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Note: Due to technical difficulties, the first few minutes of audio from this seminar were not captured in the audio recording. However, to provide better context of the seminar and the presentations, the written transcript represents the entire seminar. The audio recording begins near the start of the fourth paragraph in Ms. Strauss-Wieder's presentation in the written transcript.
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Nicholas Kehoe and I will moderate today's seminar. Today's topic is on the Impacts of Temporary U.S. Port Closures on International Supply Chains and the U.S. Economy.
Before I go any further, I do want to let those of you who are calling into the teleconference for the audio know that you need to mute your computer speakers or else you will be hearing your audio over the computer as well.
Today we will have three presenters: Anne Strauss-Wieder of A. Strauss Wieder, Inc., Don Snyder of the Port of Long Beach, and Paul Bingham of CDM Smith.
Ms. Strauss-Wieder is the principal and founder of the Westfield, NJ firm bearing her name and has more than 30 years of experience in supply chain and economic analyses and policy development. She works closely and collaboratively with private sector stakeholders and public sector interests to ensure that supply chain projects reflect market realities, emerging trends and customer needs. She has pioneered new ways of facilitating the productive integration of freight operations with community goals and economic development, as well as means for addressing key issues facing the freight industry. She continuously analyzes industry trends and trend breakers and develops forecasts for all aspects of freight movement and distribution. Among her recent projects, she is one of the co-authors of the 2012 NCHRP report on Methodologies to Estimate the Economic Impacts of Disruptions to the Goods Movement System.
Donald B. Snyder is the Director of Trade Development for the Port of Long Beach, California. He was appointed to the post in 2006 by the Long Beach Board of Harbor Commissioners, having served since 2003 as Marketing Manager in the Trade and Maritime Services Division. As Director of the Trade Development Division, Mr. Snyder is responsible for maintaining relationships with terminal operators, ocean carriers, cargo owners, and supply chain partners, developing business opportunities and supporting customer operations.
Before joining the Port in 2003, he worked with Mattel Inc., Sea-Land Services, Hyundai Merchant Marine and Lykes Brothers Steamship Co. Mr. Snyder holds a Bachelor of Science Degree in business administration from San Francisco State University and is active in the community and the international trade and transportation industry organizations.
Mr. Bingham leads Economics Consulting for infrastructure consulting firm CDM Smith. He has 30 years experience providing economic analysis of trade and freight transportation. He manages assessments of economic feasibility, economic impacts, and demand forecasts for transportation studies at CDM Smith for clients nationwide. Previously Mr. Bingham was Managing Director, Global Commerce and Transportation Consulting for economic forecasters IHS Global Insight. There his research included assessments for the Federal Government of the economic impacts of port disruptions of varying lengths and scope. For five years he was publisher of the Port Tracker newsletter, set up by the Strategic Supply Chain Council of the National Retail Federation to help their members better plan for port congestion or port disruptions. Mr. Bingham has been extensively involved with the National Academies of Science's Transportation Research Board for over 20 years. He is immediate past Chair of the TRB Freight Systems Group and continues to serve on several TRB Committees and Task Forces, including the Logistics of Disaster Response and Business Continuity Task Force.
Today's seminar will last 90 minutes, with 60 minutes allocated for the speaker, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area. Please make sure you send your question to "Everyone." The presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. If we run out of time and are unable to address all questions we will attempt to get written responses from the presenters to the unanswered questions.
The PowerPoint presentation used during the seminar is available for download from the file download box in the lower right corner of your screen. The presentation will also be available online within the next few weeks, along with a recording and a transcript. I will notify all attendees once these materials are posted online.
One final note: Talking Freight seminars are eligible for 1.5 certification maintenance credits for AICP members. In order to obtain credit for today's seminar, you must have logged in with your first and last name or if you are attending with a group of people you must type your first and last name into the chat box. I have included more detailed instructions in the file share box on how to obtain your credits after the seminar. Please also download the evaluation form from the file share box and submit this form to me after you have filled it out. While FHWA does not formally offer the professional development hour credits and will not provide proof of attendance, we have made an agenda available in the file download box that participants can use to self-certify and submit for credits on their own.
We're now going to go ahead and get started. Today's topic, for those of you who just joined us, is on Impacts of Temporary U.S. Port Closures on International Supply Chains and the U.S. Economy. As a reminder, if you have questions during the presentation please type them into the chat box and they will be answered in the last 30 minutes of the seminar. Our first presenter will be Anne Strauss-Wieder of A. Strauss-Wieder, Inc. and Anne, when you are ready you may begin.
Thank you everyone. Superstorm Sandy, which hit in late October of 2012, devastated a multistate area. The impacted area includes the most densely populated region in the United States. Communities are still recovering from the storm. The impact on the transportation system in the affected area was unprecedented. The discussion today will focus on the impact of Sandy on the supply chain, which is defined as how goods move from origin to destination. First, let's frame the discussion. It is important to do so because we are at the early Phase. We are still learning what worked and didn't work in terms of storm preparation, along with how to do better next time. We're looking at how agencies and organizations work together. It is also important, as we look at the impact of an event on the supply chain, to differentiate between the shorter and longer term impacts. During the shorter term, the focus is on the immediate needs. In the longer-term, the impacts can affect market position, supply chain strategies, and investment programs.
We start by defining what we mean by a supply chain disruption. On the left, there are several questions to answer. First, the geographical scope: Does the event affect a local, regional, state or multistate area? Superstorm Sandy was a multistate event. What facilities and modes were disrupted? Are we talking about a single mode, such as rail, being affected are we talking multiple modes? Next, the characteristics of the commodities affected. Are they are time sensitive, less time sensitive? Temperature controlled? Is it peak shipping season? These are very important considerations. Finally, what is the timeframe to get back into full operation? The material presented in this slide and the several that follow are from the recently released NCHRP 732 report, Methodologies to Estimate the Economic Impacts of Disruptions in the Supply Chain. On the right of the slide, the chart talks about the three layers of activities needed to move things in the supply chain. First of all, starting at the bottom foundation layer, it is the physical movement of goods from origin to destination through all types of facilities and all types of modes. The other two layers are equally as important. The middle layer is the information flow and this is critically needed to move goods. This is important to consider with Superstorm Sandy because of the electrical and communication system outages that occurred. Few cell phones worked for cell towers were without power. Fiber-optic lines were severed. Buildings had no power. The communications were disrupted. The top layer is the oversight and regulatory activities. These activities include the various governmental agencies that work in collaboration with private providers to move the goods either internationally or domestically. When it comes to a storm disruption, those requirement scan be crucial in preparation, diversion, and recovery. Does the truck driver who has to go to Virginia to pick up a diverted container have the credentials to drop it off in the New York port? Can cargo on a vessel that was diverted to Baltimore be cleared through Customs there?
