Tuesday, January 14, 2014

Regional Report: Infrastructure Upgrades Abound at LA and Long Beach

By Mark Edward Nero

It’s very true that a seaport's location can play a significant role in how successful the port is and could become. However, another very important factor in that success is the level of quality infrastructure in and around the port.

The condition and status of roads, bridges, rail yards, container terminals and shipping berths on or near port property can play a huge role in the efficient movement of goods in and out of an area.

This fact is quite well known by the operators and overseers of the ports of Los Angeles and Long Beach in Southern California's San Pedro Bay. Throughout 2013, both ports were engaged in multiple projects to upgrade and strengthen their respective substructures. From berth upgrades, to terminal renovations, to improvements to bridges, roadways and rail, the adjoining ports were in the midst of infrastructure improvements throughout the year.

Punctuating the point that infrastructure improvement means a lot to the two ports, the current fiscal year for each is the first time in history that their capital budgets have topped $1 billion combined.
Last June, the Port of Los Angeles adopted a 2013-14 fiscal year budget of about $1.1 billion, with almost $400 million – or 37 percent of the total budget – allotted for capital improvement.

"Our fiscal year of July 1, 2013 to June 30, 2014 is the largest capital budget in our history, a $399 million capital budget that will break all our records in terms of total capital spending," Port of Los Angeles Deputy Executive Director of Development Mike Christensen told Pacific Maritime Magazine.

Days after the POLA approved its budget, Long Beach also approved a $1 billion financial plan for its upcoming fiscal year. The budget includes the largest capital improvement spending plan ever adopted by the port: $788 million.

The capital spending total is six percent more than FY 2013. The port's modernization projects, including its Middle Harbor terminal project and replacement of the Gerald Desmond Bridge, pushed the overall budget up by 6.6 percent compared to the previous fiscal year.

One infrastructure project that both ports worked on for years that finally reached its apex in 2013 was the installation of alternative maritime power (AMP), also known as cold ironing, at container berths throughout various terminals.

The AMP installations mean that ships at berth are now able to receive electrical power from the shore while the ships' engines are off. The berth electrifications came just before a state deadline requiring certain California ports to ensure that at least half of all visits by container cargo, refrigerated cargo and cruise vessels be powered by electricity.

Under the rule, which went into effect Jan. 1, 2014, vessels must sometimes shut down their diesel engines and run on shore-side electricity while at the ports of Los Angeles, Long Beach, Oakland, San Diego, San Francisco and Hueneme.

The rule, which applies to fleets making at least 25 visits per year to California ports, was approved by the California Air Resources Board in December 2007.

The port has a total of roughly 100 berths, but many aren't container or cruise berths and are therefore exempt from the rule. That said, over the course of the past few years, the Port of LA went from having nine AMPed berths to having 26 by the end of 2013.

"Those 26 berths will be more than any other port in the world," port spokesman Phillip Sanfield said.
"We will have spent more than $180 million accomplishing this," Christensen said.

The Port of Long Beach also put a significant amount of money into AMP power.

"We've recently finished up about $175 million worth of infrastructure for the shore power regulation that starts Jan. 1," revealed Dr. Noel Hacegaba, Acting Deputy Executive Director for the Port of Long Beach.

By the end of 2013, all 13 international cargo terminals at the San Pedro Bay port complex had at least one berth that can deliver shore power to ships.

Also among the more important projects taking place on the LA side of the harbor throughout the year was continued construction of the $137 million rail project at Berth 200, also known as the West Basin Railyard.

The intermodal storage rail yard is designed to provide staging and storage for trains using the 20-mile Alameda Corridor railroad express line. When complete in the spring of 2014, it is expected to improve a vital link in the national freight network.

The project will also enable track space at the TraPac container terminal to serve as TraPac's future on-dock rail facility. About $365 million in rail, roadway and terminal improvements are being completed over the next few years at TraPac, which is currently the only Los Angeles terminal without on-dock rail.

The project is being built in two phases: Phase I, which began in 2012, includes construction of the new yard, support tracks for the TraPac and China Shipping/West Basin Container terminals, double-track connections to the Alameda Corridor and national rail network and access road improvements. 

Phase II, which began construction later in 2013, includes final rail network connections and vehicle overpasses to eliminate at-grade crossings for safer, more efficient flow of truck and commuter traffic. Both phases are due to be completed by late spring or summer 2014.

"It remains one of our most important terminal expansion programs for several reasons," Christensen said of the project. "TraPac is a $510 million expansion program that will be the first automated container terminal at the Port of Los Angeles. We began construction on the automated portions of the terminal back in 2012. The first elements of automation continue under construction this year."

At an LA Harbor board meeting last November, the commission formally approved the contracts for the largest portion of the automated terminal to go into construction.

"It's what I'd call a hybrid terminal," Christensen said of TraPac. "It's basically a three berth terminal; two of those three berths will be fully automated. The third berth will remain conventional."
Also part of the TraPac project is a new rail yard.

"This will be the first rail yard we'll open that will be an automated, on dock container rail yard," Christensen said.

The ports' infrastructure upgrades are being made in part to fend off competition from other areas aiming to steal business from LA/Long Beach, such as the Panama Canal and Canada's Port of Prince Rupert, both of which have undergone well publicized infrastructure upgrades in order to attract more containerized cargo.

