Delft University of Technology
Faculty Mechanical, Maritime and Materials Engineering
Transporttechnology / Logistic Engineering



T. de Bruin, A.D. Heijning e.a. Hinterland Transport Galveston Bay. A study of proposed hinterland, local and interterminal connections for container transport in the Galveston Bay Area.
Literature survey/Internship, Report 2000.LT.5374, Transporttechnology.


Executive Summary

PREFACE
This is the Executive Summary of the report on Hinterland Transport Galveston Bay. This summary will present the changes that can be made to improve the transport of containers in the Galveston area. The project is done by a multidisciplinary group of seven graduate students from Delft University of Technology in the Netherlands visiting the University of Texas A&M at Galveston for the period of 14 May until 8 July 2000.

We would like to thank Dr. A. James and A. Dixon for their extensive assistance. Also we want to thank the Port of Galveston, the Port of Texas City, the City of Texas City, the Port of Houston Authority, TTI and U.S. Army Corps of Engineers for their hospitality and for the information they provided. Finally we would like to thank the companies that supported us:

Texas A&M University at Galveston   
Delft University of Technology   
The Netherlands Research School for Transport,
Infrastructure and Logistics (TRAIL)		   
Ministry of Transport, Public Works and
Watermanagement of the Netherlands		   
Ballast Nedam NV   
Boskalis NV   

Galveston, 6 July 2000

Group CF 563:
  Alexander Heijning   Mechanical Engineering, Logistics Systems
  Birgitte Keulen   Civil Engineering, Geo-technique and Hydraulics
  Bunno Arends   Civil Engineering, Hydraulics
  Maarten van de Voort   Civil Engineering, Infrastructure Planning
  Rob Vos   Civil Engineering, Geo-technique and Hydraulics
  Sandor Verhoeven   Civil Engineering, Traffic Engineering
  Tjalling de Bruin   Mechanical Engineering, Transport Systems


1. EXECUTIVE SUMMARY
1.1. Galveston Bay Area
Galveston Bay (see Figure 1.1), Texas, is a highly populated area. Houston is the fourth largest city of the US and is the country's second largest port in total tonnage. The population in the Galveston Bay Area is still growing; however, there still is free space.

There is an increasing concern for the environment, demonstrated in the appreciation of nature (water, wetlands) and the growing resistance against side effects of modern life (noise). The combination of climate, traffic and industry causes heavy air-pollution, which is at the moment the worst in the United States. This problem will lead in the future to more restrictions on emissions.

If the container business is expected to continue to grow in the future, the hinterland connections have to be improved. The major stakeholders involved in this project are the area's Port Authorities, the Texas Department of Transportation (TxDOT), other governmental entities, the public, trucking companies and two railway companies.

Figure 1.1 Location Galveston Bay Area

Containers now arrive at three points in the Galveston Bay area: Barbours Cut, Turning Basin and Galveston. In the future they will arrive at at least three points: Barbours Cut, Bayport and Shoal Point. Turning Basin will probably stop serving as a container terminal when Bayport is built.

1.2. Containerization
Since 1956, the concept of containerization has had a great impact on world transportation. Container transport markets are still booming. Trends in international transport are changing; bigger containerships, hub-and-spoke ports and evolution of new markets. The Galveston Bay area is a load center and has the potential to become a shipping center. It is already handling over 65% of the containers in the Gulf of Mexico. The global Compound Annual Growth Rate for containerized cargo is 4 to 6%. In the future (2020), 66% of total container throughput at the Galveston Bay ports is expected to remain in Texas. About half of the total throughput will be destined for the Houston area (see Table 1.3 "Container transport in the future split by mode and destination" or Final Report chapter 2 "Bill of Demands"). The remaining 34% is considered long distance container transport and is mainly handled by rail, while the rest is transported by truck.