There are also various phases in disruption. After a disruption, the initial phase includes rebuilding and cleanup and recovery with a series of logistics considerations including debris removal and bringing in emergency supplies and repairing equipment. Meanwhile, from a supply chain response, short-term, the objective is to keep the goods moving. A lot of quick adjustments occur: Switch to other modes or other ports. If a warehouse does not have power, then move the shipments to another distribution center with power. Get the customer served. Next, over about a six month to year period, review the lessons learned. Are there ways to refine my supply chain practices? In terms of a disaster and resiliency, the third element is looking at potential permanent changes in the supply chain as well as potentially a reprioritization of capital investments.
To set the stage to talk about Superstorm Sandy, let us review a previous supply chain disruption. In 2001, a CSX derailed in Baltimore resulting in a fire in the Howard Street Tunnel. Eleven cars in the train derailed, four of which contained hazardous materials. This event occurred during rush hour and when there was about to be a baseball game. There are photos of thousands of people having to take to the streets because transit systems were disrupted, power was out, and a water main broke. The Coast Guard temporarily shut down the Inner Harbor. There was tremendous disruption in an urban setting. Thankfully, there was no loss of life. The fire was extinguished and five days later, with train service resuming on July 24th.
In this case, we were talking about a critical link in a multi-state network involving a single mode. Importantly, most of the commodities involved were not time sensitive. This enabled CSX to either reroute trains or delay others in yards and notify customers with delays ranging from 18 to 35 hours. Where there was a high priority time sensitive shipment - such as the Tropicana Orange Blossom Special train which contained temperature controlled products from Tropicana moving from Florida to New Jersey - this is where organizations worked together. CSX was able to work with Norfolk Southern and reroute their trains over the NS system to deliver the loads on time.
In terms of the impacts, the community was more affected than the supply chain. So as a result, in terms of looking at the long-term, there was not a significant impact on rail freight movement. However, the fact that hazardous materials were involved in a fire in the middle of a major metropolitan area, did bring more scrutiny to the movement of hazardous materials, both by the supply chain transportation providers and by the shippers and receivers. And we have seen some shifts that have happened as a result. For example, a petrochemical company in New Jersey that receives a highly hazardous material from a supplier in Louisiana is relocating the plant next to the supplier, replacing a long-distance rail movement of the very hazardous material with a short piece of pipeline move from the supplier. Such co-locations are happening more and more when it comes to hazardous material movements and plant site selection.
Moving now to talk about Superstorm Sandy, this slide sets the stage, by showing the Port of New York and New Jersey. This is a bi-state port with facilities on both sides of the Hudson River. On the left, we have the Port Newark/ Elizabeth complex. On Staten Island, the Howland Hook Marine Terminal. Directly on the Hudson River area on the New Jersey side, Global Marine Terminal, and the Greenville Yard, which includes a car-float operation connecting to Brooklyn, and the Bayonne Cruise Terminal are located in Jersey City and Bayonne. The Brooklyn Marine terminal includes the Redhook Container Terminal. The Port of New York New Jersey is the third largest container port in the U.S., and the largest on the east coast. In 2011, it handled more than 5.5 million TEUs. It is also a major importer and exporter of automobiles and handled over 650,000 vehicles in 2011.
Those of us who are in the region started hearing about the potential for a severe storm, perhaps akin to Irene, the Thursday before the Monday of the event. Transportation agencies and other emergency preparedness organizations started working on plans and activating operation centers. However, it wasn't until Sunday, the day before the storm that it became clear that the New York/New Jersey area would be near or at the epicenter of this very powerful weather event.
By that time, Mayor Bloomberg and Governor Christie began mandatory evacuations of these areas. Transit systems, such as New Jersey Transit, PATH, New York City Metropolitan Transportation systems, and Amtrak, began orderly shutdowns of their systems commensurate with the evacuations of areas. The freight railroads began to reposition their trains and locomotives, moving them from potentially dangerous areas and repositioning them, knowing that there was going to be some diversion of vessels to alternative ports.
By Sunday evening, the Port Authority of New York and New Jersey had asked all of the terminals to close and keep just the emergency personnel. Monday morning, everyone was evacuated except for a few security people, and their locations were well-known. The two pictures on the right were taken by security guards in the midst of the storm at the Howland Hook Marine terminal in Staten Island. This gives some idea of the severity of the events. We were talking, by 8:00 that evening, of winds at 90 miles per hour and surges at 14 feet, way above Hurricane Irene's. This was not a gentle rising of water. Those are whitecaps breaking in the middle of the Howland Hook Marine Terminal.
On Tuesday, it was nice and sunny, but there was no power and lots of devastation. Immediately, the assessment, the recovery and the response began. In addition, this is where other ports and other modes swung into action. The New York-New Jersey Port had been closed. There were vessels that had been diverted to Baltimore and Virginia. CSX and other railroads had qualified crews and set up temporary routes to move containers from those ports back up to New York. Truckers also were sent by customers to go pick up their containers.
There were some issues in terms of allowing containers to be picked up at those locations. Again, this is the consideration on a regulatory level. By Friday, this is Friday after the storm; the Coast Guard had inspected the channels and reopened the ports for deep draft movement. The first vessel arriving at the Port was a cruise ship, The Brilliance of the Seas, which was called on Bayonne, New Jersey, offloading 3,500 passengers and taking 3,500 passengers on. Unfortunately, the cruise terminal was one of the areas most deeply affected and the 3,500 passengers getting off probably found that they did not have cars anymore.
By November 3, power was restored in the Port Elizabeth section which contains two major container terminals. By Sunday, five vessels were working at those terminals. Labor, management and everyone was working together to bring the ports back online. By Tuesday, a week later, all the remaining terminals were open. However, one terminal operator did describe as the operations as, "Imagine cooking an elaborate Thanksgiving dinner for your extended family while simultaneously renovating your kitchen."
The damage was extensive. Flooding of saltwater in buildings, up to 5 feet high and across the facilities. The container cranes stood their ground, having hurricane lashings. However, the electric motors at their bases were submerged in saltwater and had to be cleaned for use. There was damage to fencing, which needed to be repaired for security and Customs Clearance. Roadways and rail switches were damaged. Container stacks were knocked over. There was debris in the road. Containers in the channels, on the rail tracks, on the turnpike. There was a total loss of the rail car floats at Greenville Yard.
