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PHB Public Affairs
Transportation Research Board Annual Meeting
January 13, 2014
EAST COAST MARINE HIGHWAY INITIATIVE:M-95 STUDY
04/10/2023
• 1,925 mile-long north-south corridor
• 15 states from Maine to Florida• 37 percent of nation’s population• 42 of the nation’s top 100
metropolitan areas based on population and economic activity
• Over 50 coastal and inland ports• 22,000 miles of Class I freight
railroad track• 35 percent of the nation’s vehicle
miles and more than 5.3 billion tons of freight annually
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I95/M-95 Corridor
04/10/2023
Objective • Determine potential business opportunities for
ECMHI and craft strategies for the development of marine highway services along the I-95 corridor
Goals• Analyze specific markets and associated economic
and operational factors related to the M-95 corridor.• Determine total cargo flows along I-95 corridor and
assess the potential diversion of this freight onto a proposed marine highway.
• Provide success factors needed to ensure financial and operational factors are properly addressed.
• Develop specific strategic actions to increase the strength and viability of the region’s marine highway system.
• Encourage the development of freight partnerships between the shipping and logistics community and ports along the I-95 corridor.
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PHB Public Affairs
Project Objective and Goals
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Part I: Data Collection1.1 Literature Review1.2 Industry Listening Sessions
Part II: Market Analysis2.1 Commodity Flow Analysis2.2 Projected Commodity Opportunities 2.3 Corridors & Systems Services2.4 Shipper Surveys & Interviews2.5 Value Proposition
Part III: Operational Development
3.1 Logistics Activity & Modeling3.2 Labor Review3.3 Operational Plan
Part IV: Business Plan & Viability4.1 Maritime Cargo Opportunities4.2 Cost Analysis4.3 Service Review
Part V: Conclusions & Recommendations
Part VI: Environmental Analysis6.1 Environmental Screening/Overview6.2 Baselines PEIS Framework
ECMHI Study
04/10/2023
• Visits to current and anticipated sites for marine highway activity in Baltimore, Canaveral, New Bedford and New Jersey.
• Interviews and discussions within three stakeholder groups
• In-depth validation exercises with four select and varied shippers to review potential vessel types, port pairs, service parameters and rates
• Listening session with public agencies5
Organization Type Number of Interviews
Public Agencies (DOT, MPO, etc.) 15
Port Authorities and Terminal Operators 12
Shippers and Transportation Providers 17
Total 44
Parts I and II: Extensive Stakeholder and Shipper Involvement
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Assumed 25% conversion of filtered tonnage (2% percent of total domestic cargo moving through the corridor by rail and truck). The following practical considerations leads to a smaller expected capture rate.
Transit timesService frequencyFlows are imbalancedHistoric modal performance
Market Analysis of Long Haul Domestic Moves:M-95 Cargo Conversion
• Option 1, the short-haul loop linking New England and Mid-Atlantic ports, with a focus on New Bedford and Baltimore.
• Options 2 and 3, the two long-haul East Coast routes linking New York (or Delaware River) markets with Florida.
• Option 5, a “pendulum” serving both short and long-haul markets, linking New England, Delaware River/Chesapeake Bay, and South East ports.
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Selected M-95 Service Options
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Vessel Types
• The M-95 services that were identified as most promising are uneconomical to operate without financial assistance.
• With assumed handling cost reductions, HMT exemptions and full utilization of the vessels in both directions, service operating costs along the highest performing routes exceed expected revenues by a minimum of $150-200 per load on average.
• The findings affirm why the private sector has not developed ongoing marine highway services to date and why other similar services have not achieved self-sustainability in the past.
• They also provide a roadmap of what is needed in the future to stimulate marine highway use. – Development may require governmental involvement– Increased volumes are not a principal solution to the revenue/cost
gap. – The revenue/cost ratio increases as the distance between port pairs
increases04/10/2023 9
Study Findings
Key factors that have the potential to reduce the revenue/cost gap include:
• Reduce labor costs as a share of total operating costs.– Overall cargo handling accounted for 23-44% of total operating costs.
• Reduce operating costs through use of liquefied natural gas (LNG) fuel. • LNG could reduce vessel-operating costs by about 30%
• Eliminate the Harbor Maintenance Tax on domestic cargos. – This represents about 3-5% of the cost difference.
• Reduce vessel capital costs included in cost estimates. – Service costs include the full cost of acquisition and financing of new dual-
use ships
– Capital-related costs for ships range from about 13-25% of total service costs.
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Conclusions
Additional factors that have the potential to reduce the revenue/cost gap over time include:• Increase rates as fuel costs rise over time.
– As marine highways are more fuel efficient than rail and truck transportation, marine highway rates and revenues could be increased more than direct fuel costs, closing the revenue/cost gap.
• Increase rates in response to increased rail and trucking costs – Highway and rail congestion and other factors such as driver shortages.
• Create tax or other incentives to offset costs – based on quantifiable public benefits, to encourage shippers and transportation
providers to opt for marine highway routes where practicable.
• Extend Atlantic Coast marine highway services to the US Gulf, Mexico and/or Canada – to achieve possible operating cost reduction benefits from longer haul services.
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Conclusions
• M-95 Service Impact Factors– Volume and Capacity – Frequency – Reliability – Balance – Distance – Location – Integrated Door to Door Service – Cargo Type – Vessels – Environmental – Education – Partnerships
• You can download the study at http://www.portofnewbedford.org/hdc/studies/
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Conclusions
04/10/2023 13
Next steps for the Port of New Bedford
▶ International Coastal Shipping Service – MexiMar – Target launch to begin January of 2014▶ Port of New Bedford (MA), Port Canaveral
(FLA), Port of Tuxpan (Mexico)▶ Coastal Domestic moves from new offshore
wind terminal.▶ Cape Wind▶ AMI
▶ 50 Jobs per vessel trip
▶ $200,000 economic impact per vessel trip
Source: US Army Corps / Maritime International
• Weekly ship service for dry, fresh and frozen unitized commodities between:
• Puerto de Tuxpan, Mexico• Port Canaveral• Port of New Bedford
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04/10/2023 16
Offshore Wind/ Renewable Energy
• The European experience: offshore wind has created thousands of jobs in ten years
• Cuxhaven and Bremerhaven: – 3,600 jobs by 2015– 25,000 in Lower Saxony
• Offshore wind is coming to America– Cape Wind– Areas of Mutual Interest (25%
of nation's wind reserves)– Patrick Administration's
commitment to offshore wind– New Bedford Marine
Commerce Terminal
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New Bedford Marine Commerce Terminal
04/10/2023 18
THE PORT OF NEW BEDFORD
Edward Anthes-WashburnHARBOR DEVELOPMENT COMMISSION(508) 961-3000
