High-and-Dry Areas Vie for ‘Inland Ports’

The San Joaquin Valley grasslands, miles from the ocean or any navigable river, might seem an odd place to put a port.

But there, along Interstate 5 just north of the Grapevine, sits the Tejon Industrial Complex. Resembling a gargantuan freeway rest stop, the sprawling warehouse park calls itself an “inland port” and is one of several ambitious efforts throughout Southern California to relieve chronic congestion at the Los Angeles and Long Beach harbors.

The high desert towns of Victorville, Palmdale and Lancaster are among those similarly trying to position themselves to grab some of the region’s growing cargo business and bring in steady jobs.

Right now, inland ports are little more than a regional planning concept in which cargo-processing complexes would hug freeways, rail lines and airports instead of waterways.

Such operations would differ from warehouse complexes or industrial parks because of the transportation and shipping services offered to tenants, such as a dedicated rail line or luxe trucker amenities.

Although most of the freight would still flow through the Southern California seaports, recurring logjams would be eased by swiftly moving cargo containers from crowded harbor terminals where the boxes commonly sit for days, proponents say.

Inland communities are attempting to profit from a confluence of shipping trends: The busy ports of Los Angeles and Long Beach have little room to expand; international trade continues to build; the Inland Empire, the destination of choice for warehouses and distribution centers, is becoming increasingly crowded and expensive.

“Five or 10 years ago, there would have been no reason to come up here,” said Barry Hibbard, vice president of commercial and industrial marketing for Tejon Ranch, the 162-year-old working ranch in southern Kern and northern Los Angeles counties that is developing a small portion of its 270,000 acres for industry, homes and recreation. “But the advantage we have here now is that the cost of our dirt is not as hard on the tenants. We can offer more storage space and there are no residential neighbors around to complain.”

But shipping lines and retailers, among others, are skeptical about the concept, wondering whether it would ease congestion or merely add another step.

“We understand the urgent need to find ways to accommodate the anticipated growth of cargo, and inland ports could well be part of that solution,” said Tupper Hull, spokesman for the Pacific Merchant Shipping Assn., which represents the ocean carriers and terminal operators that move more than 90% of the containerized cargo in the U.S. “But the concern is simply that every time you touch a container, the cost and the price of the goods inside goes up. The goal is to touch them as few times as possible.”

It doesn’t help that there are no examples in the U.S. big enough to serve as a credible model.

“There is talk and there is smoke but not necessarily much activity that is carried out. Whenever there is another round of military base closings, people get excited about the idea of inland ports,” said Peter Hall, a professor at the University of Waterloo in Waterloo, Canada, who has studied the Southern California ports.

Still, Jon DeCesare of Long Beach-based World Class Logistics Consulting thinks all the talk might be turning into action.

“Inland ports have been talked about for years, but it is becoming more and more important as vessel sizes and trade volumes increase,” said DeCesare, whose company has looked at dozens of potential sites for inland ports for clients nationwide. “Southern California is probably where it will happen first because of the volume here.”

Many are pinning their hopes on exactly that.

The Southern California Assn. of Governments pointed to the seaport cargo boom as a way for the region to rebound from the loss of high-quality manufacturing jobs over several years.

In a 2004 report titled “Logistics and Distribution: An Answer to Regional Upward Social Mobility,” the association outlined an ambitious proposal for creating inland ports that includes extending the Alameda Rail Corridor and spending $16.5 billion for two dedicated truck lanes that would reach from the ports of Los Angeles and Long Beach to the Victor Valley in western San Bernardino County.

Salaries in logistics and distribution jobs can range from $17,700 to $69,000, said the report’s author, John Husing, a specialist in regional economics and vice president of Economics & Politics Inc. in Redlands.

“These jobs are not just going to pick up and leave like the manufacturing jobs,” Husing said. “It’s one area of the bluecollar economy that will remain here because of the activity at the ports.”

The Tejon Industrial Complex’s efforts to lure more cargo-dependent tenants to the 1,450-acre development are eagerly supported by Kern County officials, whose constituents are plagued by high seasonal unemployment because of the county’s reliance on the agriculture industry. There have been objections too, most notably from environmentalists who want the bulk of the sprawling Tejon Ranch preserved as open space.

While acknowledging that the site is relatively far from the seaports and lacks rail service, Hibbard said Tejon was becoming more attractive as the Inland Empire has become crowded with warehouses and distribution centers.

“We are going to try to attract everyone in the cargo movement supply chain,” Hibbard said.

Situated on the relatively tiny sliver of Tejon Ranch land that straddles the I-5, the complex aims to be a trucker’s dream. There are sit-down restaurants and fast-food eateries, a drive-through Starbucks, on-site mechanics, a hotel, laundry services, an arcade, movie theater and even a chiropractor’s office.

Its main tenant so far is Swedish home furnishings retailer IKEA, which has nearly 2 million square feet of warehouse space and room outside to keep 250 to 300 cargo containers. From the Tejon distribution center, IKEA supplies stores in California, the Pacific Northwest and part of Canada.

IKEA moved to Tejon in 2001 to solve several problems, said the company’s North American president, Keith Keller.

Ensconced in a 400,000-square-foot facility in Ontario, IKEA was adding stores and needed a facility four times as large, Keller said. The company looked throughout the Inland Empire but couldn’t find a site that was big enough or fit within the budget, he said.

What’s more, IKEA needed to move goods out of the ports more efficiently to a central location to quickly supply its new, far-flung stores, Keller said.

Then, as now, cargo containers arrived at the Los Angeles and Long Beach ports and often sat for days, before they were picked up for delivery. Terminals at both ports allow several days of free storage, which exacerbates the chronic congestion there. As the containers pile up, they must be stacked and other containers must be moved to get to the boxes that are finally ready to be delivered.

IKEA wanted to cut through the tie-up by building a warehouse big enough to eliminate the need to use storage at port terminals.

“Time is money, and the situation in Los Angeles and Long Beach is unique,” Keller said, given that the ports handle 70% of all container traffic moving through West Coast harbors. “When the goods are coming in, companies need to get access to them as soon as possible. We needed to find a solution, and this has worked out really well for us.”

Several other communities, including Lancaster and Palmdale, are considering developing similar complexes.

For its entry into the inland port derby, Victorville has transformed the former George Air Force Base into the Southern California Logistics Airport and plans to build rail spurs from nearby Burlington Northern Santa Fe tracks. Local officials tout the area’s ample warehouse space, labor force and airport power plant.

In some respects, it is the most versatile of the new inland areas seeking to capitalize on the boom in international trade. The airport has North America’s second-longest runway, and it can accommodate even the largest airliners. It is also within a few miles’ reach of Interstate 15, a major route for trucking cargo.

Shippers “won’t have any nearby residential areas complaining about congestion and noise, and we have a facility we are customizing for air, rail and truck transport,” Victorville City Councilman Terry Caldwell said. “We’re here to see if we can fit in and ease the transportation bottleneck.”