Ocean cargo: Navis World 08 is generating questions for Port of Oakland

Patrick Burnson, Executive Editor -- Logistics Management, 4/21/2008

SAN FRANCISCO—As NavisWorld 08 is being staged in San Francisco this week, shippers here are asking a lot of questions about North America’s fourth largest ocean gateway across the bay and its strategic direction to accommodate growth. On the eve of this important “port and terminal technology” conference, LM was given an exclusive interview with The Port of Oakland’s maritime director, James Kwon, who tried to provide insight as well as answers.

LM: What is the port doing to provide exporters with more containers, terminal space, and carrier calls?

JK: With the additional acreage that was transferred to the port from the former Oakland Army Base in 2006, we will be reconfiguring and modernizing our Outer Harbor facilities and providing additional near-dock rail capacity. With the recently approved $456 million in infrastructure funding from the State of California for our priority projects, we see a better mainline rail system for the future. Increasing mainline rail will allow room for short haul rail that will help exporters, in particular the Central Valley agricultural community. Shifting short-haul inland truck traffic to less polluting rail is being explored, as there are potential environmental and efficiency benefits. 

LM: How will Oakland try to attract more inbound calls from "mega" vessels in new consolidated services?

JK: Oakland will attract new calls by keeping its costs competitive with other West Coast ports and by expanding its rail capacity. The port’s -50 Foot Harbor Deepening project is close to completion set for 2009. Some areas of the harbor/berths are already at -50 feet. We are able to accommodate some of the newer, larger container vessels that are now providing service between Asia and the US West Coast. Oakland currently has three first-port-of-call services and is aggressively marketing to carriers serving the port to bring in additional cargo. The port has sufficient existing terminal and rail capacity with plans for expansion in the very near future. 

LM: What about barge or sea/air strategies?

JK: Oakland has a strategic alliance with the Port of Sacramento which would help facilitate barge services to Sacramento and reduce reliance on trucks. Further study is needed to determine how that would best work both in terms of affordability and feasibility. Certainly the environmental benefits are obvious. Barging services have

been workable in other countries so we will continue to explore this option.

LM: How can shippers mitigate expenses if the port adds container fees and

other added costs?

JK: As larger ships call Oakland, we believe that the economies of scale may help reduce some of the costs for goods movement. We anticipate that part of the costs will be passed on to the consumer as well. At this point it is really too early to know exactly how this will evolve. What we do know is that we have a responsibility to grow substantially

while balancing the needs of our customers and stakeholders.