International Congress on Ports in Proximity:
Competition, Cooperation and Integration
Antwerp / Rotterdam, December 5 – 7 2007
Port Hinterland Divergence along the
North American Eastern Seaboard
Jean-Paul RODRIGUE
Department of Economics & Geography
Hofstra University, Hempstead, New York 11549, USA
Changqian GUAN
Intermodal Transportation & Logistics Program, Department of Marine
Transportation, U.S. Merchant Marine Academy, Kings Point, New York,
USA
Ports in Proximity along the Eastern Seaboard
A. Globalization, Trade and Port Divergence in North
B.
C.
D.
America
Cargo Volume Growth and Shipping Services
Port Regionalization and Potential Port Hinterland
Divergence
Conclusion: From Divergence to Convergence?
A. Globalization, Trade and Port Divergence in
North America
1. Factors of Port Divergence
•
What are the main processes behind divergence?
2. Containerized Traffic Trends
•
How containerization has evolved along the East Coast in
recent years?
3. Traffic Concentration
•
What is the extent of the divergence taking place?
1. Factors of Port Divergence
Site
Conventional factor (modal access and
accessibility). Reinforced by new generations of
containerships.
Ocean Carriers
Choice of port calls and frequency of service.
Choice of network structure.
Port Operators
Choice of asset allocation. Differences in
terminal productivity.
Policy
Port governance and public funding. Landlord
ports and privately developed ports. Shape of
private / public partnerships.
Hinterland
Access to long distance transport corridors.
Access to the regional customer base.
Supply Chain
Management
Production and distribution requirements
(scheduling, frequency).
2. A Schematic Representation of the Eastern
Seaboard
St. Lawrence
Upper Range
Mid Range
Lower Range
“The Funnel”
Direct to the
bottleneck: Montreal
“The Empty Sink”
Weak handles:
Halifax and Boston
“The Full Sink”
Strong handles: New
York and Hampton
Roads
“The Filling Sink”
Strong center:
Charleston /
Savannah
Upper Range
St. Lawrence
Mid Range
Lower Range
2. Container Traffic at Eastern Seaboard Ports,
2006
0.12
0.18
0.20
4th Tier (Niche ports)
0.24
0.25
0.26
0.53
0.63
3rd Tier (Regional Gateways)
0.77
0.86
Divergence Threshold
0.98
1.29
1.97
2nd Tier (Gateways)
2.05
2.16
Articulation Gateway
5.09
St. John's
Wilmington(NC)
Boston
Palm Beach
Philadelphia
Wilmington(DE)
Halifax
Baltimore
Jacksonville
Port Everglades
Miami
Montreal
Charleston
Hampton Roads
Savannah
New York/New Jersey
0
1
2
3
4
5
6
Millions
3. Concentration of Containerized Traffic, 19852006
100%
Diffusion of Containerization
80%
Hinterland Effect
60%
40%
20%
0%
1985
1990
1995
2000
2006
Other
Top 5
3. Concentration of Containerized Traffic, 19852006 (Lorenz Curve)
1
0.9
Cumulative TEUs
0.8
0.7
0.6
0.5
0.4
Divergence
0.3
0.2
Convergence
0.1
2006
2000
1995
1990
1985
0
0
0.2
0.4
0.6
Cumulative Ports
0.8
1
B. Cargo Volume Growth and Shipping Services
1. Traffic trend among major East Coast Ports
•
From convergence to divergence?
2. The resurgence of All Water Services
•
What are the underlying factors?
3. Service routes and transit times
•
How Landbridge and All Water Services compare?
1. Change in Container Traffic at Eastern
Seaboard Ports
0.77 M TEU 8.36 M TEU
7.19 M TEU
1.31 M TEU
+0.04 M TEU
+0.28 M TEU
+3.02 M TEU
+2.01 M TEU
1. Strong Divergence: Montreal and Halifax
1,400,000
Halifax
Montreal
1,200,000
1,000,000
800,000
600,000
400,000
200,000
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
0
1. Strong Divergence: Montreal and Halifax
45%
Convergence
Divergence
35%
Zero-sum game?
25%
15%
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
5%
Halifax
Montreal
-5%
-15%
-25%
1. From Convergence to Divergence: the
American East Coast
6,000,000
Charleston
Norfolk
New York
Savannah
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
0
1. From Convergence to Divergence: the
American East Coast (Annual Growth Rates)
45%
Divergence
Convergence
Divergence
35%
25%
15%
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
5%
Charleston
Norfolk
New York
Savannah
-5%
-15%
-25%
2. The Resurgence of All Water Services to the
East Coast
Singapore
Colombo

“China Effect”
Kobe
Hong Kong
Shanghai
Jeddah
Pusan
E qu
a tor
Eastbound
Route
Gioia Tauro
Algeciras
Seattle / Vancouver

LA/LB
West Coast Congestion
Landbridge Congestion Landbridge
Westbound
Route
Growth in the Southeast
New Distribution Gateway
Panama
Route

