Anticipating fierce competition from East Coast ports when the Panama Canal expansion project is completed in 2014, the Southern California port and logistics industries are emphasizing increased efficiency as the best strategy for protecting their dominant market share.
Competition among ports is nothing new. Long Beach has been competing for cargo since it was founded 100 years ago, said Sean Strawbridge, managing director of trade development and port operations.
The major difference today is that ports must have the harbor depth, efficient marine terminals and inland infrastructure and transportation services that are required to handle extremely large vessels, he told the Southern California Transportation & Logistics Summit in Ontario, Calif., at the weekend. He noted that Long Beach this week will welcome its first 12,500-TEU vessel, the largest container ship ever to call at a U.S. port.
The Long Beach-Los Angeles port complex handles about 40 percent of U.S. containerized imports from Asia. Although their port charges and land lease rates are among the nation’s highest, the ports offer value to cargo interests in terms of large, modern container terminals, extensive on-dock and near-dock rail yards and efficient intermodal rail service to the rest of the country, Strawbridge said.
Long Beach will invest $4.5 billion in infrastructure development over the next eight years not only to accommodate growing cargo volumes, but also to enhance the ability of terminal operators, shipping lines, railroads, motor carriers and distribution warehouses to increase the velocity of moving discretionary cargo to inland destinations, he said.
The distribution warehouse industry around Ontario, known as the Inland Empire, has the nation’s largest concentration of industrial real estate at about 1 billion square feet. It was the first warehouse/distribution hub to emerge from the economic recession, with net absorption over the past year about equal to that of the rest of the nation combined, said Matt Englhard, vice president of development and construction at Alere Property Group.
Large properties of 500,000 square feet and bigger led the recovery. The facilities in greatest demand, many of which are operated by third-party logistics companies, are mostly cross-dock operations with large yards for trailer storage, Englhard said.
Target Corp. is the number two importer of containerized cargo in Los Angeles-Long Beach. The national retailer is continually attempting to move its products more efficiently through the supply chain, said Steve Carter, director of transportation planning and strategy.
Target leverages technology to reduce lead times, and likewise seeks out high-velocity gateways in terms of truck turn times at marine terminals, efficient last-mile connectors such as the Alameda Corridor and a port community that overall is “easy to do business with,” Carter said.