r g

112 P O R T T E C H N O L O G Y I N T E R N A T I O N A L

Sourc e: Drewry Sh i pp i ng Consu l tants Ltd

TABLE 2: CO NTA I NER H A ND LI NG G R O WTH BY REG I O N (YEA R-O N-YEA R CH A NGE I N TOTA L P O RT TH R O UGH P UT)

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bu r n i n g a n addi t i o n al seve n t o eig h t t o nn es o f f u el a day, equivalent, at the time, to increased operating costs of between US$1,300 and US$1,500 a day. Another alter native is to seek a different gateway but trade almost eventually finds the best route to take and changing this will result in a combination of greater time or cost or a combination of both and this is irrespective of the area in question.
Building more capacity

Building new por ts or adding capacity is a solution, but not a s h o r t - t er m way o f s o lvi n g t h e pro ble m . Co n s t r u c t i o n is a n expensive and time-consuming option, even once environmental and funding issues have been resolved. Additional capacity further i n creases t h e press u re o n t h e i n la n d i n fras t r u c t u re a n d a ny congestion issues or bottlenecks in the transpor t system soon become apparent. It is also not always possible to build more capaci t y i n t h e t radi t i o n se n se a t L o s A n geles i n S o u t h er n Califor nia there is no land available, so a massive landfill project, w h ic h is t i m e - c o n s u m i n g a n d expe n sive, was un der t ake n t o complete Pier 300 and Pier 400. This is often a global problem and Los Angeles should not be looked at in isolation. Ports need to consider fully maximising the capacity available through more efficie nt use o f mac hi nery a nd wo rki ng prac t ices firs t bef o re simply contemplating construction alter natives.
Feeder activity and short-sea shipping

In Europe, 2004 saw increased feeder activity, with CMA CGM, Mediterranean Shipping Company and OOCL all opting to relay more of the UKs impor t / expor t cargo via nor ther n European por ts. Although the moves were par tly related to congestion at t h e p o r t s o f S o u t h a m p t o n a n d Felixs t owe, t h ey were als o attributable to landside capacity issues and driver shortages. Despite the importance of feeder services in the liner shipping industry, the growing levels of port congestion have often resulted in these carriers being moved off the berth or forced to wait for gaps in the mainline operators schedules. This played havoc with their service structures and significantly raised their operating costs. In particular, operators of barge services up and down the Rhine waterway system encountered serious delays, with two/three days t h e n o r m i n sec u ri n g ber t h i n g space a t b o t h Ro tt erda m a n d A ntwerp d uri ng the heig ht o f the crisis i n July / A ug us t. T his compared with average delays of 24/36 hours for linehaul tonnage. The growth potential in the intra-European short sea shipping market slowed in 2004 as a result of por t congestion. Indeed, delays i n t h e p o r t s m ea n t t h a t all -wa t er services l o s t o u t t o overland trailer services in several corridors. Longer-ter m, the prospects for shor t sea shipping services remain good with EU i n i t ia t ives , s u c h as M arc o Po l o a n d M o t o r ways o f t h e Sea programmes, encouraging this for m of transport. Elsewhere, the Indian Gover nment dealt with rising levels of congestion at Jawaharlal Nehr u por t by temporarily relaxing its cab o t age law, t h ereby all ow i n g f o reig n carriers t o relay inter national cargo between Indian por ts. In addition, tariffs were lowered at the neighbouring por t of Mumbai and feeder vessels of 180m in length or less were encouraged to use this port.
Supply chain

ab o u t t h e i n t egri t y o f s o m e c o m pa n ies overall s o u rci n g a n d distribution strategies. In some instances, due consideration is being given to more local sourcing, thereby avoiding the maritime sec to r al toge ther. S uc h a s tra tegy see ms mo re pro no unced i n Europe, where the Baltic States, easter n Europe and Turkey are considered as attractive, and possible supplements to China and I n dia , f o r s o m e m a nu fac t u ri n g ve n t u res . No n e t h eless , s o m e corporations in the US and Canada have been/are reassessing the potential of sourcing goods from factories in Central America and Mexico. In the latter case, the main interest is in the south of the country, including the Yucatan peninsula, where land and labour costs are more competitive. In the norther n area and especially the Maquiladora belt of Baja Califor nia, wages are thought to be four/ five times higher than in China. The thinking of impor ters / expor ters is that a shor ter supply chain ought to prove more manageable and robust. Any significant shift of manufacturing capacity back to locations closer to the end consumer would deal the liner shipping industry a massive blow as a major part of current investment and strategic thinking is geared to continuing strong growth in expor ts out of China and the depl oy me nt o f s uper - ge nera ti o n p o s t- Pa na max vessels o n the transpacific and Europe/Far East/Europe trades. A n al t er n a t ive sce n ari o a n d o n e t h a t h ad t o be reg u larly adopted during 2004 was the need for shippers / consignees to bu ild addi t i o n al t i m e i n t o t h eir sc h ed u les a n d t o h o ld m o re inventory at local warehouses/distribution centres- the so-called safety valve approach.

