While the port’s focus is on containerized cargo, it says handling aggregate could provide a steady, divergent revenue stream.
The Port of Oakland is speaking to a shipper of sand and gravel about handling products at its outer harbor terminal.
The terminal was formerly leased by a joint venture of Ports America and MSC that handled containers and declared bankruptcy in 2016.
Part of the terminal has since been taken over by TraPac, which has expanded its container operations in Oakland, and the port has been looking for alternative uses for other parts of the outer harbor.
The port’s board of commissioners last week authorized talks with Eagle Rock Aggregates, which is seeking a vessel berth along 20 acres of adjacent land at the port.
Oakland said it is looking at leasing the land to Eagle Rock because it does not envision using the property for container handling until 2035.
Eagle Rock wants a 15-year lease for one berth that would handle sand and gravel from British Columbia to produce concrete for builders in the San Francisco Bay Area.
“This is an opportunity for us to perhaps diversify our business,” said John Driscoll, the port’s maritime director. “We’ve built the Port of Oakland to be a global gateway for containerized cargo, but a steady, divergent revenue stream could be beneficial.”
Referencing the tariffs imposed by the Trump administration, Oakland Port Commissioner Michael Colbruno said this week, “Diversifying our portfolio in this time is about as critical an issue as we could be facing.”
He made his remarks as the port’s board of commissioners entered into an agreement to negotiate with the Oakland Athletics about potentially leasing land for a new ballpark, but he also referenced the potential aggregate imports as well as earlier discussions with a company to move automobiles through Howard Terminal, where the A’s are now talking about building a stadium.
The stadium is adjacent to a scrap metal export terminal operated by Schnitzer Steel, and Colbruno attacked the Pacific Merchant Shipping Association, which has raised objections to the stadium along with Schnitzer Steel, saying that the presences of Schnitzer Steel prevented the auto business from coming to the port. PMSA represents shipping lines and terminal operators.
“I am a little shocked that PMSA has aligned themselves with Schnitzer Steel,” he said. “It is Schnitzer Steel, the neighbor that they are aligning themselves with, that has caused no jobs at Howard Terminal and why that use is open for baseball.”
The port said the deal with Eagle would “mark a new twist in the port’s 92-year history. The port began life in 1927 handling bulk commodities loaded directly into the hold of ships, but abandoned bulk shipping in 1999 by adopting Vision 2000, a totally containerized cargo strategy.”
Eagle Rock Aggregates also owns and operates a terminal in Richmond, Calif., according to the website of Polaris Materials, a subsidiary of U.S. Concrete. Polaris is the major shareholder in the Eagle Rock Quarry Project, a large granite resource that is situated on the coastline of Vancouver Island in British Columbia.
During a call with securities analysts this month to discuss its first-quarter results, Ronnie Pruitt, the president of the U.S. Concrete, said the company’s West Region which consists of Northern California ready-mix operations as well as its Polaris aggregates business, represented approximately 26% of U.S. Concrete’s first quarter revenues.
He said demand was strong in Northern California, pointing to infrastructure projects funded under SB 1, California state legislation that will invest $5.4 billion per year to fix the state’s streets, freeways and bridges as well as construction at San Jose State University and San Francisco International Airport and projects at Google, Apple, LinkedIn, and Adobe.
The Eagle Rock proposal is different from a proposal by Oakland Bulk and Oversized Terminal (OBOT) to build another terminal on city property that could handle bulk cargo including coal. Because it would handle coal, OBOT has been fiercely opposed by environmental and some community activists in Oakland.
The OBOT terminal is the subject of two major legal cases. A year ago a U.S. District Court judge said the City of Oakland could not apply a prohibition on coal handling and storage retroactively on the terminal. That case is being appealed to the Ninth Circuit.
Another lawsuit filed in Alameda County Superior Court says the city has “engaged in an uninterrupted pattern of delay and interference, all with the objective of preventing OBOT from completing” its project.