North American seaports and supply chain with Michael Vanderbeek

Seaport communities do indeed benefit directly from waterborne commerce, but when the unexpected happens, the supply chain gets stressed and the goods we expect, and in many cases depend on, may not be readily available. "While government action, particularly in the U.S., has already put billions of dollars in play to facilitate near-term port infrastructure improvements, it is vital that policymakers and logistics leaders at all levels act decisively to address the systemic vulnerabilities highlighted by the pandemic holistically, focusing on resilience and the long-term sustainability of the industry," said Michael Vanderbeek, who recently joined GHD to lead the Maritime & Coastal group's North American planning efforts. As a certified American Association of Port Authorities (AAPA) Professional Port Manager (PPM) and former seaport executive, Michael is passionate about the intersection of goods movement, economic development and sustainability, and is eager to help GHD's clients maximize opportunities for success while preparing for future challenges. We spoke with Michael to get his take on the state of North American seaports.

As we close out 2021, the most obvious challenge – and the most urgent one – is the lingering impact of COVID-19 on labor markets, equipment availability, and overall supply chain fluidity. There is broad consensus that supply and demand are currently severely mismatched in a number of key sectors, with transportation and warehousing being among the most impacted, along with manufacturing. For example, record volumes of containerized imports have been purchased since the initial decline experienced during the early days of the pandemic, but the size and ability of the available labor force to get these goods to market has reduced substantially during the same period. The result is a massive stress on the global supply chain, which has led to seaport terminal congestion, empty container shortages, a reduction in inventories and a multi-factor increase in lead times for new purchases. This will continue to be a challenge until supply and demand stabilize.

Another significant challenge faced by some seaports is the devastating impact of the pandemic on the cruise industry. For those North American seaports where cruise activity constitutes a substantial percentage of operating revenue, the near-total loss of cruise business during the past 18 months has changed not only near-term capital planning, but also future investment strategies.

Post-pandemic, and looking longer term, the main challenge most North American seaports will need to grapple with is the scale and cost of infrastructure. Seaports are incredibly capital-intensive, not just in terms of the planning, design and construction of new assets, but in the ongoing maintenance and repair of existing assets. In the past, many seaports operated, by default if not design, in a run-to-failure mode, with major maintenance of assets being deferred as long as possible. In the shadow of the supply chain vulnerabilities exposed during the pandemic, and with the spectre of sea-level rise now very much in view, the consequences of asset failure are both more visible and direr than before. As a result, the maintenance, repair or replacement of waterfront infrastructure must necessarily be approached with greater urgency going forward by public port authorities, private terminal operators and investors alike.

The COVID-19 pandemic revealed a number of vulnerabilities within the North American seaport system. Some are surprising. Others have been years, if not decades, in the making. As an industry, the challenges we are currently experiencing present a once-in-a-generation opportunity for seaports to partner with policymakers, supply chain partners, and community leaders, to make a unified push to improve both the hard (infrastructure, equipment) and soft (people, technology) assets that our supply chain requires to function reliably, efficiently and sustainably into the future.

Now is the time to add resilience to the list of primary benefits that seaports must generate. It has become clear; inland communities are impacted by seaport vulnerabilities almost as much as coastal communities are. We are, in a very real sense, all connected. So, our seaports require investment not just in new berths and terminals, but in the highly specialized workforce that designs, operates and maintains those terminals, along with the warehouse workers, truckers and others who make sure that the goods we all depend on get where they need to go.

In the U.S., government action has already put billions of dollars in play to facilitate near-term seaport infrastructure improvements. This is an important first step, but our entire industry needs to have honest and urgent conversations about how to equitably prioritize and fund the various needs of our aging seaport system across numerous political, economic and geographic lines. Many seaports in the U.S. and Canada require new infrastructure to remain viable, let alone competitive, meaning there is a real, widespread need to deepen harbors, extend berths, expand backlands and modernize terminal operating equipment. Linking the business needs of seaports with the resilience needs of waterfront communities is the key to sustainable future operations. The more often and loudly we stress this interconnection, the swifter and more effective our collective action is likely to be.

Since joining the industry back in 2005, I have been fascinated by the role of seaports in localizing globalization. Seaports are a truly unique amalgam of global goods movement and local economic development. With climate change now front and center as a public policy issue, I am thrilled to be working for a strategically positioned firm to help our seaport clients become bastions of resilience and leaders of change. The challenges are real and not easy to overcome. But the importance of the work that needs to be done is clear - I'm excited to be part of, and help lead, the effort.