South Gate Distributor Taking Advantage of Boom at the Ports

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The explosive growth at the ports of Los Angeles and Long Beach is changing the face of goods movement and forcing companies of all stripes to streamline their operations.


In particular, Pacer Distribution Services Inc., a South Gate based warehouse operator and distributor, is opening a transload facility this month in Carson.


Pacer, a unit of Concord-based Pacer International Inc., one of the country’s largest logistics companies, already has three warehouse facilities in the Los Angeles area, but this new facility is different.


Unlike warehouses, transload facilities do not store freight, but instead serve as locations where the freight inside 40-foot foreign cargo containers unloaded from ocean carriers can be transferred into 53-foot, freeway-ready domestic containers.


Typically, freight from four foreign containers is transferred into three domestic containers that may be shipped nationwide. The practice also allows local cargo to be removed, and expedites the shipment of empty containers back to their port of origin.


“What we needed was a facility that was designed to move a lot of freight quickly and efficiently,” said Pacer Distribution President Kent Prokop. “With this facility we have the capacity to handle well over a hundred containers per day.”


The growth in transloading also eliminates a highly inefficient and costly practice known as “backhaul.” When freight arrives in the United States, the container used to be shipped to the middle of the country or to the east coast, where it was unloaded. Then, as much as much as 40 percent of the goods had to be shipped back to the west coast.


Currently, there are only about a dozen pure transload facilities in the Los Angeles area. But Prokop said the facilities are becoming increasingly vital, because more ocean carriers are demanding that their freight be transloaded.


“It’s much more advantageous to them to turn this box at the port than inland,” he said. “It’s becoming more sophisticated than it was in the old days.”



Budget Season

On the heels of the adoption by the Port of Los Angeles of a record $1 billion budget, its Long Beach twin is readying a smaller, but likely record-setting budget of its own.


The Long Beach port plans to send its 2007/2008 fiscal year budget to the City Council next month, and with a number of construction projects either underway or in the pipeline it will likely surpass last year’s $474 million budget.


“I suspect that will set a record,” said Art Wong, a spokesman for the port.


Details about the budget are not yet available, but among the larger capital projects are improvements to International Transportation Service Inc. terminal, which is expected to cost more than $40 million.


The L.A. port adopted a budget earlier this month that anticipates $459 million in operating revenue over the next year. It also allows for a 79 percent increase in its capital budget and a 31 percent increase in its operating expenses, including new environmental initiatives, waterfront improvement projects and security enhancements.


Paul Johansen, assistant director of environmental management for the Port of Los Angeles, said the ports have made environmental programs a budgetary priority through the jointly-sponsored Clean Air Action Plan.


“The ports have been under a substantial amount of community pressure to begin to acknowledge and address the air issues,” he said.



Congestion Capital

The seemingly unending streams of cars crawling along the city’s freeways serve as a constant reminder of the sad state of L.A. traffic.


But while the congestion is well-documented, Forbes magazine this month ran a list of the most traffic-snarled freeway interchanges in the country that somehow managed to make the situation seem even direr.


The list not only validated Los Angeles’ car-choked image, but also showed how much worse the city’s traffic is relative to the rest of the country. The city claimed four of the 10 most congested interchanges in the United States, based on time lost while sitting in traffic.


L.A. took the No. 1 spot with the interchange of the Hollywood (101) and San Diego (405) freeways, where drivers lose a total of 27 million hours per year. Los Angeles also captured the No. 5 spot with the San Diego and Santa Monica (10) freeways interchange; No. 8 with the Santa Monica and Golden State (5) freeways interchange; and No. 9 with the San Diego and San Gabriel River (605) freeways interchange.


Atlanta was the only other city to claim more than one spot on the list, with Nos. 6 and 10.


Staff reporter Richard Clough can be reached at (323) 549-5225, ext. 251, or at

[email protected]

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