A public-private partnership has secured $130 million in funding to build a container staging facility at the Port of Los Angeles that’s expected to boost productivity by 10 percent or more, reduce emissions, create hundreds of jobs and ease truck congestion.
The Harbor Performance Enhancement Center, which is dedicated to sustainable freight movement and supply-chain efficiencies, received the funding from Macquarie Principal Finance, a division of Macquarie Group. The staging hub will be constructed on Terminal Island.
When completed, the 110-acre facility will take about 3,500 truckloads a day from nearby container terminals to the HPEC staging area. The 5.5-million-square-foot facility will enhance the efficiency of imported containers passing through the 14 marine terminals at the San Pedro Bay complex, which supports 42 percent of all U.S. imports.
HPEC will utilize a hub-and-spoke distribution model to improve efficiency, a system perfected by such companies as FedEx, UPS, and Yellow Freight. That will reduce transportation costs, improve cycle times and reduce inventory while also improving the distribution processes.
Jonathan Rosenthal, HPEC’s founder, chairman and CEO, said Macquarie’s participation is significant — particularly in light of the fact that Southern California’s twin ports have lost 20 percent of their market share over the past decade.
“Macquarie is an Australian investment firm that is very large,” he said. “They have about $1 trillion under management and they are the largest infrastructure investor in the world. They are saying ‘We want to put our money in Southern California — we believe in this market.’ That’s a tremendous vote of confidence.”
The competition to steal some of Southern California’s port traffic is fierce, according to Rosenthal.
“Every port in North America wants our containers because they result in jobs,” he said. “We have 1.8 billion square feet of warehouse space in Southern California and one out of every nine jobs is port-related. There’s a tug and pull from other ports in places like Savannah and Houston to attract those containers.”
Supporters include the Sustainable Supply Chain Advisory Committee, a group made up of shippers, the California Air Resources Board, the South Coast Air Quality Management District, ocean carriers, terminal operators, trucking companies and labor and environmental groups.
A small pilot portion of the staging center — which doesn’t require CEQA approval — is expected to be up and running within a few months, Rosenthal said. The land has been graded and the entire facility could be operational within 18 months to 2 1/2 years. It will operate on a 50-year lease.
“It will support hundreds of jobs both inside the port and throughout Southern California,” he said. “That could include everything from truck drivers and warehouse workers to subcontractors and vendors.”
Alex Cherin, executive director of the California Trucking Association’s Intermodal Conference, said the staging hub will be “a game changer.”
“HPEC’s innovative approach will relieve congestion throughout the region, increase cargo velocity through the port, lower handling costs, reduce emissions and dramatically improve freight flow efficiencies in the San Pedro Bay complex”, Cherin said in a statement. “The trucking community and its customers will have one start-stop location to pick up and drop off containers, distributing to regional hubs around the clock.”