““Congestion Challenges: Are Congestion Challenges: Are We Doing Enough?”We Doing Enough?”International Cargo Handling Coordination International Cargo Handling Coordination Association (ICHCA) ConferenceAssociation (ICHCA) Conference

Richard D. SteinkeRichard D. SteinkeExecutive Director, Port of Long BeachExecutive Director, Port of Long Beach

Business, Environmental and Community friendly Port of Long

Beach

Shaping a Vibrant Community

The Port of Long Beach

Port of Long Beach

• Port opened in 1911

• 2nd busiest U.S. seaport

• 16th busiest in the world

Who We Are

• More than $140 billion a year in cargo shipped through L.B.

• Leading imports include computers, autos, clothing, toys, shoes, handbags, furniture

• Leading exports include raw materials such as petroleum coke, waste paper, plastics, chemicals

International Trade

Infrastructure Challenges

•Trade may triple or quadruple in the next two decades

•Goods movement is dependent on infrastructure … particularly in a Just-In-Time environment.

•Demand exceeding available capacity causes delays

Why Should We Care About Congestion

• Delays increase costs and negatively impact the environment and the economy:– Missed cutoff times.– Additional inventory/fleet size required.– Staffing is not optimized if freight is

delayed.– Congestion causes more emissions.– Community opposition to projects

stiffens.– Adverse economic impact, nationwide.

Atlantic SeaboardTrade value: $25.9B

Jobs: 275,300

SouthwestTrade value: $82.0B

Jobs: 1,114,700

South CentralTrade value: $32.5B

Jobs: 435,700

SoutheastTrade value: $37.7B

Jobs: 498,900

Great LakesTrade value: $53.7B

Jobs: 681,800

Great PlainsTrade value: $19.3B

Jobs: 243,200

NorthwestTrade value: $3.2B

Jobs: 39,900

Source: BST Associates, 2007

Trade Impact Through POLB/POLA

Total Impacts:

Trade: $256 billion

Jobs: 3.3 million

Containers at California Ports (Millions of TEUs)

0.5

1.5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5 Long Beach

Los Angeles

Oakland

Cargo Forecasts (millions of TEUs)

Divert Cargo? Punta Colonet? Prince Rupert? Panama Canal?

POLB/POLA Oakland

2007 15.7 2.4

2010 19.7 2.7

2020 36.7 4.2

2030 42.7 6.5

Primary Gateway for Imports

“Regardless of efforts to develop alternative West Coast

gateways, Los Angeles and Long Beach will remain the

primary entry points for eastbound imports into the

U.S.”-- Waterfront Coalition white paper, 2005

Causes of Port Congestion 2004

• 24% increase from 2003 to 2004 in POLB containers (2% at POLA)

• Rail labor & equipment shortages– 68% increase from 2003 to 2004 in on-

dock rail at POLB. (10% at POLA)

• PMA under-estimated volume and productivity growth

• Labor allocated to terminal & rail operations before vessels.

Remedies to Port Congestion 2005

• PMA/ILWU added labor – Added 5,000 casuals– Promoted 1,750 casuals to registered status– Improved forecast of labor needs.

• Technology Implementation– Optical Character Recognition (OCR)– Radio Frequency Identification (RFID) – Faster Transactions

• Rail Improvements– Added labor & equipment– Increased On-Dock rail use (now 24% of total

throughput, up from 16% in 2003)

POLB Terminal Capacity

• Existing “footprint” allows for a doubling of throughput – Dependent upon

technology and business practices changes

• “Right sizing” terminals (e.g., Middle Harbor project)

• Sensitive to environmental & community needs

POLB Terminal Productivity

CY 2007 Actual

Demand

2020Capacity

TEUs 7,312,465 20,665,000 *

Gross Acres 1,314 1,882

TEUs/acre/yr

5,565 10,980

* Assumes 26,620 feet wharf length, 49 weekly services (out * Assumes 26,620 feet wharf length, 49 weekly services (out of 108 for San Pedro Bay), 1,326 net acres, 33/hr crane of 108 for San Pedro Bay), 1,326 net acres, 33/hr crane productivity, no constraints re: channel depth, bridge height productivity, no constraints re: channel depth, bridge height or # of cranes.or # of cranes.

