Business Development: Los Angeles, Québec

The Los Angeles Board of Harbor Commissioners on November 7 approved a new incentive program to reward shipping lines that bring new container business to the Port of Los Angeles in 2014. The Québec Port Authority (QPA) has given the green light to the wood pellet terminal project after analysis of the final environmental study submitted by Quebec Stevedoring Company Limited (QSL), the project promoter.

The Los Angeles Board of Harbor Commissioners on November 7 approved a new incentive program to reward shipping lines that bring new container business to the Port of Los Angeles in 2014.

Separately, the Board also established a two-member ad hoc committee on Port Industrial and Economic Development dedicated to identifying and advancing the best economic practices for maintaining the Los Angeles’ position as the nation’s leading container handling port. Commission Vice President David Arian and Commissioner Patricia Castellanos will serve on the ad hoc committee.

"Both of these steps we’re taking today move us forward in our commitment to maintaining our No.1 status," Mr. Arian said. "We will continue to develop new and innovative strategies to make sure we are as efficient and competitive as possible."

Under the Ocean Common Carrier Incentive Program, an ocean carrier will earn $5 per 20-foot equivalent unit (TEU) for each incremental container it ships through the port in calendar year 2014. The rate jumps to $15 per TEU for all TEUs if a carrier’s container volume grows by 100,000 or more units for the same 12-month period.

The baseline for measuring the increased volume will be the total number of containers each carrier moved through the port in calendar year 2013. Carriers will receive their incentive in a lump-sum payment in early 2015. Port staff will monitor the program on a monthly basis to evaluate its effectiveness and whether to recommend its extension beyond the first year.

"Carriers are rethinking their routes and relationships to be as competitive as possible," said Port Executive Director Geraldine Knatz, Ph.D. "This incentive gives them another reason to strengthen their ties with the Port of Los Angeles."

The Québec Port Authority (QPA) has given the green light to the wood pellet terminal project. This decision came after analysis of the final environmental study submitted by by Quebec Stevedoring Company Limited (QSL), the project promoter.

The terminal will be built and run by QSL and become operational in fall 2014. It will be used mainly to transfer wood pellets, which require covered handling and storage. The complex will consist of two silos, a covered rail off-loading station and a covered conveyor system. It will be located in the western part of the port’s Anse au Foulon sector.

The new terminal is expected to handle more than 400,000 metric tons of wood pellets annually. The pellets will arrive by rail at the average of three 25-car trains per week. One ship load per month will be dispatched to the United Kingdom, where the pellets will be used as to fuel power plants as an alternative to coal.

According to the port authority, the $20 million plus project will create 260 jobs in the construction phase and more than 100 direct and indirect jobs once the terminal is in operation. The port further projects that in more than 10 years, the project should generate provincial and municipal tax revenues amounting to $32 million and $5 million, respectively. It also will offer new export opportunities for the Québec and Canadian forest industries.

"The wood pellet terminal is a concrete example of a strong project that will create value while respecting the environment and the community," said Mario Girard, the QPA’s president and CEO. "The wood pellet terminal is state-of-the-art export infrastructure, and its environmental impact has undergone exhaustive study. The terminal will create wealth here in Quebec and is exactly the kind of project we hope for to guarantee the growth of the Port of Québec."

The port authority says that it will take steps in the coming months to see that the terminal is "optimally integrated into the urban landscape."

This project aligns with the QPA’s development strategies for the Anse au Foulon sector, which are to focus on break bulk (biomass), develop covered handling for new tonnage and encourage intermodality with a small carbon footprint by relying on train and vessel transport.