Gateway at a Glance: Southern California

By Joe Zelasney

Situated along the Gulf of Santa Catalina and the Santa Barbara Channel, the Southern California gateway extends from the U.S.-Mexico border to Point Arguello in Santa Barbara County. Southern California is home to the largest container port complex in the United States Los Angeles and Long Beach. Regional ports also provide critical support to the offshore oil industry and an ocean link to global markets for the region’s highly productive agricultural community.

Located 20 miles south of downtown Los Angeles, the ports of Los Angeles and Long Beach share a harbor in San Pedro Bay. They are the nation’s largest container ports, handling approximately 40 percent of loaded U.S. container imports and 25 percent of loaded U.S. container exports each year. In 2007, the ports of Los Angeles and Long Beach ranked 14th and 16th among global container ports, respectively. If combined, the ports would be the world’s fifth largest container port complex (15.7 million TEU), behind Singapore (27.9 million TEU), Shanghai (26.2 million TEU), Hong Kong (23.9 million TEU) and Shenzhen (21.1 million TEU), based on total
container moves.

Despite their great success, the ports of LA/LB have plenty to worry about. Community and environmental groups have challenged environmental impact reports for port expansion projects and stymied port development at these Southern California behemoths. About two dozen projects in the harbor are pending approval. In order to enable future growth, the ports have been working hard to improve air quality and reduce port-related traffic in
the region.

The ports have experienced nearly a five percent loss of market share since 2006. The port complex has lost market share because of resistance by shippers to rising port costs related to environmental mitigation (harbor fees, cold-ironing, new harbor trucks, electrification of handling equipment), increased intermodal rail rates, a reputation for undependable labor, burdensome business practices and aggressive expansion of capacity and marketing efforts at seaports in the Eastern U.S. in anticipation of an expanded Panama Canal.

Despite declining market share, the ports still boast the nation’s most comprehensive network of marine terminals, distribution facilities and intermodal rail capabilities. Moving forward, the ports must improve productivity to attract larger ships. Under current operating practices, the ports cannot turn vessels carrying upwards of 8,000 TEUs in a timely fashion. They require more efficient movement off the dock to rail and road connections, and higher density use of yard space. There is a lack of automation at the ports; as a result, productivity is not up to world-class standards.

Improving productivity and attracting larger ships could help the ports maintain and even grow market share, but this will require cooperation with the ILWU and sufficient capacity and efficiency improvements by the railroads. Railroad pricing will continue to impact shipper routing decisions as well. While it is difficult to predict the future, the ports seem determined to retain their position as the preeminent U.S. gateway.

Ports of Los Angeles/Long Beach Environment
Environmental technology and practices that reduce or control air pollution are
included in all new construction projects at the ports of Los Angeles and Long Beach. In total, there are nearly 60 environmental measures being applied to the construction and operation of the new terminals.

• All container cargo vessels calling at the new terminals will plug into shore-side power and turn off their main and auxiliary engines by 2011
• All vessels will adhere to the Vessel Speed Reduction Program, which requires reduced speed on approach, beginning 40 miles offshore
• All vessels will use clean-burning, low-sulfur fuels in their main and auxiliary engines within 40 miles offshore
• All cargo-handling equipment at the terminal will be the cleanest available
• Rail yard operations will use alternative fuels and the cleanest equipment
  available
• Use of EPA 2007-compliant container drayage trucks by 2012 and 100 percent use of LNG-powered trucks by 2018
• Terminal buildings constructed to “Gold” certification-level Leadership in Energy and Environmental Design (LEED) standards
  In addition to requirements designed to reduce terminal construction and operation emissions, the ports will seek to mitigate the cumulative impacts of port operations on the community. The ports will establish community mitigation funds and pay the start-up costs for non-profit organizations that will use the mitigation funds to study ports’ impacts on the community.

