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West Coast Giants see Colonet as safety valve....

West Coast giants see Baja bay project as safety valve, not competitor



July 1, 2007


LOS ANGELES – The attitude that the ports of Los Angeles and Long Beach have toward talk of a proposed megaport in the remote Baja California bay of Colonet might be summed up in three words: What, me worry?


Predicting that a river ofAsian cargo flowing into the United States will continue to swell for at least the next 13 years, officials at the two Los Angeles-area ports – the largest by volume in the nation – say there's likely to be plenty of freight for everyone even if the Mexican port is built 150 miles south of San Diego.

“The sense right now is that there's enough cargo to go around. We're not seeing developments like Punta Colonet as being threatening to our port,” said Mike Christensen, deputy executive director for development for the Port of Los Angeles. “We're looking at it as a safety valve as much as anything else.”

Port of Long Beach spokesman Art Wong agreed. “Realistically, we can't handle all of the growth,” he said.

Still, as delays dog the proposed port in Baja, the two Los Angeles-area ports – together with their related agencies and private partners – are gearing up to spend billions of dollars to expand container terminals, replace bridges, streamline rail and freeway connections, and make other major infrastructure improvements.


U.S. imports by sea
The projects are aimed at ensuring that the lion's share of Asian goods headed for the U.S. market will continue to flow through Los Angeles-area container terminals.

“The port ... will continue to invest in infrastructure projects that will enable it to maintain its competitive position as America's leading container port,” according to the Port of Los Angeles' proposed fiscal 2007-08 budget.

One thing could bring that strategy to a screeching halt: environmental concerns. The ports' full-speed-ahead growth in recent decades has been blunted by criticism over the increasing air pollution spewing from diesel-powered ships, trucks, trains and other cargo equipment.

The ports are the single largest polluter in the smog-ridden greater Los Angeles area. A recent state study found that they cause an estimated 1,200 premature deaths annually from particulate and ozone pollution. Another study concluded that residents who live near the ports face cancer risks 10 times higher than those who live 15 miles away.

Many regional planners and other experts are convinced that the Los Angeles-area ports simply cannot grow much further without reducing the health risks they create. Port officials and their supporters say they can and will accomplish that, although they acknowledge it will cost additional billions of dollars.


The ports of Los Angeles and Long Beach plan $13.4 billion in projects over the next decade to meet increasing cargo demand.

Project: Widen and add truck-only lanes to the I-710, the main freeway serving the ports

Goal: Speed the flow of container-toting trucks and reduce air pollution by eliminating traffic tie-ups

Cost: $5.5 billion

Project: Port of Los Angeles terminal expansions

Goal: Expand cargo capacity and reduce air pollution

Cost: $3 billion

Project: Port of Long Beach terminal expansions

Goal: Expand cargo capacity and reduce air pollution

Cost: $1.8 billion

Project: Alameda Corridor East

Goal: Improve or eliminate street-level rail crossings in the San Gabriel Valley to speed eastbound freight trains out of L.A.-area rail yards.

Cost: $918 million

Project: Gerald Desmond Bridge Replacement

Goal: Widen the main bridge connecting the container terminals on Terminal Island with freeways

Cost: $800 million

Project: Commodore Heim Bridge Replacement

Goal: Replace vertical-lift bridge with a higher bridge to allow container ships to pass beneath and improve truck access to freeways and freight yards

Cost: $557 million

Project: Southern California International Gateway

Goal: Near-dock intermodal facility operated by BNSF Railway to transfer cargo containers from trucks to rail and reduce air pollution

Cost: $300 million

Project: Intermodal Container Transfer Facility

Goal: Upgrade Union Pacific facility to increase capacity and efficiency and reduce air pollution

Cost: $300 million

Project: Port of Los Angeles channel deepening

Goal: Accommodate the next generation of larger, deep-draft cargo ships.

Cost: $222 million

Sources: Port of Los Angeles, Port of Long Beach, Alameda Corridor Transportation Authority, Alameda Corridor East Construction Authority, BNSF, Union Pacific, Metropolitan Transportation Authority

“We want to hang on to the many thousands of jobs we have here,” Wong said. “But we cannot move forward with our port infrastructure projects without first dealing with some serious environmental issues, such as air quality.”

Currently, the ports of Los Angeles and Long Beach are a vast industrial complex four times the size of the North Island Naval Air Station.

They also are the cornerstone of one of California's economic juggernauts, a trade pipeline that employs more than half a million people and moves 43 percent of the nation's waterborne imports through the Los Angeles area – including televisions, furniture, athletic shoes and Barbie dolls.

