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Ship49417 - en - Economic Impact of Cruise Ports - Case of Miami
Ship49417 - en - Economic Impact of Cruise Ports - Case of Miami
UNCTAD MONOGRAPHS
ON
PORT MANAGEMENT
A series of monographs prepared for UNCTAD in
collaboration
with the International Association of Ports and Harbors
(IAPH)
17
by
UNITED NATIONS
New York and Geneva, 2001
ii
NOTE
The views expressed in this monograph are those of the author and do not necessarily
reflect those of the United Nations. The designations employed and the presentation of
the materials in this publication do not imply the expression of any opinion whatsoever on
the part of the Secretariat of the United Nations concerning the legal status of any
country, territory, city or area, or of its authorities, or concerning the delimitation of its
frontiers or boundaries.
*
* *
UNCTAD/SHIP/494(17)
iii
UNCTAD has been cooperating with the International Association of Ports and
Harbors (IAPH) for some years, in fields that include the production, translation and
distribution throughout the world of technical studies in the form of Monographs.
Through these, it helps to develop the management skills needed for the efficient port
operation in developing countries.
One important outcome of the ninth United Nations Conference on Trade and
Development (UNCTAD IX) was a new work programme for UNCTAD in the transport
field. It is important to stress that the original aim of improving the efficiency of ports
which spawne d the idea of the UNCTAD/IAPH monograph scheme was reaffirmed.
The UNCTAD Division for Services Infrastructure for Development and Trade
Efficiency is thus pleased to be able to continue to cooperate with IAPH, presenting
the practical experience gained by a specific port or professionals for the benefit of the
international port community.
Jean Gurunlian
Director
Division for Services Infrastructure
for Development and Trade Efficiency
iv
FOREWORD
Goon Kok-Loon
Chairman
Human Resources Development Committee
IAPH
v
CONTENTS
Chapter Page
Annex
1. Vessels’ characteristics............................................................ 29
Chapter One
arrive and depart MIA each day. Its extensive air service network covers over
150 cities on four continents, positioning it among the busiest passenger
airports in the world. With a total 15.8 million-passenger count in 1999,
MIA ranked third in the United States for international travelers. Total
number of passengers during the same period reached 34 million, ranking
Miami International Airport in the top ten in the United States.
9. Besides a vibrant seaport and airport that connect Miami to the rest of
the world, Miami-Dade County also has the highest concentration (over 500)
of freight forwarders in the United States. The international trade mix
includes 53 consulates, 33 bi -national chambers of commerce, 20 foreign
trade offices, 13 Edge Act Corporations 1 and 38 foreign banks. There is also
an impressive contingent of multinational corporations, telecommunications
companies and business-support industries.
10. The Port of Miami is a 260-hectare (650 acres) island facility, located
in environmentally sensitive Biscayne Bay, adjacent to downtown Miami. A
fixed-span bridge connects the port to the mainland. The island complex is
approximately 3.8 kilometres (2.4 miles) long, 640 metres (0.4 miles) at its
widest point and 10.5 kilometres (6.5 miles) total shoreline. Entrance to the
harbor is through a 12.80 metres (42 feet) deep, 152 metres (500 feet) wide
channel known as Government Cut, dredged across the south tip of Miami
Beach, then 131.06 metres (430 feet) wide to a 274.32 metres (900 feet)
approach channel to the Port of Miami. Maximum tide levels are about
0.67 metres (2.2 feet) at the highest and 0.31 metres (1.0 feet) at the lowest.
11. The official name of the port is Dante B. Fascell 2 Port of Miami-Dade,
and is a department of Miami-Dade County government. The Port of Miami
is a non-operating seaport. It provides the infrastructure for the private
sector to conduct all commercial operations. The actual loading and
discharging of vessels is carried out by independent stevedoring companies
that contract with the individual cargo and cruise lines. Financially
independent from the county’s tax coffer, the seaport generates its operating
revenue from its billings for wharfage, dockage, storage, rent, water, etc.
Different financial vehicles are used for the financing of major expenses and
projects. These may involve state and federal grants and matching funds,
bond issues, and loan programmes.
1 These are domestic corporati ons organized for the purpose of foreign banking or other
international or foreign financial operations and have a federal charter.
