Executive Briefings

Another Congestion Crunch Is Coming, and It Will Be Far Worse Thand the Last One

Experts can quibble over a few percentage points here or there, but no one is arguing about the need to expand U.S. transportation infrastructure, to handle an expected surge of freight volumes in coming years. How that problem materializes in the short term is uncertain. Asking whether port and infrastructure congestion will recur in 2006, Doug Tilden, chief executive officer of Marine Terminals Corp., answered his own question: "I haven't got a clue." The real question, he said, isn't whether congestion will pose a serious problem, it's when. U.S. container volumes, loaded and empty, totaled some 38 million twenty-foot equivalent units (TEUs) in 2005. Based on current projected growth rates, ports must add capacity equal to the size of the Port Authority of New York/New Jersey every year. What's more, Tilden said, future congestion won't be the result of random events such as railroad bottlenecks, the 2002 West Coast port lockout, or longshore labor shortages in 2004. It will be "systemic and sustained." Positive steps include Southern California's PierPASS program for handling containers in off-peak hours, additional labor hirings and bigger investments by the railroads in equipment and systems. But Tilden is worried about what he views as excessive free-time allowances for containers sitting at marine and intermodal terminals, and slow progress toward the formation of neutral chassis pools. The impact of big new containerships, some with capacity of 8,000 TEUs or more, also remains a question. But Jon DeCesare, president and chief executive officer of WCL Consulting Inc., was more willing to make a specific prediction. "The tidal wave hits in 2010," he said. That's when he expects congestion, caused by even bigger ships and the usual uncertainties such as bad weather and security concerns, to peak.

Visit www.mtcorp.com and www.wclconsulting.com

Experts can quibble over a few percentage points here or there, but no one is arguing about the need to expand U.S. transportation infrastructure, to handle an expected surge of freight volumes in coming years. How that problem materializes in the short term is uncertain. Asking whether port and infrastructure congestion will recur in 2006, Doug Tilden, chief executive officer of Marine Terminals Corp., answered his own question: "I haven't got a clue." The real question, he said, isn't whether congestion will pose a serious problem, it's when. U.S. container volumes, loaded and empty, totaled some 38 million twenty-foot equivalent units (TEUs) in 2005. Based on current projected growth rates, ports must add capacity equal to the size of the Port Authority of New York/New Jersey every year. What's more, Tilden said, future congestion won't be the result of random events such as railroad bottlenecks, the 2002 West Coast port lockout, or longshore labor shortages in 2004. It will be "systemic and sustained." Positive steps include Southern California's PierPASS program for handling containers in off-peak hours, additional labor hirings and bigger investments by the railroads in equipment and systems. But Tilden is worried about what he views as excessive free-time allowances for containers sitting at marine and intermodal terminals, and slow progress toward the formation of neutral chassis pools. The impact of big new containerships, some with capacity of 8,000 TEUs or more, also remains a question. But Jon DeCesare, president and chief executive officer of WCL Consulting Inc., was more willing to make a specific prediction. "The tidal wave hits in 2010," he said. That's when he expects congestion, caused by even bigger ships and the usual uncertainties such as bad weather and security concerns, to peak.

Visit www.mtcorp.com and www.wclconsulting.com