Pacific Maritime Magazine - Marine Business for the Operations Sector

Regional Report: San Francisco Bay Area

 

The year isn't quite over yet, but 2015 was a time of ups and downs for the major ports in the San Francisco Bay area, with rises and falls occurring in traffic volumes, cruise passenger numbers and cargo tonnage.

The battle, which was between the Pacific Maritime Association and International Longshore & Warehouse Union, was officially laid to rest after the two sides ratified a new five-year contract in May, months after a tentative agreement was reached. The agreement, announced in February, came together after nine months of occasionally contentious talks and decreasing productivity at shipping terminals up and down the West Coast.

As of late 2015, import volume year-to-date at the Port of Oakland is level with the same period a year ago, which may not sound like good news, but actually is, comparatively speaking.

"This is a major improvement from January and February when import volume was down nearly 40 percent due to the West Coast labor contract dispute," explained Oakland's communications director, Mike Zampa.

The port has reported seven straight months of import growth, but even still, overall 2015 container volume at the port – including imports, exports and empty containers – is down 4.8 percent from a year ago.

"But here, too, we're making significant improvement from January and February when overall volume was down about 30 percent due to West Coast waterfront labor issues," Zampa said.

However, the improvement in cargo traffic resulted in another problem for the port: traffic backlogs. At times, particularly during the summer months, seagoing vessels had to queue for extended periods of time before being able to dock and then load and unload their cargo.

To help alleviate the congestion, about 100 registered longshore workers were added at the Port of Oakland starting in July, and another 50 are expected to join the workforce by late December.

"In addition to this, more than 200 casual dockworkers have joined the labor pool," Zampa said. "There is no more backlog of vessels at the Port of Oakland and the labor shortage has been eliminated."

Another anti-congestion measure, however, is still pending federal review.

This past summer, the port announced that it was launching a container fee program called "OakPass" that is modeled after the PierPass program at the Los Angeles-Long Beach ports complex.

Under the proposed program, terminals would collect an "extended gate fee" of $17 for a 20-foot unit and $34 for all other sizes of container. The fee would be assessed on loaded import and export containers during peak hours, defined as 7 am through 6 pm Monday through Friday.

No fee would be assessed during off peak hours, defined as 7 am through 6 pm Saturdays. Empty containers and transshipment cargo would be exempt from the fee.

A wrench was thrown into the plan in September however, when the Federal Maritime Commission put the agreement on hold and issued a request for additional information from the five container terminals that would participate in the agreement.

OakPass, which was announced Aug. 21, was originally expected to go into effect sometime during the fourth quarter of 2015, but could be delayed by one or more quarters, depending on actions taken by the Maritime Commission, which has said it has concerns about the proposed program based on an initial review and comments received from various stakeholders that would be affected.

Along with Oakland, another seaport that went through ups and downs was the Port of Redwood City.

The port, located 18 nautical miles south of San Francisco, is the only deepwater port in the South San Francisco Bay. It specializes in bulk, neo-bulk and liquid cargoes.

During its most recent fiscal year, which ended June 30, the port experienced a drop in tonnage, in contrast to recent years, which saw increases in both tonnage and vessel calls.

"After three years of annual double digit growth in Port of Redwood City tonnage from 2012-2014, the fiscal year 2015 port tonnage declined slightly by 3.8 percent," Michael Giari, the port's executive director, told Pacific Maritime Magazine. "However, the total tonnage for the FY year ending June 30, 2015 was the fourth highest in port history at 1,715,633 metric tons."

Port of Redwood City Operations Manager Don Snaman said 96 vessels – 58 ships and 38 barges – made calls during the year, compared to 89 vessels the year before.

This, Giari said, is a reflection of continuing strong demand for construction materials in Silicon Valley and the South Bay, particularly high quality sand and aggregates shipped to his port from British Columbia.

Of those construction materials, imported sand makes up about 47 percent and imported aggregates 31 percent, while exported scrap metal is about 14 percent.

"The high quality of the sand and gravel aggregates from British Columbia combined with the dwindling supply of these materials in Northern California because quarries are unable to expand triggered a strong demand from which the port benefitted," Giari said.

Helping with the import/export process of the materials is a $17 million wharf that opened in the spring of 2014, replacing a 60-year-old World War II-era wharf. 2015 was the first full year of the new wharf's operation.

In addition, two channel dredging projects, totaled at $11.8 million, began in November. They're expected to restore the channel to its authorized depth of minus 30 feet for the first time since 2009.

The depth is crucial for port channel users, Giari said, because the prior navigation depth of 22 feet was causing extra costs and logistics problems for cargo shippers at the port.

"The bigger Panamax ships bringing construction materials to the port have deeper drafts," Giari explained. "Maintaining the channel at its fully authorized depth is critically important to increase the transportation efficiency of these bigger ships."

Increasing the depth of the channel means that cargo carrying capacity of ships calling at the port is expected to increase by 10,000 to 12,000 tons per ship.

This means the vessels can make fewer port calls and still provide the same amount of construction materials, thereby lowering the air emissions in the Bay Area from these ships and the tugs that dock them.

Over at the Port of San Francisco, things were looking up in 2015 mainly due to its bread and butter: cruise ships.

San Francisco has very different focus from its neighboring Bay Area ports; while Oakland's main maritime revenue stream is container traffic, and Redwood City's is bulk and breakbulk cargos, San Francisco's is passenger traffic.

In 2014, the port was seeing 60 to 80 vessel calls each year and 200,000 passengers annually, but those numbers have risen thanks to the opening of a new cruise ship terminal in September of last year.

The $100 million James R. Herman Cruise Terminal at Pier 27 opened with a new terminal building, mobile passenger boarding bridge, shoreside electrical power, three-acre provisioning area, three-acre ground transportation area, and a three-acre public park.

A total of 69 cruise ships visited the terminal during its first year of service, Port of San Francisco Deputy Director for Maritime Peter Dailey told Pacific Maritime.

"Cruise activity at San Francisco has been steadily increasing, from a record 256,000 passengers on 73 ship calls in 2014, to a new record exceeding 300,000 passengers on 82 ship calls in 2015," he said.

On non-cruise days, Pier 27 is used as a facility for conferences, trade shows and special events, and about 30 events were booked at Pier 27 in the first full year of operation with minimal advance marketing.

"We expect this number to increase as the Pier 27 venue becomes more widely known to event planners," Dailey said.

In addition, the port has been trying to step up its game when it comes to cargo shipping.

"The Port of San Francisco continues to market the Pier 80 Omni Terminal for breakbulk, roll-on/roll-off, and project cargoes; Pier 94-96 for bulk cargoes; and the Pier 70 shipyard for industrial ship repair," Dailey said.

The Port of Richmond had a relatively quieter 2015 than some of its neighboring ports in the San Francisco Bay, but it wasn't exactly sitting idle.

The Port of Redwood City's new $17 million wharf opened in 2014, replacing a 60-year-old World War II-era wharf. Photo courtesy of the Port of Redwood City.

The port, located in the northeastern region of the Bay Area about nine miles from the Golden Gate Bridge, is known for receiving tankers and car-carrying vessels. It can also handle dry bulk, breakbulk, and containers, making it one of the more diverse cargo handlers in not just the region, but the state.

It typically handles the most shipping tonnage in California annually and third-largest in the state.

In June, the port signed a 10-year lease with a Southern California company to ship California lumber to China, an arrangement that's expected to generate between $500,000 and $1.5 million annually for the city-owned port over the next decade, part of which is expected to fund port infrastructure improvements to make Richmond's seaport even more competitive with its neighbors, which have made it clear that they also intend of keep growing their business.

 
 

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