There are possibilities to further improve the competitive position of the ports in the Galveston Bay area. Next to the growth of imports for regional consumption there are possibilities for the ports to serve as throughput ports for the more distant hinterland (imports and exports). Furthermore, due to their location near the growing Latin American market, they will profit from the increasing North-South trade.

Containerization will increase further in the future due to growth of global wealth and the advantages of containers (cheaper, faster and safer). In the short-term there is a demand for container handling capacity, which will be provided by extra container terminals at the Galveston Bay ports. In the longer term there is need for more expansion possibilities.

1.3. Transport in the Houston area
The Bay Area is accessible by two interstate highways, one connecting North and South, the other connecting East and West. Around Houston there are two loops. The first is an Interstate Highway, the second a State Tollway. The containers are transported through the Northeast of Houston, where most intermodal facilities and distributors are located. Most of the container transport is done by truck. The growing population and economic growth of the region will cause congestion to increase in the future.

The two main railway companies in the area are Union Pacific and Burlington Northern Santa Fe. Together with the Port Terminal Railroad Association, which serves the Houston ship channel area, they operate 1300 miles of track connecting the region to the hinterland. Most of the railcars are gathered at several yards in the area before they are transported in long unit trains to the hinterland. At three intermodal facilities in the region containers are transferred from trucks to trains and vice versa. Currently there is no serious congestion in the railway system. To avoid bottlenecks in the near future, the construction of a couple of tracks is planned.

The congestion is mainly situated on the loops and the supplying roads. Beyond this area the roads have enough capacity. The roads are mainly occupied by passenger traffic. TxDOT will do general widening and upgrading of highways in the next 20 years to meet the global growth of traffic.

At this moment, none of the intercoastal cargo traffic carried by barges is containerized. However, it is expected that this will change in the future.

1.4. Ports in the Bay
In the Galveston Bay there are three ports of importance: the Port of Houston, the Port of Texas City and the Port of Galveston. The main business of the first two ports is handling crude oil and petrochemicals. To get to the Port of Houston all ships have to sail for 8 hours through the Houston Ship Channel, which is 45-ft deep. At this moment, the only port that handles containers is the Port of Houston, with an annual throughput of about 1 million TEUs. The Port has recently leased the container facilities of the Port of Galveston in order to increase its capacity. The City of Texas City and the Port of Houston have serious plans to build new container terminals, respectively Shoal Point with a capacity of 1.1 million TEUs, and Bayport with a capacity of 2.3 million TEUs.

The future (2020) demand is sufficient for all plans to be executed, as will be the capacity for container throughput of the new container terminals. However, the current capacity is too low and shipping lines are being turned down because of lack of capacity. This will not change until at least 2003, the earliest likely time for Bayport to become operational.

The channels to the ports in the Bay are not deep enough for 5th generation containerships. It will be very expensive to deepen the channels in the Bay from 45 to 50 feet. Therefore it is likely that (after 2020) a deep-water terminal will be built near the entrance of the Bay. There are no hub-and-spoke activities at the container ports in the Galveston Bay Area.

Figure 1.2 Galveston Bay Area

Explanation of Figure 1.2:
  Red lines:   Roads;
  Black dazed lines:   Rail (and minor roads);
  Purple dots:   Ports of Galveston Bay:
     SP: Shoal Point;
     BP: Bayport;
     BC: Barbours Cut;
     TB: Turning Basin.
  Orange shadow:   Urban area;
  Green shadow:   Congested area.

1.5. Expectations and Assumptions
Over the next 20 years, container transport is expected to grow at an approximate rate of 8% a year. At the moment container growth is already limited by infrastructure needs. Therefore, infrastructure in the Houston area is not currently sufficient to handle the additional traffic that container throughput growth will cause.

Expected growth
To be able to calculate the capacity needs of the system, some data is required. The first calculations will be made on the following expectations: From these estimated percentages, we conclude that the maximum annual growth percentage of container throughput in the Galveston Bay Area will be 6+1+1= 8%. This percentage is an estimated average for the next 20 years. In the first years after the expansion of the area's port capacities, growth will be stronger. This early strength is due to the fact that the lack of capacity from 1998 to 2002 will result in a sort of catch-up in the years 2003 and 2004. The percentage is an estimated maximum, to be sure that access solutions found for the problem will be sufficient.

