West Coast Ports

By ARNOLD DAVIS
AD Strategic Communications
adstrategiccom@aol.com



C.C. Wu

 

ON TRACK FOR GROWTH

    For the nation’s beleaguered ports, it’s now full speed ahead. Demand for port services has never been greater as volume and throughput continue to increase. Ports on North America’s West coast particularly are balancing throughput capacity with a general but growing lack of spare rail cars and available trucks. The trucking and rail companies that serve the ports have been short of capacity and are making little progress in changing their position. This shortage of equipment predictably will worsen port bottlenecks as shippers have to wait for trailers, drivers and rail cars. Commenting to the media on the shortage, Scott Arves, president of transportation at Schneider National Inc, said that his company is rejecting about five percent of new customer orders because of lack of drivers. "It’s the worst imbalance I’ve seen in my 25 years."
    From the port’s perspective, however, congestion is seen primarily as an infrastructure challenge. Speaking from the Port of Long Beach, Art Wong, said, "There are only so many ships terminals can handle and only so many roads you can build. Trade flows are growing faster than we can build infrastructure." Clearly, as international trade continues to expand, West Coast ports are being asked to accommodate an increasing number of ships and to extend gate hours to move ships in and out of the ports at a faster rate.
    As long as capacity is the principal factor dominating the direction of port improvements, West Coast ports are defining their success in customer service, technology improvements and infrastructure connectivity. Many are breaking records for containerized and bulk cargo. Typical comments coming from the West coast emphasize a port’s relationship between infrastructure and service. "Shippers and carriers have turned to Seattle because we have ample capacity on our marine terminals as well as on our local roadways and on the mainline railroads that move cargo to the rest of the country," said Port of Seattle CEO M. R. Dinsmore. He was quick to add, "The growth on international trade through the port is vital to the regional economy. Marine cargo moving through the port generated nearly 20,000 jobs and more than $1 billion in payroll. I think we’re well positioned to grow our cargo volumes and increase our value to the regional economy." As Seattle’s record cargo volumes are driving demand for more container terminal space, the port recently re-commissioned Terminal 25 and adjacent acreage to be used as for international container movements. Cargo volume at the port was expected to reach 172 million containers by year’s end.
    In addition to its ongoing expansion plans, Seattle and five other Washington State ports private companies and security coalitions received more than $7 million in port security grant funding from the federal Department of Homeland Security. The money is earmarked for 23 projects including access controls, lighting, gates and fencing, and new equipment. For the ports of Everett, Longview, Olympia, Tacoma, Seattle, and Vancouver, the funding also will enable non operational mandates such as security drills, recovery exercises, and operational communications.
    This increase in activity is being recognized by shippers and carriers as more are taking advantage of port enhancements. At the Port of Tacoma, for example, Yang Ming Transport recently signed a long term lease to become the port’s first single terminal user when Tacoma completes its refurbishing of Terminal 7-D by mid year. "We chose the Port of Tacoma for its ideal location as the gateway to the Pacific Northwest," said C.C. Wu, president of Yang Ming America Corporation. "With direct access to an on-dock intermodal network, increased terminal productivity and berthing specifications well suited for our vessels, the port offered the right opportunity for Yang Ming to develop a dedicated terminal to service our customers in the Pacific Northwest trade lane…" Through vessel-sharing agreements with "K" Line, Yang Ming has operated at the port almost a decade. In its current budget, the port estimates that its expanded container facilities will generate a 19 percent increase over the record volumes realized in 2004.
    The Port of Vancouver, WA, made similar news with the year-end announcement of a public/private partnership that won over Quadra Mining. After a three year absence from the port, the company has decided to reconvene movements of copper concentrate through the port. The mineral is shipped to the port’s renovated Kinder Morgan facility from Nevada by rail and truck and then loaded onto carriers bound for Japan and China.
    In addition to the Kinder Morgan facility, Vancouver recently restored Terminals 2 and 3 with over 100 acres of newly paved and lighted cargo storage yards and access to rail. These break bulk terminals handle pulp, lumber, plywood, steel and project cargo. According to a report released by Larry Paulson, executive director at the Port of Vancouver, these improvements are only part of a 2005 budget of more than $15 million for marine and industrial expan-sion. Said Paulson, "For 2005, the port will significantly invest in capital assets to accommodate the growth of port maritime and to promote expansion of port industrial business."
    The Port of Longview ended the year with the completion of its $21 million Industrial Rail Corridor. "This project is a milestone for the future development and diversity of our port," commented Larry Larson, commissioner at the Port of Longview. "It improves the connection between the railroad and our port’s marine terminals and industrial property." The new rail corridor extends from the main line of the Burlington Northern/Santa Fe Pacific railroads into the port’s industrial park and marine terminals and opens a direct rail connection that avoids the previous circuitous route across three at-grade crossings.
