Report CopyRight/DMCA Form For : Eastern Maine Development Corporation Emdc Searsport
Eastern Maine Development Corporation EMDC Searsport Bangor Logistics Corridor Project Logistical study and report prepared for by Maine Maritime Academy Loeb Sullivan School of International Business amp Logistics Master of Science Program Global Logistics amp Maritime Management GLMM Graduate Class 2012 Final Report
Executive Summary 4,Project Overview 6,Research Methodology 7. Research Limitations 8,Background Research 8,US Port Developments 8. Global US Maine Economic Outlook 9,Panama Canal Panama Canal Expansion Suez Canal 9. East Coast Congestion Implications for Maine 11, Maine s link to the Northeast Midwest Population Centers 11. Meetings Tours 12,Meeting Table 12,Port of Los Angeles 15. POLA Table Findings 16, Biomass marketing as it relates to the logistics corridor 17. Identified Industries 17,Industrial Consumer Products 17. Time sensitive and Perishable Products 18,Logistics Providers Industry Interests 18. Forest Products 18,Results Summary 18, Strategic analysis for Searsport Bangor Corridor 24. Force Field 27,Other forces affecting the corridor 27. Implications 29,Infrastructure Recommendations 30,Recommendations 32. Strategy 32,Consolidation Freight Forwarding Co op 32. Third Party Rail Provider 33,Project Limitations 34. Areas for Future Study 34,Appendix 1 Global US Economic Outlook 35. Appendix 2 Panama Canal 37,Appendix 3 East West Highway 42. Appendix 4 Short sea shipping 44,Appendix 5 Meetings Tours section 46. Appendix 6 Forestry Industry 48,Appendix 7 Time Sensitive Perishable 49. Appendix 8 Current Maine Trade Statistics 54,Appendix 9 Industrial and Consumer Products 56. Appendix 10 Third Party Logistics Transportation Providers Other Industry Interests 63. Appendix 11 Strategic analysis for Searsport Bangor Corridor 65. Appendix 12 Biomass Fuel Producer 68,Appendix 13 Regional Maps 72. Works Cited 77,Executive Summary, For several years in an effort to stimulate new business growth within the state. the Eastern Maine Development Corporation EMDC has researched the possibility of. an Eastern Maine Logistics Corridor between Searsport and Bangor henceforth. referred to as the Corridor in the report Although numerous studies and reports have. been prepared for specific industries no comprehensive overview strategy has been. completed There has been little movement forward on the Corridor due to the. fragmented studies and lack of direction, In November 2011 after an Action Committee of 50 meeting EMDC met with. Maine Maritime Academy s International Business and Logistics IBL School faculty. The Global Logistics and Maritime Management GLMM graduate students agreed to. perform a strategic analysis to assist EMDC in completing further research on the. potential utilization of the Corridor and to answer the following research question. Can the logistics assets of the Searsport Bangor Corridor be developed. to facilitate a prosperous competitive Eastern and Northern Maine. economic region, Subsequently and in support of the required research the GLMM students. gathered data through attending informational meetings and presentations given by. EMDC members professional consultants Maine Port Authority representatives and. Corridor business stakeholders as well as through extensive tours of facilities related to. the Corridor and the Port of Los Angeles In addition the students also completed. secondary research on current and future global impacts that could affect the economic. growth of the Corridor along with developing a marketing plan for a biomass pellet. company Finally the GLMM students identified four industry sectors to determine if. companies would use a logistics corridor given the corridor met all of their logistical. needs Anecdotal data was collected from companies within the industries chosen. which consisted of perishable and time sensitive products industrial and consumer. products logistics providers and forest products, Using key findings from the research conducted the GLMM students believe the. logistics assets of the Corridor can be developed to facilitate a prosperous competitive. Eastern and Northern Maine economic region This belief is founded upon. the probable future utilization of the seaport for forestry biomass export provided. the necessary bulk handling equipment is available. the potential capture of European US East coast marine traffic because of other. more frequently utilized seaport congestion issues resulting from larger vessels. transiting the expanded Panama Canal, the potential capture of Caribbean marine transload traffic i e larger Post. Panama Canal Expansion vessels transiting the canal that require transshipment. to smaller vessels more easily accommodated by the US East Coast. the establishment of a Corridor spokesperson or champion along with the. guidance of an oversight committee to more aggressively market the. capabilities of the Corridor, o thereby securing a larger customer base that has more confidence that. the corridor and its components will provide consistent long term service. continue operation, o utilize cargo consolidation techniques and opportunities to provide. reduced transportation costs to customers while increasing the volume to. carriers air rail truck deep sea and short sea shipping and. o fostering a more symbiotic open working alliance between stakeholders. thereby increasing customer confidence and satisfaction. Project Overview, Logistics is an industry that operates behind the scenes affecting every aspect of. our daily lives The importance of logistics has been highlighted in recent years. Without logistics the world economy cannot achieve its full potential Logistics provides. the ability to move products from producers to consumers