12. The seaport is a “clean port”, which does not handle bulk cargoes or
potentially dangerous or hazardous cargoes such as fuel oils. In addition to
palletized, project, and roll-on/roll-off cargo, the majority of cargo is
containerized, representing little pollution threat to the bay or surrounding
ecosystems.
13. With over forty shipping lines calling on more than 130 countries and
360 ports across the globe, the Port of Miami is the largest container port in
Florida and ranks among the top 10 in the United States. Markets served
include Africa, Asia, the Caribbean, Central America, Europe, the Middle
East and North America and South America. Geographic location and strong
cultural ties to Latin America and the Caribbean are contributing factors to
the considerable commerce with these markets.
14. During fiscal year 2000, a total of 2,424 ships docked at the port,
carrying 7.8 million tons of cargo, including 4.5 million tons of imports and
3.3 million tons of exports, and a total 868,178 TEUs. Latin America and
the Caribbean regions accounted for 60 per cent (4.7 million tons) of the
total trade. Trade with Europe has been increasing steadily, and in fiscal
year 2000 represented 24 per cent (1.9 million tons) of the total tonnage. A
significant increase in commercial trade is now anticipated with Africa and
the Far East.
15. In 1960, Miami-Dade County assumed control of the seaport from the
City of Miami. The seaport was then located on the coast close to downtown
and faced Dodge Island, which had been created back in 1902 when the
harbour was initially dredged to allow access of vessels. The county
immediately announced plans to construct a new port facility on Dodge
Island and the new Port of Miami was opened in 1963. Throughout the
1960s, the seaport flourished as the cruise and cargo industries developed.
During the 1970s, the port’s activity increased tremendously. By 1979, it
was obvious that the facilities were woefully inadequate to support new
business.
17. In the mid-1990s, Dodge and Lummus islands were joined by using
spoil materials from dredging, thus becoming a single island facility. Today,
the port bears no resemblance to its humble beginnings in the 1890s.
18. The port now has approximately 260 hectares (650 acres) dedicated to
rolling stock, container yards, refrigerated warehouse space, gantry crane
UNCTAD Monographs on Port Management 5
19. Since 1897, when the first passenger ship sailed out of Miami bound
for Nassau (Bahamas), the Port of Miami has held a preeminent position as
a leading cruise port. By the mid-1970s, the port had become the first to
host more than one million passengers in a single year, and by 1980, when
1.5 million people cruised from Miami, the port had solidified its reputation
as the Cruise Capital of the World.
20. Nowadays, the port has simultaneous berthing capacity for six mega
cruise vessels, 3 in addition to berthing facilities for smaller cruise ships and
passenger ferries. Planned passenger improvements include expansion of
berthing facilities to accommodate additional mega-ships and vehicular ferry
3 Those having lengths over 300 metres and exceeding 2,000 lower berths.
UNCTAD Monographs on Port Management 6
21. During fiscal year 2000, eighteen cruise ships, totaling 1.4 million
gross registered tons, were homeported at Miami’s seaport, and close to
3.4 million passengers passed through its passenger terminals. Total port
revenues were $72.5 million and cruise activities accounted for
approximately $33.7 million, or 46 per cent of the total. These revenues were
derived from passenger wharfage, parking, dockage fees, water and electrical
services, and other miscellaneous charges.
22. The estimated total impact on the local economy resulting from port
activities during fiscal year 2000 exceeded $8 billion and 45,000 jobs.
Approximately 50 per cent of the total economic and employment effect is
attributable to cruise-related activities, as the following figures indicate:
24. Other salient economic benefits to the county from cruise operations
are:
Chapter Two
26. In fact, the ship itself is a vacation destination with pool, shopping,
gambling, planned fun activities, quality entertainment, fine dining, and
comfortable accommodations. A cruise vacation is very often, too, a way to
meet interesting people, a romantic getaway, or an innovative setting for a
family reunion.
27. Also, within the last few years, the use of cruises as venues for
busine ss meetings has been growing, and the lines are designing ships to
accommodate this new trend. Conference rooms, audio/visual equipment,
computer centres, copy and fax machines, microphones, flip charts and
easels are some of the business amenities now found in the newer vessels.
Some lines go so far as to provide meeting coordinators, secretaries and
language translators.
