“Congestion Challenges: Are We Doing Enough?” International Cargo Handling Coordination Association (ICHCA) Conference Richard D. Steinke Executive Director, Port of Long Beach

Business, Environmental and Community friendly Port of Long Beach Shaping a Vibrant Community

The Port of Long Beach Port of Long Beach

Port opened in nd busiest U.S. seaport 16 th busiest in the world Who We Are

More than $140 billion a year in cargo shipped through L.B. Leading imports include computers, autos, clothing, toys, shoes, handbags, furniture Leading exports include raw materials such as petroleum coke, waste paper, plastics, chemicals International Trade

Infrastructure Challenges Trade may triple or quadruple in the next two decades Goods movement is dependent on infrastructure … particularly in a Just-In- Time environment. Demand exceeding available capacity causes delays

Why Should We Care About Congestion Delays increase costs and negatively impact the environment and the economy: –Missed cutoff times. –Additional inventory/fleet size required. –Staffing is not optimized if freight is delayed. –Congestion causes more emissions. –Community opposition to projects stiffens. –Adverse economic impact, nationwide.

Atlantic Seaboard Trade value: $25.9B Jobs: 275,300 Southwest Trade value: $82.0B Jobs: 1,114,700 South Central Trade value: $32.5B Jobs: 435,700 Southeast Trade value: $37.7B Jobs: 498,900 Great Lakes Trade value: $53.7B Jobs: 681,800 Great Plains Trade value: $19.3B Jobs: 243,200 Northwest Trade value: $3.2B Jobs: 39,900 Source: BST Associates, 2007 Trade Impact Through POLB/POLA Total Impacts: Trade: $256 billion Jobs: 3.3 million

Containers at California Ports (Millions of TEUs)

Cargo Forecasts (millions of TEUs) Divert Cargo? Punta Colonet? Prince Rupert? Panama Canal? POLB/POLAOakland

Primary Gateway for Imports “Regardless of efforts to develop alternative West Coast gateways, Los Angeles and Long Beach will remain the primary entry points for eastbound imports into the U.S.” -- Waterfront Coalition white paper, 2005

Causes of Port Congestion % increase from 2003 to 2004 in POLB containers (2% at POLA) Rail labor & equipment shortages –68% increase from 2003 to 2004 in on-dock rail at POLB. (10% at POLA) PMA under-estimated volume and productivity growth Labor allocated to terminal & rail operations before vessels.

Remedies to Port Congestion 2005 PMA/ILWU added labor –Added 5,000 casuals –Promoted 1,750 casuals to registered status –Improved forecast of labor needs. Technology Implementation –Optical Character Recognition (OCR) –Radio Frequency Identification (RFID) –Faster Transactions Rail Improvements –Added labor & equipment –Increased On-Dock rail use (now 24% of total throughput, up from 16% in 2003)

POLB Terminal Capacity Existing “footprint” allows for a doubling of throughput –Dependent upon technology and business practices changes “Right sizing” terminals (e.g., Middle Harbor project) Sensitive to environmental & community needs

POLB Terminal Productivity CY 2007 Actual Demand 2020 Capacity TEUs7,312,46520,665,000 * Gross Acres1,3141,882 TEUs/acre/yr5,56510,980 * Assumes 26,620 feet wharf length, 49 weekly services (out of 108 for San Pedro Bay), 1,326 net acres, 33/hr crane productivity, no constraints re: channel depth, bridge height or # of cranes.

Highway and Rail Infrastructure Projects Alameda Corridor (completed) PierPass (Implemented) Gerald Desmond Bridge Replacement I-110 Connectors SR-47 Expressway On-Dock Rail Improvements I-710 Corridor Improvements

22-Mile 40 m.p.h. Rail Corridor Consolidates Four Branch Lines (10 m.p.h.) Reduces Conflicts at 200 Grade Crossings 10-Mile Trench $2.4 billion Completed in 2002 Alameda Corridor Freight Railway

PierPASS Off-Peak Truck Gates Week Ending Peak trucks % PeakOff- Peak % Off- Peak Total 7/24/0564,79485%11,29415%76,088 2/10/0846,94261%29,43739%76,379 Peak = Weekdays 8:00 a.m. to 6:00 p.m. Source: Port of Long Beach

Insufficient capacity Existing five lanes New bridge – six lanes with shoulders Insufficient vertical clearance Existing: 156 feet New bridge: 200 feet Estimated cost: $851 million Gerald Desmond Bridge

Interstate (710) freeway under congested conditions and during 2002 shut down of West Coast ports. Lockout disrupted $6.28 billion in trade at POLA/POLB Main Roadway into Port

I-710 Corridor Improvements EIR/EIS and preliminary engineering underway Advanced container movement technologies I-710 improvement concepts include: 10 mixed flow lanes (5 in each direction) 4 exclusive truck lanes (2 in each direction) Minimize residential displacement

Economy, Environment, Security Impacted Congestion, delays, accidents and transportation costs are increasing. Goods movement facilities have not kept up with growth. Communities calling for slow or no growth.

Funding Constraints Limitations of existing grant & loan programs –Federal transportation reauthorization in 2009 –State funds including Proposition 1B general obligation bonds –County local funds –Port funds Also required: user fees for specific projects -- with firewalls, sunset provisions, etc.; i.e., Public-Private Partnerships

Federal SAFETEA-LU : Not Enough Gerald Desmond Bridge –$100 million I-710 Freeway –$9.5 million –$10 million SR-47 design Port of L.A. –VT Bridge study plus I-110/SR 47/Harbor Blvd. Interchange: $5.6 million

State Transportation Bonds Include: $2 billion for trade corridors infrastructure $1 billion for trade-related emissions reductions $100 million for port security

Project-Specific Fees Alameda Corridor (pays debt service on revenue bonds) –$18.67/loaded TEU –$4.73/empty TEU –$9.45/other rail car Clean trucks fee –$35/loaded TEU (starting October 1, 2008) –on dock rail exempt Infrastructure cargo fee for port area highway and railroad projects –$15/loaded TEU (starting January 1, 2009)

Public-Private Partnerships Consensus on what to build, funding shares, method of payment (industry buy- in essential) Legal authority Stable revenue stream Funding firewalls and sunset clauses Appropriate allocation of risk Cost and schedule control Clear decision making authority

Summary and Conclusions Terminal and highway/rail projects must advance in lockstep with Clean Air Action Plan (CAAP). Terminal productivity must increase if capacity forecasts are to be realized. Federal transportation reauthorization in 2009 must provide additional funding for freight. Timely delivery of state Prop. 1B projects. Port infrastructure cargo fee and clean truck fees must be implemented.

Thank You