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NOVEMBER 2005

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NORTHERN CALIFORNIA SPOTLIGHT



Shippers Look North
LET THE SUN SHINE: "The solar-electric system at our Oakland hub powers one of our major FedEx Express hubs, which handles more than 260,000 packages daily and serves as a major gateway for shipments to and from Asia," said Mitch Jackson, managing director, corporate and international environmental programs, FedEx Express, at the facility's opening in August.

   If Asia-dependent shippers can't get through the Southern California ports in timely fashion, they face choices ranging from Mexico to the Gulf Coast. But they can also go north. And the most immediate beneficiary of the freight congestion down south is the booming Port of Oakland.
   The story goes that the aforementioned George Lucas modeled his "Imperial Walkers" in Star Wars after the container cranes at the port. The phalanx continued to swell earlier this year when two more arrived from China, bringing the total number to 19. The port handled 2 million TEUs in 2004, a 6.2-percent increase over 2003, and is the fourth-busiest container port in the nation.
   "Together with our maritime renovation efforts and our major dredging project, these cranes will mean thousands of new jobs for our region and approximately $2 billion in additional annual economic impact," said Port of Oakland board member David Kramer.
   Provided, that is, that the dredging — from 42 feet to 50 feet in depth — continues to occur. Originally authorized at a cost of $252 million, the current cost estimate is more than $307 million. Meanwhile, the port is asking Congress to provide $60 million in its FY 2006 budget, substantially more than the $48 million slated for the project by Pres. Bush. The port projects that the dredging alone would generate $1.9 billion of increased annual business revenue and $62 million in increased annual local taxes.
   Like its cousins to the south, the Port of Oakland is also experimenting with nighttime hours in order to allow shippers to take advantage of reduced traffic congestion and keep goods moving. But it only applies to exports, and is primarily targeted at helping the region's agricultural base ship out its products. That effort is being aided by an integrated logistics center in Shafter, Calif., served by Northwest Container Services, Inc., that features a rail intermodal facility supporting re-use of import containers as outbound containers for agricultural freight.
   As for imports, MOL America inaugurated its first-port-of-call business in Oakland in June 2005, with BNSF dedicated rail serving its new operation. The first ship to arrive? The MOL Expeditor. Meanwhile, development of projects like the Reno Transportation Rail Access Corridor in Reno, Nev. — a double-stacked freight train corridor project similar to Southern California's Alameda Corridor — may influence logistics activity all the way back to the port.
   Corporate facility development is rolling as fast as those intermodal trains. This summer, Federal Express Corp. opened a processing hub at Oakland International Airport (part of the Port of Oakland) that has 5,700 solar panels covering a facility of 81,000 sq. ft. (7,525 sq. m.), supplying 25 percent to 30 percent of the facility's electricity.
   "The solar-electric system at our Oakland hub powers one of our major FedEx Express hubs, which handles more than 260,000 packages daily and serves as a major gateway for shipments to and from Asia," said Mitch Jackson, managing director, corporate and international environmental programs, FedEx Express. Part of that Asian traffic were the more than 300,000 Sharp solar cells that FedEx Express shipped in from Japan.
   Oakland's is not the only growing airport facility in the region. At Norman Y. Mineta San Jose International Airport, work had been proceeding apace on an entirely new $355-million concourse. But plans have been changing this year.
   In February 2005, FMC Corp. closed on the sale of 52 acres (21 hectares) of land at a former manufacturing site to the City of San Jose, with a sale pending for another 23 acres (9.3 hectares) once environmental remediation work was complete. And in May, the airport appointed a new director of Aviation.
   In October, based on a changing area economy and on recommendations of a recent airport/airline workshop, a 45-day moratorium on bidding projects for the new concourse was granted by the San Jose City Council, in order to carry out a thorough review of projects and funding. The recommendations include several scaled-back measures, as well as a proposed use for the former FMC property. While some short-term expense is involved with the review period, the recommendations, if followed, may save the city billions of dollars.

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