Ecmhi m95 washburn


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Ecmhi m95 washburn

  1. 1. SPONSORED BY: EAST COAST MARINE HIGHWAY INITIATIVE: M-95 STUDY PREPARED BY: Transportation Research Board Annual Meeting January 13, 2014 PHB Public Affairs
  2. 2. I95/M-95 Corridor • 1,925 mile-long north-south corridor • 15 states from Maine to Florida • 37 percent of nation’s population • 42 of the nation’s top 100 metropolitan areas based on population and economic activity • Over 50 coastal and inland ports • 22,000 miles of Class I freight railroad track • 35 percent of the nation’s vehicle miles and more than 5.3 billion tons of freight annually 2/2/2014 2
  3. 3. Project Objective and Goals Objective • Determine potential business opportunities for ECMHI and craft strategies for the development of marine highway services along the I-95 corridor Goals • • • • • Analyze specific markets and associated economic and operational factors related to the M-95 corridor. Determine total cargo flows along I-95 corridor and assess the potential diversion of this freight onto a proposed marine highway. Provide success factors needed to ensure financial and operational factors are properly addressed. Develop specific strategic actions to increase the strength and viability of the region’s marine highway system. Encourage the development of freight partnerships between the shipping and logistics community and ports along the I-95 corridor. 2/2/2014 PHB Public Affairs 3
  4. 4. ECMHI Study Part I: Data Collection 1.1 Literature Review 1.2 Industry Listening Sessions Part II: Market Analysis 2.1 Commodity Flow Analysis 2.2 Projected Commodity Opportunities 2.3 Corridors & Systems Services 2.4 Shipper Surveys & Interviews 2.5 Value Proposition 4.1 Maritime Cargo Opportunities 4.2 Cost Analysis 4.3 Service Review Part V: Conclusions & Recommendations Part VI: Environmental Analysis 6.1 Environmental Screening/Overview 6.2 Baselines PEIS Framework Part III: Operational Development 3.1 Logistics Activity & Modeling 3.2 Labor Review 3.3 Operational Plan Part IV: Business Plan & Viability 2/2/2014 4
  5. 5. Parts I and II: Extensive Stakeholder and Shipper Involvement • Visits to current and anticipated sites for marine highway activity in Baltimore, Canaveral, New Bedford and New Jersey. • Interviews and discussions within three stakeholder groups Organization Type Public Agencies (DOT, MPO, etc.) Number of Interviews 15 Port Authorities and Terminal Operators 12 Shippers and Transportation Providers 17 Total 44 • In-depth validation exercises with four select and varied shippers to review potential vessel types, port pairs, service parameters and rates • Listening session with public agencies 2/2/2014 5
  6. 6. Market Analysis of Long Haul Domestic Moves: M-95 Cargo Conversion Assumed 25% conversion of filtered tonnage (2% percent of total domestic cargo moving through the corridor by rail and truck). The following practical considerations leads to a smaller expected capture rate. Transit times Service frequency Flows are imbalanced Historic modal performance 2/2/2014 6
  7. 7. Selected M-95 Service Options • Option 1, the short-haul loop linking New England and Mid-Atlantic ports, with a focus on New Bedford and Baltimore. • Options 2 and 3, the two long-haul East Coast routes linking New York (or Delaware River) markets with Florida. • Option 5, a “pendulum” serving both short and long-haul markets, linking New England, Delaware River/Chesapeake Bay, and South East ports. 2/2/2014 7
  8. 8. Vessel Types 2/2/2014 8
  9. 9. Study Findings • The M-95 services that were identified as most promising are uneconomical to operate without financial assistance. • With assumed handling cost reductions, HMT exemptions and full utilization of the vessels in both directions, service operating costs along the highest performing routes exceed expected revenues by a minimum of $150-200 per load on average. • The findings affirm why the private sector has not developed ongoing marine highway services to date and why other similar services have not achieved self-sustainability in the past. • They also provide a roadmap of what is needed in the future to stimulate marine highway use. – Development may require governmental involvement – Increased volumes are not a principal solution to the revenue/cost gap. – The revenue/cost ratio increases as the distance between port pairs increases 2/2/2014 9
  10. 10. Conclusions Key factors that have the potential to reduce the revenue/cost gap include: • Reduce labor costs as a share of total operating costs. – Overall cargo handling accounted for 23-44% of total operating costs. • Reduce operating costs through use of liquefied natural gas (LNG) fuel. • LNG could reduce vessel-operating costs by about 30% • Eliminate the Harbor Maintenance Tax on domestic cargos. – This represents about 3-5% of the cost difference. • Reduce vessel capital costs included in cost estimates. – Service costs include the full cost of acquisition and financing of new dual-use ships – Capital-related costs for ships range from about 13-25% of total service costs. 2/2/2014 10
  11. 11. Conclusions Additional factors that have the potential to reduce the revenue/cost gap over time include: • Increase rates as fuel costs rise over time. – As marine highways are more fuel efficient than rail and truck transportation, marine highway rates and revenues could be increased more than direct fuel costs, closing the revenue/cost gap. • Increase rates in response to increased rail and trucking costs – Highway and rail congestion and other factors such as driver shortages. • Create tax or other incentives to offset costs – based on quantifiable public benefits, to encourage shippers and transportation providers to opt for marine highway routes where practicable. • Extend Atlantic Coast marine highway services to the US Gulf, Mexico and/or Canada – to achieve possible operating cost reduction benefits from longer haul services. 2/2/2014 11
  12. 12. Conclusions • M-95 Service Impact Factors – – – – – – – – – – – – Volume and Capacity Frequency Reliability Balance Distance Location Integrated Door to Door Service Cargo Type Vessels Environmental Education Partnerships • You can download the study at 2/2/2014 12
  13. 13. Next steps for the Port of New Bedford ▶ International Coastal Shipping Service – ▶ 2/2/2014 MexiMar – Target launch to begin January of 2014 ▶ Port of New Bedford (MA), Port Canaveral (FLA), Port of Tuxpan (Mexico) Coastal Domestic moves from new offshore wind terminal. ▶ Cape Wind ▶ AMI 13
  14. 14. • Weekly ship service for dry, fresh and frozen unitized commodities between: • Puerto de Tuxpan, Mexico • Port Canaveral • Port of New Bedford ▶ 50 Jobs per vessel trip ▶ $200,000 economic impact per vessel trip 2/2/2014 Source: US Army Corps / Maritime International 14
  15. 15. 2/2/2014 15
  16. 16. Offshore Wind/ Renewable Energy • The European experience: offshore wind has created thousands of jobs in ten years • Cuxhaven and Bremerhaven: – 3,600 jobs by 2015 – 25,000 in Lower Saxony • Offshore wind is coming to America – Cape Wind – Areas of Mutual Interest (25% of nation's wind reserves) – Patrick Administration's commitment to offshore wind – New Bedford Marine Commerce Terminal 2/2/2014 16
  17. 17. New Bedford Marine Commerce Terminal 2/2/2014 17
  18. 18. Edward Anthes-Washburn HARBOR DEVELOPMENT COMMISSION (508) 961-3000 THE PORT OF NEW BEDFORD 2/2/2014 18