Over the past few years the airline industry has been offering competitive prices and competing more then ever for cargo that has been traditionally transported by ships because of their cheaper prices. Because of this ship owners have been looking for ways to keep cost to a minimum and to decrease the time it takes to transport cargo from seller to buyer. The time it takes the ship to transport cargo from one port to another cannot be reduced with out building faster ships, which is not practical because of the cost of development. However the ship owners have had larger ships built to transport more cargo at one time. Forcing some to dredge their harbor entrance and the channel leading to their port. They have also, been putting pressure on terminals, to decrease the time it takes to transport cargo from the ship to truck or rail.
Vessel sharing agreements have also forced ports to improve service. Vessel sharing is when shipping companies form certain partnerships to maximize space abroad ships by filling one ship to capacity with one or more carriers' cargo rather than each partner sailing different ships not loaded to capacity. This affects ports because carriers in these agreements may reduce the number of calls to a port or a port's worse nightmare; stop calling altogether.
These demands placed on the ports have forced them to develop new ways to offer competitive prices between ports for the business of the shipping companies.
Different ports have recently come up with new ways do to this, some have offer financial incentives for shipping companies to rebuild the existing terminals. Others have chosen to keep their existing terminals while turning to technology to help increase the movement of cargo within their port. "In a world where demand for information is at a premium, ports are pushed hard to consistently increase productivity; and, increasingly, productivity is centered on being able to capture key data electronically and optimize its use"(Port of Charleston).
Port of Charleston
The Port of Charleston is the fourth busiest port in the United States and is a good example of a port that has planned for the future by upgrading the port with a state-of-the art computer system. Currently they are using a computer system called the Orion, which is a mainframe-based system that has it limits both physically and in terms of customer interface. "We recognize that in order to remain a leader in the port business, we have got to continually improve productivity on our terminals and improve the way customers are able to interact with us" (Port of Charleston).
The management at the Port of Charleston has realized that one way to improve the port by updating the entire system to a PC-based system. The system includes an interface for billing, finance, break-bulk cargo, and for container yard management. The container yard management system is the most important system because it deals directly with cargo flow and optimizing the terminal performance. This system is a fully integrated, real time, yard management system. That is able to give the status, location, condition, and history of every container right down to the second. To do this it keeps track of the containers by the identification number on each container. "We know the second a top-lifter unloads a truck chassis. We know how many trucks are in the yard at any given time, when they arrived and when they exited. We know how many empties we have, how many chassis, and how many open slots. This system provides a very clear picture of the activity on-terminal and do it in real-time"(Port of Charleston).
This system took many man-hours to develop. Because a computer system like this one cannot be based on laboratory theory, it must be based on experience. The team that developed the yard management system spent a tremendous amount of time interacting with customers, watching, and asking questions. "They were looking hard at the old way of doing things so they could understand the established processes and know what to build on. The Team spent three months in the field in the analysis phase. They watched gate operations, they watched work in the yard, and they met with port users. They even personally attended meetings of the Charleston Motor Carriers to get feedback from the trucker\'s perspective. All this information was critical to giving the project the proper direction and goals" (Port of Charleston).
Another problem facing ports today is the increased in the size of the ships. Because of the increase in the size of many vessels, ports have been forced to increase the depth of their harbor. While the current channel conditions are adequate to serve a large portion of existing commercial vessels, they create delays with larger vessels that must \"ride the tides.\" With a five- to six-foot tidal lift, Charleston regularly moves vessels drawing in excess of the 40-foot project. It is important to note that by the year 2010 the USDOT expects nearly 40% of containerized cargo to be carried on ships capable of drawing more than 40 feet of water. Allowing ships to sail freely from Charleston, regardless of their load or time of day, will hold down transportation costs and improve manufacturers' international competitiveness. It was obvious that the harbor had to be dredged to be a competitive port in the future. Now the only question left was where to get the funding needed for the project. Recognizing the need to accommodate the ever-increasing size of vessels calling Charleston, the Ports Authority began the process to deepen its channels in 1990 with a resolution by the U.S. Congress. Over the next five years, the project proceeded through the required federal steps of the Reconnaissance Phase and a Feasibility Study under the direction of the U.S. Army Corps of Engineers. All of this required preliminary work.
After concluding that the 45-foot project met the engineering, economic cost-benefit, environmental and sponsor financial capability criteria, U.S. Congress authorized the work in the 1996 Water Resources Development Act. Preliminary engineering and design work began in 1997. The above work represents a $3.7 million investment in the Charleston Harbor Deepening Project by the Federal government and the South Carolina State Ports Authority. In March 1999, the U.S. Army Corps of Engineers awarded a $58.9 million contract to deepen the 16-mile long Charleston Harbor entrance channel from 42 feet mean low water to 47 feet MLW. This work in the entrance channel began in June 1999 and should be completed in the last quarter of 2001. A $33.9 million contract for work in the lower harbor was awarded and began in the Wando River in July 1999. This covers approximately two years of work deepening channels from the Wando Welch Terminal and the mouth of Shipyard River to the entrance channel.