The future
Annual world container port handling activity is forecast to grow by 12.1% and 8.5% in 2005 and 2006, respectively. Thereafter, Drewry expects growth rates to level off to 6%-7% in the period 2007-2009. This is due to a slowing rate of container penetration and the assumption that the outsourcing process to China will taper out. Even so, and taking into account the known expansion plans of all ports facilities worldwide, there will be serious concer ns over port capacity and congestion at the end of the forecasting period. World container trade is set to grow by more than 13% in 2005 and 9.7% in 2006 to 113 million teu and 124 million teu respectively. Thereafter, Drewry expects average annualised rises of between 6% and 7% with approximately 200 million teu being moved in 2014. In ter ms of container throughput volumes, the estimated 356 million teu handled in 2004 will increase to 399 million teu in 2005 and about 433 million teu in 2006. In 2014, an estimated 703 milli o n te u w ill be bei ng ha ndled a t the wo rlds p o r ts , a figure that is almost double todays level. The fastest growth in trade and container handling activity will take place in the Far East and South Asia, with capacity constraints expected to occur in the next five years at several locations. India, which is already experiencing very high utilisation levels at several of its ports, is very high risk. This is partly attributable to the countrys onerous bureaucracy and lengthy bid and concessionary procedures that delay new ter minal development projects. On a global basis the obvious answer is to build more container ter minals, but arduous planning and environmental constraints, especially in Nor th America and Europe, mean that it is taking longer and becoming increasingly difficult to develop new ports. It is Drewrys contention that planning processes will tighten in China within the next five years and this will delay projects and raise construction costs there too. Container ter minals cannot be built as quickly as ships, nor mally a two-to-three year cycle from placing the order to taking delivery of the unit. With a record containership order book, record levels of foreign direct investment in China, much of it related to wester n companies outsourcing, the situation is likely to get worse before it gets better.
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Truckers across the world have faced delays and their productivity (trips per day) has reduced markedly. Given the exceptionally poor fiscal retur ns from container drayage work in the US, the exodus from the industry, which started more than a decade ago, has accelerated in recent years and the serious congestion last year resulted in more withdrawals. In the US, since 2000 an estimated 30% of tr uckers engaged in the container drayage (to/ from the p o r t s) busi ness have lef t t he i nd us t ry. Po t e nt ially, t his is very damaging for the ports/ter minal industry as a shortage of drivers inevitably affects cargo discharging/loading activities at the berth. Interruptions in the supply chain have raised serious questions

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Despite the various constraints a large number of port projects have come to the fore along the West Coast of the North America, par t ic ularly i n C a nada , Mexic o a nd Pa na ma . T he mai n developments comprise: Por t Ruper t conversion of a bulk facility intro a container ter minal with a throughput of two million teu. Investment of approximately US$420 million. Ensenada Hutchison Por t Holdings and Union Pacific are involved in a project to build a large container-handling facility on a Greenfield site just to the south of the existing port. South Balboa. Construction of a second ter minal at Roberts Bank, Vancouver (BC). On the US West Coast, there are major capacity expansion progra mm es l o ca t ed i n Pacific No r t h Wes t ( Tac o m a a n d Vancouver (BC)), whilst what spare capacity available, eg Seattle, will be marketed to try to attract some cargo away from souther n Califor nia. This will not diminish demand for container por t capacity at Los Angeles/Long Beach, with both ports continuing to face very strong demand to add more capacity in the future to meet transpacific shipping volumes. With congestion likely to be the principal challenge for the liner shipping industry in the shor t-ter m, ocean carriers have a number of options available to them, including: The increased use of feeder vessels to regional ports, especially where a countrys main gateway is clogged. Examples include Teesport, Hull and Liverpool in the UK Inclusion of additional por ts in mainline schedules, thereby cutting back on relays over congested hubs La un c h i n g n ew services t o l o cal p o r t s . T h is h as bee n bes t ill u s t ra t ed by devel o p m e n t s i n t h e Black Sea / eas t er n Mediterranean Far East trade where five services are now regularly operated. Two and a half years ago there were none. O ver t he nex t t wo years , D rew ry expec t s t o see direc t a nd perhaps even dedicated links started between Scandinavia, Baltic Sea a n d No r t h A m erica a n d t h e U S G u lf Co as t / M exic o/ Caribbean and the Far East. Ports need to invest in new technology (ie double spreader on ship-to-shore gantry cranes) and infor mation systems as a means of raising ter minal productivity. However, it is cr ucial that por ts / ter minals back up these investments by hiring skilled personnel. I n m a ny cases , t h e lab o u r iss u e is bei n g addressed , w i t h Ro tt erda m h avi n g t ake n o n addi t i o n al d o ckers w i t h m o re planned to be recr uited in 2005. The same is tr ue in Singapore a n d s o m e M edi t erra n ea n hu bs . B u t t h e bigges t c h a n ge h as occurred in the US with 5,000 par t timers added to the work ro le. A t t h e cl o se o f 2004 , t h e I n t er n a t i o n al L o n gs h o re & Warehouse Union had 10,000 registered members. Attention should also be given to reducing the amount of free time that containers can stay in a ter minal or raise rates so that it
ABO UT THE O R G A N IS ATI O N
H V B G r o u p h a s c o n c e n tra t e d i t s s h i p f i n a n c i n g o p era t i o n s a t t h e G l o b a l Sh i pp i ng bran c h i n Hamburg and ha s been i n bu si ne ss for over 25 years. HVB G l oba l Sh i pp i ng offers i t s c li ent s an ent ire range of s ervi c e s i n c l ud i ng trad i t i ona l s h i p f i n a n c i n g , ex c h a n g e ra t e a n d i n t ere s t ra t e h e d g i n g i n s tru m e n t s, c a s h m a n a g e m e n t pro d u c t s, a n d s h i pyard c o n s u l t i n g . H VB G l o b a l Sh i p p i n g a l s o be c ame i nvo l ved i n the F i r s t Sh i p Lea s e ( F SL) founded i n O c tober 2003 . HVB Group has a 20 % stake i n the Bremen/Hamburg-based Deutsc he Sc h i ffsbank A G , wh i c h is a ls o a l ead i ng s h i pp i ng f i nan c i er. HVB a ls o c overs f i nan c i ng c onta i ners and harbour pro j e c ts as we ll as the offshore i ndustry.