The cargo impact included the containers that were damaged. Thousands of cars were destroyed by the flooding. And of course the cruise passengers lost their vehicles.
These are pictures of Greenville yard before the storm - a legacy facility and the last remaining rail car float in New Jersey connecting New Jersey directly to Brooklyn There is a picture taken from the barge looking at the floats. And this is what Greenville Yard looked like after Sandy. The structures are completely gone. And one of the barges had broken in two and sank.
In terms of the terminals, again, the containers were knocked over. The security fencing, gatehouses, knocked over. It gives an idea of the break-up of the roads and the amount of mud and debris that had to be cleared to become operational again. The Red Hook barge, which moves containers between Brooklyn and Port Newark Elizabeth was not just at berth six, it was on berth six. Floatation devices had to be brought under it to level it, and float the barge out.
One of the critical items, in terms of starting up and moving forward was availability of chassis. Unfortunately thousands of chasses were badly damaged by saltwater, which affects the electronics and the brake drums. Each chassis takes anywhere from three up to 15 hours to be brought back to road readiness. In addition, trucks that perform activities were damaged, at least several hundred of them. This gives an example of the kind of damage to the road. The building damage also exemplifies how significant the water flow was bursting through the walls. Again, some idea of the cargo impact: the picture on the bottom right, being voted the best imitation of Tetris form by containers.
The port today is operational. The recovery continues, particularly off-peak and in the evenings. In terms of the car float, the Port Authority is working with the NYC Economic Development Corporation, and was able to bring over a float bridge from Brooklyn to restart service. Perhaps the best way of describing the storm is that it is an example of when things are at their worst, people are at their best. With that, thank you.
Thank you very much, Anne. We will move into our second presentation from Don Snyder of the Port of Long Beach. When you are ready, you may begin.
Okay. I am ready to go. Can you all hear me?
Yes we can.
Okay - very good. I enjoyed Anne's presentation. And I feel a little tough following her because she had very dramatic pictures and it really painted a very clear picture of a natural disaster. What I am going to do is -- our situation here will focus on the impact of a labor dispute. And so I'll start with just a quick background. For the Port of Long Beach: we are in a bay that is contiguous with the Port of Los Angeles. And in terms of volume, Port of LA is a number one in North America and we are number two. If you combined our container volume, we are number six in the world at about 14 million TEUs (or Twenty-foot Equivalent Units). So it is probably somewhere between 11 and 12 million containers per year. As far as operations, both of the Port Authorities here in Southern California are landlord ports. So we develop the infrastructure but we don't operate that. We feel that private operators have a better handle on operating that. So between the two ports, we have exactly 13 container terminals and more or less 30 other terminals of other container types.
What we are going to focus on is in 2012, this past year, there was a strike by the longshoremen group called the OCU or Office Clerical Unit. What I would like to first do is compare and contrast that with some other labor situations and the effects. First of all, we hadn't had an actual strike since I believe 1971, on the waterfront. But in 2002, during the labor contract negotiations, they eventually came to a point where there was no agreement. At that point, the management locked out labor. And that affected the entire U.S. West Coast, all the ports are under the same contract. So that happened for the entire U.S. West Coast. And it also happened during the peak season for imports. Primarily, the West Coast ports, as far as the containerized operation, are in a good spot between the manufacturing of consumer goods in Asia and the consumption of those goods in North America. So the lockout occurred in October, so there's a lot of the holiday season goods, the most urgent and last of them, were coming in during that period. And the lockout was for 10 days. And then there was a lot of digging out from there.
In 2004, what was no actual contract dispute, but due to some shortages of rail labor, there was a backup of cargo into the ports and a lack of proper labor levels caused congestion. And that was focused in Southern California and affected all of the terminals.
And then finally, the issue that we will talk about today, the OCU strike was in Southern California, but it did not affect all of the terminals. It was focused around just the container business, and actually not all of the container terminals were affected. So the OCU strike started on November 27, 2012. And it started at one terminal, one of the 13 terminals and spread to the remaining terminals the next day. The closure was for eight days. Again, it was the first strike that we have seen since the 70's. And so the labor was focused on a unit that is actually office workers, but they are also a division of the Longshore labor that does all of the vessel operations. So these clerks, as they put up pickets, and ended up closing 10 of 14 container terminals in the ports of Long Beach and Los Angeles. As recommended by the group here, I included a map (being shown on the web conference), if you look on the left side, that is the Port of Los Angeles. Again, we share a bay and we have a political boundary down the middle. We share infrastructure needs, security and environmental things. But we compete in business like crazy. In the Port of Los Angeles, they had one terminal opened which is the light blue one called, TraPac. And the Port of Long Beach, we had three terminals that remained open: Pier A in taupe, and then we had Pier C in the light green, and another version of light green, Pier J remained open. Those companies were able to resolve their issues with that union and remain open.
So during the eight days, what were the impacts? What happened? First of all, I would like to separate this out into a couple things. Cargo moves both with a flow of information as well as cargo. The first thing that we learned in 2002 was that, although we are landlord ports and we don't do the operations, we have a responsibility to help provide information on what is going on. And it's not just for the local community, but the people that are in the supply chain, the cargo owners, rail and ship owners, are throughout different parts of the country and different parts of the world. Although they have local offices and agents, the more information they have, the better decisions they can make on how they continue to flow their business. And so in 2002, the void was filled by Marine Exchange of Southern California. Basically they are like the air traffic controllers for ships everywhere from the Mexican border up to Port Hueneme. And they put out a daily e-mail that indicated who is open and who is closed, what is the situation with getting labor, and various types of information that helped the different parties of the supply chains make decisions.
