What Shippers Need from Inland Ports

By Dan McCue

When the economic recovery begins, not only will it usher in a new era of trade and industry; it will also, undoubtedly, give rise to an altered perception of what an inland port should be and how it should function.

Going forward, inland ports will have to be about logistical efficiencies if they want to regain the traction lost when the financial world went bust last fall.

Partnering with Coastal Ports

According to shippers and shipping lines — most of whom sought anonymity, lest they give up some competitive advantage — it’s going to take time to stop smarting from a downturn. As a result, they’re going to continue to look for ways to minimize transportation and shipping costs, even as the “new economy” ramps up.

Bruce Lambert, executive director of the Institute for Trade and Transportation Studies, a multi-state research institution, believes that, post-crisis, inland ports will need to more actively engage coastal ports as partners to meet their customers’ goals.

At the same time, Lambert says, they’ll need to engage with the range of transportation providers as never before to ensure the most reliable, cost-effective transportation services are being offered to potential customers.

“Inland ports, in and of themselves, will not be the early generators of economic activity in this environment, but they can be leveraged as distribution facilities, multi-use land development anchors, and a host of other activities,” he explains.

Build It, and They Will Come, but . . .

In December 2008, the Maersk Shipping Line stunned Charleston’s waterfront community when it announced it would pull its operations out of the city once its remaining contracts with the ports authority expire at the end of 2010.

The announcement was painful enough, given Maersk represents about 24 percent of the port’s annual business, but also surprising, given the intensity of developments both at the authority — where ground has been broken for a new terminal, the first phase of which will open in 2014 — and outside its gates.

Despite all that, Dana Magliola, a Maersk spokesman, says the line needed to act now in regard to holding down its costs, and they found better options for achieving that goal with the Port of Savannah and the Port of Wilmington, N.C.

The object lesson: Build it, and they may come, but they won’t necessarily stay unless you meet their other needs and desires.
“We view this as the decision any business would make in screening or choosing vendors,” Magliola says. “Of course, infrastructure, which provides the most efficient and affordable access to the marketplace, will serve as a beneficial characteristic for any port in consideration.”

Magliola defined infrastructure as including, but not limited to, harbor depth, superstructure clearance, access roads, rail, and warehousing.

“This again is driven by our customers’ needs and demands,” he says.

Relationship to Inland Ports

Sonya Cho, spokeswoman for the Hanjin shipping line says, “Cargo volume, obviously, is the biggest factor in deciding which ports to call; another is the incentives offered by ports, particularly on the East Coast, related to the number of boxes we bring in and out.”
“That said, we look at a port’s proximity to, and relationship with, inland ports and distribution centers,” she says. “Those things are going to be significant factors, along with infrastructure — roads and bridges — geography and terminal productivity.”
According to Cho, the global economic meltdown effectively reshuffled the deck when it came to international logistics.
“We are in a period in which we — and a majority of shipping carriers — are striving to rationalize our service routes in a significant way,” she says. “In light of the new realities, carriers are reconsidering everything.”

New Message for New Times

Among those trying to capitalize on that uncertainty is Glenn Carlson, vice president of business and economic development for the North Carolina Ports Authority, which operates the Port of Wilmington.

“For years, shipping lines told us that no one was asking them to bring cargo through the Port of Wilmington, and I think that, in part, stemmed from the belief that the state didn’t have the warehousing or infrastructure available to meet their needs,” he says.

“But a lot has changed over the years, not the least of which has been our ability to craft and deliver our message. Today, we talk about how much cargo eventually winds up in North Carolina, no matter what port they initially bring it through, and that we can save them millions if they just bring it here, saving a significant amount of money in terms of throughput costs, inland trucking costs, the repository of empty equipment, and the like,” Carlson says.

So successful has Carlson been at preaching his message that, not only did his port acquire some of Charleston’s Maersk business, it also landed the Port of Richmond’s Independent Container Line service.

“Right now, everybody — ports, rail, trucks, everybody — has excess capacity,” Carlson says. “In Wilmington, we’re only at about 50 percent. But what you’re seeing, and what I think you’ll continue to see, is people trying to place themselves in the most advantageous position at the start of the new business cycle.

“They’re looking at ports, inland ports, and the infrastructure in between and looking to combine and capitalize upon those supply chain elements poised to handle long-term growth.”

In This Issue

News, Trends & Analysis
New Items

Glimmer of Recovery

Supply Chain
A Quick Primer on Site Selection

Managing with the Supply Chain in Mind

Compliance Corner: Trade Compliance Requires a Focus on Information Gathering

How to Green Up Your Logistics Operation

Supply Chain product review
Trucking Software

Special Section
Creating the Extraordinary — the Prince Rupert Story

Features
Building a Future from Drayage Wreckage

Gateway at a Glance Pacific Northwest

Ports & infrastructure
Stimulus Bill Has Cash for Ports . . . for the Right Projects

What Shippers Need from Inland Ports

Port Product Review
Lift Trucks

Commentary
New Trends Driving Transpacific Trade

Who, What, Where, When

Final Say