Victorville Site Eyed as Possible Inland Port
Rail Link Could Allow Birth of Shipping Hub
By DAVID GREENBERG
Dougall Agan thinks he has a solution to L.A.'s port bottleneck.
With container traffic expected to triple by 2020, congestion around the ports of Los Angeles and Long Beach is certain to get worse. Any expansion of the Long Beach (710) Freeway is decades away, while the $1 billion Alameda Corridor is underutilized because it's not convenient for importers.
In Victorville, at the site of the former George Air Force Base, Agan has spent $100 million so far building an airport and freight facility he thinks can alleviate some of these problems.
"We're going to be a complementary strength for the ports to continue to offer more and more services to their customers," said Agan, who is a principal of Foothill Ranch-based Stirling Airports International.
Providing an alternative is what Stirling had in mind when it entered into a partnership with the city of Victorville in 1999 to redevelop the 5,000-acre Air Force base, which had closed three years earlier.
Stirling Airports bought the land on which the base sat in 2000, as well as the surrounding 30,000 acres in later installments for undisclosed sums. The company has since invested $100 million in infrastructure improvements.
Agan envisions an "inland port" facility, similar to the type of project that Los Angeles Mayor James Hahn directed the Port of Los Angeles to investigate last week. The site already has an airport and several large customers who have used it to import cargo from Asia and break up loads brought in by truck and acres of storage.
What it needs is a rail link to the transcontinental train tracks less than three miles away and a rail yard that would allow it to accept containers sent from the ports through the Alameda Corridor.
"Right now, Victorville can be just as easily served by truck as by rail," said John Doherty, chief executive of the Alameda Corridor Transportation Authority. "We think it is in a very attractive location and could be vital in the near future. The challenge is to try to make it competitive."
Logistics experts said it costs $200 to $225 to haul a container one way from the ports to the Inland Empire by truck, versus $350 to $400 by train.
If the airport can grab market share from the quickly saturating warehouse facilities in the Inland Empire to the south, and save some of its customers time by using rail instead of truck, it could narrow the price differential.
The overall rail project is expected to cost $450 million, including $60 million for the link between the facility and the existing intercontinental tracks. Stirling plans to request bids this fall for the rail link, funded through sales of developed land at the site and funding from Victorville's redevelopment district.
Groundbreaking on a two-year construction project is expected to begin by the end of the year.
Currently, importers who need to break up larger loads into smaller pieces typically truck them from the ports to individually run "deconsolidation yards" in the Inland Empire or the South Bay (loads sent through the Alameda Corridor can't be broken up this way). The Victorville site would give shippers access to a large deconsolidation facility by rail, where they could add to capacity as their import volume grows.
The Stirling facility already has more than 100 tenants, ranging from importers and airfreight carriers to candy companies and retail chains. Together, they have leased a combined 1.5 million square feet.
Tenants include Boeing Co., Nestle S.A., CB Richard Ellis Group Inc., Pratt & Whitney, ConAgra Foods Inc., Goodyear Tire & Rubber Co., Verizon Communications Inc. and Wal-Mart Stores Inc.
When fully built out, the 35,000-acre hub would be capable of handling 35 million containers and thousands of tons of cargo each year, shipped in or out by air, truck or rail.
But the project's success faces several hurdles, including the cost-effectiveness of the rail plan and Hahn's directive.
The study, to be completed by the end of this month, will look into the feasibility of creating an inland port on any number of city-owned properties or under-utilized federal, state or county land.
Weekly traffic at the Victorville facility totals about 100 truck-hauled containers and two to three planes, each bringing 103 tons of cargo from Asia. Typically the cargo is broken up and sent to distribution centers or retail stores by truck.
While shippers are open-minded about the Victorville link, the development likely will get resistance from the railroads, which are suffering from labor and rail car shortages that will stretch into next year and possibly beyond.
Lacking the ability to transfer equipment from long to short hauls, railroad executives said serving the airport now would require buying at least four new locomotives at about $2 million each per company.
"One of the biggest challenges with this concept is the economics," said Lena Kent, spokeswoman for Burlington Northern Santa Fe Corp., which along with Union Pacific Corp. runs the nearby rail. "The significant investment in locomotives, equipment and facilities makes this service difficult to justify."
CORRECTION: The article above incorrectly describes the size and ownership of the cargo transfer facility being developed by Stirling Airports International in Victorville. The site is 5,000 acres and is owned by the Victor Valley Economic Development Authority.
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