Hinterland Connectivity: Long Beach, Portland (OR)

Long Beach Port Commissions Short-Haul Rail Study

The Port of Long Beach has commissioned a study to evaluate the business case for shuttling cargo by rail between the San Pedro Bay port complex and the major consumer markets and warehousing districts within 100 miles of the harbor.

"Short-haul rail is a key component of a broader Port rail expansion strategy to enable our regional supply chain partners to achieve significant gains in velocity, throughput and environmental improvements," said Port CEO Jon Slangerup. "We’re taking a comprehensive look at the feasibility of this concept."

Up to 70 percent of containerized imports that move through the San Pedro Bay ports leave the harbor complex by truck. Of that total, about 40 percent are headed east for distribution centers and warehouses in San Bernardino and Riverside counties, an area known as the Inland Empire.

At these facilities, cargo is transloaded to larger containers or trailers for shipment by rail across the country or by truck to local destinations. This includes the Inland Empire consumer market of more than 4.3 million people.

"We want to know if there is a valid business case for moving this transloaded segment of cargo to the Inland Empire by rail," said Mike Christensen, the port’s senior executive lead for supply chain optimization.

According to the port, the cost of drayage to the Inland Empire is substantially higher and freeway commutes slower than ever. The greater Los Angeles area currently ranks as the most congested region in the nation based on average time wasted of 81 hours per commuter per year, according to the INRIX 2015 Traffic Scorecard.

At the same time, the Class I railroads are suffering from traffic slumps in commodities such as oil and coal. These trends have created an opportunity for the supply chain to reconsider a regional rail shuttle, Mr. Christensen sees "a new openness to this strategy on the part of both our Class I railroad partners and the cargo owners we jointly serve."

For the ports and marine container terminal operators, a major driver is the growing number of megaships delivering more cargo in a single call and during the same four or five days per ship as previously with smaller vessels. Increasing the number of containers leaving the terminals by rail reduces gate waits and improves truck velocity.

"Short-haul rail could allow the entire supply chain to manage those surges more efficiently," Mr. Christensen said.

Cost, velocity and reliability are the core measures of supply chain efficiency, and the study will address all three. The port believes short-haul rail service could strengthen the supply chain by taking more cargo off the highway and adding more consistency to inland deliveries. Regional benefits include reducing traffic on the region’s impacted highway system, with one double-stacked train eliminating up to 750 truck trips.

A clear benefit is cleaner air. Trains are up to four times more fuel-efficient and up to three times cleaner than highway transport, making for what Mr. Christensen argues is an "extremely strong environmental case."

From terminals with on-dock rail to the Alameda Corridor to the Class I railroads’ regional networks, the infrastructure needed to support short-haul trains is largely in place and has the capacity to accommodate more cargo. Still needed is an inland intermodal rail terminal.

Portland: Upriver Barge-Rail Proves Effective as Outlet for Oregon Agricultural Producers

Piggybacking on the success of the Upriver Container Barge-Rail Shuttle program, Northwest Container Service will increase rail service from twice a month to weekly starting this month. The improvement will benefit shippers in Central and Eastern Oregon.

The Port of Portland and other stakeholders have been working to increase the frequency of rail service between Boardman, and Portland since upriver barge service resumed in November 2015.
The Barge-Rail Shuttle Service starts in Lewiston (ID) with containers loaded with agricultural goods. These containers are barged every other week to the Port of Morrow and then loaded onto trains bound for Portland and continuing through to Puget Sound marine terminals. That activity in Boardman during the past five months has attracted other shippers in Central and Eastern Oregon to take advantage of growing rail operations.  

The increase in rail capacity required coordination between the Port of Portland, Northwest Container Service and commitments from key shippers to make the service viable. The project is the outgrowth of the Trade and Logistics Initiative, work the Port of Portland and the State of Oregon took on with shipping companies across the state to find alternate routes to international markets.  

"We appreciate the work the Port of Portland has put into the Barge-Rail Shuttle Program and soliciting commitments from shippers to secure the additional rail service that will allow our company, as well as others loading products in Eastern Oregon, to increase access to global markets," said Stewart Follen, president of SL Follen Company, exporter of hay and animal feed to Asia and the Middle East from across Oregon. "While the export community will see the immediate benefit, import companies are also interested in exploring the service as a way to reduce time and costs for their products to reach various U.S. markets."

Additional rail service helps address increased transportation costs and uncertainty for Oregon shippers resulting from the loss of direct carrier service and barge service at Terminal 6 in Portland in 2015. The rail service will also take hundreds of truck trips off the regional highway system and support more cost-effective and fuel-efficient modes of transportation.

While work-arounds in the absence of robust container service at Terminal 6 exist, recruitment of new transpacific service is critical to the region and is a priority for the Port of Portland. According to the port, the Portland region cargo market of 336,000 TEUs per year has the potential to support two weekly non-competing, transpacific container carriers.