EAST COAST MARINE
Board Annual Meeting
January 13, 2014
PHB Public Affairs
• 1,925 mile-long north-south
• 15 states from Maine to Florida
• 37 percent of nation’s
• 42 of the nation’s top 100
metropolitan areas based on
population and economic
• Over 50 coastal and inland ports
• 22,000 miles of Class I freight
• 35 percent of the nation’s
vehicle miles and more than 5.3
billion tons of freight annually
Project Objective and Goals
Determine potential business opportunities for
ECMHI and craft strategies for the development of
marine highway services along the I-95 corridor
Analyze specific markets and associated economic
and operational factors related to the M-95
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
Encourage the development of freight
partnerships between the shipping and logistics
community and ports along the I-95 corridor.
PHB Public Affairs
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
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 &
Part VI: Environmental Analysis
6.1 Environmental Screening/Overview
6.2 Baselines PEIS Framework
Part III: Operational
3.1 Logistics Activity & Modeling
3.2 Labor Review
3.3 Operational Plan
Part IV: Business Plan & Viability
Parts I and II: Extensive Stakeholder and Shipper
• 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
Public Agencies (DOT, MPO, etc.)
Port Authorities and Terminal Operators
Shippers and Transportation Providers
• In-depth validation exercises with four select and varied shippers
to review potential vessel types, port pairs, service parameters
• Listening session with public agencies
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
The following practical
considerations leads to a
smaller expected capture rate.
Flows are imbalanced
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
linking New England,
and South East ports.
• 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
– The revenue/cost ratio increases as the distance between port
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 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
– Capital-related costs for ships range from about 13-25% of total
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
• 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
– to achieve possible operating cost reduction benefits from longer haul services.
• M-95 Service Impact Factors
Volume and Capacity
Integrated Door to Door Service
• You can download the study at
Next steps for the Port of New Bedford
▶ International Coastal Shipping Service –
MexiMar – Target launch to begin January of
▶ Port of New Bedford (MA), Port Canaveral
(FLA), Port of Tuxpan (Mexico)
Coastal Domestic moves from new offshore
▶ Cape Wind
• Weekly ship service for dry, fresh
and frozen unitized commodities
• Puerto de Tuxpan, Mexico
• Port Canaveral
• Port of New Bedford
▶ 50 Jobs per vessel
▶ $200,000 economic
impact per vessel
Source: US Army Corps / Maritime
Offshore Wind/ Renewable Energy
• The European experience:
offshore wind has created
thousands of jobs in ten
• Cuxhaven and Bremerhaven:
– 3,600 jobs by 2015
– 25,000 in Lower Saxony
• Offshore wind is coming to
– Cape Wind
– Areas of Mutual Interest (25%
of nation's wind reserves)
– Patrick Administration's
commitment to offshore wind
– New Bedford Marine
New Bedford Marine Commerce Terminal
HARBOR DEVELOPMENT COMMISSION
THE PORT OF