28. The products offered by the major cruise lines operating from the Port
of Miami include:
3-, 4-, 5- and 7-day Eastern Caribbean, Western Caribbean and Bahamas
cruises – with the following ports of call: Calica/Cancún and Cozumel/
Playa del Carmen (Mexico), George Town (Cayman Islands), Key West
(Florida, United States), Nassau (Bahamas), Ocho Ríos (Jamaica), San Juan
(Puerto Rico) and St. Croix, St. John and St. Thomas (US Virgin Islands).
UNCTAD Monographs on Port Management 8
3-, 4-, 7-, 10-, 11-, 14-, and 15-day cruises to Bahamas, Caribbean,
Panama Canal, and transatlantic to Europe – with the following ports of call:
Coco Cay and Nassau (Bahamas), George Town (Cayman Islands), Key West
(Florida, United States), Labadee (Haiti), Ocho Ríos (Jamaica), Oranjestad
(Aruba, Netherland Antilles), Willemstad (Curaçao, Netherlands Antilles),
San Juan (Puerto Rico), St. Thomas (US Virgin Islands), Acapulco, Cozumel/
Playa del Carmen and Cabo San Lucas (Mexico), Panama Canal (Panama),
Puntarenas/Caldera (Costa Rica), San Diego (California, United States),
Barcelona and Málaga (Spain), Tenerife (Canary Islands, Spain) and Funchal
(Madeira, Portugal).
29. Air-sea packages, available through travel agents, are the primary
means of attracting greater numbers of cruise passengers. Travel agents
have a far greater impact on the cruise industry than in any other area. The
validity of this statement is confirmed by the percentage of revenue
generated through travel agents in selected sectors:
31. The proximity of the port to the airport with its adequate facilities,
broad geographic distribution of flights and easily accessible ground
transportation is the determining factor for the success of these air-sea
packages. Accordingly, the Miami International Airport (MIA) serves as the
primary gateway for 80 per cent of Miami’s cruise passengers.
UNCTAD Monographs on Port Management 9
32. The cruise industry recognizes the travel agent as their primary
source of business growth. Consequently, it is very supportive of the travel
agency community and the two enjoy a very close working relationship.
33. The most prevalent cruises are those lasting between 3 to 7 days,
termed “short” cruises. Consequently, geography plays a major role when
shipping lines devise itineraries. The geographic location of Miami is an
undeniable advantage to reach the most popular cruise destinations — not
only in the Caribbean, but also Mexico, Central America and the northern
coast of South America. It also contributes to its homeport status – being
the origin and terminus of cruise itineraries.
36. Baby boomers, 4 in particular, are culture seekers who want to enrich
themselves and want to return home with more to show from a vacation
than just a suntan. They want to come back smarter, better informed, and
thus seek out such attractions as museums, lectures and historical tours.
4 Those born after the Second World War, specifically, between 1946 and 1964.
5In addition to the ticket price, the cruise lines assess the charge for passenger wharfage —
head tax. Afterward, the lines pay the port directly, based on the seaport’s published tariff
rate.
UNCTAD Monographs on Port Management 11
41. The standards for hotel room accommodation vary among the lines.
Typically, the lines prefer to be able to accommodate approximately one -
quarter of cruise passengers in overnight lodgings as part of either a pre- or
post-cruise stay-over. The duration of this stay-over ranges from one night
to three, four, or seven nights.
44. The lasting strength of the Port of Miami as a cruise homeport is also
attributable to its being an important business and population centre. Two
of the major cruise lines, Carnival Cruise Lines and Royal Caribbean have
their international headquarters located in the city. The third largest —
Norwegian Cruise Lines — also has its national head office located in Miami.
An efficient public transportation network allows staff and cruise passengers
to reach the downtown area in less than five minutes.
6 The capacity of cruise vessels can be stated by the number of beds available to
passengers, which can be deployed in one or two levels. The term “lower berth” measures
bed capacity at one level. Occupancy rates of 110 per cent mean that some beds of the
second level are being used.
UNCTAD Monographs on Port Management 12
45. The benefits accruing from cruise base -port operations to the local
economy have greatly increased competition for homeport status, to the
point that, today, almost 100 ports are vying for 20 cruise lines. Bearing in
mind that ship re-deployment takes one year, and building a mega-terminal
takes three years, the strategy pursued by the Port of Miami is to anticipate
the needs of the cruise lines and act upon them.