In the 2012 situation, we were able, as a Port Authority, to provide information on who is open, who is closed, and what is going on. And it was very important to the supply chain to have visibility as to what is going on there. Because there wasn't a complete shutdown of the port, it helped keep effects to a minimum. So again, we have the four container terminals that remained open. So the trucking companies working with their customer, the cargo owner, would identify, and using the pretty sophisticated cargo tracking systems, what cargo was available, and continue to work those four terminals as much as possible. They did this for two reasons: 1) to keep the product flowing through the supply chain, and 2) to keep products out of the terminals so that those terminals would not go into gridlock. And it flowed very well. One of the things that occurred in Southern California after 2002, but very much helped in our situation now, is a program that we call Pier Pass - it is actually the private terminal operators that put together the program. What it does is that most ports have their gates open for trucks to deliver exports and pick up imports five days a week from 8:00 in the morning until 5:00 in the afternoon, regular business hours. Because of congestion on the highways, we worked with a number of entities. And like I said, they are terminal operators who put together Pier Pass program which opened up an additional five gate shifts, either on weekdays at night or on Saturdays, providing additional time for cargo to be picked up and delivered. That extra capacity has been very key to not only relieving traffic congestion in the long run, but in situations where there are interruptions, people are able to flex the capacity to different hours. And another key thing with it is that prior to Pier Pass, when you tried to open up gate and truck operations at Marine Terminals on it as needed basis, there is a huge learning curve, usually a lot of mistakes happened and there was very low productivity. But because of Pier Pass being institutionalized since 2005, it is a normal process. So the extra capacity can be used effectively.
Between the truckers and the cargo owners, they spend a lot of time focusing on what cargo could be picked up. Rail - somewhere about 65 or 75% of the cargo volume actually is on the import side and is destined east of the Rockies. And it is going on rail either directly in containers or is being trans-loaded into domestic intermodal boxes and moving onward. With the interruption of the supply chain the railroads are very closely lined up with the ocean carriers and terminal operators on information of how the cargo is going to be coming in the upcoming week. So the railroads on the export side of things began staging export containers on sightings out in the desert and numerous locations so that once the strike was over, they were prepared to move those exports out, as well as staging empty railcars for the imports to make sure that, as the terminals opened up, they were prepared to move cargo quickly.
And then ocean carriers had to make decisions as far as how long do they wait with cargo to get into southern California? The cost of diversion, of moving a ship to another port, is not only the cost of the ship and the fuel and so forth, but in addition to that, there is a heavy intermodal cost of that. And you have to balance that against the ship's fixed cost. Every day a ship is sitting around, at least for some of the newer and larger ships we are seeing, could be a $100,000 a day impact. So the carriers have to decide how long to wait. The other thing, as far as the public sector, is that we practice a lot of business continuity. Most of that, our drills and practices, are for natural disasters such as Anne pointed out with Hurricane Sandy. But they do provide us with the ability to work within our organization and quickly assess, what is our role? Who do we need to work with? In this case, our role during the strike was to anticipate if there were any severe disagreements, to make sure that we had security available. Fortunately, things were peaceful. There were disputes on business issues, but nothing that required security. But also, as we had volumes concentrated at four terminals, there were traffic management issues that we needed to coordinate closely with the supply chain community. And then again, as the strike ended, heavy volumes were there and a lot of truck traffic that needed to be managed, and that was our part.
Again, on the port of Long Beach side of the Bay, we had three out of our six terminals still operating. And an interesting thing was, a lot of the ocean carriers on the container side of the business do vessel sharing arrangements. Competitors will share each other's vessels so that they have more services and assets without spending extra money. And they also do a lot of terminal sharing. On the Port of Long Beach, a number of vessels that would have been stranded in the strike were able to move to another terminal that was open within Long Beach. And we ended up with no vessels diverted. And the supply chain here it's interesting, with being a tightknit community, as well as the flow of information that private industry has, within a little over a week most of the terminals were caught up into their normal operations. And they had the capacity to meet you these surges and that we have sufficient numbers of longshoremen, capital equipment, and long operating hours to handle this business.
The impact on operations - and Paul is our economist so I will try to stay away from much of the numbers. We estimate between the two ports that there is about $1 billion a day of cargo flowing through. So for the eight days, we had $8 billion worth of cargo delayed. You have to take that down by a certain percentage because of some terminals open. We also have the tens of thousands of jobs that were impacted: the longshoremen, as opposed to the office workers, they get hired on a day-to-day basis. So if there is no work, then they are not getting paid. So on the nine container terminals that were closed, there was quite a number of wages not being received for those eight days. Same is true for the truckers that operate in the harbor area. They are owner operators, so they will only be working as there is work available. Fortunately, there were some terminals to keep them going. Cargo owners and brokers that are responsible for moving the cargo and a lot of its retail, being that there was a week delay, and this is after the Christmas rush, everything should be in the stores by the time this delay happens - they were able to continue to look at their inventory and determine what was in each container, and prioritize that as the operations opened up.
Lost business opportunities - there were actually 17 vessels diverted from the Port of Los Angeles. Most of that was partial diversions in which they would go up to Oakland or another Port and dump off either all of the Oakland cargo and then come back and then not divert the total amount of cargo available. So they saw more of the vessels depart. We were fortunate, on the Long Beach side, with three terminals open and that there was a number of vessels that were able to find homes.
And as far as things go, it's a fairly recent time since the vessels got started and terminal operations are going. And we saw the busiest December that we have ever seen in the Port of Long Beach for imports. And as far as anything related to the strike or the aftermath were that there were no interruptions or delays to cargo flow. So with that, I will turn it back over for the next presentation.
Thank you very much, Don. Our next presenter will be Paul Bingham of CDM Smith. When you are ready, you can begin.
Thank you, Nick. And thank you to Don and Anne for very enlightening presentations. They make very interesting case studies for what I will try to talk about conceptually a little more in the abstract. I apologize that this will be a little less exciting in terms of the visuals because I will talk in more generic terms on how you assess the impacts of temporary U.S. port closures on international supply chains and the U.S. economy.
Looking from a very broad scale, defining a disruption as anything interrupting the flow of cargo through a port or terminal or a series of ports. First of all, for some perspective, for those of you that have not studied closely the role of the container business -- I am focusing mainly on container ports. A lot of this is generalizable to sea ports that handle any sort of cargo. Fundamentally, ports have increased their importance in the U.S. economy in the last few decades, as economic growth has been predicated on continued growth and trade. That is not only something that is a result of increasing globalization, but actually explicit government policy with the President's National Export Initiative amongst other efforts to increase the benefits to U.S. consumers and businesses from more trade, through which the ports are the places where most of that cargo moves.
