The day before the Presidential State of the Union address, West Coast shippers were given a positive view of Oakland in the annual "State of the Port" speech.
BY PATRICK BURNSON
Published: March, 2018
The day before the Presidential State of the Union address, West Coast shippers were given a positive view of Oakland in the annual “State of the Port” speech.
“This is our time,” proclaimed Port of Oakland Executive Director Chris Lytle. “We’ve spent much of this decade working with business partners to build out the cargo delivery platform our customers want and in 2018 we’re putting it to work.”
Investment in new capabilities could drive Port of Oakland cargo volume to all-time highs again in 2018, Lytle said. He was addressing an audience of 300 invited by the Pacific Merchant Shipping Association and Women in Logistics to Jack London Square.
Lytle’s presentation highlighted 2018 investment milestones expected to drive more cargo growth in Oakland following a record 2017. Among them:
• Completion of a year-long project to heighten four ship-to-shore cranes for megaship operations.
• Opening of Cool Port Oakland, a 283,000-square-foot refrigerated distribution center for containerized perishables, is expected in August.
• Expansion of TraPac marine terminal to double its Oakland footprint.
• The port set a cargo volume record in 2017, handling the equivalent of 2.42 million 20-foot containers. With new capabilities coming online, it’s forecasting new volume records annually through 2022. Cool Port alone is expected to ship 30,000 containers a year. A new Seaport Logistics Complex, scheduled to open in 2019, could further boost volume.
Although not naming specific players, Lytle also said that “international shipping lines” view Oakland as a candidate for first-call service from Asia. A first-call service would drive up Oakland import volumes, Lytle said. The first port of call in the United States is where most imports are discharged.
Lytle also revealed that the port plans to produce a new five-year strategic plan in 2018.
Port of Oakland Posts Big Volume in January
The Port of Oakland also reported that containerized export volume in January increased 2.1 percent from the same month a year ago. It was the second consecutive month of export growth at the port.
The port’s communications director, Mike Zampa, said in an interview that Asia remains the primary market. “Strong demand continues there for high-quality U.S. agricultural products,” he said. “It’s an outgrowth of the region’s expanding middle class.”
The increase follows a 1.8 percent decline in Oakland exports during 2017. The port said a weakening dollar contributed to the January increase. American products are more affordable overseas when the dollar’s value declines.
The port said exports of refrigerated commodities climbed in January. Pork exports jumped 20 percent last month when compared to January 2017. Beef shipments were up 18 percent.
“The Port of Oakland and its maritime partners have made key investments to increase refrigerated exports,” said Port of Oakland Maritime Director John Driscoll. “We expect volumes to increase as we open our new facilities.”
The Port of Oakland reported a 4.3 percent increase in overall container volumes last month compared to January 2017. That was due largely to an increase in empty containers.
Location, location, location
San Francisco-based Prologis released its third annual Logistics Rent Index recently, drawing on data from Prologis’ global portfolio and examining rental growth in critical logistics real estate markets throughout the world. Researchers say the report represents “a year of accelerated growth.”
Among the 2017 Logistics Rent Index highlights:
• Rental rates are continuing to rise at a faster pace: rental rates for global logistics real estate rose 6.6 percent—an acceleration from four percent growth in 2016.
• The top rental growth markets were New Jersey-New York City, Seattle and Mexico City.
• The United States is leading market rent growth: Rents rose nine percent in the U.S. in 2017 and it remains the fastest-growing region.
• Historic low vacancy rates: Healthy demand and disciplined supply due to lack of land and labor is leading to competition among customers.
• Quality over quantity: Customers are more willing to pay for premier locations, prioritizing fast and reliable delivery to consumers.
Chris Caton, Prologis’ head of research, said in an interview that e-commerce is 20 percent of new leasing and has been about at that level for a while. “Their growth is increasingly focused on infill last touch facilities,” he said. “Consumer expectations for delivery times and service levels are a catalyst.”
According to Caton, a broader range of customers are adapting their supply chains to meet these expectations, driving demand. “In part because of this trend, some of the biggest occupancy and rental rate gains has been in the most infill assets and submarkets,” he said.
Patrick Burnson is the executive editor of Logistics Management. www.logisticsmgmt.com