Highway and Rail Infrastructure Projects

• Alameda Corridor (completed)• PierPass (Implemented)• Gerald Desmond Bridge

Replacement• I-110 Connectors• SR-47 Expressway• On-Dock Rail Improvements• I-710 Corridor Improvements

• 22-Mile 40 m.p.h. Rail Corridor

• Consolidates Four Branch Lines (10 m.p.h.)

• Reduces Conflicts at 200 Grade Crossings

• 10-Mile Trench

• $2.4 billion

• Completed in 2002

Alameda Corridor Freight Railway

PierPASS Off-Peak Truck Gates

  Week

Ending Peak

trucks %

PeakOff-Peak

% Off-Peak

Total

7/24/05

64,794 85% 11,294 15% 76,088

2/10/08

46,942 61% 29,437 39% 76,379

Peak = Weekdays 8:00 a.m. to 6:00 p.m.

Source: Port of Long Beach

• Insufficient capacity•Existing five lanes•New bridge – six lanes with shoulders

• Insufficient vertical clearance •Existing: 156 feet•New bridge: 200 feet

• Estimated cost: $851 million

Gerald Desmond Bridge

Interstate (710) freeway under congested conditions and

during 2002 shut down of West Coast ports.Lockout disrupted $6.28 billion in trade at

POLA/POLB

Main Roadway into Port

I-710 Corridor Improvements

• EIR/EIS and preliminary engineering underway

• Advanced container movement technologies

• I-710 improvement concepts include:• 10 mixed flow lanes (5 in each

direction)• 4 exclusive truck lanes (2 in each

direction)

• Minimize residential displacement

Economy, Environment, Security Impacted

• Congestion, delays, accidents and transportation costs are increasing.

• Goods movement facilities have not kept up with growth.

• Communities calling for slow or no growth.

Funding Constraints

• Limitations of existing grant & loan programs

– Federal transportation reauthorization in 2009– State funds including Proposition 1B general

obligation bonds– County local funds– Port funds

• Also required: user fees for specific projects -- with firewalls, sunset provisions, etc.; i.e., Public-Private Partnerships

Federal SAFETEA-LU: Not Enough

• Gerald Desmond Bridge– $100 million

• I-710 Freeway– $9.5 million – $10 million SR-47 design

• Port of L.A.– VT Bridge study plus I-

110/SR 47/Harbor Blvd. Interchange: $5.6 million

State Transportation Bonds Include:

• $2 billion for trade corridors infrastructure

• $1 billion for trade-related emissions reductions

• $100 million for port security

Project-Specific Fees

• Alameda Corridor (pays debt service on revenue bonds)– $18.67/loaded TEU– $4.73/empty TEU– $9.45/other rail car

• Clean trucks fee– $35/loaded TEU (starting October 1,

2008)– on dock rail exempt

• Infrastructure cargo fee for port area highway and railroad projects– $15/loaded TEU (starting January 1, 2009)

Public-Private Partnerships

• Consensus on what to build, funding shares, method of payment (industry buy-in essential)

• Legal authority• Stable revenue stream• Funding firewalls and sunset clauses• Appropriate allocation of risk• Cost and schedule control• Clear decision making authority

Summary and Conclusions

• Terminal and highway/rail projects must advance in lockstep with Clean Air Action Plan (CAAP).

• Terminal productivity must increase if capacity forecasts are to be realized.

• Federal transportation reauthorization in 2009 must provide additional funding for freight.

• Timely delivery of state Prop. 1B projects.• Port infrastructure cargo fee and clean

truck fees must be implemented.

Thank You