Rise of California niche ports

By: | Issue #647 | at 08:00 AM | Channel(s): Ports & Terminals  Ports  

San Francisco Maritime Business Rolling

The maritime business in San Francisco is beginning to roll. Part of the reason for the improvement is decisions made by the Port Authority over the last few years are beginning to fulfill their promise. At the top of the list is Pier 80.

Pier 80 is the port’s principal cargo terminal, a 60-acre facility with two warehouses and four deepwater berths. The facility had been in a downward spiral since the Great Recession of 2008, but the location has always held great promise. Last August things began to turn around as Pasha, a major auto handling group, took over the operations of Pier 80 after inking a 15-year lease with the Port Authority. Almost immediately the facility began filling with autos, both on the import and export side of the ledger.

While the ships are calling, it is a $10 million work in progress as the Pier shifts from being an emergency homeless shelter to a hub ro/ro port of call for Pasha’s vehicle customers in the Bay Area. Part of the attraction of the Pier 80 deal for Pasha was the underutilization when compared to other West Coast auto ports like Benicia and Richmond which are already operating near capacity. Ports like San Diego (see below) are expanding their ro/ro facilities in anticipation of an increase in auto imports over the next decade. Pasha believes that when Pier 80 is completely renovated, it will be able to handle 150,000 vehicles a year and around 100 ships.

But there is another intriguing aspect to the facility revitalization. One of the first big export items was Teslas – perhaps the most recognizable brand name in the electric powered automotive sector. The Port of San Francisco is the closest port to the auto manufacturing facility in Fremont and hopes to become the primary export gateway for their vehicles – an important balance to an industry heavy on imports.

An important, related project to Pier 80 renovation is rail track improvement. Back in 2011, the Port of San Francisco was awarded a $2.9 million grant from the US Department of Transportation’s Federal Rail Administration (FRA) to rebuild Quint Street Lead, the connector track from the main line to the Port. The upgraded track enables heavier locomotives and large unit trains to come directly to the Port instead of stopping off in South San Francisco to switch out to smaller trains.

On January 12, 2017, the Port Commission approved a five-year lease extension for San Francisco Bay Railroad. SFBR invested $1.3 million dollars for 4,000 feet of new track in the rail yard. This replaces some of the track that was lost to Pier 80 due to the Pasha facility, and additionally helps stage trains needed for the Warriors Arena project.

With a grant received from the Bay Area Air Quality Management District (BAAQMD) and the US Environmental Protection Agency (EPA), the Port replaced an old locomotive to a newer and cleaner 90% cleaner locomotive. In a related move on January 5th, Caltrain announced Union Pacific would turn over their freight rail rights to Caltrain for the San Francisco-San Jose corridor and in turn Caltrain will hire a shortline operator. The operator will take over interchanging with the Port and all other freight and rail stakeholders on the Peninsula.

Although the cargo side is in a rebuilding phase, the cruise ship business continues to perform. There were 80 cruise ships in 2016, and approximately 290,000 passengers, which is similar to 2015. For 2017, 82 ships and 300,000 cruise passengers are expected. These numbers are up substantially from 5 to 6 years ago when there were 40 ships and 100,000 passengers. Pier 27, open since September of 2014, is certainly a reason for the growth, as well as the draw of the city itself.

Port of Hueneme Looks to Build Fresh Business

A little over 25 years ago the Port of Hueneme became, for all intents and purposes, a port with the official nod as a US port of entry. From the beginning the Port’s calling card has been produce and now handles around 1.5 million in freight annually. While the “fresh” business is still paramount, there are a number of other sectors to the port. For example, in 2016 at the Port of Hueneme, automobile imports totaled approximately 300,168 tons. In 2016 over 300,000 autos were imported and 37,873 autos were exported through the Port of Hueneme, a record high year for vehicle imports and exports. For the same period, fruit and vegetable imports stood at over 108,000 tons and liquid bulk fertilizer hit 160,145 tons. Overall, cargo increased by 10.6% to 1,574,903 tons, a new record at the Port.

