Saturday, July 29, 2006

Expanded Port of Oakland draws major 10-year deal

Article Last Updated: 07/27/2006 06:44:18 AM PDT

Expanded port draws major 10-year deal

By Paul T. Rosynsky, STAFF WRITER

APL's 79-ACRE TERMINAL will be rehabilitated over the next 2 1⁄2 years, allowing the company to bring more containers to the Port of Oakland. (Laura A. Oda - Staff)


OVER THE last decade, the Port of Oakland has spent more than $1 billion expanding and modernizing its maritime terminals.

It built two new terminals and a rail yard, and began dredging San Francisco Bay to accommodate a new generation of huge container ships.

The work positioned the country's fourth largest container port to keep pace with the rapid growth of commerce that comes from Asia every day. The more modern the terminals, port officials reasoned, the faster a ship could be unloaded.

Shipping executives took notice and began using the Port of Oakland as an alternative to the gigantic port complexes of Los Angeles and Long Beach.

What was mostly a theory in the early 1990s when the port expansion began started to look like reality Wednesday.

With the unloading and loading of containers in the background, port officials with representatives from shippingfirm APL announced a new deal that will keep APL at the port at least 10 more years.

"We need to have more than one gateway," said John Bowe, president of the Americas Region for APL. "It's not a question of Oakland versus (other ports), it is a question of needing both."

The new deal will add at least $10.2 million a year to port coffers and a vote of confidence in the organization's future from one of the largest shipping companies in the world.

In exchange, the Port of Oakland agreed to spend more than $55 million modernizing APL's terminal on Middle Harbor Road, which hasn't been improved for decades.

"This type of investment is not an easy decision for a company to make," said Port Executive Director Jerry Bridges. "This is a testament to my predecessors at the port who saw the vision of what was coming."

Modernization of APL's terminal has been a long-time desire of both the company and port officials. Originally two separate terminals, the 79-acre yard is a hodgepodge of roads, container storage sites and electrical outlets for the refrigerated containers.

Its design is flawed, as containers are stored vertically to docking ships rather than horizontally. As a result, the movement of those containers is slowed, backing up the process of loading and unloading a ship.

"This is a very difficult place to operate in," said Stephen Hessenauer, director of terminal operations for Eagle Marine Services, a subsidiary of APL. "It delays the transactions and really screws up how fast you can unload a ship."

The APL Philippines, one of the last remaining container ships still sailing under a United States flag, is serviced at the port. (Laura A. Oda - Staff)

With modernization the terminal's configuration will change, increasing both its capacity and efficiency.

Currently, the terminal can hold roughly 4,000, 40-foot-long containers and move about 2,500 of them through its gates a week. After the 2 1/2-year construction project is completed, it will hold more than 6,500 containers and move almost 7,500 through its gates in a week.

Adding to the capacity increase is the port's plan to build a new rail yard on the former Oakland Army Base and convince Union Pacific to add a new track along the Donner Pass.

And, as more containers move through Oakland, more money and jobs will be generated for the area, port officials say.

"It's all about efficiency," Bridges said. "It continues the path of modernization at the port."

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