West Coast ports address impediments to trade flow

Oct. 11, 2004
PortsUnder a plan developed by the West Coast Marine Terminal Operators Agreement, the Ports of Los Angeles and Long Beach will increase peak-hour charges

Under a plan developed by the West Coast Marine Terminal Operators Agreement, the Ports of Los Angeles and Long Beach will increase peak-hour charges $20 per container for containers handled on weekdays between 8 a.m. and 5 p.m. The plan, which takes effect November 1, 2004, was put in place to forestall legislation that would create Port Congestion Management Districts and establish fees for moving containers in and out of ports by truck. Terminal operators will increase hours and add weekend shifts to encourage off-peak handling.

U.S. ports in Washington state have received a total of $5.85 million in federal funding for security. This round of funding includes $1.3 million to the Port of Everett for surveillance equipment and an additional $220,000 for access control gates; $96,000 to the Port of Longview for physical enhancements including fences and gates; $75,000 to the Port of Olympia for physical enhancements; $21,270 to the Port of Seattle for portable radiation detectors and access controls, along with $263,200 for protective film for glass and $160,000 for vehicle barriers and access controls at the port's cruise terminal; $219,150 to the Port of Tacoma for perimeter lighting and physical enhancements at the Blair Terminal and $584,664 for fence and gate enhancements at the Washington United Terminal; and the Port of Vancouver received $22,771 for perimeter fences. Another $2.8 million in funding went to port users for security upgrades.

Alameda Corridor, a 20-mile rail connection between the Ports of Long Beach and Los Angeles and the transcontinental rail yards near downtown Los Angeles, says container traffic was up 14.6% in fiscal 2004. The Corridor handled 26.6% of total Los Angeles-Long Beach port volume vs. 25.9% the prior fiscal year.

Burlington Northern Santa Fe
reported to the Surface Transportation Board that it sees demand for rail service outstripping capacity over the long term and, given its current rate of return, it cannot justify the capital expansion projects necessary to meet this demand. Roger Nober, STB chairman, had asked Class 1 railroads to report on how they would handle increasing demand during the fall peak shipping season.

Canadian National and Canadian Pacific railroads also reported to the STB on their ability to meet peak shipping demand. Canadian National says it has sufficient capacity to meet customer demand, but it is concerned about congestion on other railroads at key gateway cities. Canadian Pacific says it is beginning to run into capacity constraints at various points in its network. Meeting expected increases in future demand could prove challenging given that current rates of return don't support reinvestment.

CSX Transportation is targeting on-time originations to reach 55% in August, 60% in September and October, 65% in November and 70% in December. On-time originations were 39% in the second quarter and were averaging 60% during the last two weeks of July.

Union Pacific has seen intermodal volumes near 2003's peak since April 2004. It has been attempting to deal with capacity and other issues by training an additional 5,000 trainmen and 785 engineers. It has added 395 new locomotives and 350 under short-term leases, has added or leased 6,250 rail cars, and has spent $274 million on infrastructure to increase capacity and $1.2 billion on maintenance of way to improve lines.

Ocean lines
has reported improved revenues and profits for the first half of 2004, due in part to increases in trade out of China. However, the ocean carrier says it has been unable to recover all of the higher fuel costs.

Royal P&O Nedlloyd expects container shipping to achieve a $325 million pre-tax profit in 2004 after reporting average freight rates rose 13% in the first half and underlying volumes were up 11%. Strong growth in Asia trades were an important factor for the carrier, reaching an overall volume growth of 17% with freight rate increases of 12%.

Evergreen American Corp. has launched a China-Korea-U.S. service (CKW) providing calls at Fuqing, Ningbo and Shanghai, China; Pusan, Korea; Los Angeles, and Oakland, Calif.

NOL Lines, which is currently the subject of a takeover by Temasek Holdings, has added capacity in the trans-Pacific, intra-Asia and Asia-Europe trades. Its APL group introduced the SSX service serving the Indian subcontinent and its Australia China Express (ACX) service earlier in 2004. Through the New World Alliance, it added the PSV service from South China to Los Angeles and the SCX service between Asia and Europe. In total, the company says, it has added over 5,000 TEUs per week vs. the first quarter of 2004.

Hanjin Shipping showed a 15% increase in second quarter revenues on container volumes of 690,000 TEU, a 7% increase. Earlier this year, Hanjin realigned its Asia-U.S. service to shorten transit times on its CAX China American Express. It also added China U.S. West Coast Express (CUX) and China Long Beach Express (CLX) services to handle increased volumes between Asia and the U.S.

Hyundai Merchant Marine credits the "China Effect" for a 174% increase in first-half operating income. Its $227 million income was a dramatic improvement over the $79 million loss it reported for the same period in 2003.

Latest from Transportation & Distribution

176927300 © Welcomia | Dreamstime.com
96378710 © Nattapong Boonchuenchom | Dreamstime.com