Figure 1.3 presents the total throughput calculations for all the ports in the Galveston Bay Area.

Figure 1.3 Growth of Galveston Bay throughput in million TEUs (per origin)

The maximum throughput in 2020 will be about 4.8 million TEUs. This future throughput will be split over the four major terminals in the following way: It is clear that by 2020 the capacity of the terminals has to be expanded, or new terminals will have to be built. A possible location for a new terminal could be Pelican Island, because it is near the Gulf of Mexico.

Transport consequences of the expected growth
The forecasted growth of container transport will have a major effect on the infrastructure needs in the Houston port area. Since the forecasted growth is not only due to growth in the Houston-area population, the port will take on a more important role in hinterland transport. This means that the percentages by which container destination is divided now are about to change. The growth figures indicate that, of the 8% total annual Bay-area container growth, 6% is directly related to global container growth. The destination percentages for these container movements remain the same. The 1% container growth caused by Houston's population growth will result in more containers being moved to Houston, which will be done by truck. The remaining 1%, which is due to the economic growth of Latin America and the NAFTA agreement, will increase container transport to the hinterland. Since this part of container growth especially concerns the entire hinterland (up to the Midwest), this transport will be done by rail. This will lead to the container transport figures for the year 2020 as can be seen in Table 1.1.

Table 1.1 Total container transport in 2020
Current container transport: 1,000,000 containers
Growth due to global growth: 2,800,000 containers
Growth due to Houston population growth: 466,500 containers
Growth due to Latin-American growth: 466,500 containers
Total growth: 3,733,000 containers
Total container transport: 4,733,000 containers

This will lead to different shares of modes used for container transport.

Table 1.2 Container transport growth and its origin
growth reason
Destination Mode Global Latin-America Population Total Growth
Houston truck 1,400,000   466,500 1,866,500
Texas truck 560,000     560,000
Hinterland rail 840,000 466,500   1,306,500
    2,800,000 466,500 466,500 3,733,000

Table 1.3 Container transport in the future split by mode and destination
1999 2020
Destination Mode Proportion Containers Proportion Containers
Houston truck 50% 500,000 50% 2,366,000
Texas truck 20% 200,000 16% 760,000
Hinterland rail 30% 300,000 34% 1,607,000
    100% 1,000,000 100% 4,733,000


The increase in the portion of containers moved by rail will necessitate a more intensive use of rail facilities, thereby allowing rail companies to take advantage of economies of scale. The increase in the volume of cargo coupled with lower operating costs will make transport by rail more attractive and could cause the percentage of rail transported containers to rise even beyond the 34% estimate of Table 1.3.

Figure 1.4 Overview of container flows in the Houston Area

Explanation of Figure 1.4:
  Red percentages:   percentage of containers transported by truck to that area;
  Black percentage:   (underlined): percentage of containers transported by train;
  Red labels:   road numbers;
  Purple labels:   ports of Galveston Bay:
     SP: Shoal Point;
     BP: Bayport;
     BC: Barbours Cut;
     TB: Turning Basin.

Assumptions 1.6. Alternatives
This study develops and presents five alternatives that vary from one requiring very little change in the existing infrastructure (0+ alternative) to very innovative systems (Underground Logistic System). Summaries and descriptions of these alternative systems follow. Included in the summaries are the possibilities for modalities and techniques that can be used, as well as descriptions of the systems' limitations and possibilities, now and in the future.

