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Long Beach Container Terminal: The Port Of The Future

Designing The Middle Harbor: Green Thinking From Top To Bottom

By Michael Gougis - Contributing Writer

April 24, 2012 - Large-scale transportation infrastructure can pose a difficult challenge in terms of predicting the economic future, in large part because of the sheer dollars involved. The investments required for the stuff needed for trans-oceanic container shipping are huge; the ships aren’t cheap, and have you priced a modern port crane lately?

So it becomes imperative, when planning a new project, to think in the long term – and when it comes to long-term in this industry, you are talking in terms of decades. Think of how different this is to your daily life – can you imagine driving a Ford Pinto today?

Anthony Otto, president of Long Beach Container Terminal (LBCT), stands atop one
of the firm’s gantry cranes, providing a sweeping view of the $1.2 billion Middle
Harbor project under construction. The project combines Piers E and F into one
300-acre-plus facility. Hong Kong-based Orient Overseas Container Line (OOCL),
of which LBCT is a subsidiary, signed a $4.6 billion, 40-year lease on April 3
with the Port of Long Beach for the Middle Harbor terminal.
(Photograph by the Business Journal’s Thomas McConville)

So, before designing the new Middle Harbor program, Long Beach Container Terminal, a subsidiary of Orient Overseas Container Lines, had to think far into the future before deciding precisely what it wanted to do.

After years of travel around the globe, visiting major container ports and examining the processes in place and the equipment in use, what the company has come up with is literally the port of the future. It needs to be; the project is anticipated to be in place for the next four decades, and OOCL has just signed a 40-year, $4.6 billion lease for use of the terminal.

It is designed to move more containers, more rapidly and with far less impact on the environment and the surrounding community, says Anthony Otto, president of Long Beach Container Terminal.

“It’s kind of a showpiece for the Port of Long Beach,” Otto says. “Some of the new technologies will usher in a whole new level of efficiency and productivity. When it’s done, it’s going to be incredible. It will be the most technologically advanced container terminal in the world.”

The $1.2 billion Middle Harbor project, in a nutshell, will combine the existing Long Beach Container Terminal property and the old California United Terminal property. The Middle Harbor project will fill in about 54 acres of water, creating one large terminal that will be able to handle the equivalent of up to 3.3 million 20-foot equivalent container units (TEUs) per year.

The purpose is, in a word, efficiency. The existing terminals primarily date from the birth of the containerized shipping industry in the 1950s. That means the infrastructure – the rail lines, the cranes – that was available back then is what is largely still in place today. It’s only logical. The machines are large and expensive, and you don’t trade them in frequently. One study notes that container ships last, on average, more than 27 years before they are scrapped. Locomotives and cranes can have similar life spans.

But today’s ships are much, much larger. And the volume of containerized traffic is much greater than it was. And that is driving a whole new way of building ports, Otto says.

“The port’s expansion is not infinite. As trade grows, we need to handle more volume through a smaller footprint. These designs allow for a more dense operation,” he says. “Roughly seven or eight years ago, most of the industry had moved to 7,000 or 8,000 TEU ships, and now we’re moving toward anything from 11,000 to 13,000, and there are some on the drawing boards that are much, much larger.

“Everything measured on these operations is measured in moves per hour – how quickly you can turn a ship. If you have 13,000 containers to move, the amount of time it takes in order to do that work and to depart that vessel is really where most of the money is made.

“So the more efficient you become, the more productive you become, especially with ships that large. When you were talking 3,000 or 5,000 containers, it wasn’t that big a deal, but when you’re up to 13,000 container moves on a single ship, you need to be as productive as possible and as efficient as possible in order to be able to turn that ship in the same amount of time.”

Therefore, to handle the increase in the number of containers on a ship, the equipment used to load and unload the vessel has to be far more sophisticated. And that requires more computerization and more modern equipment – and a greater ability to load containers onto rail cars. With more containers coming off a single ship, a greater percentage of those containers will be destined for regions far from Southern California. Being able to load them directly onto rail cars eliminates the need to move the container twice and cuts the handling cost. So the Middle Harbor project will have eight times the ship-to-rail capacity of the existing terminals, Otto says.

But simply buying more cranes and more equipment to handle more freight would mean more noise, more pollution and a greater impact on the surrounding community. Fortunately, in the past half-decade, environmental technology has made massive strides forward. And the Middle Harbor project will take full advantage of those advances, Otto says.

“All the cranes that load and unload the ships – the 80 cranes that are in the yard – that will be servicing the stacking of the containers and servicing the rail yard, 100 percent of those are fully electrified, compared to the current models that are fueled by diesel,” Otto says. “The cranes we are purchasing are the largest cranes in the world. They will not only be able to handle the newest ships, but the generation of the ships after that.”

Electricity plays a key role in the operations of the Middle Harbor terminal. Not only will the cranes be electricity-powered, the ships that call at the terminal will be required to turn off their engines and plug into shore power.

“So the new facility not only is fully electrified, which obviously reduces the emissions, but the ships will all be on cold-ironing, alternative marine power,” Otto says. “All the buildings are constructed to the LEEDS (Leadership in Energy and Environmental Design Standards) gold standard. We have solar panels that will assist in powering some of the operation, and offsetting some of that electrical demand. Anything that does run on diesel will be the most modern, most efficient, most technologically advanced, as far as emissions are concerned. We are bound to that by the lease.”

Every element of the Middle Harbor project will be designed with minimizing the environmental and community impacts in mind, Otto says. The cranes are rail-mounted, the newest technology, which also happens to eliminate the air particulate pollution associated with rubber tires – you’d be surprised how much of the pollution you breathe on a daily basis comes from car and truck tires. Storm water that reaches the terminal will be collected and properly processed, rather than simply being dumped into the ocean. Even expanding the ship-to-rail capabilities pays environmental dividends; the more containers that are loaded directly onto rails, the fewer trips trucks make on local highways. It’s green thinking, from top to bottom, and it’s really the only way to continue and expand operations in the future.

The terminal will be designed to accommodate the newest, largest ships, and that will make Middle Harbor one of the few places they can dock. This actually will pay dividends in environmental terms, Otto says. “The newer ships are definitely more environmentally friendly, not only from an emissions standpoint, but as well as some of the onboard services that they have. The newer ships absolutely keep the carbon footprint in mind,” Otto says.

“What really benefits the local area is the fact that the ships that call on Middle Harbor will be required within 40 nautical miles to burn only low-sulfur fuel. That’s a requirement of this new facility. When they’re in port, they have to plug into shore power, so they’re not creating emissions. It’s light-years ahead of what it was.”

It’s a big project – it will take nearly a decade to build out completely, Otto says. OOCL’s willingness to commit to a $4.6 billion, 40-year lease is an indication of how important the company believes the Long Beach port is to its future operations. The company is one of the largest shipping lines in the world, with more than 270 ships and numerous offices around the globe.

Even the expansion of the Panama Canal, which would allow container ships from Asia to sail directly to the East Coast, will not diminish the importance of the Long Beach portal to the U.S. market, Otto says. “The fact is that roughly 50 percent of the volume, slightly more than 50 percent of the volume, is headed for Southern California consumption,” Otto says. “It is unprecedented in terms of its financial commitment to this region, to this gateway and to this port as its preferred gateway into the U.S.

“A lot of people talk about the Panama Canal and its widening in 2014 and the impact that may have on this port. We don’t see it that way. And, obviously, our parent company sees the Port of Long Beach’s competitiveness going forward for the next 40 years. Their commitment is a vote of confidence.”