Role of Ports in TradeRole of Ports in Trade

Angela MorleyAngela MorleyJensen YipJensen Yip

Jake NorquistJake NorquistLee Robles Lee Robles Ryan MartinRyan Martin

The US Port systemThe US Port systemWaterways & PortsWaterways & Ports

–More than 1,000 harbor channelsMore than 1,000 harbor channels–25,000 miles of inland, intracoastal, and coastal 25,000 miles of inland, intracoastal, and coastal waterways.waterways.–Serving over 300 ports with more than 3,700 terminalsServing over 300 ports with more than 3,700 terminals–Links to 152,000 miles of railLinks to 152,000 miles of rail

460,000 miles of pipeline460,000 miles of pipeline45,000 miles of interstate highways45,000 miles of interstate highways

Intermodal connectionsIntermodal connections–Vessels, vehicles, and system usersVessels, vehicles, and system users

Decision making driven by marketplaceDecision making driven by marketplaceNational, State, local all participateNational, State, local all participate

LogisticsLogistics

Importance of U.S. PortsImportance of U.S. Ports Provides American businesses with competitive Provides American businesses with competitive

access to suppliers/ marketsaccess to suppliers/ markets– Mainstay of global economic growthMainstay of global economic growth– Enables U.S. to be worlds largest trading partnerEnables U.S. to be worlds largest trading partner

Provides cost effective mean for moving bulk Provides cost effective mean for moving bulk commoditiescommodities– Grain, coal, petroleum, etc.Grain, coal, petroleum, etc.– >95% of overseas trade in/ out moves by ship>95% of overseas trade in/ out moves by ship

Includes 9 million barrels of oil dailyIncludes 9 million barrels of oil daily Key strengths and issuesKey strengths and issues

– Flexibility/ ability to adapt to rapidly shifting market Flexibility/ ability to adapt to rapidly shifting market demandsdemands

– No other system can accommodate future growth in No other system can accommodate future growth in overseas tradeoverseas trade

Other ImportanceOther Importance

National securityNational security– Vital role in mobilizing/ maintaining national securityVital role in mobilizing/ maintaining national security– Lifeline for equipment and suppliesLifeline for equipment and supplies

Environmental valueEnvironmental value– Coastal and marine ecosystems crucial for commercial Coastal and marine ecosystems crucial for commercial

and rec. fishing, wildlife watching, boating, drinking and rec. fishing, wildlife watching, boating, drinking waterwater

– Environmentally responsible method of transportationEnvironmentally responsible method of transportation Recreational valueRecreational value

– Passenger vessels provide sightseeing, excursion, Passenger vessels provide sightseeing, excursion, dining, gaming, cruises, etc.dining, gaming, cruises, etc.

QuestionsQuestions

What area of the government participates in What area of the government participates in the management, financing and operation of the management, financing and operation of the U.S. port system?the U.S. port system?

What is an issue that the ports are facing What is an issue that the ports are facing due to overseas trade growth?due to overseas trade growth?

Ports and JobsPorts and Jobs

4 Million Americans4 Million AmericansWages are 13 - 17% higherWages are 13 - 17% higher$44 billion in personal income$44 billion in personal income$16.1 billion was paid in taxes$16.1 billion was paid in taxes

Exportation and CompaniesExportation and Companies

Companies are more profitableCompanies are more profitable Produce twice as muchProduce twice as much Overall productivity up 12 – 16% Overall productivity up 12 – 16%

North American Cruise IndustryNorth American Cruise Industry

Very dependent on portsVery dependent on ports 30.06 billion in economic activity was 30.06 billion in economic activity was

generatedgenerated 9 million people went on cruises9 million people went on cruises 77% of global cruise embarkations were 77% of global cruise embarkations were

from US portsfrom US ports

QuestionsQuestions

Name one reason ports help jobs.Name one reason ports help jobs.

QuestionsQuestions

How does exportation help companies?How does exportation help companies?

