Ocean cargo shippers can expect a slight surge in business this year, with the economic tide lifting all boats, according to a prominent shipping industry economist. This will be particularly evident when it comes to measuring port throughput across the continent.
By Patrick Burnson
Published: March, 2012
Ocean cargo shippers can expect a slight surge in business this year, with the economic tide lifting all boats, according to a prominent shipping industry economist. This will be particularly evident when it comes to measuring port throughput across the continent.
Dr. Walter Kemmsies, Moffatt & Niclol’s chief economist, spoke at the recent meeting of San Francisco Roundtable Council of Supply Chain Management Professionals in Oakland. "The fact that the U.S. is resuming economic leadership is comforting," said Kemmsies. "And our exports are largely responsible for driving this trend."
Kemmsies, who pioneered development of container volume forecasts by trade lane, uses a blend of regional economic data with the identified market reach of U.S. ports. He said almost every major U.S. outbound ocean cargo gateway is benefitting by demand for U.S. goods.
"But we are still looking for sustainable numbers," he said. "Emerging markets are making the rebound possible but our ongoing deficit in petroleum imports is worrisome."
Meanwhile, U.S. port authorities should continue to lobby for funds to expand infrastructure, said Kemmsies. The observation resonated with the Port of Oakland shippers, the nation’s top exporters of agricultural cargo.
"Bulk commodities and specialized capital goods (project cargo) fit the profile of U.S. comparative advantages," he said. "Relative to faster growing emerging markets, the U.S. has a lower cost of capital. It also has a relative abundance of scarce resources—like water—and more advanced biotechnology. Finally, we have more reliable quality control and surveillance of compliance."
But the higher cost of U.S. labor remains a problem, said Kemmsies, and may not be able to offset the strong demand for raw materials. "And we don’t want to live much longer with a jobless recovery," he said. "At the same time, we are encouraged by the government’s commitment to invest in its ports and related industries."
Shoreside Power Project at S.F. Port
Job creation on the waterfront may be getting a boost at the Port of San Francisco. Moving rapidly to implement a project with far-reaching environmental benefits, San Francisco Mayor Edwin Lee and Supervisor Malia Cohen joined City staff and representatives of the Port’s Pier 70 Shipyard operator, BAE Systems, to announce a new shore power project in the Port’s Drydock #2.
The project was approved by the Planning Commission, the Port Commission and the Board of Supervisors as mitigation for air quality impacts resulting from the America’s Cup sailing event and the construction of the Port of San Francisco’s new James R. Herman Cruise Terminal at Pier 27.
Mayor Lee and Supervisor Cohen introduced legislation to enable the Port to contract with BAE San Francisco Ship Repair, operator of the Port’s shipyard at Pier 70, to design and install a multi-million dollar upgrade to the shipyard’s electrical system. The upgraded system and new equipment will allow cruise ships and other large commercial and military vessels to shut down their engines and receive clean hydropower power from the city’s electrical grid while in port.
The shipyard’s shoreside power system, which is expected to be operational by September 2012, was inspired by the Port’s shoreside power system for cruise ships, the first such system in the state. That system, located at Pier 27, was inaugurated on October 6, 2010, with the connection of the Island Princess. The Pier 27 system will be offline for two years during the construction of the Port’s new James R. Herman Cruise Terminal and the use of the pier by the America’s Cup.
"Being environmentally sustainable can create jobs and spur economic growth," said Mayor Lee. "San Francisco has demonstrated with shoreside power that cruise ships that dock on our shores are powerful economic engines for our local economy while at the same time protect our air quality and our Bay waters."
"This unique collaboration between the City and BAE San Francisco Ship Repair will not only mean cleaner air, but the installation of shoreside power will also increase the competitiveness of the ship yard resulting in more work for the skilled union workers that we employ," said Hugh Vanderspek, general manager at BAE Systems.
Dramatic Emissions Reductions at Oakland Port
An independent study by the Institute of Transportation Studies at UC Berkeley shows a dramatic reduction in air pollution from sources at the Port of Oakland. The study reveals a 50 percent decline in diesel particulate matter emissions from drayage trucks and a 40 percent decline in nitrogen oxide emissions in the Port harbor area following implementation of the clean trucks component of the Port’s Comprehensive Truck Management Program (CTMP).
"We are very pleased by the results of the UC Berkeley study. It independently confirms that partnering with our stakeholders has resulted in cutting diesel emissions in the Port area in half," said Port Board President Pamela Calloway. "Our partners include the California Air Resources Board, the Bay Area Air Quality Management District, the Environmental Protection Agency, trucking companies, independent owner-operators, and other community stakeholders. Together we have significantly improved air quality in our maritime area; and we are continuing our commitment to reduce pollution because it is vital to the health of our workers and neighbors."
