Proposed California inland port project to relieve port congestion

The California Inland Port project proposes to develop four inland logistics hubs in California’s San Joaquin Valley stretching from Bakersfield in the south to Sacramento in the north helping to reduce congestion at California ports, according to Lois Yates, a partner at Global Logistics Development (GLD) Partners.

Yates, who led the Arizona Department of Commerce under three different Governors told AJOT: “The rationale for the project is that past efforts ignored the need to provide both inbound as well as outbound freight movements. There was no means of getting goods being imported into the (San Joaquin) Valley and then being exported from the Valley. The older plans were based on a one-way street so none of them ever panned out. This plan is to bring goods from the port into the market and then bringing them back down again.”

Adam Wasserman, managing partner at GLD Partners added: “We’re saying this is a 425-mile-long market area. It’s pretty difficult to optimize the cargo in the south if you are not getting to the north. We have talked to most of the top 100 shippers in the country and pretty much all of them say ‘if you can build this, we can have better connectivity, more reliability to our supply chain.” Reliability is now uniquely important.

In terms of cost, Wasserman said: “We are calling this a $30 billion dollar system. The vast majority of this is implying the commercial investment concentration around these hubs. The logistics hubs we are now pegging at $800 million and the vast majority of that is private investment.”

Wasserman says public spending to support the project will be essential: “We’re saying that the public has a responsibility to be a partner… so the investment grows from there. We don’t have commitments for anything yet. These things work through a process.”

GLD is working with a number of public agencies: “We are project managing this. We have a series of players working with us on the public side. I should say the project started with the Port of Los Angeles and air quality districts in the Los Angeles region, in the San Joaquin Valley and in Sacramento. All three air quality districts are involved and have committed resource money and support … The San Joaquin Valley Councils of Governments all the way to Sacramento are involved.”

Wasserman said the Fresno Council of Governments is coordinating the public participation: “The Councils of Governments (COGs) have asked the Fresno Council of Governments to be the coordinator. So, they have applied to the U.S. Department of Transportation, for example, for designation of this project as a national infrastructure accelerator. The Fresno COG is the official interface between the Governor’s office and other state agencies.”

Wasserman explained the market rationale for the project: “Our data shows 1.1 million TEUs moving in and out of this market area. These containers go through the San Pedro Ports of Los Angeles and Long Beach. It is about evenly split with inbound and outbound containers. [Editor’s note: the Ports of Los Angeles and Long Beach have a much heavier inbound to outbound total – in March 2022 Port of LA reported 495,185.8 loaded inbound compared to 111,781.25 load outbound.] The inbound is mostly consumer goods and the outbound is mostly agricultural goods. The Port of LA was very interested early on, and they have been quite involved … We are talking about four hubs, up and down that market. We are creating a system of investments that support state objectives and builds efficiency and that includes less congestion and less air pollution. The project was launched in 2019. It proposes integrated logistics, economic development, and clean energy. The projected total investment is $30 billion and participant partners include state, air quality districts, councils of governments, ports, shippers, as well as rail and trucking companies.”

According to the San Joaquin Valley Policy Council, supporters for the California Inland Port project include:

“The Port of Los Angeles; The Port of Long Beach; Union Pacific Railroad; BNSF Railroad; The San Joaquin Valley Air Pollution Control District; South Coast Air Quality Management District; San Joaquin Valley Metropolitan Planning Organizations (Kern County, Kings County, Tulare County, Fresno County, Madera County, Stanislaus County, San Joaquin County; Sacramento County); Sacramento Council of Governments; Sacramento Metropolitan Air Quality Management District; and the Central Valley Community Foundation. The project has received further support from the California State Transportation Agency, Governor Newsom’s Office of Planning and Research, California Air Resources Board.”