SoCal meeting discusses Colonet port impact
While the proposed Punta Colonet megaport in Mexico could lure cargo away from the ports of Long Beach and Los Angeles, the consensus of a panel discussion Tuesday was that there will be more than enough cargo for all three ports.
The Mexican Consul General in Los Angeles led the discussion with Southern California port officials Tuesday at California State University, Dominguez Hills, to discuss the possible competition and impacts of the Colonet port.
'Competition is good because it forces everyone to sharpen their pencils and plan ahead,' said Don Snyder, Port of Long Beach director of trade relations, according to the Long Beach Press-Telegram. 'We think there’s going to be enough cargo for everyone, but we’re going to do everything we can to remain relevant and attractive to shippers.'
Designed specifically to lure Asian cargo now heading through the Southern California ports to the U.S. East Coast via overland rail, the Punta Colonet port complex is the largest maritime product in the port's history. It is envisioned as a nearly all-intermodal operation, with containers being transported via rail to the American mainline rails near the intersection of the California, Arizona and Mexican borders.
The first phase of the Colonet project, to be located in an undeveloped Baja California bay 150 miles south of the U.S.-Mexico border, is projected to cost $5 billion and handle up to 2 million TEUs per year when completed in 2012. Additional phases could ultimately see the complex grow to the size of either Long Beach or Los Angeles, handling more than 7 million TEUs annually.
Mexican President Felipe Calderon personally opened bidding for the Colonet port development last month.
While port officials cite projections that Southern California cargo volumes will dramatically increase in the coming years — from about 15 million TEUs today to about 36 million TEUs in 2020 — and easily make up for any volumes lost to Colonet, industry experts and even some Southern California port officials are beginning to doubt these increases will materialize.
Port of Long Beach Harbor Commission President James Hankla recently said he doubted the projections would come true, and that the port authority would have to 'fight to keep every container we now have.'
Paul Bingham, managing director of world trade and transportation markets for Global Insight, said pressures such as the opening of Punta Colonet 'are going to do nothing but take market share away from the ports of Long Beach and Los Angeles.'
Although a small amount of domestic Mexican cargo will undoubtedly move through Colonet, the vast majority of the 2 million TEUs per year expected to move through Colonet is likely to come at the expense of Long Beach and Los Angeles, Bingham said.
Despite the possible competition, Mexican Consul General Juan Carlos Gutierrez said Tuesday that opening the Colonet port should be a collaborative effort. 'There should be cooperation in this global age for the health of our economy and region,' he said, according to the Press-Telegram.