Trends and opportunities Download PDF
The market
In 2006 the United States marine industry generated a total of US$36 billion in revenue, with freight sales the most lucrative sector totalling US$30.1 billion, or 83.5 per cent or revenue. Compound annual growth rates (CAGR) over the next four years are expected to average 1.8 per cent.
With just over 32,000 kilometres of navigable inland waterways, freight transportation via inland waterwats is considered the safest, least polluting and most effective mode of transportation. In 2005 a total of 2.3 billion metric tons of goods was transported by cargo and containerized vessels, with cargo vessels being the most used mode of transport.
The most important inland waterways for commerce are the Mississippi River System, the Gulf Intracoastal Waterway, the Colombia River System, the McClellan-Kerr Arkansas River Navigation System, the Tennessee-Tombigbee Mobile River System, and the Hudson River-New York State Barge Canal System. The states of Florida, California, Louisiana and Texas share have the highest share in the market for commercial water transportation with 34 per cent.
Los Angeles, Long Beach, New Yor, Seattle/Tacoma, Savannah, Charleston, Norfolk, Oakland, Houston, Miami and Port Everglades constitute the top eleven ports for container trades, encompassing 90 per cent of the market. Of these, Los Angeles and Long Beach are the number one and two ranked ports in the United States, sharing the San Pedro Bay in Southern California. Combined they constitute the fifth largest container port in the worl, handling 14.2 million TEUs in 2005, equating to 40 per cent of all cargo entering the United States. Future projections expect this to increase to 35 million TEUs by 2020.
In the years between 2001 and 2005 foreign tanker arrivals importing goods from overseas increased by 19.9 per cent, with exports growing by 8 per cent. This unanticipated growth resulted in serious backlogging and delays at ports unable to unload containers efficiently, as facilities and staff were stretched to the limits. In 2004 turnaround time grew to some seven days, double the normal time required, resulting in net losses running in the millions for manufactures unable to have their goods delivered on time to distributors for the Christmas season. As a result of the increase in trade the Inland Waterways Trust Fund has allocated US$184 million towards the repair and infrastructure of facilities, however, are lobbying for more.
Whilst investment into port infrastructure is constantly being negotiated and changed by all parties involved such as federal, state and local governments, private firms and the Coast Guard, investment into port security has been a major focus advocated by the department of Homeland Security. An additional US$260 million was granted to supplement the regular FY 2007 funsing, totally approximately US$867 million for the fiscal year. However, current investment falls short of the US$10 billion ports say they need for infrastructure, homeland security, and environmental upgrades.
Unfortunately, as a means of protecting the domestic industry the U.S. has instituted cabotage laws prohibiting any foreign vessel from being used in a commercial sense between all U.S. states and ports, including the non-continguous states of Hawaii and Alaska. Known as the Jones Act, all commercial vessels transporting merchandise are required to be built, owned, operated and manned by U.S. citizens, and registered under the U.S. flag. This however, pertains solely to the vessels themselves and not the onboard or support equipment for the vessel, including marine parts, communication and software. Australian manufactures have much to gain from innovation of high quality, high technology products.
Despite being unable to export vessels for a commercial purpose to the U.S., Article 2.6 of the Australian-United States Free Trafe Agreement (AUSFTA) regarding goods repaired and altered, dictates that customs cannot be applied to a good "regardless of it's ultimately means that the restrictions prohibiting Australian firms from performing repairs or alterations on marine products from the U.S. has been lifted, as no heavy customs duties are imposed. Furthermore, tariffs savings on manufactured goods of between 2.5 per cent to 7 per cent, help to raise the profile of Australian technology to U.S. buyers and end users.
Finally, in light of the emerging environmental concerns raised by residents of areas located near major shipping ports, there has been a push to reduce toxic emissions caused by the vast number of vessels and vehicles servicing ports and harbours countrywide. Constituting major environmental and health hazards due to their fixed locations and continuous activity, ports administrators are now working towards reducing emissions through such initiatives as offering rebates to truck owners when they replace old rigs with cleaner ones, restricting ship speed to only 40 miles per hour within harbours, installing dockside electrical outlets for ships to use while stationary, and enforcing regulations that would see all ships as well as cargo trains use cleaner fuel sources. These new regulations will be introduced gradually, with the twin ports of Los Angeles and Long Beach leading the way, and contrary to beliefs that they will raise operating costs, development into promoting this cleaner approach will also create “green technology” opportunities for the ports sector in the future.
Opportunities
AUSFTA has somewhat lifted restrictions on Australian firms in repairing and altering marine products arriving from the U.S. by eliminating heavy customs duties, however, the Jones Act still prohibits the use of foreign vessels by and large in the States. Some key opportunities include:
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Port development and infrastructure.
- High-tech marine technology; communications systems, software, security.
- Specialised services for repair and maintenance.
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High-tech products security systems and products for port security.
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Development of "green technology" for ships, refitting and maintenance.
Further information
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