    During the first meeting of the Port of Kalama Board of Commissioners, Fred Swanstrom was elected to serve as president for 2005. Also elected was Milford Westin, to serve as vice presi-dent and Jim Lucas, as secretary.
    Further up the coast, the Port of Vancouver, BC experienced dramatic growth. With more than 15 consecutive years of increased container traffic, the port has embarked on an expansion program that includes partnership with the provincial and federal governments and railways. "The impressive growth the Port of Vancouver is experiencing underscores the urgent need to work together and plan for critical investments in our transportation gateway," said Captain Gordon Houston, president and CEO, Vancouver Port Authority. "It’s our job to make sure that the goods shipped in and out of the Port of Vancouver move to market quickly, efficiently and reliably."
    In that regard, the port last year opened the Axis Container Hub, a new facility centrally located between the Port of Vancouver’s three major deep sea terminals. It was the first phase of the port’s $35 million long term plan to increase capacity while getting trucks off the road. In addition to freeing valuable acreage alongside deep sea terminals, the hub puts importers and exporters at one more centralized facility so containers are emptied and then refilled at the same location. Vancouver is Canada’s largest and most diversified West Coast port, trading C$29 billion in goods with more than 90 trading economies each year.
    In close proximity to the Port of Vancouver, at least in Canadian terms, is Port North Fraser, a major transporta-tion link for the forest and construction supply industry. In addition to a bustling tug and barge operation, the port’s access to Canada’s highway and rail networks has provided the region with an economical means to move products it Canadian markets and internationally as an important feeder port to Vancouver. Although small by most international measures of volume, the centrally-located port handles over 15 million tones of inbound and outbound cargo, including logs, lumber, wood by-products, iron steel and general cargo. Port North Fraser is a fully self-integrated transportation hub that has learned to manage the delicate balance between the region’s economic needs with environmental values. It also has grown in its importance as an important warehousing and regional distribution center for Western Canada.
    Nearly 1,000 miles south of Vancouver, BC, the Port of San Francisco last year became the first seaport on the U.S. West Coast to install Radiation Portal Monitors (RPM) to screen all import cargo. According to Monique Moyer, executive director of the Port of San Francisco, the port was chosen "as an urban port with a wide array of industries and activities which makes this effort an incredible challenge…" The radiation portal is a detection device that provides Customs and Border Protection with a passive, non-intrusive means to screen containerized and breakbulk cargo, trucks, trains and other carriers for the presence of nuclear and radiological materials.
    In the San Francisco installation, trucks drive through the RPM portal as they drive exit the terminal, a process that only takes a few seconds. If the signal turns green, the truck proceeds out of the terminal. If the signal remains red, a Customs agent directs the truck to a secondary RPM that is located out of the flow of traffic and further tests are administered.
    Nearby, at the Port of Oakland, Phase II of a program titled SynchroMet that integrates ocean carriers with motor carriers through a virtual container yard to perform mutually beneficial street turns, to reduce costs and ease port congestion. "SynchroMet provides the Port of Oakland with a tool to alleviate congestion. The use of SynchroMet will reduce Port truck traffic and public road congestion, a benefit to our West Oakland neighbors and Bay Area commuters," said Jerry A. Bridges, maritime director for the Port of Oakland. "The Port of Oakland and SynchroNet Marine are partnering directly with local stakeholders to understand and facilitate sustainable solutions to the issues currently faced."
    In Phase I of the SynchroMet program, carriers were provided equipment visibility and opportunities for collaboration that reduced road and gate congestion at local marine and rail terminal facilities. Endorsed by the Northern California Intermodal Motor Carrier Conference, SynchroMet has shown it can reduce empty truck miles and reduce diesel emissions affecting the local environment. SynchroMet also enables users to track street-turned containers by individual unit number as it provides confirmation of a street-turn event to terminal operators and ocean carriers. It also provides motor carriers with a one-stop-shop for information on port and terminal operations, customer service, and contact information with links to ocean carrier and leasing company web sites.
    The
Port of Oakland also formed an alliance between Northwest Container Services, Inc. (NWCS) and the City of Shafter (COS), which resulted in improving the movement of goods in California. NWCS will be serving the California Integrated Logistics Center (CILC) located in and developed by the City of Shafter. The CILC combines an Inland Intermodal Center (IIC) with dedicated rail logistics serving international marine terminals at the Port of Oakland. According to Wilson Lacy, director of Maritime at the port, said, "This alliance is another example of how public/private partnerships can provide innovative solutions to freight transportation issues." Oakland’s other neighbor, the Port of Sacramento, is one of the state’s smallest ports, but it too is beginning to benefit from the growth of West Coast cargo. Although its 30-foot deep shipping channel is too shallow for most modern vessels, it primarily handles breakbulk commodities and has begun to entertain the idea of barging cargo from the Port of Oakland to better balance the overflow. Although the economic feasibility of container barge feeders and rail line shuttles has not yet been fully determined, as a satellite of the Port to Oakland, Sacramento would help the state maintain its flow of intermodal commerce.
