First call drive

Oakland is storming the business ramparts to grab more traffic and get more shipping lines to use the port as the gateway to the Midwest and beyond. That means becoming the first port of call, and not being used only as the distribution point for the San Francisco Bay area and Northern California.

The main focus of this is the $750m development of 168 acres at a former army base – building new warehouses, distribution points and railway access for the two biggest rail operators on the West Coast, BNSF and Union Pacific. The port has long been handicapped because only 15% of its total container traffic moves by rail, the lowest percentage of the major gateways along the West Coast.

Jean Banker, finance and administration manager for the maritime division, says negotiations continue with the joint developers at the army base, California Capital Group and AMB Property, on detailed proposals. “The project is one of the most essential elements of our five-year plan to 2015. To attract more intermodal cargo we need to increase rail facilities.”

The benchmark of success is to increase the number of first calls. More than a dozen lines call at Oakland, with 1,400 ship calls a year, but only two make it their first stop on the West Coast.

A sweetener is being added to attract business in the form of a discount to intermodal customers who increase the number of containers above the level of 2009.

“We have also begun a marketing drive,” says Ms Banker, “by marrying our export partners with Asian counterparts. Oakland is in the middle of the West Coast and has quicker connections to the interior than other ports.”

Says port spokesperson, Marilyn Sandifur: “Another advantage is that we have almost a 50-50 trade balance here and are not so heavily dependant on imports as others.” Long Beach and Los Angeles have a 3:1 imbalance.

Keeping the environment clean is equally important. A $90m shorepower (cold ironing) project has begun, with at least 12 of the 18 berths being converted.

However, finance is proving a worry, as federal and state grants cover only 30% of the cost and other funding is being sought.

Meanwhile, the port is very happy with its lease arrangement of the Outer Harbour terminal to Ports America for 50 years, bringing in $700m. “This guarantees us a fixed income while giving the tenant the flexibility to make long-term investments,” says Ms Banker. Adds Ms Sandifur:”We now have a mix of shorter and longer leases at various terminals, which give us greater financial stability.”

The port is also optimistic about the volume of traffic. “Container volumes are better than expected,” says Ms Banker, “and will be up 13% this year.” The forecast is for loaded containers in the year to July 2012 to be 1.8m.

On the technical front, the port is breathing a big sigh of relief that the first phase of a cargo vehicle security system that electronically logs in each of the 5,000 heavy vehicles serving the port each day, has been completed.

The next step is to set up a computer-controlled network that identifies and pinpoints the exact location of each of the vehicles inside the port. “This will mean that we can track suspicious and criminal behavior,” says Mike O’Brien, port facility security officer. “We are still working on the method and have to decide whether to use a GPS or bar code sticker system on each vehicle.”

Funding has come from a $100m California port security fund. Maintaining the registry of vehicles will cost $500,000 a year while operating costs will be $250,000 a year.

“The biggest difficulty we have had so far is getting the motor carriers to keep up and maintain the information, which has to be integrated with the terminal operators’ own access control system,” says Mr O’Brien.

Coupled with this will eventually be a link up to the city of Oakland’s own security scanning system, which will allow a central control room to monitor the port as well, along with agencies such as the Coast Guard and other emergency services.

The port is also carrying on with the $5m Transport Workers Identification Card process to install electronic scanners to read the cards at terminal gates. The equipment should be in full operation in 2012-13.