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Re: Small port fantasy
Author: S. L. Murray
Date: 05-31-2007 - 15:37
Dreams of riches as the result of the container import boom are by no means limited to the North Coast and Humboldt Bay. Ports up and down the Pacific believe there is an opportunity for them to get a slice of the pie, but most of them are just being suckered into a boondoggle by ignorant or deceptive consultants.
The reality is that LA/LB have, and will continue to have, the majority of import traffic due to the huge distribution infrastructure that is tied to the ports. The rest of the ports are then left with competition for transcontinental container traffic. So, for example, Coos Bay wouldn’t be really in competition with LA/LB, but with Oakland, Tacoma, Prince Rupert, et al. As a result, the capacity issues of LA/LB aren’t really that much of an opportunity for a small port hoping to enter the container boom. There is already spare capacity at Tacoma, Seattle, Oakland, Prince Rupert, Portland, Roberts Bank. That is to say nothing of San Diego, Port Hueneme, Bellingham, San Francisco, etc. which are all deep water ports on existing good rail lines.
More importantly, capacity at any of these ports can be added relatively inexpensively, and projects are already underway to do so.
Why, from a shipper’s perspective, would you want to call at a port (I’ll use Coos Bay just for example) that:
a) would result in 10% to 25% higher freight costs,
b) is served only by the UP, so your traffic is captive,
c) has longer rail transit times, so requiring more equipment
d) couldn’t take double stacks, at least not without tunnel clearance projects
e) has to have higher port fees to finance their entire container infrastructure
f) has absolutely no local distribution capabilities?
Also, when looking at container “estimates” be sure to keep in mind that these are often expressed in TEU. Most containers are, then, 2 TEU. The average number of containers per railcar is also rising. I’m not sure what the current average is, but a couple years ago it was 5 containers (10 TEU) per railcar. There are more doublestacks now, and more 5 wells, so this number is probably a fair bit higher.
The reality is that LA/LB have, and will continue to have, the majority of import traffic due to the huge distribution infrastructure that is tied to the ports. The rest of the ports are then left with competition for transcontinental container traffic. So, for example, Coos Bay wouldn’t be really in competition with LA/LB, but with Oakland, Tacoma, Prince Rupert, et al. As a result, the capacity issues of LA/LB aren’t really that much of an opportunity for a small port hoping to enter the container boom. There is already spare capacity at Tacoma, Seattle, Oakland, Prince Rupert, Portland, Roberts Bank. That is to say nothing of San Diego, Port Hueneme, Bellingham, San Francisco, etc. which are all deep water ports on existing good rail lines.
More importantly, capacity at any of these ports can be added relatively inexpensively, and projects are already underway to do so.
Why, from a shipper’s perspective, would you want to call at a port (I’ll use Coos Bay just for example) that:
a) would result in 10% to 25% higher freight costs,
b) is served only by the UP, so your traffic is captive,
c) has longer rail transit times, so requiring more equipment
d) couldn’t take double stacks, at least not without tunnel clearance projects
e) has to have higher port fees to finance their entire container infrastructure
f) has absolutely no local distribution capabilities?
Also, when looking at container “estimates” be sure to keep in mind that these are often expressed in TEU. Most containers are, then, 2 TEU. The average number of containers per railcar is also rising. I’m not sure what the current average is, but a couple years ago it was 5 containers (10 TEU) per railcar. There are more doublestacks now, and more 5 wells, so this number is probably a fair bit higher.