The relative importance of components of U.S. trade varies, and that comes down to which ports are seeing what relative growth and for that matter, sea ports versus other modes of transport. The example I gave here was the long-term decline in importance of the North Atlantic sea trade, as our traditional trading partners in North Europe became less important than trading partners in Asia over the last few decades, which then had direct impacts on the ports that serve those trade partners. Compositionally, within trade itself, the cargo matters; trade in lighter weight and higher value products, those that tend to be those found most suitable to be containerized, continues to outpace the trade growth in the bulk commodities that are more slower growing though still moving enormous volumes -- which has had the result of increasing the relative importance of container ports in the economy in terms of proportion of trade. And most importantly from an economist perspective, the value of trade for the country. That is not only just between the goods that move maritime in dry-bulk versus liquid bulk or versus container, but also air cargo versus sea cargo where improvements in the vessels have actually eroded some of the air cargo shares in recent years. There have been efforts across the industry over the very long term to take advantage of economies of scale in the growing trade volume. And this is most importantly for port disruption impacts from the perspective of larger equipment, larger container ships, larger cranes, deeper channels, longer trains, all of which has the effect of reducing unit costs of moving those goods in normal times. But it also reduces the number of potential alternative ports or facilities or equipment quickly available in the case of interruption. In other words, ability to concentrate cargo into larger individual units of movement activity also makes it more difficult to replicate that when there is a disruption.
So consequently, any interruption in the supply chain that uses gateway container ports systems is - at least I believe over the long term - every year more important to the U.S. economy. Another way to look at the potential for impacts of disruption is by looking at transportation services and associated logistics costs that are incurred in the economy. This graph here is not specific to international trade, let alone sea trade or container trade; it is from the Council of Supply Chain Management Professionals. It is their estimate of 2011 for total logistics cost. The point is that the transportation cost proportion of this is still the large majority of transportation logistics cost. This is the landed cost that an importer or an exporter would face in serving an end-market in terms of cost of transport from the origination point to the destination, the final destination. So transportation costs of which the port handling and the vessel services and the rail costs and the truck costs are all components and are very important from an economic perspective, in terms of what these costs actually are in the system.
Let's turn to the factors that affect the supply chain and ultimately the economy from interruptions. There are a couple of dimensions that I think are fundamental to being able to estimate the size of economic impact or even understand the nature of disruption. The first of which I believe is anticipation. Interruptions that can be anticipated, even by a few hours or days or longer - for example, a lockout or a strike or in some cases a storm - can have costs reduced by advanced action, that is the mitigation you take ahead of time to get equipment off the wharfs or get the vessels out to sea or something more strategic where you advance shipping or divert to other ports to minimize potential disruptions to the supply chain by taking whatever action you can with as much time as you have to minimize that. So anticipation is critical. You can say, "a natural disaster, there is very little that can be done"; but with advanced planning, there are actions here. In terms of anticipation, there are also things that are institutional that are not physical. For example, contract expiration dates matter. We saw planning last year in advance of the expiration of the ILA, a union contract on the East and Gulf Coasts, in advance of a potential strike there.
The next factor is duration. Perhaps this becomes the most critical to understand in terms of the real impacts on the economy broadly. Interruption impacts are a nonlinear function of time. That means that it is not continuous in terms of escalation of costs, the longer you see a disruption. Initial costs are often built into the system - a few hour disruption has costs that are very little at the margin because very often there is enough slack in the system that those will get smoothed out and taken up where available capacity and normal everyday operations offer flexibility.
But as the duration of interruptions expands quickly, they escalate quite rapidly. And there is a period depending upon the circumstance or the location or some of these other factors, the impacts from days to weeks to several months, become much greater. But after a period of time, and it depends on all those same circumstances, the overall system will adjust and further impacts actually will increase at a greatly diminished right… so that if you get to a very long disruption, you have a new equilibrium essentially where those initial impacts are diminished. Don mentioned that seasonality matters. Interruptions to flows of trade matter because they are not constant throughout the year. The amount of cargo handled in any one week varies quite greatly. The typical swing pattern on import container flows in the U.S. is about a 20% peak to trough seasonally every year from the peak season in late summer into the fall, and then the slow season, right about now in December and into February. So it matters a lot when it happens, how much cargo is even subject to the disruption.
And finally, critically is the economic-geographic scope. How much of the system is actually going to be affected by the disruption? Is it port-wide as we saw in the Metro area with Sandy? Is it like what Don was talking about, in which a subset of the terminals within two ports are affected? Or is it coast-wide like we saw with the 2002 lockout at container ports? Or what has been threatened with the potential ILA strike coming potentially this year? These factors are all interrelated. That is what makes it complex sometimes to try to figure out with the impacts are. There is another dimension to looking at impacts, to try to understand their repercussions for an economy. And that is the split - what you can call the direct and the indirect impacts. The direct impacts being the immediate lost economic activity at the ports and related functions in the system due to the disruption. And you can measure that in terms of lost employment, associated lost wages and income. There is the depreciated value of damaged-destroyed assets. If it is a natural disaster and you can account for that. And then there is the indirect impacts which can be much more extensive as the disruption right at the port facilities is extending on into the economy through lost revenue and employment of associated industries and providers. It cuts across modes of transport. There is the lost output and employment from lower exports, if you impede a trade long enough and you lose export sales. There is lost output and employment due to the disruption of imports of intermediate goods that feed into the domestic manufacturing or perhaps you see a shutdown such as we saw in facilities with a lockout in 2002. There are also the indirect effects on output and employment in all industries from those direct impacts. And as income is reduced, and employment goes down, that has a ripple effect throughout the economy. In total, the economy-wide effects on prices, consumer spending, can be measured and ultimately can be seen, even at the level of the nation's full gross domestic product, if it is a big enough disruption. We will talk a little bit later about estimates of what that might be.
If we look at the consequences of extended interruptions - what might actually happen if we get a disruption to a supply chain through sea ports over a more extended period of time, which I won't attempt to define explicitly here. But understand that if we have a disruption that is enough that it really affects the supply chain functioning, you see diversions or lower productivity will be a certain consequence, as well a reduction in the velocity of the supply chain from this disruption, whatever it is. And that has the impact of raising the total delivered cost, raising the price of trade. It would make the imports more expensive or reduce the exports by making them less competitive. From the import side, cost increases pressure retailers to or importers to realign sourcing and ultimately they are trying to minimize cost. That can include shifting the countries of origin. They can say, "I can't rely on this supply chain so I will shift to another supplier or location." There may even be product substitutions where you can't get a particular product so you buy something else as a substitute perhaps from another source.
