Don't low-ball US port throughput

Don't low-ball US port throughput

I've read with interest recent articles in The Journal of Commerce reporting that the most "efficient" U.S. container terminals handle an average of 3,000 to 4,000 TEUs per acre per year. In the few years prior to the opening of the Pier 400 Marine Terminal in the Port of Los Angeles and the Pier T Marine Terminal Long Beach, several terminals in Southern California had achieved "throughput densities" in excess of 5,500 TEUs per gross acre per year, with the densest terminals at 6,500 TEUs-acre-year.

Since the opening of the new terminals, average densities have dropped somewhat. However, the advent of the new technologies resulting from the hard-fought 2001 Pacific Maritime Association-International Longshore and Warehouse Union agreement are allowing densities to increase. We are seeing some terminals once again exceed 6,000 TEUs-acre-year, with strong indications that densities of up to 7,500 TEUs-acre-year are just over the horizon. The new technologies are allowing reduction of manning and increases in equipment utilization that fundamentally shift the economics of grounded operations. Combined with changes in chassis regulations, we believe that high-tech grounded operations are becoming cheaper, per lift, than wheeled operations. This pattern, of course, will allow existing maritime infrastructure to handle more freight, and will allow an overall increase in the usage of longshore labor as trade continues to expand.

The recent Natural Resources Defense Council Environmental Report Card on the nation's largest ports gave the Port of Los Angeles a very low environmental grade, partially on the basis that the port's terminals were making very poor use of the land compared to terminals in the Far East, with very low throughput per acre. It is, of course, difficult to compare U.S. terminals to Asian terminals. U.S. terminals cannot readily engage in intra-coastal transshipment operations because of the Jones Act. Asian terminals are under no such limitation. Hong Kong, a frequent benchmark against which environmentalists compare U.S. terminals, has over 50 percent of its cargo in the form of transshipment.

Transshipment greatly skews the statistics, since the "TEUs per acre per year" is based on TEUs crossing the wharf: Hong Kong and other transshipment ports get to count two TEUs of "throughput" for every one transshipment physical TEU handled. In effect, they experience one container's worth of yard demand, but get credit for two lifts of throughput. If we were to compare "apples to apples," Hong Kong's reported density of 10,000 TEUs-acre-year would equate to about 7,000 TEUs-acre-year on a pure import-export terminal such as those in the U.S.

In fact, with the advent of new technologies and operating patterns on the West Coast, the Southern California ports now exhibit among the highest throughput densities, and the best land utilization, of any pure import-export facilities in the industrial world. Instead of giving the Southern California ports a failing grade for land utilization, they should have recognized that these ports represent the state of the art in import-export operations. These ports, and their operators, should be given a gold star, rather than a black eye.

Throughput density is a very complex subject, and prone to distortion by those who have an axe to grind. Each port has different throughput patterns that have profound influences on land utilization and the calculation of throughput statistics. When we quote these statistics, we should be aware of their strong political impact. We should do our best to state them accurately, and in a form that maximizes public understanding. When we use these statistics to drive public policy, we must understand the limitations inherent in them, and do our best to resolve distortions and avoid unsupported conclusions.

Thomas Ward is principal, terminal planning and analysis, at JWD Group, an Oakland, Calif., firm specializing in the design of marine terminals. He may be contacted at (510) 832-5466, or via e-mail at tward@jdwgroup.com.