Niche ports provide California with critical logistic options

By: | at 12:00 PM | Channel(s): Ports & Terminals  

The San Pedro ports of Long Beach and Los Angeles in Southern California and the Port of Oakland in San Francisco Bay to the north handle a vast majority of the Golden State’s containerized ocean freight. Between the three, they have a throughput of over 17-million teus, not to mention bulk and break bulk totals.

Understandably, these three ports are key to Californian trade and indeed the nation’s international trade. But the California’s niche ports are far more than a footnote to the totals of the big three. California has two ports with over 4-million tons of cargo annually, four more registering over 1-million tons of freight and three more tallying over 300,000 tons of cargo. In many respects these ports play a critical role in the State’s transportation make-up by providing specialized cargo handling facilities, that wouldn’t be available otherwise.

Many of the California niche ports are located in the San Francisco Bay area. Among the Bay area ports besides San Francisco itself are Redwood City, Richmond, Benicia, Stockton, West Sacramento and Crockett. While these ports are not household names, they represent a significant amount of freight.

Bay Area Ports

For example, in the case of the Port of Redwood City, Redwood tonnage for all commodities moving across Port of Redwood City docks during the three quarters of Fiscal Year 2013-14 (ending March 31, 2014) was 1,236,661 metric tons, an increase of 18% over the prior FY.

In this case, imported sand and aggregates from British Columbia accounted for 930,934 MT, more than 75% of the tonnage for the first three quarters of the fiscal year. This was nearly a 30% increase in the amount from the same period last fiscal year. The next largest cargo was exported shredded scrap metal by Sims Metal Management, totaling 201,614 MT, more than 16% of the total tonnage for this year-to-date.

Although not large tonnages, shipments of bauxite from Australia, gypsum from Mexico, and domestic sand from the San Francisco Bay-Delta added to the mix of inbound cargo.

Fifty-nine vessels (44 ships and15 barges) made calls during the first three quarters of FY 14 compared to 52 vessels (37 ships and 15 barges) during the same period last year.

The port also completed the modernization of a wharf this last April.

The $17 million modernized wharf replaced a 60-year old World War II era wooden wharf with a new bulk handling concrete wharf that was designed to meet the present demands for operational and seismic conditions as well as climate change issues. Construction on the new wharf began in September 2012 with the demolition of the old wooden Wharves 1 & 2 and the adjacent warehouse. A 950-foot long seawall designed to meet storm surges and predicted sea level rise has been built along the shore of the Port adjacent to the modernized wharf. The new wharf is large enough to handle Panamax size ships.

Last year Port of West Sacramento, after years of handling the port itself, awarded the master lease to SSA Pacific Inc. The new lease replaces an existing terminal operations management. Under the agreement, which was approved by the Sacramento-Yolo Port Commission, SSA Pacific handles all maritime related expenses and the city of West Sacramento receives guaranteed rent payments. The terms of the lease are for a minimum of five years with the lease extendable in five-year increments up to 20 years. The minimum rent payments to the city would be $650,000 annually, the revenues for the city increase as tonnage shipped through the port increases.

The agreement also eliminates $850,000 in existing debt the port owes to SSA, and under it SSA agrees to buy the port’s existing air credits for handling bulk cargo for $50,000.

Although San Francisco isn’t as large as cross bay rival Oakland, the Port still handles nearly 750,000 tons of freight annually, virtually all of it bulks. The Port also has break bulk and project work that it is trying to develop.

Benicia is another million ton plus port in the Bay area. Nearly the entire 1.48 million tons is vehicles, virtually all in bound. It’s a privately owned facility and handles General Motors, Ford, Chrysler, and Toyota. Benicia is the Northern California hub for the

domestic distribution of Fords and Chryslers, and all Toyotas delivered to Northern California are processed from this Port.

Another Bay area niche port is the Port of Stockton, which annually handles around 1.8-2 million tons of cargo. The port is an excellent example of the importance of niche ports in the Californian port system. For starters, the port handles over 90% of the fertilizer imports for the Central Valley agriculture – a key industry in the State’s economic portfolio. In FY 2013 (ends in June) the port handled a wide variety of dry and liquid cargoes such as steel (57,375 mt), bagged rice (58,986 mt), sulfur (186,827 mt), fertilizer (110,343 mt), urea (93,915 mt) iron ore (237,098 mt) on the dry side and ammonia (173,767), fertilizer (529,741 mt) and molasses (246,169 mt) in liquid freight.

However, the real story was the launch of the Marine Highway 580 project which is shuttling containers on barge between the Port of Oakland and the Port of Stockton.

The new tug and barge service could shift as many as 750 truckloads per week off Northern California highways and reduce fuel costs and emissions. The operation, which was launched under the TIGER grants, is expected to hit the break-even point sometime this summer.

Southern Californian Niche Ports

Kristin Decas, ceo for the Port of Hueneme said, “Last year we had a benchmark year and we are hoping to have another one this year.” (see full interview with Decas in May 5 edition page 10).

The Port reported $8 billion in cargo value in the year ending in June 2013 and reported 267,737 car shipments, 49,000 high and heavy units and 20,000 containers.

There was a sizeable increase in imports of heavy equipment: “We saw a 6.8% increase in the imports of tractors and other heavy equipment -our high and heavy cargo because there had been pent up demand. The question is whether these shipments will continue to increase or whether they will plateau. The jury is still out on this.”

Decas said a “similar situation exists with our auto shipments. There was an increase over the last few years but we are not yet back at 2006 levels so the jury is out on whether we will see further increases or the car shipments will plateau. There was a 12.2% increase in imports last year.”

The Port is looking at some strategic investment to upgrade the port facilities to handle more project cargoes such as wind turbine blades and more high and heavy cargo. In order to do this, “we need to deepen the ship channel from the current 35 feet to 40 feet, something we are working with the Army Corps of Engineers.” The Port is also looking at improving its cold storage capacity.

The Port of San Diego lies just 100-miles from the San Pedro ports and occupies a unique position both geographically and service-wise to the California port system. In 2013, San Diego posted 5.17 million tons of freight, up 7.2% of 2012. A majority of the freight tonnage was in vehicles, amounting to 3.92 million tons, an increase of 13.5% over 2012.

In August of 2012, the Port signed a 24 ½ year lease with Dole Fresh Fruit Company for a 954,864 sq/ft berth at Tenth Avenue Marine Terminal. As part of the deal, Dole will invest around $7 million in infrastructure improvements. The cargo is mainly bananas and pineapples from Dole.

The Port also has become a project cargo hub, following the $3 million capital improvement project to its Tenth Avenue Marine Terminal. The Port invested in the project to provide more flexible berthing and to improve its ability to handle specialty cargo that requires large space for storage and staging. The project included the demolition of transit sheds and warehouses, originally constructed to accommodate cargo that moved on pallets and required covered storage, such as newspaper and cotton.

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American Journal of Transportation