Terminal Operators Harboring Hopes for Long Beach Expansion

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Marine terminal operators at the Port of Long Beach are pushing local officials to approve a $750 million redevelopment project next week that will create thousands of jobs and sharply increase the port’s cargo capacity.

Known as the Middle Harbor Development Project, it involves constructing a single massive container terminal in the place of two older terminals at a time when ports in other states and countries are vying to get a bigger slice of global trade.

“This is a very old facility, and we need improvements to be able to service the shipping lines that come through,” said Elvis Ganda, president of California United Terminals. The company is a subsidiary of South Korean conglomerate Hyundai Group, and occupies the container terminal on Piers D and E where the project would be located.

The project centrally located in the heart of the port, hence, the name will allow California United and a second terminal operator to handle up to three of the biggest so-called Post Panamex ships, which derive their name from the fact they can’t fit through the Panama Canal. Currently, the existing terminals can only handle one such ship, which can stretch 1,400 feet in length.

The project also will extend rail lines to the entire terminal area, which currently has only limited rail access, requiring much of the cargo to be transported by truck. Once completed, the rail yard’s size will increase to 75,000 linear feet from 10,000.

All in all, the expanded terminal will be able to handle 3.3 million 20-foot cargo containers, or TEUs, annually, a little more than double the existing capacity.

“We have had no room to expand, and when the recession fades, we want to be able to say we have the room and rail to handle more business,” Ganda said.

Long Beach Container Terminals, owned by Hong Kong-based shipping company C.Y. Tung Group, operates the other Middle Harbor-area terminal at Pier F. It could not be reached for comment.

A big issue with the project, however, is whether it can pass environmental muster. Port Director Richard Steinke has repeatedly touted the project, which is being entirely funded by the port, as the greenest in the United States.

For example, the terminal would have giant electrical outlets so ships can plug in while docked, eliminating the need to run auxiliary diesel engines to power on-board operations. That would cut ship emissions by 90 percent.

But environmentalists disagree with Steinke’s assessment.

The Long Beach Board of Harbor Commissioners is expected to vote on the project’s final Environmental Impact Report at its April 13 meeting. Environmental groups have submitted a 75-page letter of comments, demanding at least $5 million in measures to counter the effects of air pollution, noise and truck traffic.

“In our view, the port didn’t address issues to take care of the additional pollution, and their traffic projections were flaky,” said David Pettit, senior attorney for the Natural Resources Defense Council. “But I do think we can achieve a totally green port; it’s just that we haven’t seen a thorough level of commitment.”

Even if the harbor board approves the document and project, the proposal still has to win final approval from the Long Beach City Council, likely to take up the issue this summer. More delays could come if any lawsuits are filed against the port for the project.

“The tough part about this issue is that I think as long as you do nothing, you are still not helping the environment,” Ganda said. “The pollution is already happening, so the longer we take to start on this project, the longer it takes to start reducing pollution and cleaning it up.”

Supporters of the plan believe that they have one key factor in their corner the projected creation of about 14,000 permanent jobs in Southern California and about 1,000 temporary jobs annually during the 10 years it’ll take for construction, which could begin as early as December.

Indeed, the lengthy construction schedule is a boon on two accounts. It will provide jobs at a time when the global recession has sharply cut into trade and port-related work. And all that capacity won’t come on line for years a period during which it probably isn’t needed.

Trade industry officials predict it could take at least six years to get back near the record levels set in 2007, when Long Beach handled 7.3 million cargo containers.

“We don’t have the opportunity to shut down the ports or a part of it, so in a way it’s helpful to have slower cargo, because these are long-term projects,” Steinke said. “The last few years we’ve been just trying to keep up and now we can step back and look ahead to what we can do to better prepare for the next surge.”

Middle Harbor is one of three major proposed projects at the port totaling $2.2 billion. The others are a $650 million, 160-acre project at Pier S and a $1 billion replacement of the Gerald Desmond Bridge.

Paul Bingham, an economist who manages global trade and transportation forecasts for IHS Global Insight agreed with Steinke’s assessment.

“Projects like Middle Harbor are a smart move right now. Trade will inevitably rise again, and even if the port loses some market share in the meantime to other ports, high amounts of volume will come back,” Bingham said.

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