transportationreport MARITIME/PORTS
capacity to process 2. 2 million TEUs a year. The port plans
to build a second container terminal that will increase
overall TEU capacity to 3. 4 million by 2015 and 6. 5 million
by 2020.
Though Lázaro Cárdenas is closer in rail miles to key
Texas points than is Long Beach, the substandard track conditions in Mexico have always been a drag on transit times.
However, due to track improvements by Kansas City
Southern, the exclusive rail provider between the port and
the U.S., transit times to Texas through the center of Mexico
are now about the same as they are from Long Beach,
according to Howland. Shippers and beneficial cargo owners (BCOs) using Lázaro Cárdenas realize savings from the
shorter distance in rail miles as well as the lower operating
costs at the Mexican port, he said.
Further south and to the east of Lázaro Cárdenas is the
well-publicized Panama Canal expansion project, set for
completion in 2015. The widened and deepened passage
will accommodate the “megaships”—vessels capable of carrying up to 12,500 TEUs—seen as the future workhorses of
global trade. It has also fueled a multiyear debate as to
whether an all-water route through the canal to the East
and Gulf coasts will be more cost-effective for U.S.
importers than having their goods offloaded on the West
Coast and trucked or railed inland.
Jones Lang LaSalle, a Chicago-based logistics and industrial services giant, caused a stir in mid-2009 when it predicted the canal’s expansion would result in West Coast
ports’ losing up to 25 percent of their existing traffic base to
eastern rivals over the next few decades. The firm still
stands by that projection, said John Carver, director of port,
airport, and global infrastructure, in a February interview.
Besides the growing competition from Canada and
Mexico, there are the “doing business” issues like cost, congestion, and labor that Lytle wakes up to every day. Shippers
and carriers have grown accustomed to the expensive and
crowded conditions that are part of life in Southern
California. They’ve also coped with three labor-related disturbances at Long Beach in the past decade, the latest being
an eight-day strike late last year by a clerical workers unit
that curtailed operations at Long Beach and effectively
shuttered Los Angeles after union dockworkers honored the
picket lines.
Carver said users of the twin ports face a myriad of obstacles that seem to coalesce into one big and constant
headache. As a result, they have been searching for alternatives, he said.
Cathy Burrow, global transportation manager for Kansas
City-based Hallmark Cards, said Hallmark today uses Long
Beach and Los Angeles for about 60 percent of its waterborne imports from Asia. The other 40 percent transits
through the Panama Canal to the East and Gulf coasts.
About 10 years ago, 90 percent of Hallmark’s imports
entered through the West Coast. Hallmark imports about
10,000 TEUs a year.
Burrow said Hallmark diversified its import gateways
because the many challenges at the Southern California
ports threatened the reliability of the company’s supply
chain. “We knew we had to create more consistent leadtimes
for our inventory in order to do a better job of managing
it,” she said.
Burrow said she has toured Lázaro Cárdenas, but as of
now, Hallmark doesn’t ship through the port. “It’s on our
watch list,” she said.
Will a new ag export run bear fruit?
Five of the seven biggest steamship lines and a large western railroad are in talks to tap into underutilized capacity
at the nation’s two busiest ports in an effort to expand
global markets for U.S. agricultural exports.
The proposed initiative involves hauling intermodal containers to the ports of Los Angeles and Long Beach from
California’s Central Valley, a 450-mile swath of fertile land
extending from Redding in the north to Bakersfield in the
south. At the ports, the containers of agricultural products
would be loaded aboard containerships for the trip across
the Pacific.
The move from the Central Valley to the ports would
actually be the second leg of a round-trip starting at the
ports’ docks. Containers carrying import merchandise into
Los Angeles and Long Beach would be transferred to a
“loop train” for the northbound moves up the coast, with
the train stopping at various intermodal ramps to unload
the cargo. Large retailers, produce growers and packers,
and the railroad would synchronize their schedules so the
railroad could accept containerized shipments of agricul-
tural products for the return move to the docks.
