News / Analysis: Los Angeles – Pier 500 the only answer for a port already 'at full capacity'

Photo: Port of Los Angeles

The US’s largest container port, Los Angeles, last week outlined plans to build what is likely to be its most ambitious expansion project undertaken – a new standalone container terminal, provisionally titled Pier 500.

Hemmed in by Los Angeles’ enormous metropolitan area, the only way the port has so far been able to increase capacity was through productivity measures developed in response to the prolonged congestion suffered during the pandemic era.

However, the alternative, formally proposed last week, is to reclaim land and build out to sea, similar to the successive expansion seen in Rotterdam’s Maasvlakte developments, and the port has issued a request for proposal documents from interested developers.

However, with much of the detail still to be finalised, it is currently unclear how much the project would cost and what sort of capacity it would add to the port.

The proposed site lies just south of Pier 400, operated by APM Terminals, currently the largest container terminal at the port, which opened in 2002.

Crucially, however, during the construction of the adjacent Pier 400, large amounts of spoil and hardcore were deposited on the proposed Pier 500 site, resulting in a 124-acre submerged area on which the new terminal could be built, substantially reducing reclamation costs.

“While the existing submerged site of 124 acres could lower dredging/fill costs, California’s permits, seismic standards, and sustainability mandates could raise them considerably,” Drewry ports & terminals analyst Eirik Hooper told The Loadstar.

“A reasonable ballpark for the completed terminal would be at least $4-6bn, allowing for some inflation over the 10-plus years of the project,” he added.

It is also difficult to gauge what sort of capacity addition Pier 500 would represent. According to Port of LA, “Pier 500 would be a 200-acre site with two new berths and approximately 3,000 linear feet of new available wharf”.

“Located in natural deep water on the southern tip of the port’s Terminal Island, the project site would greatly increase port cargo efficiency, as it would allow for bigger, next-generation cargo ships,” it added.

Pier 400 offers some guidance: APM Terminals said the facility, which it claims is “the single largest container terminal in the western hemisphere”, has an annual handling capacity of 4.4m teu across 507 acres.

At slightly under half that size, it would therefore be reasonable to assume that Pier 500 will offer at least 2.2m teu capacity, given advances in yard productivity since Pier 400 opened.

“For the first time in a generation, the port of Los Angeles plans to build a new container terminal to meet global supply chain demand for decades into the future,” said Port of Los Angeles executive director Gene Seroka. “The development of the cleanest terminal possible would enhance our efficiency and sustainability, while creating new jobs in our communities.”

However, the timeframe of the project is likely to be critical, with capacity across the combined Los Angeles-Long Beach port complex likely to come under pressure over the next few years, tariff-afflicted volumes notwithstanding.

According to the Xeneta-owned eeSea liner database, Los Angeles’ total nominated capacity currently stands at 12.9m teu, expanding to 13,3m teu next year. Last year, a record-breaker for the port, it saw throughput of 10.3m teu, representing 80% utilisation: a rule-of-thumb for the container port industry is that a 75% to 80% utilisation level is effectively full capacity.

Meanwhile, neighbour Long Beach has an annual capacity of 13.55m teu and last year processed 9.65m teu, representing a 71% utilisation level.