1. Port Drayage, Productivity, and Capacity: Results of Three New Studies March 1, 2010 PRELIMINARY ^

2. 2 Three New Studies Port Capacity Study, sponsored by the USACE Institute of Water Resources (IWR) CDM as prime contractor Port Productivity Study, sponsored by the Container Handling Cooperative Program (CHCP) Truck Drayage Practices, sponsored by the National Cooperative Freight Research Program, Transportation Research Board, National Academy of Sciences, Project 14 All three studies nearing completion

3. 3 Port Capacity and Productivity IWR Port Capacity Study - Key Questions What is East and Gulf Coast port capacity? What constrains capacity? Can they handle new Panama Canal vessels and business? CHCP Port Productivity Study - Key questions Are we using the right productivity measures? Where do we get the data? How do we approach benchmarking? How do we encourage productivity improvements?

4. 4 TEU per Acre? Are we losers? BUSTED

5. 5 Five Dimensions of Terminal Capacity DRAFT BERTH LENGTH STACKING HEIGHT CY DEPTH (AREA) OPERATING HOURS

6. 6 CY Metrics Cheap land at U.S. ports leads to: Lower TEU/acre Dedicated carrier terminals On-terminal chassis pools On-dock rail transfer Wheeled operations Fewer moves per box Lower terminal operating costs Key Metrics TEU per CY acre Slots per acre (density) and TEU/slot (turns) Utilization – annual TEU vs. CY capacity

7. 7 CY vs. Gross Acres RAIL TRANS LOAD CHASSIS LOT STAFF PARKING CY US terminals include more functions On average, only half the gross acres are used as CY

8. 8 Gross vs. CY TEU per Acre On TEU per CY acre, US terminals suddenly look “world class” Many, but not all, ports and terminals publish CY acreage

9. 9 Estimated TEU Slots per CY Acre (Density) AVERAGE = 190 Many, but not all, ports and terminals publish TEU slot data

10. 10 CY Utilization: 2008 TEU per Slot (Turns) AVERAGE = 34 MAXIMUM = 70? AVERAGE = 34 MAXIMUM = 70?

11. 11 Crane Metrics The primary task is turning the vessel Crane utilization and productivity can be measured in TEU and vessels worked Crane efficiency would be measured in moves/hour, but data are seldom available There is a critical tradeoff Annual crane output is higher if fewer cranes work the vessels BUT Vessel turns are faster and more reliable with more cranes

12. 12 How many cranes per berth? Average is 2.2 Maximum of 5? 7 cranes for 6 berths 32 cranes for 22 berths 8 cranes for 3 berths 24 cranes for 8 berths

13. 13 How hard do we work those cranes? Some, but not all, ports and terminals publish crane moves per hour

14. 14 Estimated 2008 Crane Utilization TEU vs. Max Sustainable TEU AVERAGE = 35%

15. 15 Berth & Vessel Metrics Berth utilization can be measured in multiple ways Vessel calls and TEU per berth TEU as percentage of maximum vessel capacity TEU as percentage of current vessel capacity Vessel utilization is also a factor Average vessel size compared to maximum possible for berth and channel depth Average TEU per vessel as % of vessel capacity

16. 16 How hard do we work the berth?

17. 17 How well do we use the draft?

18. 18 Estimated 2008 Berth Utilization CURRENT TEU VS. CAPACITY NEAR TERM WITH CURRENT VESSELS LONG TERM WITH MAXIMUM VESSELS

19. 19 East & Gulf Coast Capacity Most East and Gulf ports have CY, crane, and berth capacity to handle additional near-term Panama Canal business As larger vessels are phased in over time, most East and Gulf Coast ports will have to add cranes NYNJ and Norfolk can handle large vessel drafts today, although NYNJ has a long-term air draft problem Baltimore, Philadelphia, Charleston, and Savannah have dredging programs in progress or proposed Rising volumes will eventually require additions to road and rail infrastructure

