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US west coast ports are looking to cultivate partnerships with inland facilities, which they hope will relieve their congested docks.
The port of Long Beach has signed a four-year partnership agreement with the Utah Inland Port Authority (UIPA).
This involves joint marketing efforts and data sharing to improve air quality and energy efficiency – but the main objective is to improve cargo flows between them.
Long Beach will invest in optimising its on- and near-dock rail system, with the UIPA developing transloading capacity within its jurisdiction to “enhance import fluidity and increase export capacity”.
The agreement came less than a month after the UIPA signed a similar deal with the port of Oakland.
“This partnership is a huge step to establishing Utah as a transformational location in trade logistics,” said UIPA executive director Jack Hedge. “Working directly with the nation’s western cargo gateways will shape new trade patterns for the western US.”
The alignments also have a short-term objective: the California gateways view the UIPA as a way to ease some of the congestion on their premises.
“This agreement is vital to the port’s strategic goals to diversify exports and create new partnerships that will help alleviate the unprecedented cargo surge we’ve experienced since last summer,” said Mario Cordero, executive director at Long Beach.
Bryan Brandes, maritime director of the port of Oakland, said: “We’re seeing a trade surge that has no signs of slowing. This collaboration creates a path to long-term stability in the supply chain by improving fluidity and velocity as goods move inland.”
Inland ports were established to eliminate the higher drayage costs at ports further from cargo markets than their competitors, noted Craig Grossgart, SVP global ocean product at Seko Logistics. The concept was initially developed by container lines, but later ports took over.
In the current market conditions, however, dealing with congestion is a priority inland ports are meant to address.
“You get the cargo off the port. They are a release valve for overburdened terminals. Any relief that these inland container yards can provide is a good thing and they will only grow in this environment, added Mr Grossgart.
And Bob Imbriani, SVP international at Team Worldwide, also sees merit in the concept.
“Moving goods to inland ports for final clearance and pick-up would possibly alleviate some congestion at the terminals in Long Beach and Oakland,” he said.
However, for this to work well, the delays in docking and unloading vessels must also be addressed, he added.
According to some port officials and terminal operators, the ports have made some headway with the delays in docking and unloading, but the congestion in the rail system is beyond their control and has profound repercussions. Overburdened rail facilities, especially in the crucial Chicago area, are said to be the main reason for the rise in dwell times at ports.
According to the Pacific Merchant Shipping Association, dwell times at the Los Angeles/Long Beach complex for containers going to the eastern US exceed 11 days, three times the average for boxes headed for the LA region.
Mr Grossgart noted that containers booked to go on to an inland port often received preferential treatment – put straight on wheels when they come off a vessel and do not move to the stacks.
“There is a premium charge for it from the terminal,” he said.
The question is how much relief inland container ports can bring to congested sea ports. Georgia Port Authority has been an avid developer and user of this tool. Its Appalachian inland port is served by six trains a week and has an annual capacity of 50,000 teu.
In recent years, most new inland port developments have played out along the eastern seaboard, particularly in the south-east. The west has been less eager, until now.