When the extremely successful Intermodal Container Transfer Facility opened in late 1986, 4.4 miles from Los Angeles and Long Beach harbors, some analysts thought it would kill any future plans for on-dock rail transfer yards.

These pundits were proven wrong last August when Kawasaki Kisen Kaisha ("K" Line) opened an on-dock yard in Long Beach.Construction will begin soon on another on-dock railyard at Long Beach Container Terminal, with more such facilities planned for Long Beach and Los Angeles.

In a scenario being played out at most West Coast ports, it has become apparent that on-dock transfer yards can coexist profitably with off-dock facilities several miles from the harbor. Each type of facility has advantages as well as disadvantages, but they complement each other.

In Southern California, on-dock rail transfer capability has not hurt business at the Intermodal Container Transfer Facility. The ICTF handled 475,089 containers in 1989, a volume originally projected for 1995. Port planners see continued growth at the ICTF even as more on-dock yards are built.

"Quite frankly, there's enough business for everyone," said Lee Hill, managing director of planning and engineering in Long Beach. Mr. Hill said Long Beach will construct as many on-dock yards as steamship lines want. "Our direction is clear. Our customers want on-dock rail," he said.

Some analysts say Southern California should have built on-dock yards 10 years ago, rather than starting with the ICTF. On-dock yards eliminate drayage (local transport) and gate charges and give steamship lines control over the container transfer process.

"Historically, what they did was wrong," said Asaf Ashar, research associate at the Ports and Waterways Institute at George Washington University in Washington, D.C. "Why didn't they start with near-terminal yards?" he asked.

Mr. Ashar added, however, that traffic in Los Angeles-Long Beach is so great even wrong decisions turn out right. "There is so much volume there, you can't lose," he said.

David B. Crampton, director of international intermodal marketing at the Southern Pacific Transportation Co., which operates the ICTF, is not concerned about competition from on-dock yards. "We have 60 percent of the intermodal freight going through the two harbors. That speaks for itself," he said.

On-dock rail is not for everyone. Mr. Crampton noted that not all terminals have sufficient space to accommodate on-dock rail, and some steamship lines do not generate enough traffic for regular unit train service. His words ring true at other West Coast ports which are also going with off- dock as well as on-dock rail.

The Port of Oakland is currently testing both types of facilities. James J. O'Brien, executive director of transportation services, said the port may decide to have both facilities if that is what the port's tenants want.

"We conclude a mix is what we're most likely to see, because shipping lines have different priorities and they all operate differently," Mr. O'Brien said.

On-dock yards may be more efficient, but they can also cause problems. George Marshall, senior vice president of marketing at Mitsui O.S.K. Lines in Long Beach, said assembly of unit trains creates a "floating wall" that can block vehicular traffic. "You have to consider the physical layout of the terminal," he said.

Furthermore, on-dock yards operate at their peak efficiency only when containers are transferred from vessels to trains without being placed on the ground. Arranging this direct transfer can be a logistical nightmare requiring proper loading of vessels overseas and precisely coordinated vessel and train schedules.

The "K" Line terminal in Long Beach transfers a portion of its containers directly to stack trains, but most of the boxes are placed on the ground and moved to the trains with yard equipment. Virtually all on-dock terminals at West Coast ports require this intermediate move.

The cost savings inherent in on-dock facilities diminish with each additional cargo move. In some cases, the savings at an on-dock yard will be only marginally less than at a transfer yard a few miles from the harbor.

The Port of Seattle has one on-dock facility and two railyards within a couple of miles of the harbor.

"On-dock is almost sold as if it were free, but there are costs involved," a spokesman said, noting that the loading of containers and spotting of railcars involve labor costs. "No one has really taken a sharp pencil to it," he said.

Even if on-dock facilities are only marginally superior to off-dock yards, West Coast ports will continue to promote them.

Ports today are considered to be most responsive to their customers when they provide on-dock rail, and Mr. Ashar noted that in the highly competitive port industry, perception can be as important as facts.