46. Overall, the pivotal role of the shipping lines in making cruises such a
phenomenal success cannot be overestimated. They generate the new cruise
products (e.g. itineraries and destinations), deploy and operate expensive
vessels and, together with travel agents, follow the changing preferences of
travelers to offer them appealing air-sea packages every season. The fast
reaction of the shipping lines to adapt their cruise packages to signals
coming from the travel networks is paramount in successfully marketing
their ships and destinations.
UNCTAD Monographs on Port Management 13
Chapter Three
47. The dual billing of cargo Gateway of the Americas and Cruise Capital
of the World presents the Port of Miami with some unique challenges.
Foremost is the need to meet the functional requirements of both trades,
cargo and cruise, while maintaining an aesthetically pleasing appearance
that satisfies the expectations of the tourists.
48. Lighting and landscaping are among the means that the port
successfully uses to mitigate the manifestation of the cargo infrastructure.
These complement the clear physical separation of the two trades. As
indicated in Figure 5, cruise operations are conducted on the northeast side
of the island-port, while cargo ships work along the south side of the port.
49. The diversity of issues inherent in the cruise trade requires that more
than one division within the port be involved. The nature of the issue to be
addressed or resolved determines which section is to handle it. As an
example, contractual agreements with shipping lines, policy matters and
similar topics are dealt with at the top executive level of the seaport
management team. Ongoing service accommodations, on the other hand,
are part of the functions of the marketing division, just as issues relating to
operations are resolved by the cruise operations division and accounting
matters are the responsibility of the finance division.
51. There is an efficient use of the premises for cruise and cargo
terminals. Most of the surface is devoted to open storage for containers and
covered storage for goods, including a refrigerated warehouse. There are
also several office buildings occupied by the port administration,
UNCTAD Monographs on Port Management 14
Government agencies, cruise and cargo shi pping lines, shipping agencies,
and freight forwarders.
52. The essential land-based facility for the cruise trade is the passenger
terminal. In 1969, it cost $5 million to build three passenger terminals
totaling 3,000 square metres (32,000 square feet) of air-conditioned space,
manual baggage pick-up areas (under roof, but not air-conditioned) and an
open parking lot. In 1999, the port completed the refurbishment of
two passenger terminals totaling 23,000 square metres (250,000 square
feet), totally air-conditioned, and the added amenities of airport -style
conveyor baggage system, VIP lounge, seating for 4,000 passengers, airline
reservation counters, and car rental stations. Also a compo nent of this
project included a 730-vehicle parking garage with a pedestrian bridge
connecting it to the terminals. The cost of the whole project reached
$76 million.
UNCTAD Monographs on Port Management 15
56. Cruise passengers returning from their vacation at sea will follow
the reverse process. They will find that the compartmentalized baggage
rooms and new luggage handling equipment allow the disembarkation
process to proceed smoothly — sequential disembarkation of passengers
according to flight priority is frequent. The modernized facilities also result
in accelerated processes through the relevant official services (e.g. customs,
immigration, etc.).
57. For those vacationers flying out directly after the cruise, registering
themselves and their luggage at the airline check-in counters, located on the
ground level and inside the terminal, effectively reduces the level of anxiety.
There is also a variety of user-friendly and efficient local transportation
between the seaport and the airport, culminating in a hassle-free and
seamless process.
58. The rate of passenger flow is different for arrivals and departures.
Since passengers embarking on a cruise are actually coming from different
UNCTAD Monographs on Port Management 16
points and on different modes of transportation, the flow may start in the
morning and continue through to the afternoon. The process for
disembarking passengers at the end of the trip is at the approximate rate of
1,200 to 1,400 persons per hour. Since, on average, the cruise vessels carry
between 2,000 and 3,500 passengers and usually dock between 06:30 and
07:30 hours, by mid-morning all the passengers have disembarked.
61. The goal to strive for is always to make every aspect of the cruise
vacation a pleasant and memorable experience. This includes the process of
reaching the port, the time spent waiting to embark, and the reverse process
of disembarking and leaving the port facility. The various redevelopment
projects undertaken by the Port of Miami in the last two or three years have
succeeded in greatly enhancing the cruising experience for millions of
passengers.