    Intermodal also is booming at the Port of Stockton where the Stockton Public Railroad has been increasing the number of railcar moves by the thousands each year since 2001. Key to this growth is the port’s immediate access to two transcontinental railroads complemented by two loop railroads, one of which is on-dock for accommodating unit trains for export of coal, petroleum coke, and ores. It also enables consolidation of rail shipments of inbound and outbound steel coils.
    At the Port of San Diego, security technology has received the most recent attention. One of its tenants, Crossflo Systems, Inc., recently announced the first commercialized use of a data-sharing platform that enables the Unified Port of San Diego, Los Angeles Port Police and the Los Angeles County Sheriff to share data with the San Diego Harbor Police Department. The Crossflo security initiative provides a framework for representing different types of law enforcement and security databases and is considered one of the most comprehensive and effective new tools in homeland security. The priorities established by the Port of San Diego are being used as a template for other West Coast ports. San Diego also has become on of the nation’s leading ports for the processing of automobiles and other vehicles. Since it opened its vehicle processing center in 1990, the port has processed over 2 million vehicles and now processes more than 300,000 vehicles annually.
    Of course, no summary of West Coast Ports would be complete without mention of the country’s two largest port operations, the Port of Long Beach and the Port of Los Angeles. Throughout the past year, a surge in cargo and a shortage of longshore workers slowed vessel movements almost to a trickle as dozens of vessels were forced to wait at anchor for days for an opportunity to reach a berth. The congestion reached an embarrassing level in the fall as close to 50 vessels were at anchor with nearly the same number berthed but idle, waiting to be handled. As finger pointing and the absence of culpability were replaced by teamwork and partnership, the ports gradually gained back control over their operations. Finally, late in the year, longshore workers were able to clear the seemingly endless bottleneck of vessels and container volume and the ports dropped back to their "normal" operations with fewer than a dozen vessels at anchor.
    To reduce the probability of a return engagement of the vessel bottleneck dilemma, the Port of Long Beach initiated a
new roadway construction project that will help to ease traffic congestion along Ocean Boulevard on Terminal Island. The $34 million project began early this year and is projected to be completed in 2007. When completed, motorists using Ocean Boulevard will be able to travel non-stop east and west on a new elevated roadway over the intersections with the Terminal Island Freeway and Henry Ford Avenue. Traffic signals at these intersections, to a measurable degree, helped to contribute to the port’s chronic congestion.
    Richard Steinke, executive director of the Port of Long Beach, addressed the LB Chamber of Commerce on January 14th, with a "State of the Port" review. Cargo volumes continue to increase through Southern California ports. With 8,000+ TEU container vessels calling the San Pedro Ports with more frequency, terminal efficiency will be the key to keeping the Port Complex the vital cog in the goods movement system. Steinke discussed his view on what needs to happen to move increasing volumes while mitigating impacts of cargo growth to the community and environment.
    Appointed to his current position in December 1997. Richard Steinke has successfully directed the redevelopment of the 500-acre, former Long Beach Naval Complex on Terminal Island into shipping terminals. He led negotiations that culminated in a 25-year lease with Hanjin, under which the South Korea shipping company pays the port a minimum $40 million a year, or a minimum total of $1 billion over the life of the lease.
    Also under Steinke’s direction, the port launched a decade-long $1.9 billion capital improvement program to create new and more efficient shipping terminals and redevelop existing ones to handle a projected doubling in cargo. Since Steinke was named executive director, port container cargo volume has increased by one-third.
    For the 2001-2002 year, Steinke was chairman of the American Association of Port Authorities, an alliance of more than 150 port authorities in the United States, Canada, the Caribbean and Latin America. He is a member of the AAPA’s executive committee as the representative for South Pacific ports. He is currently the president of the California Association of Port Authorities. Steinke is a member of the board of directors of the Alameda Corridor Transportation Authority, Intermodal Container Transfer Facility Joint Powers Authority, Harbor Association of Industry and Commerce, St. Mary Medical Center in Long Beach, and a member of the Red Cross CEO Advisory Committee.
    Prior to joining the port in 1990, Steinke served five years as airport property officer at Stapleton International Airport in his native Denver, Colorado. A graduate of Chadron State College in Nebraska, he has done post-graduate work at the University of Colorado.
    The Port of Los Angeles, in addition to its many accomplishments, was singled out by an industry group as the top seaport in North America. Selected over other West Coast ports and the Port of New York and New Jersey, Los Angeles ranked higher in attributes including service, reliability, cost, convenience, and, yes, ease of access, among others. "It is truly an honor to receive this prestigious award," said Larry Keller, executive director of the port. "The port is committed to listening and responding to our customers and this award says loud and clear that the industry appreciates the work of the people of Los Angeles." {}