1.6.1. 0+ Alternative
The 0+ alternative covers improvements that can be made to the existing system without major fundamental changes to the system. Besides upgrading S225 and S146 from State to US highways, traffic management techniques like Green Wave and Route Information System (RIS) (see Figure 1.5), are proposed as improvements. Since these techniques are not innovative there will be few difficulties implementing them.   
  Figure 1.5 Dynamic Route Information
  Panel (DRIP) in the Netherlands


The adjustments to the system are limited so construction will not be expensive. Therefore, it is expected that the public will not oppose such changes unless some particular environmental or safety issue comes to the forefront. However, since this alternative causes emissions to increase due to the growth of container transport, the possibility of public resistance should not be excluded. The region now ranks as number one in the United States in certain types of air pollution. Besides air pollution, other environmental problems such as noise hindrance will also grow. Therefore, this alternative will not solve the area's congestion problems in the long term. This could cause people to demand solutions that separate freight traffic from passenger traffic.

Besides the public, a second stakeholder with some interest in this alternative is the Harris County Toll Road Authority (HCTRA). It is not very likely that they will approve (without other sources of revenue) an elimination of tolls for trucks that use Beltway 8. However, if the government is willing to pay, or obligates trucking companies in another way to use Beltway 8, then there is a chance of this alternative's success. Under this alternative, the percentages of containers using truck and rail modes remain the same. However, due to the volume growth, the transfer time for moving containers will increase. It is likely that the industry would like to have larger revenues for the extra hours they need for transfer (see Appendix Final Report chapter 7).

Since this alternative does not require the construction of a large amount of new infrastructure, it does not require much additional funding. The additional infrastructure is not expensive and public funding is possible since tax money and bonds can be used to finance the required road expansion. Furthermore, some of these costs might reasonably be included in TxDOT's planned construction over the next few years, since they are responsible road widening and other maintenance. However, the operating costs of the 0+ alternative will be very high due to the congestion transport is going to face. The high operating costs cause the 0+ alternative to be a poorly feasible one.


Figure 1.6  0+ alternative

Upgrading and widening of S225 and S146 will increase their capacity. Since these kinds of capacity increases can only be done to a certain extent due to expansion limitations at highway junctions, congestion will still occur when large volumes of traffic use the highways. The congestion will limit the port's growth. Therefore, this alternative does not pose a long-term solution for reliable container transport in the Houston area. Route Information System and extending toll policy can result in some improvement.

1.6.2. Additional Constructions Alternative
In the Additional Constructions alternative, new techniques like on-dock rail and dedicated lanes on the road are introduced. On-dock rail will increase the percentage of containers that will be put directly onto rail at the ports. Fewer containers will need to be stored at the ports at any given time and direct transport from the port to Englewood Yard is possible. This new technique provides the additional advantage of providing a larger storage capacity at the yards. Dedicated lanes are not new to the Houston Area as there are already dedicated lanes for buses, vanpools and carpools. New dedicated lanes in this alternative will reduce congestion for truck traffic and will be constructed on the right side instead of the currently used location in the center of the road. Truck emissions will be less than in the 0+ alternative because a portion of the containers will be transported by rail instead of truck. The costs for on-dock rail are not very high; however, building dedicated lanes can be expensive.


Figure 1.7 On dock rail system (schematically)

The public benefits only indirectly from this solution. If all trucks are shifted to the dedicated lanes and trucks use them frequently, then this alternative should meet with public approval. However, if the dedicated lanes are empty while passenger cars are stuck in traffic, then public support will quickly disappear. Although the shifting of a part of the transport to rail will help reduce emissions, total emissions will still increase due to growth in the volume of truck traffic. On-dock rail will result in the direct loading of rail cars. This will most likely result in a modal shift, causing the railway companies to benefit from and therefore support this solution. Dedicated lanes will reduce container transport congestion considerably, which is advantageous to trucking companies. Other environmental impacts may result from this alternative, but to a small extent.

Once construction of the dedicated lanes on the major roads is complete, congestion will decrease, reducing the amount of congested miles that containers are transported. This causes the Additional Constructions alternative to be less expensive to use than the 0+ alternative.