62. Accordingly, the continual upgrading of the facilities to meet the needs
of the cruise lines is an ongoing task. A good example is the 32–month
improvement on terminals 8 and 9, which was undertaken in four phases
comprising seven construction projects. With very tight construction
deadlines, lasting from 3 to 11 months, the terminal serving 600-pasenger
Fantasy class vessels was upgraded to serve the bigger 2,800-lower berths
Destiny class vessels. The facility remained open to the trade throughout the
refurbishment period.
UNCTAD Monographs on Port Management 17
63. Among the future projects is a proposed new passenger gateway and
access-road complex, currently in the design stage. The change in passenger
operations would channel traffic in cars, buses and taxis into a centralized
gate system near the centre of the port. Access to the passenger areas
would be controlled at the gate, and admission would be contingent on
producing a valid cruise ticket or visitor’s pass. New access lanes would
conduct traffic from the gate area to the passenger terminals at the eastern
and western ends of the seaport. The proposed system would effectively
separate passenger traffic from the cargo gate complex, thus enhancing
safety and security.
66. Both baggage and stores are handled at ground level, the former
reaching the apron through the ground level of the passenger terminal.
Suppliers carry the latter directly to the apron from where they are loaded
into the ship’s holds. These operations are carried out well below the level of
the passenger-bridge, positioned at the third level of the terminal.
68. Accordingly, the vessel agent must make arrangements with a USDA
approved garbage disposal company for the removal and destruction of all
regulated garbage. This garbage must be contained in leak-proof plastic
bags, at least four millimetres thick and, if necessary, double bagged. USDA
officers must monitor the removal of regulated garbage from the vessel to
the containers on shore (See paragraph 78). Ship lines, agents or
crewmembers are responsible for inspecting the container for missing locks
and holes that may allow spillage. They are also responsible for locking the
container and making sure that it is completely sealed.
69. Following are some of the Government agencies with oversight of the
cruise industry regarding the monitoring of vessels, passengers, baggage,
stores and garbage:
72. The USCG is also responsible for enforcing the IMO’s Measures to
Prevent Unlawful Acts Against Passengers and Crews on Board Ships,
adopted in 1986. The regulations outline specific procedures that cruise
ships, ports and flag States must follow in regard to security. The IMO
measures require ship operators to restrict access to authorized personnel
and monitor the flow of materials brought on board a ship in port.
73. Further, on October 16, 1996, the United States Coast Guard
implemented an Interim Final Rule on Security for Passenger Vessels and
Passenger Terminals that adopted the IMO measures. The rule set three
levels of security – low, medium and high – based on the nature of the threat
received, and requires vessel and port terminal operators to adjust security
procedures accordingly.
UNCTAD Monographs on Port Management 20
74. Each year, the cruise lines submit a comprehensive security plan to
the USCG for each vessel and port terminal. The plan details the security
procedures for screening passengers, baggage and ship supplies, as well as
limiting access to the vessel and terminal facility.
75. The USCG is also entrusted with protecting the marine environment,
notably enforcing regulations regarding ocean dumping from vessels. The
regulations make it illegal to dump plastic refuse and garbage mixed with
plastic into any waters, and restrict dumping of non-plastic trash and other
forms of garbage. Foreign -flagged vessels are subject to these regulations
while operating in United States waters out to, and including, the Exclusive
Economic Zone (200 miles offshore).
78. The United States Customs Service is the leading border agency at
ports of entry for cruise ships arriving from foreign destinations. The
official services performed by United States Customs include:
Animal and Plant Health Inspection Service (APHIS), Plant Protection and
Quarantine (PPQ) — Department of Agriculture
79. APHIS and PPQ are responsible for monitoring the handling of
regulated garbage in accordance with regulations. They are also charged
with enforcing USDA regulations concerning limits on items brought into the
country from overseas by cruise passengers. Prohibited items can contain
foreign animal and plant pests and diseases that could seriously damage
crops, livestock, pets, and environment. Items not allowed entry are meats,
fruits, vegetables, plants, animals, and plant and animal products.
Accordingly, APHIS and PPQ officers inspect passenger baggage for
agricultural products.
