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American ShipperShippingWarehouse

Macquarie commits $130m for container staging hub in L.A.

The proposed Harbor Performance Enhancement Center on Terminal Island at the Port of Los Angeles is designed to speed the flow of containers.

   The developer planning to build a large container staging yard on
Terminal Island at the Port of Los Angeles has obtained
financing for the project.
   Jonathan Rosenthal, the chief executive
officer of the proposed Harbor Performance Enhancement Center (HPEC),
said Macquarie committed up to $130 million for the
project, which would involve building a 110-acre dray-off yard for
containerized cargo moving through the ports of Los Angeles and Long Beach.
   HPEC will not simply be a parking lot, but a service,
he explained. Containers arriving at the ports would be loaded on
chassis and then moved by drayage trucks that HPEC will hire to the
staging yard. That would allow HPEC customers to have the truckers
moving cargo to and from their final destination to pick-up or deliver
containers at the HPEC staging yard without having to actually enter
marine terminals where there are often long delays.
   Trucking
companies would be able to go to HPEC, rather than potentially visiting
multiple terminals among the 13 container terminals that operate at the two Southern California ports.
   HPEC believes that when
fully-built out, it would be able to take 3,500 truckloads per day from
nearby container terminals. That will be in two or three years, but
Rosenthal said the company plans to open a pilot version of the terminal
within six months that could accommodate 400 containers.
  
Rosenthal views the investment by Macquarie as a major vote of
confidence in the project, saying the investment bank is investing its
own funds, not just money it manages on behalf of others in the project.
  
The yard will be built in an area of the Port of Los Angeles on
Terminal Island that was formerly used to stage exports of petroleum
coke. The coke terminal was shut down in 2002.
   Rosenthal said the
ability to locate a large dray-off yard right in the port was an unusual
opportunity, contending that it might not be possible to find a
comparable site without going many miles from the port to an area such
as the Inland Empire. In contrast, he said the HPEC site is within 7,500
feet of terminals with 80 percent of the crane capacity of the Port of
Los Angeles.
   HPEC will be able to take advantage of so-called
“peel-off” programs where shippers or groups of shippers work with
marine terminals to have a fleet of trucks rapidly remove a large group
of containers from a pile of containers rather than sending a trucker
to pick up one particular box from the thousands or tens of thousands
that may be stored at a terminal.
   Rosenthal said HPEC could
make peel-off programs more attractive to marine terminal operators
because they will be able to put any container going to HPEC in the
same block of containers.
   “The terminal operators now, they have a
hard time creating free flow stacks, because unless you’re Wal Mart or
you’re Target, you just don’t have enough volume… for a free flow stack, you need volume,” he explained.
   HPEC will help truckers become more efficient, said Rosenthal. “Your number of turns per
day per truck is much higher. Your labor cost is much better, and the
truck drivers can make more money because they have higher turns.”
   He believes truck drivers who work for HPEC will be able to make up to five round trips to marine terminals in a day.
   The
facility is attractive to beneficial cargo owners, said Rosenthal, because they will have more control over their inventory, labor, and
warehouse or distribution center. Labor, he said, can be better matched
to the arrival of inventory.
   He said all the containers at HPEC terminal will be mounted on chassis and the facility will have a
computer system that allows BCOs to know what containers are available,
and where they are. The facility will have automated gates and truckers
will be able to enter it 24 hours a day, 7 days a week. He expects turn
times to be 20 minutes.
   Shipping lines will potentially be able to offer shippers a differentiated service, he said.
  
“Today, everybody flies coach,” he said. When HPEC begins operating, he
said carriers will be able to say to customers, “We’ll deliver this thing
to HPEC. We’ll deliver the can on wheels and you can come whenever you
want and come pick it up.”
   Rosenthal said the project is about
midway through the California Environmental Quality Act process and will
have to be permitted and approved by the Los Angeles Board of Harbor
Commissioners. The board has, he said, previously approved a memorandum
of understanding and exclusive negotiating agreement with HPEC.
  
Rosenthal said the terminal hopes it is able to use
alternatively fueled vehicles running on liquefied natural gas, or hydrogen or electricity
to move containers from the terminals to the HPEC lot.

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Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.
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