The Port of Oakland plans to spend $570 million on capital improvements over the next five years. It made efforts last month to ensure that small, local firms continue to share in that work.
By Patrick Burnson
Published: February, 2015
The Port of Oakland plans to spend $570 million on capital improvements over the next five years. It made efforts last month to ensure that small, local firms continue to share in that work. At a half-day seminar, the port educated 155 contractors from nearby communities on bidding for public works projects. The objective was cast a wider net in selecting firms to do everything from paving to perimeter dike improvements.
“The Port of Oakland’s mission is job creation and economic growth,” said Amy Tharpe, director of the port’s social responsibility division. “As we progress, we want firms right here in our backyard to benefit along with everyone else.”
At last month’s seminar, builders, plumbers and electricians crowded a classroom near the Jack London Square for contracting advice. Port engineers and contract experts educated potential bidders on how to compete for public works projects. Some of the new projects discussed included building renovations, electrical upgrades and pavement overlay on runways at Oakland International Airport, which is managed by the Port of Oakland.
Here’s the port’s record over the last three years in public works contracting with local and small businesses:
85 percent of the spending has gone to firms in the port’s local business area of Alameda and Contra Costa counties;
65 percent has gone to firms in the port’s local impact area of the cities of Oakland, Emeryville, San Leandro and Alameda;
27 percent was spent with small businesses; and
15 percent was spent with very small businesses.
Cargo Traffic Surges at Port of Oakland
In other port news, cargo volume reached an all-time high at Oakland last year. According to port spokespeople, Oakland handled the equivalent of 2.394 million 20-foot freight containers in 2014. That broke the record of 2.391 million boxes moved in 2006. A 20 percent surge in December loaded import containers contributed to the record performance.
The Port of Oakland said overall container volume—imports and exports—increased two percent in 2014. Import volume for the year increased 5.29 percent. The latter figure is important because the port has made import growth a strategic business objective.
“An unprecedented series of events has brought us to this point,” said Port of Oakland Maritime Director John Driscoll. “It’s our job now to efficiently manage the growth.”
The port said that three factors have contributed to the cargo surge: stronger U.S. demand for Asian manufactured goods; the port’s own marketing efforts; and cargo diversions from congested Southern California ports. A freight backlog at the ports of Los Angeles and Long Beach has rerouted thousands of containers to Oakland.
Last month, Oakland handled 74,356 loaded import containers. That was the most since May 2014. However, the big buildup has also temporarily slowed cargo throughput, and a labor dispute between waterfront employers and dockworkers is magnifying the slowdown.
Observers report that 10 or more ships are anchored in San Francisco Bay daily awaiting berths at Oakland marine terminals. Some truckers report waits of several hours to pick up cargo. This condition is expected to persist until labor and management agree on a new contract.
Construction Begins on Project to Increase Oakland Rail Capacity
With all this success, is it any wonder the port continues to grow?
A global logistics hub envisioned for Oakland’s decommissioned army base took a big step forward last month as the Port of Oakland and Union Pacific Railroad start construction to link the site with Union Pacific’s main line.
“Connecting the Oakland Army Base to the national rail network is a milestone for us,” said Port of Oakland Engineering Director Chris Chan. “To be successful, we must have good rail access.” The $25 million project is financed by the Port of Oakland and the California Transportation Commission’s Trade Corridors Improvement Fund.
It’s part of a $100 million port effort to significantly expand Oakland rail capacity. A 7,400-foot lead track and the reconfiguration of adjacent tracks should be completed in October 2015. Once finished, the port will be better positioned to receive bulk rail shipments at the former army base from Union Pacific and BNSF railroads.
The port and City of Oakland expect to transform trans-Pacific supply chains at the 360-acre former army base logistics center. Located on the port’s outer harbor, it would include warehousing, trans-load facilities and a dry-bulk cargo terminal. Here’s how it could change the way exports are moved:
Bulk shipments of commodities such as grain and beef from the Midwestern United States could be delivered to Oakland by rail, trans-loaded into containers at the port, and then exported via Asia-bound container vessels.
Bulk shipments of other commodities could also travel to Oakland by rail. They would be loaded onto bulk vessels at a new dry-bulk shipping terminal and exported to Asia.
Union Pacific will manage construction of the army base rail link within its own property, and the railroad has hired Oakland-based McGuire & Hester for a significant portion of the work. The port has emphasized use of local contractors since construction began at the former army base in 2013.
Patrick Burnson is the past president and current board member of the Pacific Transportation Association, based in San Francisco. www.pacifictrans.org
