TraPac Doubling Oakland Footprint

By Mark Edward Nero

Container terminal operator and stevedore TraPac LLC plans to nearly double its marine terminal size at the Port of Oakland, the company revealed Oct. 13.

TraPac, which began Oakland operations in 1991 and also manages terminals in Los Angeles and Jacksonville, Florida says it plans to lease an additional 57 acres and two vessel berths on the Port of Oakland’s Outer Harbor. If the deal is approved, it would strengthen TraPac’s position as the second-largest terminal operator in Oakland.

According to the Port of Oakland, TraPac will invest to upgrade and modernize the new terminal acreage under its control in Oakland. Among other things, TraPac says it plans to construct a new gate to give harbor truckers better access to the terminal.

TraPac disclosed its plans at the most recent meeting of Oakland’s Board of Port Commissioners. The proposed 14-year lease agreement with the port becomes final if the Board approves it at an Oct. 27 meeting.

“This is a significant step forward for TraPac and the port,” Oakland Maritime Director John Driscoll said. “TraPac gets room to expand its thriving business and the port gets to revitalize valuable property with a highly respected tenant.”

TraPac, which handles 20 percent of the containerized cargo moving through the Port of Oakland, manages two vessel berths and 66 acres of land. Under the new agreement, it would have four berths and 123 acres, with much of the land used for cargo handling.

“Our business is growing and placing new demands on our operations,” said Mike Porte, general manager of TraPac’s Oakland site. “With this new agreement we can meet the demands and the service expectations of our customers.”

“With this expansion, we’re demonstrating our long-term commitment to Oakland,” Porte said.

Oakland, Tenant Reach Lease Termination Agreement

By Mark Edward Nero

The Port of Oakland has agreed to a lease termination agreement with bankrupt tenant Outer Harbor Terminals LLC.

The port’s Board of Port Commissioners approved the agreement the afternoon of Feb. 19, and it is now set for review by a bankruptcy judge in Delaware who is overseeing Outer Harbor Terminals’ request for bankruptcy protection.

In January, Outer Harbor filed for bankruptcy and announced its intention to close its Oakland operation, which is one of five privately-operated marine terminals at the port. If the bankruptcy court approves the lease termination agreement, Outer Harbor Terminal will close April 29.

The agreement terminates the 50-year lease that Outer Harbor signed with the port in 2009, and imposes several conditions, among them that Outer Harbor Terminal would continue Oakland vessel and cargo operations through March 31, and that it would pay about $6 million in February and March rent to the port.

The agreement also requires the terminal operator to clean up debris and remove equipment on the 166-acre property, plus pay the port $5.1 million for additional cleanup and repair.

In return, the port would provide free rent in April to ensure the terminal remains open for cargo operations until the shutdown.

“We’re not pleased to see a terminal close, but this agreement helps ensure a smooth transition for our customers,” Port of Oakland Maritime Director John Driscoll said. “All of our attention now is on efficiently migrating their cargo to the other terminals in Oakland.”

Earlier this month, the port developed a continuity plan to move ships and cargo to adjacent terminals when Outer Harbor Terminal closes, and also implemented a $1.5 million transition assistance program to extend gate hours at port terminals.

Oakland Forming Post-Terminal Closure Plan

By Mark Edward Nero

The Port of Oakland will maintain cargo volumes and improve performance as one of its marine terminals closes, Executive Director Chris Lytle said during his annual State of the Port speech on Jan. 21.

Lytle’s comments were in response to Ports America, the largest stevedore and terminal operating company in the United States, revealing Jan. 19 that it is closing its Outer Harbor terminal at the Port of Oakland at the end of March.

Lytle said ships and cargo now managed at the terminal will be redirected to neighboring Oakland terminals.

“We will do all in our power to prevent disruption to the movement of cargo,” Lytle told an audience of 230 during the speech. “We’ve identified a new home for 90 percent of the cargo that must be relocated.”

Lytle’s address came before a lunchtime audience that included Federal Maritime Commission Chairman Mario Cordero, Oakland City Council President Lynette McElhaney, and varied maritime and supply chain representatives.

Among the steps to be implemented once the Outer Harbor terminal closes, Lytle said, are:

• Extended terminal gate hours including Saturdays and some weeknights;
• More labor to process cargo transactions; and
• A Central Valley depot to help agricultural exporters pick up and drop off containers.

Lytle also said he’ll ask the port’s Board of Commissioners for approval to help finance transition costs. The funding could be used to provide performance incentives during the initial period of cargo migration.

According to Lytle, Oakland marine terminals have excess capacity, and closing a terminal and redistributing cargo would lead to more efficient use of port property.

The port will explore future uses for Outer Harbor Terminal that may not include container operations.

“There are too many acres devoted to container operations,” Lytle explained. “We now have a chance to reset.”

Also during his speech, Lytle addressed rail improvements, saying that the port is expected to complete construction of its new rail yard in the second quarter of 2016, which would add 44,000 feet of new track.

Also, he said, construction should begin mid-year on a 370,000-square-foot logistics facility.