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HIGHLIGHTS
Five decades ago, the containership revolution started in the United States, changing how the United States and the world handle international freight transportation. In 2006, world maritime container traffic was estimated at 417 million twenty-foot equivalent units (TEUs) (loaded and empty) — 10 percent more than the 378 million TEUs transported in 2005. Today, one container in every nine carrying global trade is bound for or is coming from the United States, comprising 11
percent of worldwide container traffic.
The year 1956 saw the United States pioneer the world’s first use of containers for intermodal sea-land movements. Prior to this innovative transfer of containerized cargo between Newark, New Jersey, and Houston, Texas, finding a way to seamlessly move cargo from sea to land and land to sea was the greatest challenge for intermodal freight transportation. A “containership revolution” was born when it was publicly demonstrated that standard metal containers could successfully move goods on land-sea intermodal journeys.
Since that first journey over fifty years ago, containers have greatly changed the movement of U.S.-international freight, port operations, and the distribution of port’s share of total oceanborne trade. They have also impacted rail and trucking operations to and from seaports, affecting traffic on the landside of these ports.
From 1995 to 2006, world container traffic more than tripled in volume from 137 million to 417 million TEUs, growing at an average annual rate of about 11 percent (table 1). Expanding U.S. and global economic activity fueled this phenomenal growth in maritime container freight. With the exception of a few products, such as cars transported in specialized vessels, huge container vessels carry manufactured products of nearly every description.
Although the United States remained the leading trading nation, accounting for 12 percent of total world merchandise trade in 2005 , the United States ranked second in container traffic, a position it has held since relinquishing the number one position to China in 1998. The United States’ position in container traffic directly relates to its position as the world’s largest trading partner with the world’s biggest economy. U.S. total imports ranked first with over 16 percent of global imports in 2005, while U.S. total exports accounted for 8.7 percent of global exports, following Germany, which was the leading exporter. The United States also remained the world’s largest economy, accounting for 28 percent of world gross domestic product (GDP) in 2005, up from 25 percent in 1995 (table 1).
INBOUND V. OUTBOUND TRAFFIC
America’s container seaports are gateways for both imports and exports. But, overall, U.S. seaports handle more TEUs of imports than exports. This U.S. deficit in maritime container traffic has been on the increase since the late 1990s. Prior to 1998, the deficit of U.S.-international container traffi c was less than 1 million TEUs per year, but by 2005 this gap had widened to 9 million TEUs (figure 1). In 2005, maritime container imports accounted for two-thirds of container traffic passing through our ports, a major increase from just over one-half in 1995. During this period, the U.S. container trade deficit mirrored that of the overall U.S. merchandise trade deficit, growing at a similar pace. The United States’ position in container traffic directly relates to its position as the world’s largest trading partner with the world’s biggest economy.
U.S.-international maritime container traffi c nearly doubled between 1995 and 2005, and comparable growth is expected over the next several years (fi gure 2). In 2005, about 26 million TEUs of U.S.- international oceanborne trade moved through U.S. container ports, up from 13 million in 1995 (PIERS annual data). On a typical day in 2005, U.S. container ports handled an average of 71,000 TEUs, up from 37,000 TEUs per day in 1995. This large number of containers moving through our nation’s seaports highlights the significance of container traffic and its potential impact(s) on the economy, local communities, national security, and the environment. The growth in container traffic has resulted in increased vessel, truck, and rail services in and around port regions. Challenges posed by the largescale movement of container traffi c include:
* maintaining efficient cargo flows from point-oforigin to final destination in a safe and secure manner,
* improving air quality and reducing noise surrounding port areas, and
* removing freight bottlenecks at intermodal transfer locations where trucks and railroads connect to marine terminals.
PORT CONCENTRATION
Container traffic in the United States tends to be highly concentrated and is becoming even more so as the use of larger, faster, and more specialized vessels call the ports that are capable of handling them. Because the larger cranes, berths, and storage yards; advanced information technology; and additional dredging needed to accommodate this demand requires significant investments, the limited number of ports that have expanded their investments has resulted in concentrations of container traffic at these facilities.
