SoCal Port of Entry Insight – March 2019

Providing insights into the Ports of Long Beach & Los Angeles Region Goods Movement Dynamics

DRAYAGE OPERATIONS

• ELD Complicates US Agricultural Exporters’ Logistics – Enforcement of the federal Electronic Logging Device (ELD) requirements has limited the ability of drivers to complete their hauls to ports, railyards, and transloading facilities within their hours-of­service limitations for many California Central Valley agricultural shipping areas. Congestion at ports and railyards further limits drivers’ ability to serve longer routes.
• Drayage Industry Size – About 17,000 trucks are registered to work in the San Pedro Bay ports of Long Beach and Los Angeles. There are nearly 2,000 licensed trucking companies that contract with or employ the truckers who drive at the ports.
• China/US Tariff Impact – During the last quarter 2018 and first quarter 2019 importers front-loaded their imports to avoid the negative impact of U.S. tariff changes. This seriously added to the congestion and equipment shortages making it more difficult for drayage operators to maintain service and cost standards. On February 25, 2019, the U.S. government extended the tariff hike deadline.

MARINE TERMINALS

• Third Automated Marine Terminal – APM Terminals’ plan to use unmanned straddle carriers at Los Angeles highlights a new path for other US West Coast marine terminals to automate in order to better handle mega-ship calls without incurring the higher upfront investment costs of existing automated terminals. APM’s pilot project on a 100-acre parcel at its Pier 400 terminal will be the first in North America to use autonomous (unmanned) straddle carriers, which bring lower upfront costs because they don’t require extensive modifications to existing terminals. The auto-strads can operate on existing terminals, and will, therefore, be more scalable than other automated terminals, which must be reconfigured with tracks for automated stacking cranes and sensors for automated guided vehicles.
• LBCT to Finish Final Phase – Long Beach Container Terminal’s automated facility is expected to finish the final phase of its project by 2020. It will have an annual throughput capacity of about 3 million TEU. This one terminal’s volume will make it the 4^th largest volume container port in the U.S. Its volume could potentially exceed annual volumes at the ports of Savannah, Vancouver, BC, Seattle-Tacoma, Norfolk, Houston, Charleston, or Oakland.
• Dual Transactions have Decreased – One of the most effective strategies for relieving terminal congestion and increasing truck capacity is to promote dual transactions. According to various drayage industry experts, dual transactions have significantly decreased since the implementation of marine terminals’ Appointment Systems.

Ports

Major Infrastructure Improvements 

• Port of Long Beach – Investing $1 billion in rail improvements that will help boost the Port’s on-dock rail cargo to 35 percent, with a long-term goal of 50 percent; Gerald Desmond Bridge Replacement ($1.3 billion) When completed, the Gerald Desmond Bridge Replacement Project will span the Port of Long Beach’s Back Channel with a deck rising 205 feet above the water. The new bridge is expected to be completed by the end of 2019.; Long Beach Container Terminal Final Phase: The Port’s construction budget for Middle Harbor is $1.493 billion. The first two phases totaled about $1 billion, and the cost of the final phase is estimated at $470 million.
• Port of Los Angeles – During 2018 a $127 million investment in the on-dock rail yard at Yusen Terminal project to modernize on-dock rail operations was completed. Everport Container Terminal Improvements Project is in progress to deepen its berths and improve its terminal facilities, allowing the terminal operator to accommodate the larger next-generation vessels. In 2019 Los Angeles will begin design work on rail-expansion projects at APM Terminals and at the West Basin.

THIRD-PARTY LOGISTICS PROVIDERS

• Universal Logistics buys Container Connection – In December 2018 Universal Logistics bought Container Connection for $60 million in cash to expand California drayage presence. Container Connection works with more than 230 independent contractors that serve the inland areas. It also provides warehousing and yard space at an 18.5-acre facility.
• Major Shippers Reversing their Outsourcing – WalMart is taking over its Eastvale warehouse long operated by Schneider Logistics. Amazon is taking over a Rialto Warehouse Operation from XPO Logistics.
• 3PLs in the Innovation Game – Once slow to adapt to innovation, 3PLs are now leading the way. For example, Kuehne & Nagel International, CH Robinson, and DHL Supply Chain have implemented Innovation Center offices to assist their associates to accelerate identifying creative, customer-focused solutions. DHL Supply Chain is utilizing mobile collaborative robots and smart glass technology in its fulfillment operations. Third-party supply chain provider NFI along with Penske Truck Leasing will take delivery of and test Daimler Trucks North America’s (DTNA) electric vehicles.

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