Railhead Is Competitive Edge for Port

A mammoth rail facility opened last week to handle container cargo coming through the Los Angeles and Long Beach ports, and officials predicted that it will help increase port business and reduce truck traffic on nearby freeways.

Completion of the $62-million facility culminates a six-year effort by port officials. It is expected to enhance the ports’ ability to attract cargo destined for inland markets such as the Midwest, East and Gulf states because it will eliminate the need to truck container cargo 25 miles to rail yards near downtown Los Angeles.

“It’s always been a problem for us competing with the other West Coast ports because our railheads are 25 miles away,” near downtown Los Angeles, said Travis Montgomery, director of trade development for the Port of Long Beach.

The other West Coast ports all have rail facilities at or near cargo terminals, Montgomery said. “We think this facility certainly translates into helping our competitive position.”

Save Time, Money

Shippers also applauded the new facility, which will save them time and money.

“There were many of us who wanted this facility 10 years ago and easily saw the need for it and felt the demand would grow,” said George Marshall, a senior vice president of marketing for Mitsui OSK, a Tokyo-based shipping line.

The new rail facility, about four miles from the ports on a 150-acre site next to Alameda Street in Los Angeles, is called the Intermodal Cargo Transfer Facility. It is the first major facility that the two ports--both of which have experienced steady growth in recent years in container cargo--have built together.

Competition among West Coast ports for shipping-line business has become fierce, port officials said, as imports from the Far East have grown and new technologies have emerged. For example, containers can now be double-stacked on rail cars, making it cheaper for a shipping company to move cargo from the West Coast overland instead of going as far as possible by sea.

“Nobody can afford to sail from port to port; that is just not good enough anymore,” Marshall said. “A (shipping company) has to think about and plan its intermodal operations.”

A sign of the competition was evident last Wednesday, one day after the Los Angeles rail facility opened, when the Port of San Francisco unveiled its own $3.6-million Intermodal Cargo Transfer Facility. Unlike the Los Angeles facility, containers there can be loaded directly onto train cars from the marine terminals without having to be trucked, according to San Francisco port officials.

That was not feasible at the Los Angeles port, which is much larger than San Francisco’s. The Port of Long Beach has one small rail facility on the waterfront but it serves only one shipping company.

The new rail facility was financed primarily through the sale $53.9 million in bonds that will paid back with money collected by a $30-per-container gate charge that shippers must pay. It will be operated by the Southern Pacific Transportation Co. under a 50-year lease with the ports, according to Art Goodwin, the Port of Los Angeles official who oversaw construction of the facility.

When the 1.3-mile-long facility is fully operational in the next month or so, up to nine trains a day will be able to arrive and depart from it. Ron Paul, Southern Pacific’s marketing manager for the facility, estimated that 70% of the containers handled at the yard will be loaded onto double-stacked rail cars.

Mile-Long Trains

Port officials said some of the trains will reach a mile in length, and could be composed of containers from a single ship. For example, a shipload of dresses, already on hangers inside containers, could be unloaded onto a truck trailer and hauled to the facility. There, the containers would be stacked on rail cars within hours and moved to Chicago.

To offset the noise, pollution and increase in traffic on nearby Carson streets that will be created by the rail facility, the ports have agreed to pay the city $50,000 a year for 50 years to maintain nearby streets, and $250,000 to pay for a sound wall along Alameda Street.

Additionally, if the rail facility is expanded in coming years, the ports have agreed to assist in paying to widen Sepulveda Boulevard to six lanes, as well as to pick up city expenses for long-term projects to build overpasses.

Although truck traffic is expected to increase on the Terminal Island Freeway and Willow Street leading into the facility, truck congestion on the Long Beach and Harbor freeways is expected to decrease. Port officials predict that 600 to 800 truck hauls a day from the ports to downtown rail yards could be eliminated by the facility.

“It’s going to be dramatic,” said Judith Girard, president of Long Beach-based trucking firm, Rail Delivery Service.

Less Pay for Truckers

Some truckers, as well as officials from the ports, say shipping companies, faced with the $30 gate fee, will undoubtedly seek to pay truckers less to haul containers to the new facility than they would pay to have them hauled downtown. However, truckers should be able to make up the difference by picking up and delivering more containers to the new rail facility, they said.

“You can drive from any container terminal to the (intermodal facility) in about 15 minutes,” Goodwin said. “Going downtown from a terminal can take two hours.”

However, Robert White, president of the Wilmington-based Truck Owner/Driver Cooperative, predicted that the rail facility will have a “devastating” effect on truck drivers. He said shipping companies have already indicated to some of the cooperative’s 237 drivers that they want to decrease the amount they pay to haul containers to the new rail facility instead of downtown.

Drivers are paid about $70 to haul a container downtown.

“Let’s say that there are 1,000 containers in the harbor,” White said. “If you pull them twice as fast at less money, what do you have? Less to go around.”