Across the United States and much of the world, ports are preparing for a changing future. These leading U.S. ports are upgrading their infrastructure and expanding their cargo handling capabilities.
W hen consumer demand skyrocketed during the pandemic, cargo volumes at many of the nation’s ports jumped ahead of projections by several years. “The Port of New York and New Jersey saw an enormous spike in volume during the pandemic,” says Patrick Thrasher, the port’s senior program manager for capital program delivery. The port hit volume levels that had been projected for five to seven years in the future, he adds. Across the country, employees at many ports worked tirelessly to meet the increased demand. In addition, many carriers diverted ships to less-congested ports on the Gulf and East Coasts, or deployed smaller ships that could more easily navigate into ports, says Doug Thiessen, ports and maritime leader in the western United States for HDR, Inc., an engineering services firm. While necessary to keep goods moving, the steps required to correct for the backlogs highlighted the aging infrastructure and lack of capacity at some ports, and the need for investments in infrastructure, technology, and environmental solutions. “U.S. seaports need continued large capital investments in modernization to repair and replace older docks and piers, deepen channels, install larger and improved rail yards, improve electrical service, and improve landside road links,” Thiessen says. Other needs include larger and faster cranes; electrified yard equipment; and zero-emission and autonomous street trucks. Now, several years from the height of the pandemic, port congestion is easing and many shipping costs have dropped. While these changes sound positive, the main driver is weaker consumer demand, says Edward Hertzman, CEO of Hertzman Global Ventures, a supply chain intelligence and solutions firm.
Some investments to address the recent challenges have begun. “Almost all ports are making some type of investment in improvement,” says Spencer Shute, principal consultant with Proxima, a supply chain consultancy. TARGETING EFFICIENCY AND VISIBILITY “Everybody is aiming to become more efficient,” Shute says, adding that automation allows ports to respond more nimbly as demand shifts without jeopardizing safety. Investments in connections to rail service remain critical in many West Coast ports, says Kenneth Cochran, managing director in the consumer and retail group of Alvarez and Marsal, a global professional services firm. Continuing investments in chassis management and repair services are also a focus, as chassis availability remains a key constraint. Overall investment in automation in the United States still lags the rest of the globe due to resistance by some labor groups, Cochran adds. Although still nascent, the growing preference for East Coast ports by many carriers highlights the importance of a diversified supply chain, not just overseas at the factory level, but locally at the port level. “Diversification will be part of the go-forward strategy for most organizations,” Hertzman says. As ports consider their capital needs, part of their funding may come in the form of federal dollars from programs like the National Infrastructure Project Assistance (Mega) program. This program “supports large, complex projects that are difficult to fund by other means and are likely to generate national or regional economic, mobility, or safety benefits,” according to the U.S. Department of Transportation (DOT). Eligible projects are of national or regional significance, and could include bridges, ports, and other structures. Both private and public sectors
also are investing in advanced data capabilities and platforms. The goal? “To provide real-time visibility for ports, shippers, freight forwarders, brands, and retailers so everyone knows exactly where the goods are and how to plan accordingly,” Hertzman says. The Freight Logistics Optimization Works (FLOW), which launched in March, is an effort by the White House and multiple supply chain companies to develop a digital tool that provides information on the condition of a node or region in the supply chain. Through the FLOW pilot, the DOT acts as an independent steward of supply chain data across shipping lines, ports, terminal operators, truckers, railroads, warehouses, and beneficial cargo owners. With this information, participants can make more informed supply chain decisions. ADDRESSING ENVIRONMENTAL CONCERNS Along with efficiency, port investments are addressing environmental concerns and climate change. Numerous electric vehicle (EV) demonstration projects are underway, with a goal of cutting emissions from port facilities and the transportation options serving ports. In addition, greater use of intermodal rail can cut emissions while helping to address the truck driver shortage. Hertzman recommends monitoring California and the California Air Resources Board (CARB). “Companies will have to be CARB compliant in the years to come,” Hertzman predicts, adding that he believes other states will mirror their regulations. In 2020, for instance, CARB approved a new regulation that builds on the At-Berth Regulation adopted in 2007, adding new vessel categories that will be required to control pollution when they run auxiliary engines or boilers while docked.
August 2023 • Inbound Logistics 45
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