There are revisions that happen as a consequence of any disruption, whether it is from a natural disaster, as we have seen repeatedly over the last few decades, or other disruptions such as strikes. Some of those take quite a long time to play out. The revisions to supply chains can be very rapid but they can also take an enormous amount of time in terms of years, as investments and decision-making opportunities come along, where the risk minimization and the ability to change some of the situations related to sunk cost come up for businesses. So that over time, you can see changes happening that are consequences of disruptions from many years before. And we saw that after the port disruptions on the West Coast with the lockout in 2002 and the congestion in 2004 up until 2005. It took many years to see the full impact of those changes. Similarly we have seen similar lags related to the disruptions that happened with Katrina on the Gulf Coast several years ago. Ultimately in the economy, the increased cost will be passed through to the customers mostly and that reduces their ability to spend on imports or it reduces export sales by making the exports less competitive. Ultimately it reduces economic performance of the economy. And the effect of that is through the changes of trade. That is actually how you can see the impact of it.
As an exercise to try to estimate the permanent economic impacts of an interruption, you do the full accounting however many years it takes to look at what happened. There are a couple of things to do. That includes considering the extent to which the impacted activity represents a permanent loss to the economy. The contrast for that, as Don mentioned, is a knee-jerk reaction to say, "how much trade is affected when we have a disruption?" The first numbers that are easy to get are things like, "what is the average value of trade moving through the ports each day?" and you say "okay, well there's the impact." But in fact, that is not the impact because you would have to sink the ship and lose all the cargo if those impacts actually amounted to that much. Most of that cargo eventually gets delivered. Perhaps there are perishables that have degraded in value or perhaps have lost all their economic value. But for the most part, the goods eventually get delivered to their final destination unless the duration of the disruption is much longer. You really need to look at a net impact over a longer period of time when you see the remediation and recovery steps and take that into account (for) what happens, and that includes all steps (that) were taken to mitigate the impact, delay shipment dates, and find alternative routing or accelerating production in advance or cargo handling afterwards. All of these can be minimized in terms of their impact through advanced planning. As mentioned, there are planning steps and even drills across facilities and organizations that try to deal with disruptions so that when they do occur, the impacts will be minimized and the institutions will function as best they can under those conditions. All of which help reduce the losses and reduce the effect on the economy.
A framework for doing that, is on this chart. It is a little confusing to follow. It starts in the second box, the supply chain interruption, whatever type that is, is a direct impact. As a mentioned before, the indirect impacts can be measured through the trading and support industries relating to that and quantified in terms of reduction in income, whether that is individuals or households or businesses. And looking at the consequence in terms of expenditures and back through to final demands to see, what did it actually do in the economy to reduce the output?
There was an example exercise done, looking at various duration disruptions. The disruptions in the example are timing-wise, just picked at random and all from a year, for U.S. West Coast container ports. So this is a disruption of all West Coast container ports, echoing the lockout of 2002 in terms of scale or scope. We then have different durations here. This is somewhat random. Think of it as a one business week and two business weeks and then 20 days to double that. Impacts are measured in three different concepts: the full-time equivalent jobs lost - this is a job equivalent basis, personal income, and finally, US real GDP or the top line for the whole economy. The estimates here show the nonlinear nature of disruption impacts where the five day disruption to the entire coast - the biggest region of import handling in the county - resulted in the loss of 155,000 jobs. But double that up to 10 days and it is 162,000. So, not a lot in the first window period of ramp up. There were minimum amounts of disruption that were immediate. And remember Don was talking about an eight-day disruption for this OCU strike for those limited number of terminals. In 2002, we had a 10-day disruption, so that is a middle range. For these disruptions, income losses of $0.6 billion can be found from a 5-day disruption and doubling in the 10 day. Notice at 20 days, the increases are substantial as you get up into the much more significant disruption period, in terms of supply chain functioning and the repercussions to the economy. That is consistent through all three of these metrics, where the nets to the whole country's economy are less than $1 billion from a five day disruption on net in the long-term. The 10 day is a little bit more than double that. And if we look at the 20 day, it becomes much more substantial. This is where the longer duration disruptions become much more significant in terms of the permanent cost to the economy and what it means for the country. These are the kind of disruptions that the planners and those that are trying to deal with mitigation, to try to minimize the impacts, really need to focus, not so much the one-day disruptions, those medium to longer-term ones that become much more significant if they were to occur. And therefore, warrant much more attention in terms of planning resources associated with them.
Let me wrap up with the last slide and make the point that, infrastructure alone, including public infrastructure and logistics practices, can amplify or reduce these impacts to the supply chain. So Don just talked about the ability for the ports of Los Angeles and Long Beach to deploy reserve capacity. They have some limits - both operational and physical - but they have been able to fine-tune availability of that so fortuitously when it happens and they are not pushing capacity, they have the ability to recover relatively quickly from what was a significant volume disruption to cargo movement through planning and through the systems that are in place. Similarly, he mentioned the railroads and for that matter, the truckers were able to also take some steps to try to mitigate the impacts on them. The dimensions around the inland system include the geographic concentration of use of the system to handle the port cargo that includes moving cargo through alternate corridors, if it is possible, or through alternative terminals. In other circumstances, that could be terminals at other ports, such as we saw with Sandy where there were vessel diversions to other East Coast ports. If there is this slack capacity, this is the safety stock concept not just for a retailer with a warehouse, but if you think of it in terms of transportation networks, it is their capacity there to have throughput capacity that is not used on an everyday basis, but in case of disruption is available to be deployed, even if it is at a higher cost. We look across the modes that support the port cargo on the land side. Trucking is more dynamic than fixed rail network. Those limitations, especially in the short run, on the trucking side is more the drivers and the equipment, especially after the operating rules that we have for them and the competitiveness of the business, it does not allow for slack capacity. On the rail side, similarly there are labor, power, and equipment limitations that extend more than just the track network. There is a degree of uniqueness to port trucking and rail, and it is correlated with the cost of substitutes. You cannot just bring in an average truck driver and trailer on to the wharf and start transloading a number of containers. This is an issue as far as the efficiency of the system under normal conditions. It makes it more difficult perhaps to mitigate to the general capacity and the broader transport system in the event of a disruption. Understanding that, in terms of what that requires for planning.
Finally, the use of lean logistics practices continues in industry. Inventory still gets managed tightly by retailers and manufacturers and that still creates vulnerabilities. We have seen that as repercussions from disruptions to operations such as in Japan in 2011 that carried back through to the U.S. The use of trucks as terminal storage, including warehousing, actually expands the service vulnerability of the system a little bit more to disruption, if those facilities or that equipment is disrupted due to either weather disasters or something else. I guess the point for this audience really is that advanced planning is what is critical. To minimize the impacts, it really takes the community collectively to be able to do it. As Don just testified, that we have seen through the OCU strike, a combination of players had to react to make sure that the impacts were as minimal as possible. That did covered multiple modes in both the public and private sector involved in making sure that happened and was built on the experience of dealing with disruptions in the past. That completes my prepared remarks. I look forward to participating in the Q&A. Thank you.