3. Service Routes and Transit Times: Far East to
New York
-1
23
24
Singapore
Hong Kong
18
Kaohsiung
+4
22
25
18
Shanghai
23
16
Tokyo
Busan
21
14
0
5
10
15
Land Bridge
+7
26
14
20
All Water
+7
+12
+7
25
30
3. Service Routes and Transit Times: Far East to
Norfolk, Virginia
-1
23
24
Singapore
Hong Kong
18
Kaohsiung
+4
22
25
18
Shanghai
24
16
Tokyo
Busan
23
14
0
5
10
15
Land Bridge
+8
26
14
20
All Water
25
+7
+12
+9
30
3. Service Routes and Transit Times: Far East to
Savannah, Georgia
25
Singapore
Hong Kong
18
Kaohsiung
19
Shanghai
18
Tokyo
Busan
0
5
10
15
Land Bridge
22
+3
22
+4
25
14
20
All Water
-3
+3
21
24
16
28
25
+8
+11
30
3. The Resurgence of All Water Services to the
East Coast
Zone of Contestability
NY
Savannah
E qu
Eastbound
Route
a tor
New Direct Links
17 (2002)
26 (2007)
New York (1):
75% (2005)
60% (2020)
3
1
Landbridge
2
Westbound
Route
New York (2+3):
25% (2005)
40% (2020)
Panama
Route
3. Service Time Reliability to the EC: All Water
Services vs. Transpacific / Landbridge
Port congestion
Offshore transshipment
Transloading
Unit train assembly
Rail congestion
Transmodal operations
Road congestion
Transpacific /
Landbridge
18 days
Port congestion
Offshore transshipment
Panama / Suez Delays
All Water
Services
NY: 22 days
Savannah: 21 days
3. Monthly Inbound Traffic, Port of Los Angeles (TEUs)
450,000
400,000
350,000
300,000
2004
2005
2006
2007
250,000
200,000
150,000
100,000
50,000
Au
gu
st
Se
pt
em
be
r
Oc
to
be
r
No
ve
m
be
r
De
ce
m
be
r
Ju
ly
Ju
ne
y
Ma
Ap
ril
rc
h
Ma
Ja
nu
ar
y
Fe
br
ua
ry
0
3. Summary
 Supply chain management
• Landbridge is critical for high value cargo from East Asia
due to its short total transit time.
• The 7 day difference is quite critical.
 Inland areas cargo (e.g. Chicago)
• Landbridge still has an overall advantage.
 Hong Kong and Singapore
• Points of equilibrium between landbridge and all water
service has a slight advantage in terms of transit time.
 South Atlantic ports
• All water service is very competitive.
• South Atlantic ports are in a good position to compete with
North-Mid Atlantic ports for hinterland markets.
C. Port Regionalization and Potential Port
Hinterland Divergence
1. Port Infrastructure Development and Intermodal
Services
•
What are the major infrastructure projects?
2. The reemergence of the “hinterland factor”
•
How the maritime / land interface is being modified?
3. Port regionalization strategies
•
How specific gateway ports are improving their regional
hinterland access?
1. Port Infrastructure Development and
Intermodal Services
New York
Dredging (50’)
On-dock rail
PIDN
Hampton Roads
APM Terminal
Craney Island
Terminal (2017)
Heartland Project
Charleston
New Terminal
(2013)
Terminal upgrade
Dredging (47’)
Savannah
New berth
Improved rail yards
2. The Reemergence of the “Hinterland
Factor”: Rail Gateways and Metropolitan
Freight Centers
New York
• 85% are local cargo
• 14% is distributed by rail
• Less than 1% is distributed by water
Hampton Roads
• Over 47% of cargo originates or is destined for
locations within Virginia
• 53% of cargo are hinterland bound
2. The Reemergence of the “Hinterland
Factor”: Inland Corridors
2. Heartland Corridor Project, Virginia /
Chicago
Current Double Stack Route
(1,264 miles to Chicago)
Virginia Inland Port
Heartland Corridor
(1,031 miles to Chicago)
28 Tunnels Modified
to a 20’ 3” Clearance
D. Conclusion: Challenges and Opportunities
of the New Panama Canal (New Panamax –
12,000 TEU)
Singapore
Colombo
Hong Kong
Shanghai
Kobe
Jeddah
Pusan
E qu
Suez
a tor
Gioia Tauro
Algeciras
Eastbound
Route
Westbound
Route
LA/LB
Kingston
Panama
D. Conclusion: Challenges and Opportunity for
Arctic Routes
Vostochny
Oakland
Harbin
Long Beach
Un ite
d
S tate
s
Salt Lake City
Tacoma
Vancouver
Lianyungang
Beijing
Port
Gauge Change
El Paso
Zabaykalsk
Rail Terminal
Canada
China
Ulaanbaatar
Arctic Bridge
Irkutsk
Northern Sea Route
Lanzhou
Mongolia
Northwest Passage
Houston
Kansas CIty
Russia
Minneapolis
Chicago
Urumqi
Novosibirsk
Lokot
Savannah
New York
Astana
Montreal
New York
Yekat erinburg
Perm'
Halifax
Archangel'sk
Haparanda/Tornio
Oulu
Vologda
Vainikkala
St. Petersburg
Moscow
Maritime Segment
Rail Main Trunk (Broad Gauge)
Rail Main Trunk (Standard Gauge)
Azimuthal Equidistant Polar Projection
Rotterdam
Brest
Presnogorkovka
Kazakhstan
Druzhba
D. Conclusion: From Divergence to Convergence?
 There is a divergence favoring a specific number of
ports
• Site: Limited number able to accommodate larger ships.
• Ocean carriers: Emergence of all water services as a new
•
•
•
•
dimension of standard port calls.
Port operators: Allocation of capital investment.
Policy: Ongoing privatization, albeit at a slower pace.
Hinterland: Development of rail corridors, particularly
towards the Chicago hub.
Supply chain management: A stronger factor than
accounted.