The top 10 U.S. container ports accounted for 85 percent of U.S. containerized traffic in 2005 (measured in TEUs), up from 78 percent in 1995 (table 2). Five of the top 10 container ports in the United States are on the west coast, four are on the east coast, and one is on the gulf coast (table 2). Between 1995 and 2005, the ports of Los Angeles and Long Beach grew the most in terms of absolute level of container traffic, reflecting increased U.S. trade with Pacific Rim countries. The ports of Savannah, Los Angeles, and Houston had the highest average annual growth rates (table 2). The growth rates for Savannah and Houston reflect the expansion in U.S. container trade with Latin American countries and changes in shippers’ decisions on how to move their cargo. For example, in order to limit the impact of port terminal or waterway closures for weather-related and other reasons, some shippers and carriers have included redundancy (e.g., multiple distribution center locations and additional vessel calls) in their supply chains and vessel rotations.
Between 1995 and 2005, oceanborne containerized cargo handled at the Port of Savannah increased by 13 percent, making it the fastest growing port in the nation. Accompanying the growth in containerized traffi c has been the establishment of import distribution centers by several national retailers to handle the thousands of TEUs transiting the nation’s seaports.
REGIONAL PORT TRENDS
Over time, the use of oceanborne containers to transport international trade has affected the distribution of total maritime trade among U.S. ports. In the 1980s, when U.S.-Asia-Pacific Rim trade was modest, east coast ports handled the majority of U.S.-international maritime trade. As trade with Asia grew, the east coast ports’ share of the value of trade declined while west coast ports’ share increased reflecting the growth in container traffic between the two regions. Also during this period, changes in industrial activity in the Midwest affected the volume and type of cargo moving through Great Lakes ports. During this period, several industrial changes, such as changes in the location and distribution of fi nal assembly plants and companies that produce auto parts, affected manufacturing activities in the Midwest. Since the 1990s, some auto companies and parts producers have moved out of the Midwest, impacting overall goods movements in the Great Lakes region. Gulf of Mexico ports experienced a modest increase in their relative share as trade with Latin America grew.
Over half, nearly 55 percent, of U.S. containerized merchandise trade in terms of TEUs passed through west coast ports in 2005, up from 42 percent in 1980. Regionally, west coast ports grew the fastest during this 25-year period (figure 3). Although west coast ports handled the most container trade, they also had a larger share of the oceanborne containerized trade deficit, in terms of the export-import balance, than other regional U.S. ports. Overall, west coast ports serve more as U.S. import gateways than as export gateways to the rest of the world. In contrast, east coast ports tend to handle more container exports than imports. Gulf coast ports handle nearly an equal share of container imports and exports.
TABLE 2 Top 10 U.S. Maritime Container Ports: 1995-2005 (Thousands of TEUs)
Container trade also affects the pattern of freight movement within the United States. Nearly all U.S. oceanborne container trade is transported by rail carriers, long-haul truck carriers, or local truck carriers to and from origins and destinations throughout the country. The growth in U.S.-international merchandise trade, particularly U.S. containerized trade, is placing pressure on the nation’s transportation network and influences traffic congestion in the areas surrounding the major U.S.-international gateways.
VESSEL CALLS AND CAPACITY
Over the past two decades, the concentration of container vessel calls at U.S. ports has shifted, reflecting changes in containerized traffic trends. In 2005, the top five U.S. container ports handled over half (55 percent) of containership calls to and from the United States and 61 percent of the container cargo capacity (table 3).
U.S. maritime ports also handled larger container vessels, measured by the average vessel size per call. The average size (per call) of container vessels calling at U.S. ports was nearly 45,000 deadweight tons (dwt) in 2005, up from 38,000 dwt in 2000 (table 3). By contrast, the average size of container vessels calling at ports worldwide was 34,000 dwt (MARAD 2006). Increases in vessel calls and containership capacity impact port operation, port productivity, and the infrastructure requirements needed to accommodate these mega postpanamax vessels2 as well as the environment and surrounding community.
In 2004, the U.S. ports of Los Angeles, Long Beach, and New York-New Jersey (combined) ranked among the world’s top 20 container ports when measured in TEUs, placing 8th, 12th, and 15th, respectively (table 4).