is not attractive for importers to do this. In the US this is about five days for impor t boxes but it is regularly abused with ocean carriers offering their biggest clients two/ three times this grace period and the ter minal operating companies rarely collecting the fee. The current charging level in souther n Califor nia star ts at US$44 per day. The problem with stored containers is that they have to repositioned several times whilst at the ter minal and this is time consuming. In essence, ter minal-operating companies must do everything in their power to speed up the movement of boxes through their facilities. One must consider the use of more inland depots for the storage and distribution of containers, thereby freeing up the marine ter minal. In souther n Califor nia a number of projects are under investigation, including operating a shuttle train service to/from various inland depots. This would also help alleviate some of the pressure on the areas crowded highways. In Oakland a similar arrangement is already in place, with a rail shuttle service being operated by Northwest Container Services between the port and Shafter. Similarly, where possible, dedicated tr uck lanes to/from por ts o u g h t t o be c o n sidered . T h e o rigi n al pla n f o r t h e Ala m eda c o rrid o r pro jec t i n s o u t h er n C alif o r n ia was f o r a m ixed rail / highway conduit, but the six tr ucking lanes were removed beca u se o f pla nn i n g iss u es a n d c o s t fac t o rs . Ye t i n s o u t h er n Califor nia, more than 85% of all cargo entering/leaving the port at least needs a truck for part of its jour ney. Shippers/consignees also need to be involved in the process and t oge t her w i t h t heir t ra nsp o r t providers c o me up w i t h s upply c h ai n s o l u t i o n s t h a t ca n c o pe w i t h a m o re c o n ges t ed freig h t transport environment. Since congestion in the ports is only one element of the problem, considerable effor ts are also needed on the road and rail fronts. Arguably, long-ter m and effective solutions will only come about if all parties in the supply chain are involved in the process. This means the ocean carriers, port authorities, ter minal operating companies, logistics providers, truckers, railroads and gover nment at both the national and local level. It also means economists and a n alys t s as reliable f o recas t s w ill h elp t h e t ra n sp o r t / service providers better plan their future capacity requirements. Tr uckers need to be paid more so that it again becomes an industry that people want to work and invest in. Shippers / consignees have to adjust and /or build contingency plans into their supply chains and it probably makes sense for them to ship a higher proportion of cargo earlier, thereby avoiding the pitfalls of the peak season. The problem, however, is that this is alien to the JIT concept which is based on minimising stock holdings. Pressure on inland transpor t service providers will continue. Containers cannot afford to be held-up at ports because distribution and logistics networks and infrastructure (i.e. rail and truck) are not able to cope with increased container freight demands this is going to continue to be a worldwide phenomenon. T h e s t u dy i n f u ll m ay b e d o w n l o a d e d i n pd f f o r m a t f r o m : www.hvb.de/globalshipping.
EN Q U IRIES
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