Figure 1.8 Dedicated lanes on the right

The funding for this alternative is quite similar to that of the 0+ alternative. Railroad track expansions are not directly in the interest of the population of Harris County and therefore the public will not be eager to contribute to these expansions. However, since rail transport is a much cleaner alternative to trucks for transporting containers, environmental advantages could be adduced as a reason for publicly funding this part of the alternative.

Since this alternative includes a considerable stretch of dedicated lanes and fly-overs, the construction costs for this alternative will be high; however, the operating costs are much lower than those of the 0+ alternative. Fuel taxes could be used for the investments in road infrastructure. This causes the Additional Constructions alternative to be more feasible than the 0+ alternative.


Figure 1.9 Figure 1.9 Additional Construction

As long as there is no significant modal shift the capacity will be sufficient. The dedicated lanes on the right will have enough capacity until 2020. Only at peak rush hour will there be any likelihood that cars crossing the dedicated lanes at the on- and off- ramps might cause some congestion. Route Information System and Intelligent Roads can improve this system. Both the length and number of dedicated lanes can be increased in the future.

1.6.3. MODL Alternative
The MODL (Multitrailer On Dedicated Lanes) alternative utilizes an innovative system for container transport. In this system, the container does not have to change carriers during transport, a fact that simplifies the logistics chain. Containers can be separated at the quay by cranes into those that will use either on-dock rail or chassis. The result is more efficient logistics system with lower costs and greater time savings than the ports currently have.


Figure 1.10 Present situation


Figure 1.11 Multitrailer On Dedicated Lane (MODL)

The MODL system uses trailers that are much like existing truck chassis, except that this trailer has a guidance feature that makes the 'train' of trailers "track following." That is, without need for rail, the trailers follow in the exact path of the tractor much like ducks in a row. Several trailers can then be pulled by one tractor. The multitrailer system is a proven technology for 5 to 7 trailers but has not yet been applied to highway transport. Current production costs are higher than for normal chassis, but future improvements will eventually reduce the multitrailer's costs. The multitrailers will have dedicated lanes in the middle of the road, separate from the rest of the road and its associated traffic. Crossings of MODL lanes with other infrastructure significantly increase the construction costs of this alternative. However, this alternative has the important advantage of actually taking the container trucks off public roads. If all freight transport in the future can be shifted to these dedicated lanes, then significant safety improvements will result.


Figure 1.12 Multitrailer-lanes at the Port of Rotterdam

Furthermore, emissions will decrease compared to both the 0+ and Additional Constructions alternatives because more trailers will be moved per tractor. Trucking companies will probably support the system in the long term if a separate system is built. Railway companies will profit to the same extent as in the previous alternative.

MODL uses a shuttle system to transport the containers into the city. The multitrailers do not face any congestion on the dedicated lanes. Therefore, the transport costs of this alternative are low compared to other alternatives (see Appendix Final Report chapter 7).

Like the Additional Constructions alternative, the MODL alternative should qualify for environmental grants because the system reduces emissions.

The MODL alternative reduces container transport congestion to about the same degree as does the Additional Constructions alternative. The operating and construction costs of the two alternatives are also about the same. These facts make the MODL alternative as feasible as the Additional Constructions alternative.


Figure 1.13 Multitrailer On Dedicated Lanes (MODL)

The capacity of the system will be sufficient for transporting the expected amount of containers until 2020. The dedicated lanes in the middle could also be used by other freight transport modes. However, the system can only be extended to adjacent highways and beltways. Widening dedicated lanes will be very difficult and costly. MODL can be automated by using automated guided vehicles (AGVs).

1.6.4. Hub Alternative
The Hub alternative uses a hub at the Northeast side of the city and three terminals within the city (see ). The system uses on-dock rail, which is cheap and efficient. To meet the needed capacity, extra tracks will have to be built in the future, and a shuttle system must be constructed from the ports to the hub and the terminals. Each shuttle-train will be configured at the port for a specific destination. At the hub, containers are reconfigured, stacked or continue directly to the terminals. The system will require investment, but is cheaper than the systems that use dedicated lanes. The solution is environmentally friendly because it involves a modal shift from truck to rail, which is less polluting.


