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Does that belong in my port? By Christopher Steele, President, CWS Consulting Group LLC Ports have historically served as natural magnets for economic activity of all sorts, largely because they serve as key links to the outside economy. The global marketplace demands that goods be moved quickly, reliably and efficiently, and at competitive rates — all roles at which ports excel. This then attracts other distribution activities, industrial functions, and — in older days — even attracted such supporting functions as finance, commerce and insurance. While times have changed and some of the “softer” industries have moved away from the ports, the location advantages of the port remain for a wide variety of businesses. During this time when both globalization and potential fuel cost increases continue to drive competitive advantage, locations near ports become even more attractive as areas for expansion in select industry types. Ports provide access to both raw materials and end users, have optimal logistics connections, and seem to sit at the middle of everything. Competition for port-related lands Interestingly, this can also make ports the victims of their own success. Ports near thriving cities face development pressures from commercial, residential and office uses as they expand from the downtown areas. The waterfront and history of older ports also draw new users to the area due to the qualities of the water’s edge. Still, much of the competition for port space remains transportation related. Automobile shipping and importing are a good example. Some ports have found this business large enough to become their prime focus. Others who looked to automobile traffic as a supplement to their container or bulk business have faced a bit of a quandary. A number of ports with significant auto capabilities have found that the laydown and auto preparation space required for success in this business has forced them to dedicate large tracts of land for these functionally constrained uses. This has kept them from adding cranes or cross-docking space that might otherwise directly support the core mission of the port. Green energy — a current growth opportunity — has had a similar impact on port land use. The large, cumbersome and complex components (which include the towers, turbines, blade assemblies, dynamos, and transformers needed to both generate and transmit energy to the grid) must be moved and assembled where there is sufficient space, capability, and expertise. In fact, prior to the current economic decline, some ports had expressed concern that the increase in both bulk traffic and new energy-related growth could put a strain on the area’s capabilities if road and rail improvements were not made. Both Beaumont and Corpus Christi are prime examples of this. Both have seen significant increases in wind-energy equipment (mainly turbines and towers) coming through the port as well as piping for LNG facilities. Wind equipment also tends to take up a lot of space, making it difficult to fit into some ports, or forcing them to make difficult decisions as to where their focus ought to be. On the other hand, this same problem presents an opportunity for other regions. Freeport Texas, which has significant tracts of undeveloped land directly adjacent to the port itself, is taking advantage of market need and is actively courting wind equipment manufacturers and installers. Finding a Balance Manufacturing, energy, and other related uses depend on and extend the capabilities of the port into new areas, and diversification is good. Having a variety of paying tenants with differing economic exposure helps to manage financial risk. These non- or semi-port ancillary uses bring in revenue when volume lags in other port functions. Having a mix of uses can also be a competitive advantage when luring container, bulk, and other true marine activity to the port itself. The port then has the ability to add even more value to the process. Port operators will need to find a balance going forward. Like any scarce resource, land and access must be invested in a way that brings the best return to the entity. Newer ports may be able to defer these issues by specifically identifying backlands for ancillary distribution or industrial development. Older ports may wish to develop partnerships with nearby waterside industrial parks to develop satellite operations. In each case, port operators must find innovative ways to provide space for their core operations as well as for new industrial uses that will require access to the port.	In This Issue Up Front News, Trends & Analysis New Items The risks of delayed action Supply Chain Is your service provider compliant? Does that belong in my port? Features Grading the carriers: How are your service providers doing? Gateway at a glance: China Ports & infrastructure Port Productivity Tools: Six success stories U.S. ports downsize staffs in new economy Port Products RTGs and reach stackers Commentary What’s on the horizon? On the Horizon Fleets of the future: The Chameleon Casualties
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Does that belong in my port?