as efficiently as possible. As a state with just over one million people Maine relies heavily on tourism to. fuel Maine s economic needs However the tourism industry has struggled in recent. years as a result of the economic downturn therefore Maine has been struggling to. compete While tourism provides considerable support to the state tourism alone will. not provide the growth Maine needs Ten percent of the state s residents are living. under the poverty level while one third are considered poor or near poor maine gov. For the state to thrive and for its people to succeed Maine must make a change. In the past the state has attempted to make the necessary improvements to. strengthen the economy such as the proposed development of Sears Island in. Searsport ME However a common phenomenon the not in my backyard NIMBY. mind set has prevented these developments Maine is a state with many strengths. physical assets and a determined people which need to be better utilized. As a result for several years EMDC has researched the possibility of an Eastern. Maine Logistics Corridor between Searsport and Bangor which could stimulate new. business growth within the state Numerous studies and reports have been prepared. for specific industries yet no comprehensive summary has been completed As such. there has been little movement forward on the Corridor due to the fragmented studies. and lack of direction, After an Action Committee of 50 meeting in November 2011 EMDC met with the. MMA IBL School faculty At this point the IBL faculty suggested the MMA GLMM. graduate students could perform a strategic analysis to assist EMDC in completing. further research on the potential utilization of the Corridor The MMA GLMM graduate. class a group of students specializing in the field of logistics was provided with the. following research question, Can the logistics assets of the Searsport Bangor Logistics Corridor be. developed to facilitate a prosperous competitive Eastern and Northern. Maine economic region, The GLMM students have gathered data through attending informational. meetings and presentations given by EMDC members professional consultants Maine. Port Authority representatives and Corridor business stakeholders as well as through. extensive tours of facilities related to the Corridor In addition the students toured the. Port of Los Angeles POLA including the Alameda Corridor POLA s logistical freight. The students also completed additional secondary research on current and future. global impacts that could affect the economic growth of the Corridor as part of the. creation of a marketing plan for a biomass pellet company. Finally the GLMM students identified four industry sectors to research to. determine if there is a sufficient interest in utilizing a logistics corridor within Maine. Anecdotal data was collected from various companies within the selected industry. sectors which consisted of perishable and time sensitive products industrial and. consumer products forest products and logistics providers. Research Methodology, The research effort included the performance of telephone email surveys of. current established businesses preferably in the Corridor region to establish an. understanding of their potential use of the Corridor e g as a producer carrier. consumer freight forwarder logistic provider etc, In addition the research material included publicly available published data. sources such as trade publications journals reports and online resources along with. presentations provided to us from EMDC consultants Maine Port Authority etc. Using this research methodology information pertinent to the research question. was obtained and reviewed and included in this report. Port of Los,Background,East coast,Congestion Industry. Group Research,Strategy Thoery Third Party,Current State of Logistics and. Infrastructure Transportation Interviews,providers Primary Research. Panama and Suez,canal impacts Time Sensetive Secondary. and Perishable Research,Economic growth Products Communications. Recommendations,in World and Inference and strategy. Maine Forest Products implications,Collaboration,Meetings and between modes. tours Technical,Future Research,Investment in feasibility studies. Reports and infrastructure Public outreach to,Others we may across modes to reduce NIMBY. have missed improve attitudes,intermodal,movement More. Research Limitations, The research performed was broad in scope but narrow in depth Many facets of. the logistical aspects of the Corridor were reviewed but with limited depth In many. instances and because of compressed time constraints the ability to perform follow up. interviews was limited In addition no statistically valid surveys were performed All. surveys although performed with professionals within their fields of business were. anecdotal in nature,Background Research, In this section we will introduce and analyze the significant background research. pieces and why they have a direct impact on the Corridor. US Port Developments, Some U S ports have traditionally developed due to consumer demand derived. from the population base Port infrastructure has grown over the years in a gradual. manner to facilitate the increased growth in population The transition from U S. manufactured products to foreign imports has increased the need for a variety of. terminals which have reshaped the East and West Coast ports. Increased demand for renewable energy sources in Europe and raw materials in. China have increased U S exports to these regions Due to the need for such products. the U S is in a position to facilitate the market demands for renewable energy sources. and raw recyclable materials Maine is in a position to seize the opportunity with a. supply of the available renewable energy sources For example