Thank you very much Paul. We will now get started with the question and answer session using the questions typed into the chat box. The first question I see is for Don. Don, how are you calculating the $1 billion per day figure?
I have to watch my P's and Q as Paul is more the expert on this. I believe that what we are doing is that there is a value of goods declared as you import shipments. You have to put in customs clearance operations to clear the cargo as well as pay any duties. So on the import side, I believe U.S. customs service provides the value of the goods that they received on document. On exports, I believe that goes through the Census Bureau. There is a dollar value that is associated with the two ports in Southern California. It is pretty close to $365 billion for the year or so. Even my state university mathematics, I divide that up. It is about $1 billion a day is our number, as far as the value of the goods. As Paul has pointed out, those goods just didn't disappear or sink, they eventually moved. So the actual impact, I can't tell you. But that is the approximate value of the goods passing through the two Southern California ports on a daily basis.
Thank you Don. The next question is also directed to you Don. Does the Port of Long Beach have any agreements with seaports in Mexico as relief ports for the Port of Long Beach closures?
First and foremost, we don't. But the issue doesn't have anything to do with the Port of Long Beach or Los Angeles or the Mexico ports or any other target ports. It is at the actual decision of where the cargo goes is not made by the ports. First and foremost, the ocean carriers, the vessel operators, are the ones that will decide if the cargo can't come to Long Beach, which port do they want to go to? They normally have most of the ocean carriers, or containerized ones, are global operations and have relationships at most ports throughout the world and will make that decision. The other thing is, in a natural disaster, such as Anne went through, the U.S. Coast Guard Captain of the ports when there is a disaster or some sort of situation, they are the ones that will decide if the port is operational. They will decide if the ships should come in or if they declare a disaster and that the facilities are not acceptable and ask the ship to please divert. In any case, if there are some issues coming here, it is the ocean carriers that will work with the terminal operators and port authorities to decide where they divert the cargo.
Can I add to that a little bit? There are a few other perspectives. One is that due to current security regulations, diverting cargo even though it is ultimately up to the vessel operators to decide what ports they call, the ability to discharge cargo that had to be declared in advance before even loading the vessel for a particular destination is a little bit of a complication these days in terms of being able to do that physical diversion from what was originally reported. Conceptually, it's like you filed your flight plan and then you want to divert to a different airport. You have to get clearance to do that. But there is another dimension which is the liner services. These container ships are calling multiple ports already. Unless you have a coast wide shut down, there is almost a built-in multiple port call characteristic to these vessels. And I think we found that start to play out on the West Coast strike where a lot of these vessels come into Long Beach first and then head up to Oakland when Oakland was operating. I don't think in the end there was much cargo diverted there. At least in terms of the decision-making on the part of the vessel operators, often times you can think of that as, they will almost skip the call. I think what happened to most of the vessels is that they actually did go up to Oakland and discharge and then come back to Long Beach when the strike was over. They basically changed the order of the typical vessel rotation to minimize the impacts on their own service operations.
Paul, I cannot correct you because you were accurate. I think you brought up some good points. In the case of the U.S. Customs, they are involved in the security of the country as well as making sure that all commercial laws are followed. In 2002, various issues like that, they do have some concerns. There is only so much flexibility and it may take them a while to react to that. They have to balance commercial considerations with the security of the nation from a physical standpoint as well as making sure that the products coming in our meeting all of the rules and regulations. So that has played out quite a bit. So I agree.
Fantastic. Thank you. The next question I believe is for you Anne. If there is an East Coast ILA strike, do you expect any of the cargo to be discharged at West Coast ports?
There are a couple of issues going on here. First of all, one is the duration of the event. If it is not very long, it may just be a temporary disruption in the vessels offloading. Supply chain professionals are the planners; they don't like any surprises. So my feeling is that there are some shippers that are looking at contingency planning. It depends what type of year, as Paul and I have discussed. Is it a high moving season or a low movement season for them? Can they move things in advance? Can they use another port? If it is a whole East Coast strike, they may go to Canada before they go to the West Coast. It's not clear. Each supply chain is distinct to a particular company. So I think it is the uncertainty and the potential length of time that the supply chain planners are thinking about right now.
Thank you. At this time, I do not see any additional questions typed into the chat box. As we are continuing, if you think of any, please feel free to type them in.
This is Chip Millard with the FHWA Freight Office. Since I am sitting here in the room with Nick, I just want to ask a couple more questions for the presenters and hopefully they will be willing to answer them. The first question I have is for you Anne. How has the Port of New York/New Jersey, bounced back volume wise following Superstorm Sandy impacted the port, especially in terms of not only the impact on the infrastructure but also the infrastructure impact on the connections to the port. What kind of impact has there been on the volumes at the port post-Superstorm Sandy?
I would have to defer to the Port Authority in terms of the particulars. I haven't really seen them at this point. At this time, we are talking that that is part of the peak movement season. In terms of bounce back and getting the port operational, I think it is remarkable, given the amount of damage that has occurred, how quickly the port came back online. As I understand it, the rail was back up first, being further information actual berth. In terms of tracking, the biggest issue was chassis, chassis availability, and getting the chassis back online. If you had to go to another port, getting a chassis there and bringing that here and making sure the chassis got back and credentialing the truckers. I think that the connections with regard to the port of New York and New Jersey inland connections were back even more quickly than the actual terminals themselves. In terms of volumes, I would have to refer to the port authority.
Okay. My apologies for asking a question you can't answer. I appreciate your answer, thank you.
This is Don Snyder and I will not talk for New York/New Jersey. I think that as Anne said, they have to speak for themselves. One of the things in supply chains is that, and I used to be a traffic manager, on the short run most cargo has an effective way or a path that it wants to follow. If New York/New Jersey is the most effective path, most people after an incident are going to return to that. If the consequences are enough, it takes a supply chain quite a while; it is not just a matter of diverting the cargo to another port or another gateway. It is: where is the distribution center and how does that affect your retail network? And there are more long-term things that we wouldn't see in the short term that would be to take place to say, gosh, I don't like what I saw on this one port or gateway, I am going to move. It takes a fair amount of planning to do that. It's hard to say how that gets affected.