UNCTAD Monographs on Port Management 23
Chapter Four
80. The worldwide cruise industry relies heavily on the North American
market (United States and Canada), which has been growing steadily for
many years. The most recent expansionist phase of the North American
cruise industry began in 1997, when it added a net of eight ne w ships with
an aggregate capacity of 8,047 lower berths — a 7.4 per cent increase in
berth capacity. Between 1997 and 1999, the industry added 18 more ships
and more than 29,800 lower berths – an increase of 13.7 per cent in the
number of ships and 25.2 per cent in the number of lower berths. As these
percentages indicate, the industry is not only expanding its fleet, but also
doing so with larger vessels.
81. For 1999, it was estimated that cruise ships homeporting in Florida
had a combined annual capacity of 21 million bed days, 7 or 67 per cent of
the total United States capacity — the largest in the world. The Port of
Miami had the largest share (39.03 per cent) of this total, with other State
ports following: Canaveral (35.08 per cent), Everglades (15.31 per cent),
Tampa (5.23 per cent), Palm Beach (4.46 per cent), and Manatee (0.89 per
cent).
7 This is another capacity measure used in the cruise industry that multiplies the available
lower berths by 350 days. It is generally assumed that two weeks per year are necessary for
maintenance and refurbishment of each cruise ship.
UNCTAD Monographs on Port Management 24
slight increase in the average length of a cruise and a decline in the capacity
utilization rate.
Table 2
88. The Caribbean8 research suggests that those factors can be grouped
into two, namely: (i) port-related attributes; and (ii) island-related attributes.
The former includes vessel accessibility to the port, berth availability,
berthing facilities, passenger reception facilities, good official services and
vessel security. The latter comprises water sports, cultural diversity,
friendliness of locals, political stability, tourist safety, etc.
89. A cursory review of tourist brochures9 shows that cruise trades are
spreading to other regions. Thus, other ports could seize opportunities
opened to them in “short” and “long” cruises.
Teamwork needed
8 Strategies for Global and Regional Ports – The case of Caribbean Container and Cruise
Ports by Dr. G. De Monie et al. Kluwer Academic Publishers. 1998. Dordrech, the
Netherlands.
9 A 12-day cruise covering the West Mediterranean, Morocco and the Madeira and Canary
islands; a 15-day cruise around the Baltic Sea; a 26-day cruise covering the West Coast of
South America, Panama Canal, Caribbean coast of Central America and Yucatan Peninsula;
and a 27-day cruise covering Australia, New Zealand and the Antarctic.
UNCTAD Monographs on Port Management 26
92. In 1999, the Port of Miami and the cruise industry rallied the entire
community to successfully fend off an attempt to impose a $4 tax per person
per day on every cruise passenger sailing from the seaport. The purpose of
the tax was to fund a new baseball stadium. Because the head tax was to
be charged only to Port of Miami passengers, the cruise lines would have
had to absorb it to remain competitive. The eventual result would have been
the lines moving to another port, either in Florida or offshore. In either
case, the effect would have been devastating to the community’s economy.
Among the losers would have been the port, the cruise lines, the airport,
local hotels, restaurants and entertainment centres, retail stores, rental car
companies, and would result in the loss of thousands of jobs and millions of
dollars in wages.
96. The underlying message behind the three examples cited above is a
simple, but important one: One port, one community.
UNCTAD Monographs on Port Management 27
Reference Sources
− Enterprise Florida
30
Gantry Crane Berths 127 - 131 450 137 180 36 11.00
Gantry Crane Berths 131 - 140 1,125 343 180 28 8.50
Bays 144- 148 600 183 80 (24.40) 25 7.60
Bay 154, Ro/Ro – Lo/Lo 670 204 80 25 7.60
Bay 155, Ro/Ro – Lo/Lo 550 168 80 25 7.60
Bays 161- 171 (171 Ro/Ro – Lo/Lo) 1,250 381 80 31 9.50
Bays 165 – 177 (171&172 Ro/Ro – Lo/Lo) 1,450 442 80 25 7.60
Bays 183 -187 450 137 80 25 7.60
Passenger Terminal 12 (Bays 187-195) 1,000 305 100(30.40) 28 8.50
Notes:
1. Ships’ berths are noted with bay numbers that begin at the northwest corner of the island. Bay numbers increase in a clockwise
direction around the port in increments of approximately 120 feet per bay.
2. Bulkheads are concrete -capped, steel sheet pile with 7.5 feet minimum height above MLW. Apron areas are asphalt paving over
compact fill or reinforced concrete decking on piling.