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The chains and gears of shipping

The chains and gears of shipping
The subjects of finance, and freeing of congested logistical gears figured prominently at the just completed American Association of Port Authorities (AAPA) convention held this past week in Miami.

Noel Hacegaba, from the Port of Long Beach, was one of several participants on a discussion of “Partnering to Optimize the Supply Chain”.

“Port authorities need to be collaborating, and partner with other port authorities,” in the supply chains of the future, said Hacegaba, who added that ports need to have a focus well beyond the docks.

Fellow panelist Bruce Cashon, senior vice president and chief commercial officer at Ceres Terminals Inc (owned by an NYK affiliate) talked about “…cargo seeking the path of least resistance…” , setting the stage for Peter Friedmann, a Washington DC representative for exporters of farm products, to describe lengthy landside cargo movement brought about by hyper-congested local ports.

For port authorities, who comprised the majority of the attendees at the AAPA event, held in downtown Miami, the message from this panel, and from another session “Enhancing Efficiency Around Your Port”, is that landlord ports cannot sit back and say, “whoops, that’s not our problem,” as trucks back up, or other logistical snafus snarl operations.

Hacegaba explained that Long Beach is working on supply chain optimization, working in conjunction with all stakeholders in supply chain. The Port of New York and New Jersey’s - which follows the “landlord” template, represented by Bethann Rooney, assistant director in the Port Commerce Department, took a different approach in describing the port’s Council on Port Performance.

As Rooney noted the need to work collaboratively with many interests around the waterfront (and, importantly, with nodes farther inland), her slides showed a mesh of gears (rather than the usual “chain” metaphor normally found in such presentations) and she noted that “…for efficiency, all of the gears need to work with each other.”

Her co-panelist, Port Everglades’ port director Steve Cernak, very proud of his port’s successes in gaining a go-ahead for channel deepening after nearly decades of effort, said “you need to understand how all the pieces fit together…you need to understand how other businesses work.”

Paul “Chip” Jaenichen, the administrator of the US Maritime Administration (MARAD), provided one of two keynote addresses, discussing steps being taken now to open up additional funding sources for ports (including funding aimed at fixing clogged up gears and broken chains), saying that “…ports define our economic landscape.”

The administrator talked extensively about the ongoing development of the US National Maritime Strategy - a process two years in the making, includes the expansion of key bulk and energy ports - as well as the big containerized cargo gateways.

He also pointed to a newly established clearing house at the US Department of Transportation (the parent of MARAD) - the Build American Transport Investment Center (BATIC). The new portal is aimed at simplifying the task for ports applying for Federal funding.

Jaenichen stressed the ongoing Transportation Investment Generating Economic Recovery (TIGER) grants program, but noted a downturn in applications from ports. He also noted that billions of new Federal credits will be available for port projects, through changes in the existing Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) programs.

Citing a large $500m project at the Port Newark Container Terminal, Jaenichen said that these funding sources can now be applied to “inside the gate” projects at ports, for example rail linkages directly to dockside.