The Port’s main calling card is still produce and in particular, bananas. The port attracts calls from global cool operators like Chiquita and Del Monte as well as regional distributors like Mission Produce, Calavo, Westfalia Fruit, Five Diamond Cold Storage and Sun Fresh. Hueneme handles annually nearly 700,000 tons of fresh fruit. Bananas are an important item and in 2016 the port handled over 117,000 tons of bananas accounting for $19.4 million in freight.

In February, the Port of Hueneme entered into a Project Partnership Agreement (PPA) with the United States Army Corps of Engineers to deepen the Port’s general navigation areas to 40-feet Mean Lower Low Water. The dredging project which has been in the works for a couple of years is key to the Port’s goal of handling the larger post-Panamax ro/ro vessels (the port handled its first post Panamax ship last year).

According to the documents, the proposed project’s berth deepening effort “would include dredging activities to deepen Berths 1 and 2 along Wharf 1 to approximately -40 feet MLLW, to provide deep draft vessel continuity from the harbor, through the channel and to Berths 1 and 2 along Wharf 1. Through implementation of the project, vessels would no longer need to wait for higher tide to transit the channel and come to berth, increasing operational efficiencies.”

Another big boost for the port was SeaLand’s (part of the Maersk Group) decision last September to make the Port of Hueneme a port of call for the West Coast Central America (WCCA) service. The SeaLand service focuses on the fresh fruit and other agricultural goods traded between Southern California, Mexico, Central America and the West Coast of South America. It’s important as the Port (located 60 miles northwest of the San Pedro Ports) is the only U.S. port of call in the WCCA rotation. What makes the service even more intriguing is that it is containerized, unlike the port’s other main services.

Port of San Diego Gears Up

The Port of San Diego is gearing up for the future. San Diego, less than 30 miles from the border with Mexico, perhaps more than any other port in the nation has had to balance the many needs of the neighborhood against the demands of a working waterfront. In December, the Port of San Diego commissioners voted unanimously to remove two warehouses on the tenth Avenue Terminal. The decision wasn’t easy for the port but was necessary to remove a bottleneck to port progress. According to the report: “The plan provides a long-term road map for the terminal, outlining key cargo business markets. Certification allows construction on phase 1 of the Plan to begin in 2017. This plan is anticipated to increase the terminal’s cargo capacity, create jobs and implement clean technology to reduce pollution.”

The first phase of the terminal’s new master plan, costing $24 million, includes the demolition of transit sheds 1 and 2 on the west side of the 96-acre terminal, a new area for temporary equipment storage and the completion of several rail improvements. Future phases would include:

  • a 100,000-square-foot dry-bulk storage container;
  • improved conveyor systems;
  • demolition of Warehouse C in the middle of the terminal;
  • and five new 270-foot gantry cranes.

The terminal improvements are projected to increase cargo from 1 million metric tons in 2014 to 4.7 million metric tons by 2035. An earlier projection showed an increase to 6.2 million metric tons.

Some of the freight would come in the form of dry and liquid bulk shipments, refrigerated food products and multipurpose general cargo. Multipurpose general cargo (ro/ro) would rise the most, from 85,131 to 733,050 metric tons.

Construction on Phase 1 is anticipated to begin by summer 2017 and is anticipated to take 33 months. Phase 1 will entail $24 million in Port and federal investment, which includes a $10 million TIGER grant.

The Port annually handles over 420,000 vehicles, mostly imports, making it one of the nation’s top auto hubs. According to the Port’s budget information, “National City Marine Terminal (NCMT)… has begun seeing automobile volumes that rival pre-recession numbers, signaling continued strength in this cargo sector. The District is working closely with port tenant, Pasha, to accommodate both international and Hawaii volumes, and proactively manage business growth. These efforts include recent inducement-calls at NCMT of Pasha’s newest vessel, Marjorie C, which typically calls in Los Angeles.”

In addition, the port has over 300,000 sq/ft of temperature controlled warehousing – the most on the West Coast – which makes it a top port for reefer goods. Recently, San Diego has seen its reefer numbers increase as Dole has boosted capacity with three new larger ships having moved into service. The new vessels have gone from 500-550 FEUs (forty-foot equivalent units) to 770 FEUs each.

George Lauriat's avatar

American Journal of Transportation