The pipeline consists of the ports themselves as well as rail lines, trucking companies, storage yards, freeways, and gargantuan distribution centers – often measured in acres – that many of the nation's major retailers have built in the inland cities of Ontario and Riverside. From there merchandise is trucked throughout the region, including to stores in San Diego County.

Cargo volume at the two ports jumped 66 percent between 2000 and 2006. Studies show it likely will double by 2020.

In terms of TEUs – twenty-foot equivalent units, a standard measure used for international cargo containers – that means the ports would go from handling about 16 million TEUs this year to 32 million TEUs in 2020.

Even so, Hassan Ikhrata, a planner for the Southern California Association of Governments, a Los Angeles-based regional planning agency, said the total demand for container cargo on the West Coast in 2020 will exceed the capacity of the Los Angeles-area ports by about 9 million TEUs. The proposed port at Baja's Punta Colonet would be able to handle 1.5 million to 6 million TEUs annually, he said.

“You do the math,” Ikhrata said. “Having a port that handles single digits (in terms of millions of TEUs) wouldn't be competition” for the ports of Los Angeles and Long Beach.

In addition, the Baja port would, at least initially, lack the double-and triple-tracked rail lines and massive regional distribution centers that have made the trade pipeline through Los Angeles so efficient – and dominant, Ikhrata noted.

And with retailers nationwide demanding “just in time” delivery to keep inventory costs to a minimum, freight bound for the United States from the proposed port at Punta Colonet could face crucial delays at the border, in part due to U.S. security concerns.

“That's something (proponents of the Baja port) don't talk about,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corporation.

Although the Baja port could have lower labor costs – particularly if its workers are nonunion – Ikhrata and Kyser point out that nearly one-third of the freight that pours through the Los Angeles-area ports is purchased by Southern California residents. If it were to be shipped to Punta Colonet instead, it would then have to travel by train and truck to Southern California, negating at least some of the labor cost savings, they said.

“You'd send your biggest ships into Los Angeles-Long Beach (under any circumstances) because of the size of the local market and the rail links to the rest of the U.S.,” Kyser said.

Ikhrata agreed. Punta Colonet “could be 20 percent or 90 percent cheaper, but here's the problem: The capacity of that port will be very limited . . . and in-time delivery is the key point,” he said.

Ray Ortiz, a member of the California Coast Committee of the International Longshore and Warehouse Union, said his organization is unconcerned at this point that the proposed Baja port could threaten union jobs or pay rates in Los Angeles.

“You're probably going to need some outlets like this” to handle the expected increase in imports, Ortiz said, adding that a new port in Mexico could provide local workers with jobs that pay well even if they don't meet U.S. wage scales.

The ILWU, which has contracts at every major West Coast port in the United States and Canada, has seen the ranks of its longshoremen swell by more than 30 percent or more over the past three years, Ortiz said, largely fueled by the rising volume of trade through the ports of Los Angeles and Long Beach.

The ILWU views future increases as good for labor in general, although the union believes that cargo-industry pollution has to be dealt with for the sake of the local communities, he added.

Ikhrata estimated that in order for the ports to meet the coming surge in cargo volume, $10 billion to $25 billion will have to be spent on reducing pollution. Otherwise, he emphasized, the expansion projects are liable to be stopped in their tracks by tightening state regulations and environmental lawsuits.

While that outcome could boost plans for a port in Punta Colonet, so far the Los Angeles ports and some of their private-industry allies have shown a willingness to spend heavily on reducing emissions in order to get their projects built.

The ports recently proposed a $1.2 billion truck replacement program, for example, that would phase out older trucks that pick up cargo containers at the docks in favor of newer or retrofitted models that emit at least 80 percent less pollution. And the ports' terminal expansion plans include the costly step of providing ships with shore-based electricity while cargo is unloaded, eliminating the need for docked ships to run their engines with high-sulfur diesel fuel.

Meanwhile, the proposal by BNSF Railway for its near-dock, intermodal rail facility incorporates plans for electric cranes, natural-gas-powered yard equipment, and cleaner-burning, more fuel-efficient locomotives, among other measures.

Many environmentalists remain skeptical that pollution can be reduced as trade ratchets up. But port officials insist their blueprints for expansion are taking on a greener tinge.

“We want to grow. We'd love to stay the No. 1 container port on the West Coast, and we're going to do everything in our power to do that,” said the Port of Los Angeles' Christensen. “But we're going to do that in a different manner than we would have 10, 15, 20 years ago.”

Published Sunday, July 1, 2007 1:02 PM by Laura Tierney


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