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Maritime Industry Invests Heavily to Increase Efficiency for Customers Y ueled by the many shipping rise in Asian companies, ports Fimports to and other members the United States, of the intermodal West Coast ports transportation network

A handled more than are investing heavily in 220 million revenue developing infrastructure tons of waterborne to maximize cargo dry cargo valued handling at West at more than $266 Coast ports. Photo: Maersk Inc. billion last year. Susan Maersk en route to the Port of Long Beach on her This year, maiden voyage from Asia. Industry Advancements

D Asian imports through West Coast levels at several West Coast ports, Members of the maritime ports continue to flourish as the infrastructure investment is at industry are maximizing existing Asian-Pacific economy rebounds. an all-time high. resources to accommodate In fact, according to the Journal of Making a positive impact on increasing demand as cargo- Commerce, carriers are expecting its customers’ bottom lines is a handling volumes grow with July 9, 1999 1999’s imports to rise more than significant priority for the maritime improving economies. Vol. 2, No. 14 16 percent over 1998. As cargo- industry. In response to customers’ For instance, to provide its handling volume rises to record growing demands for efficiency, customers with added value in shipping, Maersk Inc. introduced

O the 6,600-TEU container-carrier Susan Maersk to serve the U.S.- Retailers Rely on Port Efficiency Asian trade route last month. to Boost Bottom Lines Although it has been in service for two years in Europe, the ship T As shipping customers keep up with the increased pace of a growing made its first voyage to the United economy, they demand more out of every link in the transportation chain. States stopping at the Ports of From the terminal operator to the freight forwarder to the service transportation Long Beach and Tacoma on the provider, each link is critical to handling cargo from the ports to destinations West Coast as part of her new

inland. As a result, off-port infrastructure improvements have become just as important as those to the ports themselves. permanent deployment. It is the West Coast ports have dedicated 48 percent of their infrastructure largest container ship to call at a investments to off-port components of the supply chain including U.S. port. infrastructure to transfer cargo from ship to rail (and truck) efficiently. Megaships, like the Susan These investments are critical to improving the service provided to Maersk, enable shipping companies customers such as mass retailers, who deal in high volumes and low profit margins. As inventories are kept to a minimum, just-in-time cargo delivery to deliver cargo to multiple markets and achieve economies of scale in A is key to retailers’ bottom lines. "Mass retailers have made an art out of squeezing costs out of a global transportation network. delivering large quantities of goods," said Robin Lanier, senior vice president Investments like these will enable of industry affairs for the International Mass Retail Association (IMRA). the maritime industry to efficiently "As a result, our member companies have been able to provide great quality meet customer demands. and very low prices." Shipping customers, such as IMRA members, require efficient “Vessels of this size achieve intermodal transport to meet market demands. The current and future economies of scale and focus West Coast port and off-port investments play a critical role in boosting on strategic hub ports to serve these customers’ competitive advantage. continents,” said Tom Boyd, general manager for Maersk. M Increased volume crossing ➺ PMA Today is a publication dedicated to highlighting West Coast port activities and developments the docks translates into a need to as they relate to economic and international trade issues in the 21st century. We hope you enjoy PMA Today and find it to be a valuable informational resource. For more information about PMA, please visit our Web site at http://www.pmanet.org. P 2/July99/B.mech 7/8/99 10:16 AM Page 2

The Value of U.S. West Coast- PMA A Asian Trade Relations Did you know … …the Ports of Los Angeles and Long Beach

TS U.S. Port Capital Expenditures for 1997 handled a combined total of more than 7.5 million Contiguous 48 States TEUs last year? The volume is expected to triple Great Lakes POR West Coast 0.7% to 24 million TEUs by 2020. 62.4%

THE Source: The Journal of Commerce Atlantic 21.0%

ensure that the intermodal FAST Corridor development, transportation network can easing traffic seems to be handle the flow. Although the an attainable goal. Gulf 15.9% T -A-GLANCE Percentage of Total 1997 Investment in Off-Port Infrastructure 48% tland t of Por Photo: Por West Coast ports are investing heavily in developing infrastructure to maximize cargo handling and efficiency. 16% growing cargo traffic has not Upon completion of the been a problem, ports and project, grade crossings and other players are proactively congestion from railroad tracks West Coast Other U.S. Regions planning for the future. crossing highways will be “When these large ships come things of the past. By 2020, in, they require enormous as a result of these investments, amounts of space and the Ports of Tacoma and Value of Waterborne Trade Through efficient operations,” Seattle will handle nearly 50 West Coast Ports said J. Gordon Palmer Jr., percent more railcars and more $283 billion manager of planning for the than 40 percent more trucks. $266 billion Port of Long Beach, in the “Bolstering efficiency provides Los Angeles Times. “I’m not our customers with a better designing 100-acre facilities value in cargo handling and anymore. I’m designing can boost their bottom lines,” $195 billion 300-, 400- and 500-acre said Phil Resch, senior vice terminals.” president for operations, In Seattle and Tacoma, the PMA. “Delivering 1997 1998 1999 the Washington Public Ports consistent, dependable and *Projected Association expects container accountable cargo movement Source: Berkeley Roundtable on the International Economy traffic through the ports for shipping companies and to more than double over their customers will keep the next 20 years. As $355 the West Coast ports strong PMA Today (1999 Pacific Maritime Association) is published for the membership of the million pours into the and competitive.” • Pacific Maritime Association. Comments, suggestions, additions to the mailing list and address changes should be sent to PMA, c/o Joey Parr, PO Box 7861, San Francisco, CA 94120-7861. Produced by PMA Staff.