Backlog prompts buildup of ports
By Ronald D. White
Los Angeles Times
A building boom is under way along the Western seaboard of North America as ports strive to handle the growing flood of trade from China — and possibly lure away some of the shipping that clogged the ports of Los Angeles and Long Beach last year.
Billions of dollars have been committed for dredging and construction projects in Alaska, Canada and up and down the West Coast. Expansion programs are on the drawing boards on the Baja Peninsula and at the Panama Canal. Backwater ports in the San Francisco Bay Area and British Columbia are dreaming of better days.
The activity was inspired in part by the spectacle of cargo-laden ships waiting for days to unload at Los Angeles and Long Beach — the second time in three years that the United States' busiest port complex has suffered ruinous backlogs.
Since July, more than 100 ships have been diverted to Oakland, Calif., Manzanillo, Mexico, and other ports to avoid the Southern California traffic jam, and some of the lost business could be permanent as shipping lines look for less-congested alternatives.
For Kevin Bruce, director of business development at the port of Anchorage, Alaska, the epiphany came one evening in September as he flew into Long Beach en route to the annual meeting of the American Association of Port Authorities. Looking down, Bruce saw a flotilla of container vessels idling offshore.
"I counted 28 ships and I thought, 'Wow, that's not right,' " Bruce recalled.
Within weeks, Anchorage had hired a New York advertising agency, and a batch of greeting cards was in the mail to 50 of the world's largest shipping lines and freight-forwarding companies.
"Don't let the Grinch steal Christmas again," the card said. "There's a reason why Santa works up here."
The seaport nestled at the head of Alaska's Cook Inlet isn't relying only on clever promotions.
Anchorage, which says that freight unloaded at its facility can be delivered to the middle of the lower 48 by truck in three days, is spending $350 million to more than double its berthing spaces and boost its cargo business from 500,000 containers last year to 1 million within two or three years.
It's a familiar story on the Western waterfronts.
On Puget Sound in Washington state, the ports of Seattle and Tacoma have embarked on separate expansion programs that will increase their combined capacity from 3.8 million containers in 2004 to between 5.1 million and 5.5 million by 2006. And the ports are counting on Southern California's recent maritime woes to drive business their way.
"The question I'm getting is, 'Can you get our goods to Chicago faster than Los Angeles and Long Beach?' " said Jeannie Beckett, senior director of inland transportation for the Port of Tacoma. "We're saying, 'Yes, we can.' "
Oakland, the fourth-busiest container port in the nation, has spent $620 million to build up its capacity and is looking to use an abandoned Army base to add more. At the same time, it's courting shipping lines to try to redirect cargos from Southern California to the San Francisco Bay Area.
Farther south, Mexican officials said talks were under way to transform the relatively small port of Ensenada into a major deepwater facility.
The state of Baja California has hired Hong Kong-based Hutchison Port Holdings to perform a feasibility study, although Deputy Antonio Rodriguez Hernandez, the president of the Baja California House of Deputies' Commission for Economic Development and Port Affairs, said plans to expand Ensenada were still in the conceptual stage.
Expansion projects also are under way at the Manzanillo on Mexico's Pacific coast about 150 miles south of Puerto Vallarta, and at the Panama Canal.
Shipping companies say they welcome the expansion projects. APL, a major shipping line whose parent company is Singapore-based Neptune Orient Lines Ltd., said it was banking on increased capacity at other West Coast ports to provide an alternative to Los Angeles and Long Beach.
The company also plans to use bigger ships to send more Asian cargo directly to the eastern United States by way of the Panama Canal, bypassing the West Coast ports altogether.
Los Angeles and Long Beach port officials say they aren't worried about losing significant business or jobs to their growing ranks of competitors. The area already has the sea-and-land transportation infrastructure in place, they note, and also boasts a huge local market for imports.
"Roughly half of the cargo that comes here stays here. You are not going to truck it to Southern California from somewhere else," said Keith Higginbotham, a spokesman for the Port of Long Beach. "The rail hubs here are more developed than anywhere else, and the non-local cargo is attracted here for those reasons."
As if to underscore that importance, the two railroads serving Southern California — Union Pacific Corp. and Burlington Northern Santa Fe Corp. — are racing to lay a second line of track between Los Angeles and Chicago, the nation's busiest corridor for shipping imported freight.
Moreover, some maritime and port-development experts are convinced that the United States has seriously underestimated the future volume of trade with China, arguing that even the expansion plans now on drawing boards up and down the Pacific Ocean's eastern rim may not be enough to handle the traffic.
