Seaports in the San Francisco Bay Area “can expect long-term cargo growth in three sectors that could stress capacity: containerized cargo, ro-ro vehicle cargo and import dry bulk cargo,” says a draft of a 30-year forecast prepared by Tioga Group and Hackett Associates for the San Francisco Conservation and Development Commission.
The 199-page report, 2019-2050 Bay Area Seaport Forecast, will be used by the commission to update its seaport plan, which is used to make port-related regulatory decisions.
The forecast looked at the outlook for public ports in San Francisco, Oakland, Richmond, Benecia and Redwood City as well as private terminals in cities such as Oakland, Richmond and Redwood City. (Not included are the terminals of oil refineries in the area.)
It noted that cargo volumes moving through those ports “will be determined by economic activity in the Bay Area itself and in the broader Central and Northern California market.”
The report said a variety of economic forecasts “share a common view that the pace of growth in California over the coming three to five years will be at a reduced pace and that the West Coast in general will grow at a slower pace than the rest of the nation.”
Long-term forecasts “tend to focus on population and depict steady growth over the long term, but at a slower rate than previously seen in California,” it said.
The report provides forecasts for cargo volume under slow, moderate and strong economic growth scenarios.
Oakland is by far the region’s largest port and the only one currently handing containerized cargo.
Last year the Port of Oakland handled 2,546,351 TEUs of containerized cargo (2,356,908 TEUs to and from international destinations and 189,443 TEUs to and from Hawaii and Guam).
The report offers projections out to 2050 if total container trade grows at a compound annual growth rates of 1.3%, 2.2% and 3.2 %. Under those three different growth rates, total volumes in 2050 would amount to 3.86 million TEUs, 5.19 million TEUs and 7.04 million TEUs, respectively.
Port of Oakland volumes could see import volumes boosted if it attracts “first call services” in which it becomes the first North American call of a transpacific string. Today, inbound services from Asia generally call the Ports of Los Angeles and Long Beach before Oakland or call ports in the Pacific Northwest such as Prince Rupert, Vancouver, Seattle and Tacoma.
“An event such as the ramp-up of Tesla production is likely to markedly increase demand for first call delivery of high-priority imports — auto parts in Tesla’s case,” the report noted, adding that “discussions with Port of Oakland officials suggested that a first call service would increase import volumes by 50,000 to 100,000 TEU.”
The report said container terminals in Oakland will likely handle increased volumes first by expanding into areas adjacent to existing container terminals: 20 acres at Berths 33-34 adjacent to the Ben E. Nutter terminal; 39 acres at what is called the “roundhouse property” adjacent to the Matson terminal; and 150 acres at the Outer Harbor Terminal, formerly occupied by a Ports America-TIL joint venture.
Another 50-acre parcel, the former Howard Terminal that was occupied by Matson, is being investigated as a potential site for a new baseball stadium for the Oakland Athletics and housing as well as expansion of the port’s turning basin.
In addition to expansion of terminals onto adjacent properties, the Port of Oakland has the ability to grow “through investment in automation or equivalent productivity improvements,” the report said. “It should be noted that many of the benefits obtained by semi-automated and ‘fully’ automated terminals are generated by improved terminal configurations, equipment and information systems, not by automation per se.”
Based on current performance at Oakland’s largest container terminal — SSA Marine’s Oakland International Container Terminal — the report authors estimated the port’s capacity at 6,061 TEUs per acre per year.
At high-productivity terminals, throughput can be 17% higher, 7,112 TEUs per acre per year, “and for aggressive automation is 17,088 TEU/acre (181% higher than the conventional average).”
However, the report cautioned “claims for high throughputs at completely automated terminals have not yet been proven in practice.”
Turning to roll-on, roll-off cargo, the report noted that there are terminals in Richmond, Benecia and San Francisco, where Pasha opened a new facility at Pier 80 in 2016, that all handle vehicles and have aggregate space of about 215 acres. They handled 360,671 units last year, and the report said “discussions with the ports of Richmond and Benicia indicate that those facilities are approaching capacity.”
Richmond’s “Port Potrero ro-ro terminal is currently operating near capacity, sometimes receiving as many as four vessels in 10 days. The port is seeking ways to expand ro-ro operations, including the use of off-terminal parking.”
The report added that “in a late 2018 interview, Amports CEO Steve Taylor noted that Amports is developing a new port about 15 miles east of its dedicated auto terminal in Benicia after signing a long-term lease on a 100-acre former paper mill site in Antioch. Mr. Taylor said Benicia is at capacity, on pace for 250,000 vehicles, and the new development will have room to move 150,000 to 175,000 vehicles per year.”
The report said by 2050 there is expected to be a need to handle anywhere from 424,892 to 617,923 units in the Bay Area under the three growth scenarios examined in the study.
However, it said uncertainty about trade, where vehicles will be manufactured and the possibility of autonomous driving vehicles and car-sharing services make predicting auto imports and exports difficult.
“Dry bulk import cargoes handled through Bay Area ports have long been dominated by construction industry needs,” the study noted. “The major commodities have included, and continue to include, aggregates (sand and gravel), bauxite and slag (used as concrete additives), and gypsum (used in wallboard).” Some of the sand handled at the terminals is dredged from San Francisco Bay.
Outbound dry bulk cargoes include scrap metal, petroleum coke (pet coke, a refinery by-product) and coal.
In 2018, 7.8 million tons of dry bulk commodities were handled at Bay Area terminals, and by 2050, that could grow to between 12 million and 33.2 million under the various growth scenarios examined in the study.
Figures from the California Geological Survey in the report indicate “California has only about 69% of the aggregate resources need to meet demand over the next 50 years. Most areas served by the Bay Area ports have a 21-30 year supply, suggesting that the need for imported aggregates will rise sharply in that time frame.”
Exports of scrap metal from Oakland, Redwood City and Richmond are the area’s biggest export commodity — 2.5 million tons in 2018. Scrap metal exports peaked in 2011 and have been falling, coinciding with a decline in Chinese imports.
“China has placed strict requirements on imports of waste and recycled materials and has announced intentions to ban such imports after 2020,” the report said, but added, “Overall growth is expected in the global market for ferrous and non-ferrous scrap metals, as the use of recycled metals is generally more efficient than producing metals from original ores.”
The report projected scrap metal exports could see a CAGR ranging anywhere from 0.8% under a low-growth scenario to 3% in a high-growth scenario in which Chinese demand “is replaced seamlessly with demand from other nations.”
Coal and petroleum coke exports amounted to 1 million tons and 562,112 tons in 2018, but are highly controversial. The city of Oakland is involved in litigation in the U.S. Court of Appeals for the 9th Circuit with a developer that wants to build a dry bulk terminal at the former Oakland Army Base that could handle coal.
Community activists and environmentalists also are seeking to end the export of coal and petcoke through the Levin Richmond Terminal in Richmond.
A proposed city ordinance would prohibit the storage and handling of coal and petcoke in Richmond, saying it poses risks to the health and safety of residents. The ordinance would give the terminal three years (the period could be extended) to phase out handling coal and petcoke.
However, on Thursday the Richmond Planning Commission declined to recommend the ordinance to the City Council after Gary Levin, the president and chief executive of the company, said his terminal “cannot be converted to other uses, if at all, within any period approaching the three years contemplated by the proposed ordinance.”
Dozens of workers from both the terminal and construction trade unions also argued against the proposed ordinance, saying it would mean the loss of 40 jobs.