Figure 1.14 Hub system

The logistics chain of this alternative will be very different from the current container transportation situation. It is more time and cost efficient than the conventional system. The shuttle is a proven technology and the rail tracks already exist. Building new tracks next to the existing tracks will improve the safety and reliability of the system.

Many containers with a final destination in the Houston area will leave the port via the shuttle to the hub or to one of the three terminals. The transportation between the hub and the terminals will be calculated with fixed and mileage costs for the shuttle. The shuttle transport costs are low.

Since the hub alternative depends more on rail than road techniques, it is not likely that public funds will be available for this alternative. This means that the railroads must be willing to contribute more to this alternative then they would to any other. However, the potential profitability that this system can provide to rail companies should make them look at this alternative as an investment opportunity. Because the hub alternative is also advantageous from an environmental point of view, there may, after all, be some grounds for federal or other public funding.


Figure 1.12 The Hub system

Investment costs of the Hub alternative are much lower than for the MODL or Additional Constructions alternatives. Since the railroads can cover their costs by charging the same amount as they are doing now, these costs are easy to estimate. Operating costs are comparable to those of the other alternatives. Therefore, the Hub alternative is a feasible alternative.


Little expansion of such a system will be needed to handle container throughput in the future. The system's capacity can easily be expanded by constructing a new main track. The shuttles between the hubs and port can be automated. The system can easily be combined with an Underground Logistic System (ULS) for city distribution in the future since the hub and terminal facilities will already exist.

1.6.5. ULS Alternative
The last alternative combines on-dock rail with an Underground Logistic System, therefore fundamentally changing the logistics chain. At the ports, the logistics will be the same as in the Hub alternative. Containers either go by truck directly to their destination or go on rail to a hub where they leave for long distance destinations or enter the ULS for the local market. The ULS consists of underground tunnels in which vehicles move around and bring the cargo to terminals. In order to minimize the costs of a ULS, the diameter of the pipes has to be optimized. Therefore, the containers are stripped into pallets for loading into the ULS. The reduction to pallet-sized freight constitutes the major difference between the ULS and the other alternatives. The technology and the system in this alternative are very innovative.


Figure 1.16 An artist impression of urban pipeline transport

Because these innovative technologies are not yet commonly used in practice, there is a risk to the system and therefore to the investors in the system. The people in Houston and Harris and Galveston Counties probably do not want to pay for a test-project. However, if in the meanwhile the method is tested in other places, then chances of acceptance and contribution increase.

From an environmental perspective this alternative is a very good one. It is very clean (reducing emissions) and noise and visual hindrances will disappear in the urban area. This alternative will require great amounts of adaptation from the current system. Because a large amount of private investment might be necessary to construct this system, it is not likely that it will be easy to find companies eager to invest in this plan.

Because the throughput costs at the hub include the costs of stripping containers into pallets, the overall operating costs of the ULS alternative make this alternative somewhat more expensive to users in comparison with the others.

The Underground Logistic System alternative is very similar to the Hub alternative except for the number of terminals and the underground connection between the hub and the terminals. This causes the Underground Logistic System to be expensive both in construction and operating costs compared to the Hub alternative. The major advantage of the ULS is that there is no hindrance of the system to its surroundings, and vice versa. Currently, this advantage is not great enough to counterbalance the extra investments required for constructing such a system, but it might in the future. The similarity between the ULS and the Hub alternative can be used to construct underground connections between the hub and the terminal in the future, thereby transforming the hub system into a ULS. At this moment, however, a ULS is not feasible.


Figure 1.17 ULS alternative

The ULS will have enough capacity until 2020. The system is already high-tech in its automation and electric propulsion systems. It can, however, only be extended by construction of new pipelines.

