The Port of Long Beach, locked in fierce competition with the neighboring Port of Los Angeles for dominance in the booming cargo-handling business, has just made its already ambitious expansion plan even grander.
The port now plans to reconfigure most of its existing facilities into five mega-terminals of more than 300 acres each. Building out the mega-terminals will cost an estimated $1.9 billion over the next 10 years, port officials said.
"The work will be done in phases over the next decade, but the bulk of it we expect to do over the next four to five years," said Geraldine Knatz, the port's managing director of development.
That aggressive timetable is viewed as critical, with local cargo volume expected to triple over the next 20 years, and the Port of L.A. eager to snatch away Long Beach tenants. Just last year, L.A. lured Maersk Sealand, the world's largest shipping line, away from Long Beach to its 484-acre Pier 400 terminal. That move is expected to bring $2 billion in revenues to the L.A. port over the next 25 years, and Long Beach can ill afford to see that scenario repeated.
"It's a widespread development to build ever-larger terminals," said Sarah Anne Towrey, vice president with Jordan Woodman Dobson, an Oakland-based architectural and engineering firm that specializes in terminal design. "The volume of container traffic is growing so fast that the new terminals are full before they finish building them."
The Long Beach plan, which will be funded by a combination of port revenues and bonds, calls for adding 200 acres of land through a number of small landfill projects and consolidating all but a few of the existing terminals.
Indeed, land is becoming a major concern for the operators who lease the terminals from the port. With the volume of imports exploding, the operators need to find ways to keep the containers from piling up at the terminals and to move them through to destinations as quickly as possible.
One of the easiest ways to keep cargo traffic moving is to immediately put containers on truck chassis after they are unloaded from ships, rather than stacking them along the dock. That way, truckers can get to their containers relatively easily and drive off quickly rather than having to wait for cranes to pluck them from stacks and load them on a truck chassis.
However, lining up those chassis for pickup requires a huge amount of space. Hence, the need for mega-terminals.
Ports in New York/New Jersey, Houston and Charleston, S.C., as well as in Asia, are all in the process of building similar mega-terminals to accommodate their exploding container traffic, according to Towrey.
An additional factor prompting the push is that shipping lines are trying to achieve economies of scale by building ever-larger ships, which require deeper channels and berths, as well as cranes that are big enough to load and unload them.
The biggest container ships at this point can carry as many as 5,600 TEUs, or 20-foot-equivalent units, the standard measure for cargo containers. But in the not-too-distant future, ships will be capable of carrying 8,000 TEUs.
Another reason for the mega-terminals is the need to make room for state-of-the-art rail facilities, so containers can be unloaded directly onto train cars and wheeled down the Alameda Corridor to inland destinations.
"The main concern for operators is achieving quicker turnaround on the growing volume of containers," said Craig Fernandez, executive vice president with Daniel, Mann, Johnson, & Mendenhall and project designer and manager of the new Pier 300 container terminal at the Port of L.A. "They need terminals that can handle the size of the newest ships, that have multi-modal facilities, including rail, and that have automated gate facilities."
Pier 300, which was finished in 1997, was the first mega-terminal in the Port of Los Angeles. It covers 262 acres and is leased by American President Lines Ltd.
Mega-terminal moving ahead
In Long Beach, the first mega-terminal to come online will be Pier T, which is being built at the site of the former Naval Shipyard on Terminal Island. The first phase of the 375-acre terminal is scheduled to be completed in 2002 and the second phase in 2003. Korea's Hanjin Shipping Co., which last year moved over 1 million containers through its much smaller Pier A facility, has signed a letter of intent to lease the new mega-terminal.
The port expects to generate $42 million in revenues annually from Pier T, once Hanjin moves in.
The second mega-terminal in the works is Pier S, across Ocean Boulevard from Pier T. That project is still in the early preparation stages. The site is at the center of the Wilmington Oil Field and is currently undergoing a $33 million soil remediation process to clean up about 200,000 cubic yards of oil residue.
Knatz said the port is negotiating with Stevedoring Services of America to lease the terminal, which is scheduled for completion in 2003.
Three additional mega-terminals are planned on the east side of the Long Beach harbor, at the current site of five smaller container terminals.
However, building mega-terminals is only part of the answer to handling the increasing volume of cargo at the ports. A further challenge is transporting it once it's off the docks. Although the Alameda Corridor promises to take some the pressure off existing rail lines, the Long Beach (710) Freeway is also sorely in need of some relief from the soaring number of cargo-hauling trucks.
A transportation study by both the Port of L.A. and Port of Long Beach, expected to be released next month, will spell out a number of possible solutions to alleviate port-related traffic congestion.
"The study was prompted by revised cargo forecasts that show that our container volume will triple in the next 20 years," said Knatz. "And our forecasts tend to be conservative and are often exceeded."
One recommendation will be to expand the 710 freeway, Knatz said.
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