While ongoing channel maintenance is financed entirely by the U.S. government, deepening projects are cost-shared between the Federal government and local sponsors. The FY1999 Energy & Water Appropriations bill passed by Congress included $22 million for the work to begin in 1999. Members of South Carolina's U.S. Congressional delegation have indicated they will continue to work diligently for federal funds. Senator Hollings and Congressman Clyburn have been especially helpful. The Federal FY2000 Energy & Water Appropriations passed by Congress provided $37 million for harbor deepening in 2000, helping to ensure the project's timely completion. The full House and the Senate recently gave preliminary approval to $16.7 million for the deepening and widening project in federal FY2001 (Port of Charleston).
On the local side, the Ports Authority has received commitments for $40 million from the South Carolina General Assembly for harbor deepening work. In March 1999, the General Assembly passed legislation providing $16 million for harbor deepening to get underway, and in June the remaining $24 million was committed through a Bond Bill. The project requires another $24.6 million from the State to be completed.
The Ports Authority and its supporters from across South Carolina continue to build a strong case with legislative leaders for full funding and timely completion of the deepening project. The State Chamber of Commerce, every urban chamber in the state, major employers and the entire waterfront community has supported the project.
Port Authority of Virginia
The Port of Virginia is among the largest and most successful ports in the United States, the Port of Virginia is owned and operated by the Virginia Port Authority. This port is well established and trade with more than 100 different countries. "The Port's success is due to its ability to react to market conditions and maintain a strong mix of cargo, and a management philosophy of providing customers with modern facilities, and responsive service and effective operations"(Virginia Port Authority).
Unlike the Port of Charleston, the Port of Virginia has established a well working on site management system. That has already integrated today's technology to help obtain maximum performance. The Port of Virginia has also been lucky, because their harbor has been able to accommodate today's larger ships. That is why the Port of Virginia has been focusing most of their attention market share for the future and development of the port itself.
The Port of Virginia has a similar system in operation. Because of the complexity of the system used by the Port of Virginia they have created an information systems department recently. "The Information Systems Department designs, implements, maintains, and operates computer systems that provide each VIT department and customer with the information and tools needed to effectively, efficiently, and competitively operate the Port of Virginia" (Virginia Port Authority).
Maintaining market share among competing ports on the U.S. East Coast is an ongoing challenge. Because of this the Virginia Port Authority has employed a special team of maritime experts to assess marketing, operations and facilities of the Port of Virginia and recommend improvements to help insure success of the port in the next century. "The team of maritime experts led by VZM (VZM is the consult team of Vickerman, Zachery and Miller) followed two criteria in producing the plan-existing port wide cargo handling facilities, and the plan must be maximized before developing new or improved facilities, and the plan must be market-driven with a balance between forecasted growth and cargo levels the Port can handle" (Virginia Port Authority).
The overall report predicts an increase in volume in all types of cargo the port handles. It shows that the amount of cargo handled will increase about a total of 550% by the year 2010. However to be able to attract this amount of volume the port will have to spend more then 334.8 million on improvements to existing facilities and the creation of new ones. "We must remain committed to taking advantage of the tremendous opportunities and growth outlined in the 2010 plan, recognizing that investment and capital improvement projects in the Port are essential to meet the need of our customers' growth" (Virginia Port Authority).
The main reason why containerized cargo dominates the Port of Virginia is because of the labor realization between the Virginia Port Authority and their employees and along with their ability to offer deep water and room for the increasingly larger vessels. "Over the years we have attracted most of the major lines because of our service, competitive rates, geography, labor climate, access to Norfolk Southern rail services and good motor carrier support. Once the major lines came here and then started rationalizing services through consortiums our position was solidified. We expect that to continue" (Virginia Port Authority).
For a port to be competitive in the future, each individual port must have a plan. An important factor ports must take into account when planning for the future is the accessibility of the port. Does it have the capability of handling larger ships? And if not is it possible to make changes to accommodate these continually growing ships? Also more cargo will be transported by container, in the future. Because of this a port most maintain a well-run container terminal with the ability to transfer each container to rail or truck in a timely manner. If a port is able to offer this and maintain good customer relations, I feel that they will be able to say competitive in the future.
Key Volume StatisticsContainer Volume FY1999 FY2000
Export TEUs 690,771 823,918 19%
Import TEUs 656,847 743,675 13%
TOTAL TEUs 1,347,618 1,567,593 16%
Non-Container Tons FY1999 FY2000
Charleston 543,357 493,543 -9%
Grain Elevator 19,820 66,448 235%
Georgetown 1,709,949 1,635,646 -4%
Port Royal 364,153 336,793 -8%
TOTAL 2,637,279 2,532,430 -4%
Vessels FY1999 FY2000
Charleston Ships 1,963 1,981 1%
Georgetown Barges 294 286 -3%
Charleston Barges 63 123 95%
Georgetown Ships 108 107 -1%
Port Royal Ships 27 30 11%
Grain Elevator Ships 2 6 200%
TOTAL 2,457 2,533 3%
For More Information Contact:Anne Moise or Byron MillerTel: 843-577-8121 FAX: 843-577-8127E-mail: firstname.lastname@example.org