the biomass industry. has the potential for job creation and new export markets which will bring economic. growth to the area,Global US Maine Economic Outlook. The global economic outlook is weak but overall in 2012 global GDP is expected. to grow by 3 The strongest performers will be the developing nations such as China. which is expected to have a growth rate of 8 5 in 2012 The debt crisis in Europe is. expected to deepen with the rest of the world s economies lying between China s. stronger growth and Europe s continuing recession, The United States is expected to have slower growth in 2012 There will be. increased repercussions this year because of Europe s recession which will cause. more fiscal restraints in the U S However the U S may not revert to recession it. simply means that growth may be slower, New England s GDP increased by 1 5 however Maine s GDP fell by 4 in. 2011 making it the only state in New England to report a negative growth Mainebiz. For more detail pertaining to this section see Appendix 1. Panama Canal Panama Canal Expansion Suez Canal, The true effect the Panama Canal Expansion will have on commerce is still unknown. and widely debated However there is no doubt the expansion project will change the. transportation flow air sea and land for North and South America for years to come. with the Searsport Bangor Logistical corridor able to benefit in potentially two different. The Corridor may benefit if transmodal transfers transfer of cargo from larger. ships to smaller ships attributable to larger vessel sizes transiting the Panama. Canal as a result of the expansion increases in the Caribbean area These. smaller vessels are more easily accommodated by most US East Coast seaports. especially those that are draft restricting and thus are widely accepted. In addition while Maine s ports are some of the closest to US East Coast. European Suez shipping traffic it has failed to capture any significant freight. tonnage from this traffic see following 2010 tonnage chart However the ability. to capture a portion of the US East Coast maritime traffic in particular the US. East Coast European Suez traffic as a result of the Panama Canal Expansion. needs to be evaluated It should be noted that the larger ships capable of. transiting the expanded Panama Canal and their increased cargos may result in. the glutting e g at or exceeding capacity of the select ports that can accept. these deeper draft vessels As such Searsport is ideally situated to capture the. potentially displaced marine traffic that either would have resulted in a port being. over capacity or resulted in the vessel to delay its arrival i e by slowing down. or going to anchorage until the vessel s cargo could be accepted without. exceeding the original port s capacity, To gain a further foothold into the maritime traffic the Searsport seaport should. consider becoming the preferred seaport of choice for potentially diverted. maritime traffic This would be traffic that may have been bound for another. seaport but due to unforeseen circumstances e g weather port difficulties with. another ship strikes etc arrival and unloading of the vessel may not be able to. proceed as planned As such to prevent increased costs due to delayed. offloading e g required to go to anchorage slow steaming increased spoilage. of perishable cargo etc diverting to Searsport and offloading there may be. desirable for the shipping company For more detail see Appendix 2. Three Port Vessel Total Tonnage Import and Export in tons 2010. 46 919 478,Source Vessels Calls at U S Ports by Vessel Type. http www marad dot gov documents US Port Calls by Vessel Type xls. East Coast Congestion Implications for Maine, Currently the U S transports over 1 000 truckloads per day between Florida and. the Northeast which is expected to double within a few years consequently increasing. road congestion Frankel 2011 The I 95 corridor is the main traffic corridor linking the. Northeast to the major East Coast population centers I 95 is almost 2000 miles in. length with more than half of the interstate passing through urban areas Currently. more than 60 percent of this corridor suffers from heavy congestion from both. commercial and commuter traffic It is expected without any additional infrastructure. improvements that the restriction of transportation as a result of the congested I 95. corridor will only increase However if Maine s East West Highway becomes a reality. Maine may be uniquely situated to provide access to large population centers while. avoiding the congested I 95 corridor that slows travel along the East Coast. Maine s link to the Northeast Midwest Population Centers. Maine offers a variety of transportation opportunities making it suitable for. providing an access link to the Northeast Midwest Population Centers The Montreal. Maine and Atlantic MM A Railroad offers a direct route via other rail lines from the. port of Searsport to Montreal and then to Chicago and other Midwestern markets It is. more efficient to transport commodities by rail to the Midwest rather than using the. congested US highway networks Searsport is in a unique location near the northeast. population centers featuring a deep water port direct rail and highway access See. Appendix 13 Bangor International Airport also boasts a longer than average runway. length with heavy lift aircraft handling capabilities and the highest rated instrument. landing system ILS rated by the FAA FAA,Meetings Tours. Over the course of the semester the GLMM class has had the opportunity to. interact with several Maine industry leaders to gain insight and knowledge regarding. Maine s transportation systems ports airports and industries. The below table represents professionals and industry leaders the class interacted with. during