Changing trade flows are placing demands on ports to develop export-oriented facilities, especially those that handle food products, both dry and refrigerated, according to Moffatt and Nichol commercial advisor Anne Landstrom.
After focusing on container terminals designed to handle rapidly growing imports from China during the boom years from 1996 to 2006, ports must now deal with a new trade paradigm, Landstrom told the FuturePorts seminar Wednesday in Long Beach
Containerized imports are leveling off as the U.S. population ages. Senior citizens spend most of their money on services rather than consumer goods. As this trend intensifies over the next few years, it is likely that containerized exports will reach parity with imports, she said.
At the same time, the growing middle classes in China and other Asian countries are consuming more grain and meat products. These countries are also expanding their livestock herds, and are therefore importing more animal feed grains. The U.S. is a major exporter of agricultural products.
Since agricultural products are sourced mainly in the nation’s interior, and are often shipped to seaports in bulk via rail hopper cars, there is a need for more grain transloading facilities at the ports, Landstrom said. Likewise, cold-storage warehouses are needed to handle increasing shipments of frozen meat and poultry from the interior.
Moving freight long distances by rail and highway requires improved infrastructure, but developing transportation and logistics infrastructure is a costly proposition. The industry needs creative funding programs based on public-private partnerships.
“There is capital out there,” Landstrom said, “but it needs a roadmap.” Private-sector investors want to see detailed plans, including possibly a national freight program, before participating aggressively in such projects, she said.
The Obama administration’s export initiative that seeks to double U.S. exports by 2015 can assist the port and freight transportation industries in the public portion of the partnership, said Paul “Chip” Jaenichen, acting maritime administrator, U.S. Maritime Administration.
Port-related development is now on the list of projects eligible for federal funding, Jaenichen said. Ports in fact, will play a key role in the administration’s export initiative.
As for development of a national freight plan to pull all of the surface transportation initiatives together, the MAP-21 program passed by Congress and signed by President Obama last year will ensure that freight projects do not occur in a vacuum, Jaenichen said. The MAP-21 plan must be completed in two years, he said.
Yet another development having a big impact on transportation and logistics is e-commerce fulfillment. Landstrom said retailers are joining pure e-commerce companies like Amazon.com in constructing warehouses near large population centers to handle e-commerce fulfillment. Amazon itself is expanding its offerings by moving into business-to-business e-commerce fulfillment, she said.