1.6.6. Balance of Alternatives
The alternatives are balanced based on four main aspects: technique, stakeholders, costs and future. These aspects can be subdivided in several criteria, which can be found in Table 1.5 Score chart of the alternatives.

In this table two economic criteria are included: transport costs and economic feasibility. In Table 1.4 only the transport costs of a system are presented. These costs do not include any writing-off costs. Writing-off costs are therefore taken into account in the economic feasibility criteria.

Table 1.4 Average transport cost per container in the region
 Alternative  Transport costs for user 
 0+  $ 330.53
 Additional Constructions  $ 177.94
 Hub  $ 184.83
 MODL  $ 172.32
 Underground Logistic System   $ 205.31

The improvement criteria gives a judgement to which extent an alternative provides improvements for the current situation, based on the alternative's effects over the next 20 years. The flexibility of the alternative is weighed in the final criteria. This criteria does not only include the degree to which the alternative is expandable, but also takes the options of adjusting the system to other, high tech techniques in the future into account.

Table 1.5 Score chart of the alternatives
 Aspect Alternative
   0+   Additional   MODL   Hub   ULS 
 Proven technique  ++ 0 0 + -
 Logistic  -- 0 + + +
 Transport costs  -- + + + 0
 Economic feasibility  0 + + ++ --
 Public  - 0 0 - -
 Environment  -- - + + ++
 Other stakeholders  - + + + -
 Capacity  - + + ++ +
 Improvement  0 0 + + +
 Flexibility  0 + 0 ++ 0

The Hub alternative is clearly the most feasible alternative. Low transport and construction costs make the system economically feasible. The fact that it uses proven techniques and relatively simple logistics makes the system technically feasible. The capacity of the system can easily be expanded. The system is flexible enough to be used in combination with an Underground Logistic System in the future.

1.7. Conclusions
There are several options that can be used to improve container transport in the Galveston Bay Area. Any of these options will make container transport faster, more effective, cheaper and more reliable than in the existing situation.

However, in the long term, with the 0+ alternative, improvements to the existing container transport costs will be very high and the system will not be sufficient to overcome serious congestion problems. Therefore, it is the least desirable solution for improving hinterland, local and interterminal connections.

Of the other proposed alternatives, there are three feasible options: The remaining alternative, an Underground Logistic System, could be an option for the future, but it is too expensive at this moment to be considered feasible.

A system that avoids congested areas will improve speed and efficiency and lower the costs of container transport. Alternatives such as the Multitrailer system and especially a rail-shuttle system will be the cleanest. Besides these advantages, an efficient container transport system in the Galveston Bay Area will lead to economies of scale and a stimulation of the area's economy. The ports will gain competitive advantages and extra jobs will be created.

After weighing each of the benefits and costs of the alternatives, we conclude that the alternative with a hub and three terminals proves to have relatively low transport and constructing costs, which makes the system economically feasible.

The hub system has the following advantages and disadvantages compared to the current situation:

Advantages: Disadvantages: 1.8. Recommendations
As a result of the research involved in this study, several key concerns have become apparent, leading to the following implementation recommendations:

Cooperation
It is advisable for the three (future) container ports to cooperate as markets grow. By combining efforts, the ports will be in a stronger position in Gulf of Mexico and North-South container transport markets. Scale economies induced through cooperation will lead to greater efficiencies at the Galveston Bay ports, increasing their competitive advantage.

Cooperation between the ports, public entities, railroad and trucking companies, and other stakeholders is essential to finance the large investments necessary to realize these efficiencies. Cooperation in the building of a new transport system will result in efficiencies and growth that is in the interest of all stakeholders.

Logistics
Besides the congested hinterland connection, the capacity of container throughput has other limiting factors. The most important factor is the logistics system of the ports. The fact that containers, on average, currently stay at the ports for 5 or 6 days indicates that there are great possibilities for improvements in the logistics. If the ports were to Increase stacking fees and at the same time improve the data systems for container tracking and tracing, such actions would result in a significantly higher container handling capacity.