Port of Hueneme
The Port of Hueneme is located approximately 60 miles northwest of Los Angeles in Oxnard, California. Known as the “port the farmers built,” it is the only deep-water harbor between Los Angeles and the San Francisco Bay area, providing numerous services to California’s productive central coast agricultural community. The port has a depth of 35 feet at mean low water and boasts ample on-dock cold storage, as well as a Liebherr LHM 320 mobile harbor crane.

The Port of Hueneme ranks among the top seaports in California for general cargo throughput. Niche markets include import and export of autos as well as fresh fruit and produce. The port handles more than 300,000 autos each year and ranks among the country’s top 10 auto ports. Annually, the port accommodates more than 600,000 metric tons of bananas, making it one of the nation’s largest banana gateways. Its strategic position near the Santa Barbara Channel has allowed the port to become the primary support facility for Southern California’s offshore oil industry.

Port of Los Angeles
The Port of Los Angeles, the nation’s largest container port, boasts 43 miles of waterfront and 27 cargo terminals on 7,500 acres. It specializes in container, dry and liquid bulk, breakbulk and automobile handling. In 2008, 7.85 million containers moved across the port’s docks.

The Port of Los Angeles finally received approval to expand the TraPac container terminal, which was delayed for years by a series of environmental challenges. The TraPac Terminal expansion will allow it to expand capacity from 900 thousand TEUs to 2.4 million TEUs by 2025, and includes the construction of a new on-dock rail facility.

Eight years after submitting the original environmental impact report, the Port of Los Angeles is finally scheduled to begin expansion of the China Shipping Container Line terminal next summer. The project cost is estimated at $106 million, and the facility’s footprint will expand from an existing 72 acres to 142 acres of backland, with 2,500 feet of wharf served by 10 Post-Panamax
cranes and an annual capacity of 1.5 million TEUs.

Port of Long Beach
The Port of Long Beach is the nation’s second largest container port and boasts 3,200-acres of terminal space. In 2008, 6.35 million containers moved across the port’s docks. In addition to containers, the port has specialized terminals that handle petroleum, automobiles, cement, lumber and steel.

In April of 2009, Long Beach gained approval for the Middle Harbor redevelopment project. The project will combine two older container terminals into a single 345-acre facility by merging the existing terminals and adding 51 acres of fill. When complete, the terminal will have a capacity of 2 million TEUs per year. This 10-year, $750 million project includes the addition of an on-dock rail yard.

Long Beach hopes to begin construction of a 175-acre container terminal at Pier S by 2010, pending environmental approval. The project cost is estimated at $300 million and would also include an on-dock intermodal rail yard.

Port of San Diego
The Port of San Diego leases property at two marine cargo facilities, the Tenth Avenue Terminal and the National City Terminal. The port offers direct access to rail, three interstate highways (I-5, I-8 and I-15) and is located just 20 miles north of the U.S.Mexico border.
The 96-acre Tenth Avenue Terminal offers 300,000 square feet of dockside cold storage and one million square feet of warehouse space. In addition to warehousing operations, the terminal handles dry and liquid bulk, breakbulk and small-scale container operations. Major inbound cargoes include refrigerated goods, cement, fertilizers and forest products. Export cargoes include
refrigerated goods, breakbulk and bulk goods. The terminal has eight berths with 42 feet of depth at mean low water.

The 125-acre National City Terminal complex is a primary entry point for major Japanese and German automobile companies and has the capacity to handle more than half a million autos per year. In 2007, the Port of San Diego processed over 250,000 import and export vehicles. The facility is equipped to handle heavy equipment and major project cargoes and also moves lumber, livestock and containers. The terminal has seven berths with 42 feet of depth at mean low water.

In This Issue

Up Front

News, Trends & Analysis
New Items

The outlook is improving

Supply Chain
Federal chassis rules: Are you ready?

Working with the public sector

How will your company deal with Sarbanes-Oxley

Features
Gateway at a glance Southern California

Six case studies in green

Ports & infrastructure
Nowhere near a Peak Season this year

Port Products
Green port product review

Commentary
Sustainable: The new buzz word

On the Horizon
Expect to see more LNG fuel stations in the future

Casualties