Is anyone in charge in California?

Is anyone in charge in California?

California, particularly Southern California, is a chokepoint in the flow of commerce in and out of the U.S. Those involved in moving freight should not expect any quick improvement, at least not as a result of any significant improvement in infrastructure.

The intermodal system is operated by private interests - steamship lines, port terminal operators, railroads and truckers. Except for the rail sector, infrastructure is provided by public agencies. And therein lies the problem. Public agencies have more concerns than the earnings focus that drives business. They must determine that a project is cost-effective - that it will return more in benefits to society than it costs in dollars. And if voter approval is needed to expand infrastructure, the task becomes even more difficult.

Too often we end up with a lot of self-serving statements as each participant in the process seeks to blame another and take no responsibility for its own failings.

Factor in that California has a fractured government system and a high-tax environment to begin with, and it soon becomes obvious why there is no blueprint for handling the forecast growth in transportation demand. Actually, there are many blueprints. What there isn't, is a single coordinating agency that can make things happen.

Railroads, until recently, have been reluctant to add significant new terminal and track infrastructure, having paid the economic penalty for having too much capacity for much of the last half century. With tight capacity and growing demand, the railroads are getting intermodal rates to the point where they justify the investment of capital for expansion.

The short-term answer to the California infrastructure problem isn't even to add more physical plant. It is to wring more capacity out of existing infrastructure by operating efficiently.

The International Longshore and Warehouse Union has been referred to as the neatest little monopoly anyone has seen in a long time. The union, known for taking tough positions with employers and for resisting the introduction of technology that would improve productivity, provides an average wage in excess of $100,000 for its members. It's hard to blame the ILWU for wanting to preserve that. In fairness, the ILWU is living up to its contract, terminals are introducing new technology and throughput is increasing.

Operating the docks on a 24/7 basis would result in a quantum improvement in throughput with no increase in infrastructure. PierPass, the new program that penalizes shipments that move through the terminals during peak hours to encourage more traffic at non-peak times, is a good start. If containers are leaving the docks at night and on weekends, however, regional distribution centers also will need to move to extended hours, something they have resisted.

New or increased capacity from development of new infrastructure is not likely to occur in the near term. Container ships are getting bigger, but ports are limited in the ability to add berths or terminals. There is so much existing infrastructure at the Los Angeles-Long Beach port complex, but diversion to ports in Mexico or as far north as Prince Rupert in British Columbia is not seen as a real threat. At most, diversion will only slow the rate of growth at the Southern California complex. California already is laced by highways, and there are few who believe that many miles of new pavement will be added.

Railroads face physical constraints. BNSF Railway, which is completing the double-tracking of its Transcon line between Los Angeles and Chicago, wants a near-dock intermodal container transfer facility. Union Pacific already has the Intermodal Container Transfer Facility, which cuts congestion by reducing to just a few miles the distance boxes are drayed from the docks to the ICTF where trains are loaded and dispatched.

Increasing capacity through efficiency will work only so long. Eventually, new facilities will be required. The good news is that capacity will be made available as players see an opportunity to make a buck. There always will be a competitor who will see a way to profit by offering a better product or service. And once that operator makes a commitment and reaps the benefit of risk-taking, others will move to match or exceed.

The process isn't neat. The lack of coordination means there will be temporary dislocations, some costly. But eventually, things will come together, because they must. In the case of intermodal transportation, because there are many players controlling different but essential assets and each operating in its own self interest, it is perhaps easier to have faith in the eventual outcome. The huge business that is intermodal today didn't develop neatly or cleanly.

Larry Kaufman, former intermodal editor of The Journal of Commerce, has worked in and written about railroads for nearly 40 years. He can be contacted at