the semester,Meeting Table,Name Company,Conferences. Michael Aube EMDC,Jennifer Brooks EMDC, Eastern Maine Rebecca Hupp Bangor International Airport. Development,Corporation John Porter Bangor Region of Commerce. David Colter GAC Chemical Corporation,John Henshaw Maine Ports Authority. Jim Therrialt Sprague Energy,Maine s Gateway Craig Starnes LL Bean. to International,Robert Grinrod Montreal Maine Atlantic Railway. Percy Pyne American Feeder Lines,Author of Intermodal Freight Transportation. Gerhardt Muller Professor US Merchant Marine Academy. Dr Ceasar Hildalgo MIT Assistant Professor,Coffee By Design. Maine Sandro Giovanni,International Embraer,Trade Conference. LuAnn Ballesteros Jackson Lab,Ed Flanagan Wyman s and Sons. David Cole Consulting Former Maine DOT,David Cole,Commissioner. John Henshaw Maine Ports Authority, The class also visited several pertinent areas within the proposed corridor. Relevant tours included Bangor International Airport BGR MM A Sprague Energy. and GAC Chemical in Searsport The purpose of the tours were to gain further insight. into what roles the airport railroad and seaport play currently and how they could best. be utilized within a logistics corridor For more detail see Appendix 5. Bangor International Airport BGR is a full service domestic and international. airport BGR can handle any size aircraft presently flying Handling services include. most services required by an airline e g ground power units GPU lavatory and water. service aircraft cleaning air conditioning and heat and arrangements for airframe and. power plant maintenance The airport is a 24 hour facility with Customs and. Immigration services a 33 acre Free Trade Zone FTZ and is the closest US Airport of. Entry from Europe BGR has uncongested airspace and land transport access with. room for growth Its strategic location FTZ 50 000 sq ft heated storage space and 24. hour Federal Inspection Services make BGR a viable option for air cargo Galt Block. Warehousing also has 250 000 sq ft of refrigerated warehouse storage in the Bangor. The Montreal Maine Atlantic Railway MMA is the rail system that services the. Port of Searsport The MMA is headquartered at Northern Maine Junction in Hermon. which has an onsite 123 000 sq ft warehouse 300 acres available for development. and direct access to warehouse and transload facilities operated by Logistics. Management Systems LMS a subsidiary of MMA The MMA system services. Searsport Millinocket and Montreal with connections to all major rail lines including. Canadian Pacific CP Canadian National CN Norfolk Southern and CSXT These. connections provide access to all of North America and most notably an MMA CP route. to Chicago that can be transited in 40 hours In addition the MMA routes currently have. unrestricted double stack container clearances, The Port of Searsport consists of two terminals Sprague Energy owns 100. acres of land at the Port of Searsport with 40 acres still developable Sprague s pier is. 615 feet long with a berth of 850 feet and a draft of 37 feet at low water The Maine. Port Authority owns the second terminal Its pier is 800 feet long with a ship berth on. both sides and drafts ranging from 32 feet to 40 feet at low water The MMA railway. services the port There is 90 000 sq ft of indoor storage available Products shipped. through the port include petroleum road salt and paper products with a growing market. for wind power equipment Another emerging market for the Port of Searsport is. biomass fuel as a result of the increasing demand from Europe due to the 20 2020. legislation which mandates that by 2020 twenty percent of EU energy must come from. renewable or sustainable sources European Climate Foundation Liquid bulk storage. at the port is provided by 30 tanks equaling approximately 1 6 million barrels of. capacity There is an abundance of available storage creating opportunities in. commodity trade Equipment at the port consists of a Mobile Harbor Crane capable of. servicing Post Panamax vessels and two smaller cranes which can assist with dry bulk. GAC Chemical is another landowner adjacent to the Port of Searsport They. own 150 acres of which they are utilizing 40 acres GAC produces approximately 9. products including products for the food paper and pharmaceutical industries Products. are primarily liquid based with the exception of one dry material GAC benefits from the. location within the port and the access to infrastructure utilizing shipping rail and truck. modes of transportation The company is heavily involved in both import and export. and they operate a barge facility,Port of Los Angeles. The GLMM class had the opportunity to tour the Port of Los Angeles POLA and. gain a comprehensive firsthand perspective of the freight operations within one of the. most significant U S seaports and its corresponding transportation corridor The hands. on experience allowed the class to view a world class port operation from all aspects. The class was exposed to multiple facets of logistics operations including multiple. container terminals break bulk handling facility a dry bulk manufacturing and shipping. facility several rail yard operations and distribution import facilities. The opportunity to see the multiple phase process a container transits from being. unloaded from a vessel to storage rail car truck chassis to warehousing was. significant because no single transportation mode has the ability to handle all stages of. the process The Port of LA operates with a systems approach to logistics All. components allow the port to function in a fluid and efficient manner The port relies on. all of these transportation modes being readily available and reliable to ensure its. operations are completed expeditiously and efficiently in order to maintain its.