20. 20 US Port Productivity Terminals attempt to balance the five dimensions of capacity Berths long and deep enough for the biggest expected vessel Enough berths and cranes to avoid vessel delay Enough CY acreage and density to avoid congestion Enough hours to turn the vessel US Ports are underutilized, not inefficient Cheap land has led to large, individual terminals instead of small multi-user terminals Most ports have substantial excess capacity Lower density holds down costs Better productivity metrics are possible “Sometimes” data such as CY acres, TEU slots, and crane hours can yield better measures

21. 21 NCFRP-14 Port Drayage Project Key questions Where are the bottlenecks and delays? What are the causes? What are the solutions? Answers The terminal drayage bottlenecks are the gate, CY, and chassis pool The causes are congestion and exceptions The solutions include terminal improvements, operating practices, and exception reductions

22. 22 Terminal Congestion Terminal data (which exclude gate queues) show the expected correlation between volume and turn times 2008 DATA FROM MARINE TERMINAL SYSTEM

23. 23 Chassis Transactions and Pools Chassis transactions add drayage time and delays at stacked terminals Two sources of delay – finding the chassis, and waiting for the box Two source of exceptions – chassis problems and transfer problems Moving pools off-site to save space adds drayage trips and time Chassis interchange adds time to gate transactions In the near term, neutral pools expedite chassis searches and reduce equipment problems In the long run, trucker or third-party chassis supply should reduce terminal time and exceptions

24. 24 Gate Queuing – Webcam Study Example LONG QUEUES IN THE MORNING AND FOR EXPORT CUT-OFFS

25. 25 Lunch Break Closures - Ouch! TERMINAL GATE CLOSED FOR LUNCH - FRONT ROW SPENDS 72-83 MINUTES WAITING DATA COLLECTION VIA TERMINAL WEBCAMS

26. 26 Gates – 3 to 4 Minutes, but Too Many Exceptions 5% of the moves use 14- 18% of the total time and back up the queue

27. 27 Turn Times – Again, Too Many Exceptions QUALCOMM data show added queue time 5% of the moves use 14% of the total time

28. 28 Process Issues Cause Exceptions 5% of transactions get trouble tickets 80% due to booking, dispatch, or system errors Each one adds an hour

29. 29 Experience Matters The average is 5%

30. 30 The Trucking Company and Ocean Carrier Matter The average is 5%

31. 31 Drayage Solutions Reducing Bottlenecks Keep gates open during lunch Chassis pool – Saves time in stacked terminals “Automated” gates – OCR, RFID, saves gate time Two-stage gates – Gets exceptions out of line Appointment system – May save time, depends on implementation Reducing Exceptions – The 5% “tail” Talk – regular trucker/terminal/port/customer meetings Manage booking, dispatch, and system communications Choose experienced trucker and efficient ocean carrier

32. 32 Transition from Lower to Higher Density Volume growth will drive denser, more capital-intensive operations

33. 33 Terminal & Drayage Tradeoffs Higher terminal density has costs… More cranes to handle larger ships More berth and CY congestion on vessel days Higher terminal operating costs due to more moves per box, more labor, and more capital Higher drayage costs due to more time and moves in terminals Greater impacts on roads and rails The transition has to be managed carefully… A long-term solution to on-terminal chassis supply Terminal operations that move both vessels and trucks Gates that expedite clean transactions and separate problems Systems to cope with rising complexity of terminals and transactions

34. 34 Bottom Line: What does the customer want? Better, faster, cheaper

35. 35 Are customers willing to switch? Yes! It depends on….? Costs being equal.

36. 36 Thank you! Questions? Contacts and Follow-ups Container Handling Cooperative Program: wgorfink@earthlink.net, Robert.Bouchard@dot.net National Cooperative Freight Research Program Project 14: http://144.171.11.40/cmsfeed/TRBNetProjectDisplay.asp?ProjectID =2412 On-line survey: http://www.surveymonkey.com/s.aspx?sm=gKU1ZDY25GgNzNAI1 WK9mw_3d_3d Tioga website: www.tiogagroup.com Project manager: dsmith@tiogagroup.com, 925-631-0742