I think that Don raises a very good point in terms of thinking about the overall supply chain. In his area, he has the inland empire and one of five or six locations in the U.S. with a high concentration of distribution activity. New Jersey is another area of similar magnitude with well over 900 million square feet of distribution space in the immediate hinterland in the state itself, not considering what is in Eastern Pennsylvania. We do have that concentration. That is the thing also to consider with the port of New York/New Jersey is that the port is located in a very dense consumer population. So about 85 percent of the cargo coming from the port is moved by truck rather than rail because it is locally consumed or it is being moved locally to one of those distribution centers. One of the things that happens with Sandy were other ripple effects on the supply chain. For example, in terms of supplying stores; stores have power to accept goods. It may back up at distribution centers. Does the distribution center have power? Were roads blocked? There was tremendous wind damage. It made it difficult to get around. If a vessel was shifted to Baltimore or Virginia, it may be that the supplier or the receiver wanted the product delivered to a different distribution center either because of customer demand or because the original one was blocked or did not have power. There are also customers going directly to warehouses. There are a lot of different ripple effects that occur.
Thank you. I see that we have another question posted online. In lessons learned, at New York/New Jersey, are they looking at freight on its way to the ports on trucks, containers currently in the port, as well as freight headed to the port on ships?
In terms of the disruption, there are a couple of different aspects. It is an import and export port. When we talk about the supply chain, we are talking about a multimodal situation that involves in inland portion that can be truck or rails or barge. Columbia Coastal is one example. Those inland connections can also provide some resiliency when one port is affected and another is not, so that you could call on the rail or the barges to help with recovery. In terms of trucks, they are equally important. I just mentioned in 85 percent of cargo moves by truck to the distribution centers from the Port of New York/New Jersey. There are all sorts of things that went on with Sandy recovery, in terms of overweight, over dimensional permits. If you are bringing in disaster supplies, my understanding is, you did not have to pay tolls in New Jersey. There are all sorts of considerations going on here. I hope that answers the question.
Thank you. We have another question posted online. This is for all of the presenters. From a strategic planning perspective, should more resources be devoted to the resiliency or mitigation for critical U.S. ports infrastructure? The cost benefit analysis for either option may be significantly different and have insurance considerations.
This is done. I have been on the private sector most of my life. Maybe there could be a definition of resiliency versus medication. That would help me from my perspective to answer.
All right, for the person asking the question, if you can clarify, that would be fantastic. If any of the other presenters have any thoughts, feel free to share them while we wait.
I will take a shot at that. I think of mitigation including advanced mitigation which I guess is defined as resiliency to the system; it is the excess capacity you can plan for. That is also operationally as Don describes. You run drills at the Port Authority and there are other organizations that have built institutionally to the organization. And that is a function which is resiliency planning. What do you do in case of a disaster that is abnormal to typical operations to the facility? Clearly there is some justification to do that, even apart from a cost-benefit analysis from a national security or health and safety perspective. Beyond that, to make sure that the facilities function, there really is some justification to say, you should do cost-benefit analysis around this. I think there are some examples that we have seen in the past on some things with safety and security that were wasted. This is partly because of the uncertainty when inherently you do not know when they will occur or how big they will be. Clearly trying to plan for something the size of Katrina's impact on the Gulf Coast would have been extremely difficult to do. Conversely, we see the enormous expense of trying to recover from that. And we have seen that overseas as well. There have been some facilities that have attempted to plan for disasters and yet you see things like the Port of Kobe Japan where they suffered an earthquake many years ago and were out of operation so long that essentially the supply chain shifted and never regained its prior role in the international port network. There is also a point where you can say, that a disaster can be so significant that there is no inflection point and recovery in the part of the country is to reduce the role of the facility or the location affected. That may be something, strategically if you had gone back and said, let's start with a clean slate and design a network, we may not use those facilities. But there was cost there so we chose to use what we already had. I suspect that may be some of the discussion around what happens in New York in the future, given the vulnerability from Sandy and what happened to the disruption there; will all of the facilities be run or restored exactly as they were before? Clearly the example with the car float that we saw the photos from Anne is one where it may be done a little differently. In that case, I do not know the insurance is. Anyway, I will stop talking and see if anyone else wants to add to that.
From the Port of Long Beach's perspective, we do a bunch of drills with business continuity, and as in the Kobe earthquake disaster, their business did not recover. It is not just a local business perspective, say from the Port Authority itself, but it is a huge economic engine for Southern California. So our ability to get back up and be a dependable part of the supply chain and continue to be the economic engine is very important. We spend a lot of time on that. There are some grant funds that can help support that as well as some of the security grants coming into that area. The other thing is that the difficulty in having more resilience, from an infrastructure standpoint, is probably a subject for another conference call. As the budgets get tighter for everyone, getting funds for port infrastructure gets increasingly difficult. We are self-funded, as far as the terminals are concerned and the infrastructure of the roads within the harbor district, we are self-funded. As far as trying to have the infrastructure resilience, I keep hearing from the political side of things on the public sector is that freight doesn't vote. So it is very difficult to get traction to spend money on freight infrastructure even though doing so can relieve some of the other congestion. It is not a real sexy subject apparently from just hearing conversations on that.
Thank you very much. Anne, I will give you an opportunity if you want to add anything to the conversation.
I think with any storm, with any kind of disaster, there is an emphasis on lessons learned and how things could be done better in the future. As Paul also mentioned, part of the long-term considerations is taking a look at the capital investments, the planning. Some may have to be accelerated to replace facilities. Some may have to be changed. In the case of one terminal operator, he had a good news/bad news story. The bad news is that he had not received the emergency generators because he was rebuilding the terminal. The good news was that the pedestals for those generators, if they had been installed, they would have flooded. So he had the opportunity after the storm to raise them about five feet in case there is another event. In terms of business continuity, again, it does show resilience of the supply chain, when you have access to multiple modes and the ability of organizations to work together on that physical movement, the information level, and the regulatory we all talked about.
Thank you very much. I see no additional questions at this point posted online. So I am going to go ahead and start reading the closing material. We do have a couple minutes left. I will check back once and see if any additional questions are posted before closing out.
But I would like to thank you all for attending today's seminar. The recorded version of this event will be available within the next few weeks on the Talking Freight website.
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The next Talking Freight seminar has not been scheduled, but will be announced to all attendees of today's session when it has.
I encourage you to join the Freight Planning LISTSERV if you have not already done so. Information to join the LISTSERV is posted on the title slide that is up now, and this is another mechanism which the future of Talking Freight seminars will be announced through. Looking back at the chat box, I do not see any additional questions so we will conclude today's seminar a couple minutes early. Thank you all for attending and have a great day.