Imports from Asia are largely responsible for making Long Beach the nation’s second-largest container port, but exports could lead that growth in the future, especially agricultural products.
In order to attract more agricultural exports, Long Beach, like other container ports, must address its inadequate export infrastructure. Port planners are looking for sites that can accommodate on-dock and near-dock transloading facilities and the cost-effective rail service required to make these facilities viable.
“Having an export strategy is clearly an element of port development,” said Sean Strawbridge, managing director of trade relations and port operations at the Port of Long Beach. “We integrate it into our planning.”
Containerized grain products account for 14 percent of the port’s exports, he said, and the imbalance at the nation’s second-largest container port is stark. In the first four months of 2011, loaded containerized imports outnumbered exports by 64 percent to 36 percent.
The gap was even greater at the neighboring Port of Los Angeles, which favored imports 69-31 percent last year.
A major problem facing agricultural exporters in the heartland is access to competitively priced empty marine containers to hold their shipments of cotton, feed grains and distillers dried grain. “It can be costly and unreliable to get empty containers from the coast,” said Peter Friedman, executive director of the Agriculture Transportation Coalition.
A Long Beach facility would reverse the process, with Midwest grain being shipped by rail to Southern California, where there is always a surplus of empty containers. Unit trains of covered hopper cars would call directly at the transload facilities.
Strawbridge said developers may establish a transload operation at the 385-acre Total Terminals International facility, although the project isn’t final. As the port expands and reconfigures other terminals, such as Middle Harbor, planners will consider including export capability.
The chief challenge for any dockside transload facility is accommodating a lead track long enough to handle the 100-car unit trains railroads prefer. The TTI facility, for example, would have to work the trains in two segments.
Attracting near-dock facilities also is on the port’s agenda. Los Angeles Harbor Grain Terminal has operated a successful near-dock transloading facility for years, but expanding is difficult because of the high cost of land in the harbor area, said Howard Wallace, president.
Union Pacific Railroad will avoid the high cost of waterfront property by opening a transload facility next month in Yermo, Calif., about 100 miles northeast of Los Angeles. UP will carry distillers dried grain from the Midwest in covered hopper cars. It will run stacktrains of empty containers to Yermo, fill the containers with grain and deliver the containers to on-dock rail facilities at the ports.
The traditional method of transloading grain into containers is to locate the facilities near population centers. Import distribution hubs in the inland cities generate surplus marine containers. The empties are drayed to the agriculture transload facilities, and loaded containers are then shipped on stacktrains to the West Coast.
BNSF set a variation of that model in Minot, N.D. BNSF carries loaded containers of sand to oil drilling operations in North Dakota. After unloading, the empties are drayed to a container yard in Minot to be reloaded with DDGs.
Another variation has been under consideration for some time in Shafter, Calif., 115 miles north of Los Angeles. Shafter has access to UP and BNSF tracks. Locating transloading facilities in Southern California provides ready access to empty containers and to the ports, where shipping a container of grain from Los Angeles-Long Beach to Asia can cost $500 or less.
Whatever the site, the main impediment to exporting is the cost of inland transportation. A long rail haul combined with truck drayage can knock a low-margin grain export out of the export market, and fluctuating ocean rates can change the equation a great deal, said Bruce Abbe, executive director of the Midwest Shippers’ Association.
“The problem,” Wallace said, “is that the economics of this business change every six months.”
Contact Bill Mongelluzzo at email@example.com.