I love telling people that Oakland sports the country’s fourth busiest port. Too bad I can’t anymore. The Port of Savannah (which ranked ninth in the country only 2 years ago) stole our crown last year. And this isn’t likely to be the end. It is a distinct possibility that our ranking will slip further in the next few years. Ports we compete with directly, like Seattle and Tacoma, grew an average of 7.0% and 8.5% annually between 2000 and 2005, while we boasted a paltry 5.1%1.
The problem is rail. You can read all about the situation in more detail in the McKinsey report, Section 4 (I encourage everyone to do so), but I’ll sum up briefly here. Employment related to the Port’s maritime activities has been falling nearly 2.1% per year. Although rail is the most cost-effective method of moving containers, we have only enough capacity to transport 35% of our volume this way (in contrast, Seattle & Tacoma can move 90% of their goods via rail). Everything else moves on trucks. Nobody thinks this is a good thing. It’s bad for commerce and bad for people. Even with the Port’s efforts to mitigate truck impacts, like the diesel truck exchange program, large scale trucking is an environmental nightmare, particularly for the people living in West Oakland.
“Green” Rail Facility – This project will create an intermodal rail terminal at the location of the former Oakland Army Base. The project will include the construction of container loading and unloading tracks, container parking areas and connections to the major railroad lines. This facility will increase rail terminal capacity from approximately 640,000 containers per year to 1.7 million containers. This project will also include the development of a state-of-the-art, clean-air facility, with fully-electric yard operations.
Cross your fingers, everyone. We need it.
I mention all this because today’s Trib story about James Kwon, the Port’s new Director, didn’t really give a full picture of the issues he’s going to face. Reading the story, you might have thought it was simply a matter of better marketing. Although one thing it did say:
In 2005, cargo activity through the port generated more than 28,500 jobs, either directly or indirectly. It doesn’t take much to conclude: More cargo equals more jobs.
Many of the Port-generated jobs fall into the relatively low skilled field of logistics. For the most part, these pay more than retail jobs, do not require a college education, and require a relatively small skill set that can be taught easily. Logistics represents a very promising opportunity for a large number of un- or under-employed residents. But to get those jobs here, we have to increase Port traffic.
Summer is coming to an end, our City Council will be returning from their recess soon, and Oakland Mayor Ron Dellums will be back with his Port Commission appointments. It is imperative that the Council considers the Mayor’s candidates very carefully.
1. Taking Stock of Oakland’s Economy (Big PDF!) Sec 4:45.