But the LA and Long Beach upgrades are also being made so that the ports can better compete against a closer competitor: each other. Although some outside the region look at LA-Long Beach as one big sprawling complex, and although they do collaborate in some instances, such as on anti-pollution initiatives, in actuality the two sides are highly competitive with one another, something that keeps each striving to gain a competitive advantage.

One area where the two entities butted heads in 2013 was the development of the $500 million, 153-acre Southern California International Gateway project. The SCIG is a planned near-dock rail container transfer facility proposed by Burlington Northern Santa Fe Railway for use on land owned by the City of Los Angeles Harbor Dept., as well as on adjacent private land in Los Angeles, west Long Beach and Carson.

The project was approved by the Harbor Commission in March and the LA City Council in May, but in June, the City of Long Beach, the Natural Resources Defense Council, South Coast Air Quality Management District and Long Beach Unified School District all submitted anti-SCIG lawsuits in Los Angeles Superior Court, alleging that the Port of Los Angeles didn't conduct a full and thorough environmental review before approving the project.

Long Beach's suit contends that the SCIG project would adversely affect its residents, businesses and schools by bringing more noise and air pollution to an area that has already suffered plenty over the years due to nearby port-related operations.

"The Port of Long Beach is a department of the City of Long Beach, and so our position is consistent with that of the city," Hacegaba told Pacific Maritime Magazine.

Due to the litigation, construction, which was supposed to begin in 2013 and completed about three years later, has been put on hold indefinitely.

"We're now we're slogging through the additional portions of litigation," Christensen said. "It remains a very important project to us and to the BNSF Railway, the project's sponsor. It's awfully hard to estimate the time it'll be tied up in litigation. That's about all we can say at this point."

The conflict is a rare example of the two sides openly being in direct conflict with one another; usually projects one side undertakes affect the other side more indirectly, such as the building of a new bridge on the Port of Long Beach side to replace the aging Gerald Desmond Bridge.

The $1 billion Desmond Bridge project consists of replacement of the obsolete structure with a new state-of-the-art span. A groundbreaking for construction of the new bridge took place in January of 2013, and the new, as yet unnamed structure is expected to be finished in 2016. The new bridge would be higher from the water and have more traffic lanes than the existing 45-year-old Gerald Desmond Bridge, which sits adjacent to the under construction span.

"It's important for the public to know that we're investing billions of dollars into our infrastructure at a time when the global competitive landscape is changing and it's important to note that we're doing this to position our port to be the most competitive in North America," Hacegaba said. "What we're trying to do is make sure we're big-ship ready."

The existing bridge's height of 155 feet restricts newer, larger ships from reaching piers within the inner channels, but the new bridge is expected to raise the clearance over the port's inner harbor channel to 205 feet, giving it the tallest span height for a cable-stayed bridge in the US.

"The new bridge will be an icon in the Long Beach skyline," Hacegaba predicted.

"Not only is the new bridge going to be taller to accommodate the larger vessels that will have to pass underneath it, but it will also be wider, so it will certainly positively affect the commuter traffic," he said. "So for the trucks and commuters that drive over the bridge, we'll be able to accommodate the traffic flow so that you don't get as much congestion."

Separate, but related to the Desmond Bridge project is the replacement of the 65-year-old Commodore Schuyler F. Heim Bridge, a vertical lift bridge that lies partially within both the Los Angeles and Long Beach city limits, due north of the San Pedro Bay port complex.

For the $351 million Heim Bridge project, which began in 2011 and is expected to be complete in 2017, the California Dept. of Transportation determined it would be more cost effective to replace the structure than attempt to retrofit the bridge. Therefore, the lift-span portion of the existing Heim Bridge is being replaced by a fixed-span bridge structure, which means the new span that expands over the navigation channel will permanently be attached to the support beams, as opposed to being able to move and lift upward.

Caltrans says the new bridge, which like its predecessor is expected to see heavy truck traffic, will provide a permanent navigable channel that's 180 feet wide, with a vertical clearance of 47 feet, as opposed to the current bridge's 38 feet.

Perhaps most importantly, with the elimination of the lift, traffic over the six-lane span won't be delayed due to passing ships.

One of the more interesting things about all the upgrades and improvements that port facilities are undergoing is that neither port had to implement a planned infrastructure fee to get the funding for them.
A few months ago, both ports repealed approved never-implemented cargo fees that would have been used to help finance major rail, highway and bridge improvement projects.

The infrastructure cargo fee (ICF), which would have varied from $6 to $18 per 20-foot equivalent container unit, would have been assessed on all loaded containers entering and leaving the port by truck or rail.

The fee was formally revoked by the Los Angeles Board of Harbor Commissioners Sept. 19 and by the Long Beach board two months later.

The fees had been expected to begin in 2009 and raise $1.4 billion in order to secure matching state transportation funds for the design and construction of 17 specific highway and rail construction projects throughout the harbor district.

But when the economy began to slide into a deep recession, both ports decided to put the customer first and shelved their versions of the ICF while pursuing other federal, state and regional grants to advance their projects.

Over time, the ports managed to find other revenue sources to secure the majority of the funds needed to pay for multiple capital projects now being built or due to begin construction in early 2014.