California Apparel News

The ports of Los Angeles and Long Beach, Calif., used to be known as the places you didn’t want to send your cargo if you needed it in a hurry. All that changed in 2005 when the ports extended their hours and more dockworkers were hired.

In 2006, more changes are on the way to add and expand cargo container terminals, make room for megaships and speed truckers through the port gates.

In a few months, all truck drivers going in and out of the ports will be required to have RFID (radio frequency identification) tags attached to their rigs so they can be processed more quickly when moving through the ports’ terminal gates to pick up cargo containers. It’s also a security issue. Once through the gates, truck movements can be monitored.

The RFID-tag idea comes from PierPass Inc., the same not-for-profit company created by marine terminal operators to open up the ports at nights and on Saturdays.

“This will add security to the gates and improve the process of getting drivers through the gates,” said Bruce Wargo, president and chief executive of PierPass, based in Long Beach.

Wargo said that PierPass, which was created to fix the port congestion problem that came to a head in 2004, would be covering the cost to buy and install the tags on the about 10,000 trucks calling on the ports. The tags and installation will run about $50 per truck.

PierPass is hiring WhereNet Corp., of Santa Clara, Calif., to produce and deliver the tags. EModal.com Inc., a port-related technology company in Irvine, Calif., will be setting up and administering the database to register and track the trucks. The first-year cost of the program, which should start sometime in March, is $1.2 million, Wargo said.

PierPass launched the OffPeak program last summer to extend the ports’ hours beyond the 8 a.m.–5 p.m. Monday–Friday schedule. This was to alleviate the line of ships anchored beyond the breakwater waiting to dock.

Now all 12 international container terminals at the ports are open 6 p.m.–3 a.m. Monday–Thursday, and 8 a.m.–6 p.m. Saturday, in addition to their regular hours.

Importers picking up or dropping off their goods during daytime peak hours, 3 a.m.–6 p.m., have to pay a $40 fee per 20-foot container and an $80 fee per 40-foot container to finance the $160-million-a-year PierPass program. Those who collect cargo during OffPeak hours pay no fee.

Wargo said the fee to pick up cargo containers during the day would not be increased immediately to pay for the new RFID tag program.

The program is intended to help truckers pick up more loads, but some trucking companies are skeptical. “From our perspective, if it helps improve terminal efficiency, that is good,” said one source in the trucking industry who asked not to be identified. “The question is, will they start charging $1 here or $5 there every time a trucker passes through the gates to recover their costs? And we need to address who has access to the data collected by them with the RFID system.”

Under the program, the RFID tag will automatically be read by an electronic reader posted at the terminal gate. At the same time, the driver will insert his or her driver’s license into a machine to verify that the truck and its driver have authorized business at the port.

Bigger and bigger

In 2004, a glut of ships arriving from Asia created a major traffic jam at the two ports, with cargo taking as long as one week instead of two to three days to be unloaded. At one time, there were as many as 90 ships either anchored offshore or dockside at the two ports. Normal traffic is 35 to 50 ships.

By 2005, many shippers opted to send their vessels to Oakland, Calif., or Seattle, fearing a repeat of 2004. But still the side-by-side ports of Los Angeles and Long Beach saw a 7.6 percent increase in cargo traffic, which meant they unloaded and loaded 14.1 million containers in 2005. That helped the ports to remain the busiest port complex in the United States.

The most dramatic increase was seen at the Port of Long Beach, which experienced an 18 percent jump in cargo container traffic in 2005 to about 6.7 million containers. In 2004, cargo traffic was up 24 percent, said Port of Long Beach spokesman Art Wong.

Long Beach will probably continue to grow at a brisk pace because it is the only port on the West Coast that can accommodate fully loaded megaships, the new breed of freighters that are more fuel-efficient and carry up to 8,000 20-foot containers versus the 4,000 containers transported by the previous generation of ships. Long Beach’s deep channel is the result of oil exploration. The port sits atop an oilfield. In the early years, petroleum companies pumped oil out of the harbor, causing the ocean floor to sink. Consequently, Long Beach has 17 berths that have the water depth to handle megaships. With more freight carriers adding megaships to their lines, they undoubtedly will be calling on Long Beach in the near future.

The Los Angeles port is dredging its main channel to deepen it from 45 feet to 53 feet to allow megaships to dock. But that project won’t be completed until about the middle of 2007, said port spokeswoman Theresa Adams Lopez. When the dredging is done, the Los Angeles port will be able to accommodate five megaships at a time, Lopez said.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., predicts that with more goods coming from Asia, the twin ports will be processing 22.8 million 20-foot containers by 2010, about a 40 percent leap over 2005.

“Most people say cargo traffic is going to be strong in 2006 because shippers have regained confidence in Long Beach and Los Angeles and have run up against capacity restraints in other ports on the West Coast,” Kyser said.

Wargo of PierPass sees another reason for increased ship traffic. “You are going to see several steamship lines bringing in larger ships. They are going to want to fill those ships, and to do that they will be lowering their rates to Los Angeles,” Wargo said. “These steamship lines are creative in getting ships up to capacity and have done well financially. So they can fudge the rates for a while and get traffic patterns back up.”

Ocean view

Long Beach is making room for the anticipated traffic. A new 160-acre cargo container terminal at Pier S, a reclaimed oilfield on Terminal Island, could be up and running by the end of 2006 or early 2007, Wong said.

Further down the road, a major project to create a 342-acre marine terminal for cargo container traffic is in the works. Piers D, E and F, encompassing 294 acres, would be reconfigured, and dredging in the channel would add another 48 acres. But that project is years from completion because of the extensive environmental impact reports that must be completed, reviewed by the community and approved by the city of Long Beach.

Meanwhile, the Port of Los Angeles is working on developing 91 acres at Berths 206–209 into an environmentally friendly terminal. It has not been occupied since Matson Navigation Co. Inc. moved to the Port of Long Beach three years ago.