Images of fleets of large container ships at anchor waiting to be unloaded, terminals at capacity, stressed customs clearing functions and a growing truck driver shortage underline just how fragile our supply chains are. These interruptions will jeopardize our on-time inventory systems, manufacturers’ reliance on parts sourced from overseas, the delivery of the very consumer goods that we Americans count on, and much more. Further, these delays not only affect our economy, but they also distress our foreign trading partners. In short, as the largest consumer economy in the world what happens in the United States affects the interconnected global economy. Only time will tell what the long-term damage will be.
Seemingly there are no quick fixes. All the much-needed improvements at the ports and transportation infrastructure will take time and money to implement. Today, the container is the global transport platform of choice, with 70% of all manufactured goods being moved in containers. Future volumes will grow. We missed the Container Revolution that has encircled the globe over the last thirty years, we are not prepared, and today we are paying the price.
How does the world move containers? First, most countries use three modes of transportation to move containers – road, rail, and water — based on a hub and spoke system. The crucibles of the container business are reliability and frequency. Large ships discharge loads at modern container ports and from there, containers are distributed either by road, rail, or water, which ever makes sense and is the most efficient, economical, and environmentally sensitive. If rail or water are the chosen to distribute from hub ports, trucks deliver the containers from the spoke ports and rail head depots to the final destination. Trucks are always the first mile or last mile facilitators.
Today up to 40% of all containers are distributed from hub to spoke ports by small purpose-built short sea container vessels. In fact, there are more than 3,000 small, environmentally-sensitive short sea container vessels in use worldwide. We liken these small vessels to local Fed Ex or Amazon delivery trucks. Regrettably we have none of these small container vessels in the United States.
There is a silver lining in the present debacle, and that is to highlight and rediscover the significant value of our American Marine Highway with its twenty-five thousand miles of navigable water and an existing port network. The American Marine Highway costs nothing to build and little to maintain. There are no traffic lights, bridges, or potholes on the American Marine Highway. Water dictated the pattern of the country’s development and is the underutilized safety valve that will add its unlimited transportation distribution capacity to our failing and at limit landside transport systems.
Importantly, water is the most environmentally sensitive means of transport in the world.
To mirror the world’s systems of moving containers from our hub ports to our numerous existing spoke ports, we must build small purpose-built container vessels. These vessels will be the trucks of the American Marine Highway with our existing regional (smaller) ports as the on and off ramps. We can accomplish the task of building a fleet of environmentally sensitive fuel-efficient vessels in our regional shipyards just like we did during WWII with our Liberty Ships. This effort will create thousands of jobs in our commercial regional shipyards.
Summing up, the container is here to stay. Inevitably volumes will grow to meet the demands of growing economies and populations. Our challenge is to adopt the container distribution systems that have been developed worldwide. We have the American Marine Highway. Now we have to use it!