TRADING PARTNERS
The top fi ve overall U.S. containerized cargo trading partners in 2005 were all Asian countries: China (mainland), Japan, Hong Kong (categorized as a special administrative region of mainland China), Taiwan, and South Korea. China was the leading Postpanamax ships are too wide to transit the Panama Canal locks. They typically have widths exceeding 32.2 meters (105.6 feet). Recent designs of these vessels are able to carry more than 9,000 TEUs. For the analysis in this report, U.S. merchandise trade with mainland China and Hong Kong are presented separately. containerized merchandise trade partner, accounting for 43 percent of U.S. maritime import TEUs, up from 25 percent just five years ago in 2000. China (mainland) accounted for 19 percent of the export TEUs in 2005, up from 9 percent in 2000 (fi gure 4a and 4b). During this period, while China’s share grew, the other top five trading partners saw declines in their maritime containerized cargo with the United States. Japan is the second largest trading partner for U.S. oceanborne containerized exports, having been overtaken by China in 2003.
U.S. imports and exports with its major trading partners vary by types of goods, and this affects the types of vessels (e.g. container, dry bulk, general cargo, or tanker) number of port calls, and the seaports used. For example, while most U.S.-Canada maritime trade involves agricultural products, lumber, and petroleum products, most U.S.-German maritime trade involves manufactured products, such as automobiles and machinery. Also, while U.S. maritime imports from Japan were valued at about $7,000 per ton, U.S. exports to Japan were valued at $500 per ton, refl ecting differences in the types of goods and the growth in high-value containerized imports to U.S. ports. For example, major U.S. waterborne imports from Japan include passenger cars and parts, and electronic equipment; major U.S. waterborne exports to Japan include agricultural products, machinery and equipment, and chemicals. The major U.S. merchandise imports from Latin America include textile and apparel, machinery, and agricultural products. The major exports include machinery, motor vehicles and parts, and chemicals.
TABLE 3: Top 25 U.S. Port of Calls and Capacity by Vessel Type: 2005
ENTRIES OF OCEANBORNE CONTAINER UNITS
The containers entries data represented in the next two sections and in figures 5 and 6 are different from the TEUs data presented earlier in the report. The entries data, from the Customs and Border Protection Service, count individual container units, while the TEUs data refer to twenty-foot equivalent units (i.e., one 20-foot equivalent container equals one TEU and one 40-foot container equals two TEUs). The challenge of handling large volumes of containerized imports from our trading partners can also be seen in the number of individual container entries processed by the U.S. Customs and Border Protection. In 2005, there were over 11.4 million oceanborne container entries into the United States, up 91 percent from nearly 5.9 million in 2000
(figure 5).
After a slight decline in the number of oceanborne containers entering the United States in the aftermath of the September 11, 2001 attacks, the nation’s seaports have handled an increasing number of container units.
CONTAINER ENTRIES BY ALL MODES FROM ALL COUNTRIES
Overall, there were nearly 26 million container entries into the United States by all modes of transportation in 2005, up 37 percent from 19 million in 2000. In addition to the nearly 11 million ocean borne containers used to bring imports into the United States, over 15 million containers entered the nation by truck and rail from Canada and Mexico in 2005 (figure 6). The large number of containers crossing by land border into the United States by surface modes reflects the continued importance of overall U.S. trade with its top two trading partners, Canada and Mexico. From 2000 to 2005, the number of truck, rail, and maritime containers (full and empty) crossing into the United States rose by 10, 23, and 91 percent respectively.
CONTAINER PORTS AND DATA NEEDS
Comprehensive and comparable data for all modes of transportation, including intermodal transfer points, are necessary to present a complete picture of containerized cargo movements to, from, through, and within the United States. No single data source currently provides all the data needed for true multimodal and i n t e r m o d a l containerization research and analysis for all modes. The lack of data on commodity details for all containers and the lack of U.S. outbound border crossing information for container traffi c by truck and rail pose a problem for analyzing the use and performance of the nation’s ports and border infrastructure.
Also, with regards to analyzing container transportation trends, there is the lack of information on true origins and destinations of container shipments within the United States. This data gap limits analysis of major freight corridors to and from U.S. seaports and border gateways and affects our understanding of freight capacity, highway congestion, and traffic delays related to U.S.-international freight transportation.
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