Ports of Los Angeles and Long Beach building at furious pace
At the edge of San Pedro Bay, home of North America’s largest cargo complex, they’re building new piers, wharves and rail yards at a furious pace to further dwarf the competition.
So much construction is underway that the new facilities by themselves would move more freight than the entire port of Savannah, Ga., which ranks No. 4 among the continent’s ports.
The ports of Los Angeles and Long Beach, first and second in the cargo-movement hierarchy, respectively, are hauling in so much dirt, they would have enough land to build a twin of Universal Studios Hollywood with enough left over to fill 100 football stadiums with 20 inches of muck. Long Beach alone expects to use 6,000 truckloads of concrete.
The most expensive and extensive upgrades in the history of both ports will cost nearly $6 billion. The improvements are getting underway as international trade rebuilds ever so slowly from the devastating global recession, but experts say the building binge is necessary to keep the roughly 40% share of Asian imports that the two ports handle.
“Complacency would be our biggest enemy,” said freight specialist Gill V. Hicks, director of Southern California operations for Cambridge Systematics Inc., a transportation consulting firm. “And infrastructure is an important aspect of maintaining that advantage. If that is not handled correctly, shippers will find other places for their cargo.”
Seaport improvements are perhaps the biggest infrastructure spending projects these days in the U.S.
The American Assn. of Port Authorities said recent survey results show that U.S. ports have $46 billion in upgrades planned over the next five years, partly to jockey for new business from the widening of the Panama Canal, which is slated for completion in 2014.
The nation’s ports are competing for tens of thousands of new jobs that are among the best-paying blue-collar positions in the U.S.
International trade is important to the Southern California economy.
About 640,000 people work in trade-related jobs in Los Angeles, Orange, Ventura, Riverside, San Bernardino, San Diego and Imperial counties, economist John Husing said. That’s up from a low of fewer than 600,000 during the recession, but still far short of the 709,000 trade jobs in pre-recession 2007.
“The competitive environment is about to get a lot tougher,” said Husing, of consulting firm Economics & Politics Inc. “When you move to increase capacity and efficiency you are in a position to say to your customers, ‘You really still want to be using us.’ Throughput is the name of the game, getting the cargo in and out, in a hurry.”
At the ports of Los Angeles and Long Beach, new cargo terminals will cut air pollution by half compared with the current facilities. More containers will be loaded directly onto trains; handling equipment will run on electricity instead of diesel. Ships will hook to the electric grids so that they can turn off their diesel engines while in port.
The only thing that isn’t clear is the amount of automation the new terminals will have, which probably will be a subject of intense longshore union contract talks.
Middle Harbor is a $1.2-billlion project at the Port of Long Beach that started in May with the driving of a golden pile (actually, a concrete pillar painted gold). It will create one 304-acre terminal out of two smaller facilities for Hong Kong-based Orient Overseas Container Line and the Long Beach Container Terminal.
The Middle Harbor project also involves increasing the port’s landmass by filling in two water channels. It will have a capacity to handle 3 million cargo containers a year.
Also in May, the Long Beach Board of Harbor Commissioners approved another part of the $4.5 billion the port will spend on improvements over the next 10 years. The board accepted a bid to replace the Gerald Desmond Bridge with a more modern structure. Total cost to tear down the old bridge and build the new one is put at about $1 billion. Commissioners will vote on the $649.5-million “design-build” phase of the project Monday.
“We feel very strongly that this is the best time to do it,” said J. Christopher Lytle, executive director of the Port of Long Beach. “You really don’t want to build when you are congested and out of space. Better to do it now when our volumes are not as high.”
An added benefit in a weak economy, Lytle said, was the fact that the contractors were bidding low to earn the business. “We are seeing bids for these contracts coming back 25% or so under engineer estimates,” Lytle said.
At the Port of Los Angeles, executive director Geraldine Knatz says that “the biggest issue is the competitive landscape,” later adding, “How do we protect the amount of discretionary cargo that the port handles? So, over the next five years, we will be focused on that.”
Los Angeles is spending $1.2 billion over the next five years — or about $1 million a day — on capital projects. Its TraPac Inc. container terminal will receive an on-dock rail facility, an improved wharf, electric rail mounted runways, new terminal buildings and a new main gate, shore-to-ship electric power connections to allow dock ships to plug and turn off diesel engines, landfill additions, electrical system upgrades and new automatic stacking crane infrastructure.
Another project, due to begin at the Los Angeles port this year, will modernize the container terminal operated by longtime tenant Eagle Marine Services, a subsidiary of ocean carrier APL Ltd.
Yet another development, called Pier 500, is at a much earlier stage. It will extend the port’s cargo terminal capacity much farther into San Pedro Bay.
“We have already done about a third of the landfill for Pier 500,” which remains underwater at this point, said Michael R. Christensen, deputy executive director for development for the Los Angeles port. “This would be the furthest out into the harbor that we’ve ever been,” about 500 feet short of the breakwater, which is 2,500 feet from shore.
With competing ports also building furiously, harbors will be vying even more vigorously for one another’s customers, said Wally Baker, president of Jobs1stAlliance, a Southern California trade group.
“They will try to take business away from Los Angeles and Long Beach,” Baker said. “That is how they will have to pay for those projects. They will have to do something to pay for it.”
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