Long-term planning
Nowadays, plans are made for the next twenty years. It seems that within ten years these plans are often outdated. Future possibilities should be investigated more thoroughly. Because the evolution of capacity for container throughput is behind, the next years are needed to catch up. To be able to satisfy the demands for container throughput in the Gulf of Mexico, long-term plans have to be made, and these plans must include a new transport system, such as one of those proposed in this report.

Phases
To make improvements in the connections between hinterland and ports financially feasible, plans must be worked out in phases. An extra positive aspect of building in phases is that the system can be used very early to earn revenues and be expanded as needed while in use. One interesting possibility for such a plan might include the building of a megaport in the distant future. The implementation of any of the feasible systems suggested by this report enables expansion to the best place for a future mega terminal, Pelican Island.

Future studies
Before embarking on the construction of any of the systems recommended by this study, more detailed research on various aspects of the system will be necessary. Research should be done on the system's exact layout. A clear picture of the precise routes, changes in the infrastructure and needed construction should be obtained. Another essential part of the study is a complete cost analysis. When an overview of required construction is obtained, a more precise estimate of the building costs can be made. With this information it will be clear whether it is likely that the system can be financed.

1.9. Vision
Now that we have studied and analyzed ways to improve hinterland container transport in the Galveston Bay Area, we would like to give our long-term vision of the Bay Area over a period of 20 years and beyond.

We have a dream...

Continuing growth
The Galveston Bay Area is already highly populated. Growing wealth in the area will attract even more people. In the next 20 years the consuming population will continue to grow exponentially. Containerization has contributed to the welfare of the population and, in turn, population growth has contributed to the growth in containerized freight transport. So, we should expect total container volume to continue to grow well into the foreseeable future. The transportation of containers will be done by a few multimodal and multinational carriers.

Containerization leads to globalization, and new markets are evolving. The growth of South American markets and the transportation of E-commerce goods are of great interest to the Galveston Bay Area. Demand for greater capacity of container terminals will be inevitable.

Efficiency
Rapid development in technology, growing public pressure and cutthroat competition among ports in the Gulf of Mexico will contribute to far more efficient container transport systems. Fewer intermodal container transfers, separate transport systems and automated handling will reduce time and costs. Information and Communication Technology will be of great strategic value.

Cooperation
Container terminals in the Galveston Bay Area are load centers for Texas. Operational cooperation between the ports can make the Galveston Bay Area a Megaport and a shipping center for North-South trade. The Megaport will become a port of influence in business and politics. The ports will cooperate in: By using hub-and-spoke, dedicated terminals, and improved interterminal and hinterland connections the Megaport will be more efficient. Barbours Cut and Bayport will be dedicated to the Galveston Bay Area, while Shoal Point will be dedicated to long-distance (rail) transport. In 20 years the Megaport will be extended with a deep-water container terminal on Pelican Island for 5th generation container vessels. The Port will feed New Orleans, Freeport and others by use of intercoastal container barges. The Galveston Bay Megaport will be a strong competitor among all major Gulf ports.

Environment
Heavy air-pollution and increasing concern for the environment will force carrier companies to use cleaner or alternative transportation. The Galveston Bay Megaport will take mitigating measures to increase welfare in the most responsible manner. Rapid developments in technology and greater emphasis in the valuation of the environment in cost analysis at the Port will help improve the wellbeing of the population.

Congestion
Traffic congestion in the Galveston Bay Area tends to keep on growing. Implementing one of our alternatives (see Conclusions) will reduce congestion. 24-hour economies will make nighttime transport possible, which will reduce congestion while increasing container-related revenues. The cities in the Galveston Bay Area will have Underground Logistic Systems for city distribution and will be connected by Aboveground Logistic Systems. All together, these systems will result in no congestion due to container transport.

Reports on Logistic Engineering (in Dutch)
Modified: 2000.10.12; logistics@3mE.tudelft.nl , TU Delft / 3mE / TT / LT.