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Christopher B. Matson

Two drivers of change have emerged in the past few years that will become increasingly significant in 2009. The first is a growing trend toward private investment in port infrastructure, and the second is the reduction of inland cargo-handling steps. These game-changers arise from the combined need to reduce costs, shorten the supply chain while maintaining distribution agility and reduce companies’ overall carbon footprint. We are seeing a period of extreme economic belt-tightening in the private and public sectors. This fiscal contraction is strongly impacting the ability of our public ports to attract state and municipal funding for needed infrastructure development. At the same time, reduced consumer spending is further squeezing the supply chain, necessitating a much leaner and more agile distribution network. Therefore, conditions will favor private investments on the part of cargo owners and carriers that are specifically directed at reducing supply-chain costs and increasing inland distribution efficiency. Private investments have mainly focused on near-dock international cargo distribution centers. These centers, located at specific ports of entry, effectively increase the velocity of ISO containers and maximize the inland carrying capacity through cargo transload into 53-foot, high-cube domestic containers. This practice will have the added benefit of shortening the functional length of the supply chain by diminishing the reliance on regional inland distribution centers. First implemented in Southern California, expansion of near-dock distribution centers have acted as supply-chain buffers enabling dynamic redirection of cargo in response to changing consumption patterns This trend will expand in 2009 to include other private, port-related developments such as third-party intermodal rail terminals, dedicated inland container depots and private marine terminal construction, as exemplified by the new APM terminal in Portsmouth, Va.