U.S. Ports - Preparing for Global Demand
A thriving container-shipping industry means increased logistical challenges for major American seaports.
Brian Knowles, Principal, Industrial Services, The Staubach Company and Timothy P. O'Rourke, Executive Vice President, Jones Lang LaSalle (Aug/Sep 06)
(page 2 of 2)
diversification continues to push container traffic to alternative East
Coast Ports, such as Charleston and Savannah. These ports rank among
the top 10 container ports in the United States. This year alone,
Charleston is expanding its bulk warehouse space by 1.3 million square
feet. Additionally, the port offers several land sites consisting of at
least 50 acres, which are ideal for future development of distribution
facilities. The main Charleston port operations lie along the Cooper
River and offer modern container-handling equipment and facilities. The
port is seeking to add three new berths and a 280-acre marine terminal
at the former Charleston Naval Base.
The Port of Savannah is the
first major container terminal for ships utilizing the Panama Canal for
Eastern Seaboard access from Asia. As a gateway to the huge "inland
port" of Atlanta, the Port of Savannah offers plenty of land for
expansion. Target Corporation is scheduled to complete a 2.1
million-square-foot warehouse next year at the Savannah River
International Trade Park, approximately four miles from the Garden City
Terminal. Target will be joining Home Depot, Wal-Mart, and Pier 1
Imports, all of which have chosen Savannah as a strategic location for
Competition for port-adjacent property will be
provided by the six Class I railroads currently operating in the United
States. Intermodal terminals have been one of the fastest-growing
segments of the railroad system, serving both the trucking and shipping
industries. The railroads help to relieve pressure on the nation's
highways, which reduces transit times and overall inventory costs.
railroads have been beneficiaries of the record-high import volumes.
Combined, they hauled more freight in 2005 than ever before. While
speed and service levels have been widely reported problems as the
railroads operate at near capacity, rail companies are attacking these
issues with an aggressive capital spending program of approximately $8
billion. The railroads' ability to increase capacity and improve
service levels, combined with near-dock intermodal facilities and
inland ports, will greatly assist the existing constraints on the
overall transportation network.
Carriers and shippers are all
concerned about inland transportation costs, which can account for up
to 50 percent of the overall cost to move product from a factory in
Asia to a store shelf in the United States. Thus, many ports are
actively pursuing rail expansion and improvement programs that will
help speed the flow of containers through the struggling U.S.
With supply-chain issues and their effect
on the bottom line reaching the executive suite, the metrics for
corporate America may not be how much per square foot, but rather how
much can be saved by being more logistically efficient within the
supply chain. Speed to market pressures have not abated.Brian
Knowles and Timothy P. O'Rourke are members of the Logistics Practice
Group for The Staubach Company, a market-leading global real estate
advisory firm. Mr. Knowles works out of the company's Murray Hill, New
Jersey, office; Mr. O'Rourke is located in Los Angeles. Both can be
reached via the company's website at www.staubach.com.