Although it’s difficult to say what impact the new round of US-China trade wars will have on perishables exports from the United States, increased demand from Asia, combined with improvements in cold-chain technology, have boosted sales volumes. In response, key U.S. West Coast seaports with a heavy concentration on Asian trade lanes and several major cold-chain companies are making major new investments in temperature-controlled capabilities.
One such investment is Cool Port, an advanced cold storage and logistics facility within the Port of Oakland, California, that is designed as a state-of-the-art intermodal transload and consolidation facility. The facility opened last fall and was developed by Dreisbach Enterprises in partnership with Lineage Logistics for perishable commodities.
An international gateway for temperature-controlled cargo, the facility operates as an advanced storage and transportation hub. Its features 280,000 square feet with 90 truck dock doors, 20,000 pallet positions, three blast cells, and high-cube 100,000-square-foot multi-temperature storage. Cool Port is capable of handling up to 1 million tons of perishable product.
Particularly unique, the facility can accommodate 36 refrigerated rail cars that are staged within the cold storage facility. Located within the Port of Oakland, importers and exporters realize increased container capacity and reduced transport costs since intermediate truck transfers are eliminated.
“Cool Port sets a new standard for efficiency, food safety and speed in the temperature-controlled and transportation industry,” says Lineage president and CEO Greg Lehmkuhl.
Mike Zampa, director of communications at the Port of Oakland, emphasizes the importance of the port’s near-dock intermodal rail. “It makes us the nation’s most attractive export gateway,” he says. “We’re the final West Coast stop before ships head back to Asia, and we’re adjacent to nation’s most fertile agricultural areas – Central Valley, Napa, Sonoma, Salinas valleys.”
San Pedro Bay Ports
Baker Cold Storage, a 250,000-square foot state-of-the-art facility located on private property in the “Over Weight Corridors” in both the Ports of Long Beach and Los Angeles, handles cold storage for both San Pedro Bay ports. It features a freezer, cooler and refrigerated cross dock for truck, container and rail service. Top imports are fruit, vegetables, fish and shellfish; top exports are fruit, vegetables, meat and dairy products.
Also important to the trade, both the Port of Los Angeles and the Port of Long Beach have five major cold storage facilities within seven miles from the port with a total capacity of 115,000 pallet positions. Some of the cold storage facilities are served by the two Class I railroad companies that operate on the US West Coast: Union Pacific (UP) and Burlington Northern Santa Fe (BNSF).
“The Los Angeles region also has a cluster of cold storage with additional capacity in Vernon, California, just South of Downtown L.A.,” says Marcel van Dijk, Port of Los Angeles cargo marketing manager.
The amount of refrigerated cargo traffic flowing through both San Pedro Bay ports (Los Angeles and Long Beach) is fairly consistent, with a slight increase since 2015. At the Port of Long Beach, exports have declined with a drop reported in 2017, and imports climbed substantially during the same time period. In 2018, the Port of Long Beach imported 90,621 TEUs and exported 60,536 TEUs of perishables. The year before it imported 70,416 TEUs and exported 72,132 TEUs.
Last year the Port of Los Angeles imported 113,693 TEUs of perishables and exported 86,124 TEUs, making for a fairly balanced trade. In 2017, the port imported 113,497 TEUs and exported 90,406 TEUs.
“Most of our exports are to Asia,” says van Dijk. “Our grapes, citrus, beef, pork is shipped to the Asia region. On the import we get most of the fish and shellfish from Southeast Asia.”
Imported fruit mostly comes from Central and South America.
The trade war between China and the United States is having an impact on volumes overall at the Port of Los Angeles. “In general, we have seen an impact on the exports,” van Dijk reveals. “In 2018, our exports overall decreased 1%, but exports to China decreased 21.7%.”
While part of the decrease encompasses agricultural commodities, the port does not have specifics regarding just how much of the decline is related specifically to perishables.
“Our imports didn’t have too much impact with the tariffs,” he adds. “Most of the import perishables are from Southeast Asia and are not China sourced.”
Almost all perishable cargo is moved by truck from the terminals. Imported perishables are transported to local cold storage facilities from where they will be re-distributed. “Exports of fruit and vegetables are all sourced locally and are trucked into the port,” explains van Dijk.
The port receives frozen and chilled beef, pork and poultry by rail from the US Midwest.
The port has undertaken many improvements to help increase the shipment of perishables and better accommodate large vessels that come to the Port of Los Angeles. “From 2005 to 2024 we will and have spent US$3.6 billion in capital improvements,” he comments. “These investments are for all cargos at our port, including perishables. The Port of Los Angeles has a total of 4,000 reefer plugs on our container terminals. This is more that we need to use for the current volume of reefer containers.”
Overall, the Port of Long Beach has 6,000 spaces for refrigerated containers throughout the port. Its Long Beach Container Terminal (LBCT), of which its first half opened in April 2016, offers 1,125 stacked spaces. By the time construction is completed in 2021, the capacity at LBCT will double to 2,250 spaces for refrigerated containers.”
Nearly all refrigerated/perishable cargo is seasonal with the exception is frozen cargo, which can be stored for a longer period prior to shipping.
The most popular exports are foods grown and harvested in California, including beef, pork, citrus fruits, grapes, stone fruit and cheese. The top refrigerated imports coming into the Port of Long Beach include shrimp and fish.
“During our export off-season, imports will also include citrus fruits, meats and vegetables – many of the items we typically export,” says Lee Peterson, port spokesman. “This happens after seasonal cargo has been fully exported, and that same commodity is then imported from a different growing region. This ensures consumers have access to the same fresh produce all year long.”
Asia plays a significant role with refrigerated cargo at the port, with South Korea, Taiwan, Hong Kong and China being the top destinations for exports. China leads the way with refrigerated imports. “China is our biggest trading partner, so the tariffs may lead to higher imports from other sources and our exports going to other destinations,” Peterson says.
Currently, a small percentage of refrigerated containers are moved off dock by rail. The majority are trucked to warehouses and broken down for immediate distribution. “However, as part of our aggressive modernization and capital improvement program, the port is investing US$1 billion over the next several years to add infrastructure and enhance efficiencies in the rail system to maximize on-dock rail capacity,” Peterson says. “Due to the weight requirements of many temperature-controlled containers, hauling items by rail for export is one of the most optimal pathways to transport these goods.”
By Karen E. Thuermer
Correspondent | Washington