Dryport Confernece, October 20-22, 2010

Transport Research Institute (TRI) and SEStran (the South East of Scotland Transport Partnership) hosted a conference on Dryports in Edinburgh, Scotland, October 21-22, 2010.   There was an optional tour on the 20th of the Falkirk Wheel and the Coatbridge Intermodal Facility.

The conference was a resounding success, with speakers from six of the seven continents.  This provided a great dialogue to discuss the role of ports and their hinterlands, especially as related to mostly containerized shipments.  (Here is a link to the writeup.)

During the opening session, Gordon Wilmsmeier, one of the conference organizers, challenged the audience as to the definition of a dryport.  This thought was echoed in several presentations as to what is a dryport, and while there was no clear consensus, it seemed to involve two main concepts:  a link between a port and a hinterland location served by a dedicated intermodal or logistics service, and customs or related activities for international shipments.   (The issue of governance was presented by Gordon Wilmsmeier, Jason Monios and Bruce Lambert at the International Association of Maritime Economists Annual meeting in July 2010.)

I spoke as one of the final keynote speakers on the session (my presentation is available here).

Takeways: (because of the dual track program, I was unable to hear all the speakers):

  • The Barcelona port has been very successful in developing and maintaining dryport services,
  • Australia is seeking to develop transnational gateway and hinterland flows,
  • In the developing world, customs and related government inspections complicated trade facilitation and prevented the development or ongoing use of dedicated dryport systems,
  • In the developed world, the focus on access to intermodal containers to either alleviate highway congestion or to assist in export opportunities were seen as important elements,
  • Dryports allow for greater competition, which may lead to lower costs and better services for shippers,
  • The penalty for being on the periphery is real, with costs and limited services for shippers in disadvantaged regions,
  • The push of green intermodal connectivity ignores the balance between rail freight and rail passenger services.  It would be hard to have both in the UK given overhead clearing constraints and rail operations,
  • While the global supply chain has benefited from relatively low and stable oil prices in the past, the dynamic could change if oil prices become either relatively higher or more volatile in the future,
  • The six main points for any dryport terminal development: tenants, buildings, financing, market analysis, global logistics and land,
  • Glocalization: bringing the world to the consumer.  While I never heard the specific term, the process has been discussed in many different settings,
  • Port-land space (from competing other users, limited expansion area, or other constraints) remains a component that has to be addressed regarding the future competitive position of ports,
  • Many speakers mentioned the “road subsidy” as a constraint to the growth of rail intermodalism and that we need to get to a more “balanced” modal share,
  • Dryports can operate in close proximity to each other if they provide different services or have a different customer base,
  • How to integrate ports into a global logistics supply chain for major shippers, especially if the port is seen as simply a transfer point and not a generator of economic activity,
  • There are many different approaches to modeling dryports and their connectivity, each focusing on either service or carbon attributes (DEA), basic transportation costs, or general equilibrium modeling,
  • Don’t forget that your sense of a rational transportation decision is not necessarily the same as others regarding your project,
  • Dryports in Scotland compete with feeder services, so shippers can choose different choices, but which choice is better to the national economy?,
  • Sweden has 25 dryports (either authorized or operating),
  • Intermodal facilities need to be co-located with other firms and transportation generators to provide more options to shippers and carriers to generate the necessary densities,
  • Dwell time can limit intermodal operations, especially if it is too cheap to encourage movement off the dock,
  • Manus is the largest FTZ in Brazil,
  • Africa has the largest share of landlocked countries in the world, so dryports are seen as critical to generating economic growth,
  • Asia is moving towards an integrated railroad and roadway network, especially to link rural markets and border crossing facilities.

What does this mean for the Southeastern U.S.?

What does this mean for the Southeastern U.S.?  While the Port of Virginia has an existing inland port, most of the international containerized rail movements are intermodal services between railroads and various port terminals.  In the U.S., it is the relationship between the ports and the railroads that provide the critical link between hinterlands and gateways.  (This was highlighted by the Appalachian Regional Commission (ARC)’s Network Appalachia  Study.) Clearly, the Heartland Intermodal Corridor remains the U.S. poster child of an integrated dryport concept, with strong public and private partnerships formed to ensure the corridor would receive not only the necessary funding to double stack the corridor, but to also develop intermodal terminals that would be able to support local businesses.  (This was part of the reason ITTS hosted a tour of the Heartland Corridor for its member states – October 2010 Newsletter.)

Customs modernization has simplified many of the reporting burdens, as shipments in the U.S. are free to clear customs at any location. (The Free Trade Zones can serve to provide additional customs related activities.)  While US dryports do not necessary have the same customs components as other regions, there still exists the needs to provide services (consolidation, etc.) and dedicated intermodal connectivity.  Several ports in the U.S. southeast are actively working on expanding rail connectivity, and CSX’s National Gateway program highlights plans to connect hinterlands with ports through rail operations.  There are questions about the availability of containers within the U.S., especially for rural exporters, as the heavy inbound traffic tends to consolidate in the large metro areas and coastal areas where the cargos are stuffed from 40’ international containers to 53’ domestic containers.  This leads to additional costs to dray these containers to rural areas to load outbound export shipments.

Optional Tour:

We had the pleasure of visiting two facilities, the Freightliner terminal at Coatbridge, and also the Falkirk Wheel.

Normally, transportation is seen as ugly – something for someone else to bear the visual and related externalities of the transportation activity.  The Falkirk Wheel clearly is a major tourist attraction and an impressive facility.  The majority of the lifts are recreational boating.  We rode from the lower level to the higher level.  (I would have more pictures, but as usual, I got a bad seat, so the photos from the boat always seemed to have at least one child jumping up and down.)

The visit to Coatbridge Terminal was also impressive.  While the terminal uses older equipment, the facility is integrated into an intermodal service to Southern Scotland.  Given the large volume of Scottish exports (they are a net exporter of containerized shipments, with large shipments of whiskey and fish), the role of gateway traffic and connectivity is critical to Scottish firms.  The intermodal facility was able to offer dedicated and reliable services to meet containerized shipments from southern British ports.

Canal near the port

Canal near the Falkirk Wheel

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