Top Trading PartnersTop Trading Partners

ExportsExports (Goods)(Goods)

Imports (Goods)Imports (Goods)

Products from Top 3 ImportersProducts from Top 3 Importers Canada 18.2%

– Passenger cars, new and used $36.3 (in millions)– Gas-natural $26.8– Crude oil $24.1

China 14.0%– Computer accessories, peripherals and parts $25.7– Computers $14.4– Apparel and household goods-other textiles $13.1

Mexico 10.7%– Crude oil $23– Auto parts and accessories $20.6 – Passenger cars, new and used $10.8

Goods the U.S. exports to the top three Goods the U.S. exports to the top three trading partnerstrading partners

Canada 22.8%Canada 22.8%– Parts and accessories of vehicles $23.5 (in millions)Parts and accessories of vehicles $23.5 (in millions)– Passenger cars, new and used $12Passenger cars, new and used $12– Trucks, buses and special purpose vehicles $10Trucks, buses and special purpose vehicles $10

Mexico 13.5%Mexico 13.5%– Electric apparatus $8.7Electric apparatus $8.7– Computer accessories $6.2 Computer accessories $6.2 – Plastic materials $5.8 Plastic materials $5.8

China 5.0%China 5.0%– Civilian aircraft $3.8 Civilian aircraft $3.8 – Semiconductors $3.3 Semiconductors $3.3 – Soybeans $2.2 Soybeans $2.2

QuestionsQuestions

What country imports the most to the United What country imports the most to the United States? States?

What is the #1 good Imported from Canada? What is the #1 good Imported from Canada?

Current IssuesCurrent Issues

Amount of trade and cargo dramatically Amount of trade and cargo dramatically increasingincreasing

– Due to globalizationDue to globalization– High consumption of AmericansHigh consumption of Americans– Demand is so large that it is hard handle Demand is so large that it is hard handle everything being sent to U.S.everything being sent to U.S.

Current IssuesCurrent Issues

Greater need for capital Greater need for capital

investment in port infrastructureinvestment in port infrastructure– Shared costs between public and private Shared costs between public and private

sectorssectors– 2003-Public invested $1.7B to meet shipping 2003-Public invested $1.7B to meet shipping

industry needsindustry needs– Likely to increase as trade continues to Likely to increase as trade continues to

increaseincrease

Current IssuesCurrent Issues

Vessel sizes are increasing Vessel sizes are increasing and require larger channelsand require larger channels– Bigger = betterBigger = better– Most ports have depths of 35-45 ft. Today’s Most ports have depths of 35-45 ft. Today’s

large ships require depths of 45-53 ft. large ships require depths of 45-53 ft. – Dredging adds costs and implicates the Dredging adds costs and implicates the

environmentenvironment Disposal?Disposal? Disruption to environmentDisruption to environment

Current IssuesCurrent Issues

SecuritySecurity– Ports handle essential cargoes for military Ports handle essential cargoes for military

operationsoperations– Gateway into the countryGateway into the country

Management of 6 U.S. ports and Dubai Ports World Management of 6 U.S. ports and Dubai Ports World conflictconflict

Updating with radiation monitors, detection systems, Updating with radiation monitors, detection systems, and ID systemsand ID systems

Questions?Questions?

Name 1 reason why the amount of trade has Name 1 reason why the amount of trade has increased with ports?increased with ports?

Globalization, U.S. demand and Globalization, U.S. demand and consumptionconsumption

Questions?Questions?

Why are people concerned with the Why are people concerned with the environment when talking about ports?environment when talking about ports?

Dredging, harmful effects on natural eco-Dredging, harmful effects on natural eco-systems, disposal of dredged materialsystems, disposal of dredged material

Why managers should careWhy managers should care Ports serve as a gateway to goodsPorts serve as a gateway to goods

– Both coming in and going outBoth coming in and going out– 95% of goods are in same way linked to ports95% of goods are in same way linked to ports

A partA part A raw material, etc.A raw material, etc.

Can cause major problemsCan cause major problems– Possibility of bottlenecksPossibility of bottlenecks– StrikesStrikes

A strike could put an entire company out of businessA strike could put an entire company out of business

SummarySummary

Type of productsType of products Volume of tradeVolume of trade ImportsImports ExportsExports

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