Digital Edition

May16, 2016

Issue link:

Contents of this Issue


Page 39 of 63

40 THE JOURNAL OF COMMERCE MAY 16.2016 TOP 25 NORTH AMERICAN PORTS SPECIAL REPORT DRIVEN PRIMARILY BY the need to reduce truck congestion, the creation of a short-haul rail service to shuttle con- tainers from on-dock transfer facilities at the ports of Los Angeles and Long Beach to a n inla nd location about 50 miles away could become a reality. The concept has been studied peri- odically over the past two decades, but the economics always fell short and the logisti- cal challenges could not be overcome. Now, however, financial encouragement has grown as a result of growing port conges- tion, increased drayage costs, and a desire by beneficial cargo owners in Southern California's Inland Empire to avoid send- ing their truckers to the harbor if possible. "It saves money throughout the supply chain," said John Husing, an economist in the Inland Empire who is contributing data to a study being con- ducted as part of the ports' supply chain optimization efforts. "In an economic sense, I think the numbers are there." Logistically, the main challenge would be to make the loading of on-dock shuttle trains work in an increasingly complex marine terminal environment. Mega-ships operated by shipping lines in vessel-sharing arrangements carry containers belonging to more than a half-dozen lines on the same vessel, and each of the lines has its own contractual intermodal arrangements with the two western Class I railroads. Therefore, stowing vessels in Asia so the ships can be unloaded in Los Ange- les-Long Beach and sequentially loaded onto unit trains of about 200 containers at an on-dock yard would be a complex endeavor. Efforts to get buy-in from BNSF Railway and Union Pacific Railroad are underway, but the outcome is uncertain. Importers who operate warehouses in the sprawling Inland Empire east of Los Angeles, who ultimately would pay for the service through their freight rates, may determine if the shuttle line becomes real- ity. Husing has been talking to the BCOs, and he said they are "quite enthused." Warehouses in the Inland Empire would slash the distance their trucks would have to travel if a short-haul service from the ports was established. A number of BCOs with operations in Phoenix and Las Vegas also would be much happier to send their trucks to the Inland Empire rather than to the harbor, Husing said. The critical mass of cargo needed to support a short-haul rail service is there, and it will grow steadily in the coming years. According to the San Pedro Bay Cargo Forecast released in January by Mercator International and Oxford Eco- nomics, containerized import volume in Los Angeles-Long Beach last year totaled 7.9 million 20-foot-equivalent units, and is projected to grow to 10 million TEUs by 2020 and 12.1 million TEUs in 2025. Containerized imports are a significant contributor to truck congestion at marine terminals because drivers clog entrance gates when vessels arrive and exit gates after they get their load. If more contain- ers leave the port by rail, fewer trucks will have to pass through terminal gates, thereby helping to reduce congestion. According to the study, about 38 percent of containerized imports are placed on trains at on-dock railyards and moved intact to the eastern half of the country. A total of 62 percent of imports leave the ports by truck. About half of the imports that move by truck are destined for warehouses in California, Arizona and Nevada, where the merchandise is consumed locally. The remaining half is typically drayed to transload facilities in Southern California, where the merchan- dise is transferred into 53-foot domestic containers and then shipped east. Of the import containers that leave the ports by truck, some 30 to 40 per- cent are destined for the Inland Empire, providing a sufficient cargo base for a short-haul rail service, said Mike Chris- tensen, senior executive lead for supply chain optimization at the Port of Long Beach. When conditions are ideal for trucks, which means marine terminal gates aren't congested, traffic is light on local freeways and the PierPass traf- fic mitigation fee is not charged. In this scenario, trucking becomes the most efficient, least-costly way to move con- tainers from the harbor to the Inland Empire, Christensen said. In reality, terminal gates are often congested, freeway traffic is rarely light and the PierPass traffic mitigation fee of more than $140 per 40-foot container is Bill Mongelluzzo A LONGER LOOK AT SHORT-HAUL RAIL With congestion and costs rising, interest is growing in shuttle trains from Los Angeles-Long Beach to the Inland Empire

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - May16, 2016