Notes on the Port of Oakland

I recorded a pod-cast today for the North California Appraisal Institute. I will link to it as it becomes available. I am always nervous when I talk to people, especially when my voice is being recorded. I am much more comfortable giving written statements, since I have spell check, and the long pauses and the base utterances of human speak (uuuuummmmm, aaaaaaa) I find especially annoying.

I suppose some work on public speaking should be in order.

Anyway, here are my notes on the Port of Oakland:

The port of Oakland is a leading container cargo port, handling a little over 2 million containers in 2009, an 8 percent decline from 2008 and a 14% decrease from its peak. Oakland is ranked in the top 4 in the country and in the top 20 in the world in term of annual container traffic.

The Port of Oakland has been able to handle the economic crisis better than most other West Coast ports, notably the Ports of Los Angeles and Long Beach, which saw container traffic plummet almost 40% since its peak. The effects for Los Angeles/ Long Beach have been severe, since those ports combined are around 6 times the size of the port of Oakland and the decreases in imports has left thousands of local employees without jobs.

Most suppliers, major companies, importers, etc. will ship goods to LA / Long Beach and also Oakland, they operate at both ports, in order to diversify their risk. Many remember the work stoppages at the ports of LA / Long Beach in 2002 when traffic was tied up at the ports, many suppliers realized that they had put all their eggs in one basket. The following year, 2003, Oakland had a sharp rise in traffic almost 13%, and has grown steadily every year until 2006 when the shadow of the recession first began to emerge.

One of the reasons Oakland has been able to hold market share has been the infrastructure improvement Oakland has done, since 2000 the port has invested around 1 billion to add storage yards, extend rail lines, and improve cargo handling capacity. Rail capacity is especially important, since a lot of what the US exports is bulk agricultural goods, goods that are expensive to ship via truck.

Oakland’s proximity to Napa and Sonoma counties and the Central Valley farming communities have been a benefit. Oakland have been very responsive to meeting the needs of these exporters and the smaller size of Oakland has forced it to be more business friendly and also more nimble in accommodating the demands of businesses.

The shipping landscape is starting to change, with a greater emphasis being placed on exporters. The weaker US dollar is making US goods more attractive to foreign buyers, but the problem now is getting these goods out of the country.

Over the last 2 decades, booming imports into the US have geared our supply chain to be set up to handle the import of goods, with warehouses locally set up to break down shipments and then send them to the rest of the country. Now we are having a problem of retooling this system to move goods the other way, and in many cases the system we built was more or less one way only.

The US government has the goal of doubling exports in the next 5 years, a goal that will benefit the port of Oakland, as the rules have changed. Oakland was for a large part pushed to the sidelines in the import game. Los Angeles and Long Beach were the winners in that game, but in this new export game the cards have just been dealt and nobody is out of the running just yet.

Bottlenecks are beginning to form at US ports. Shippers have cut back on their service routes to the US as the recession made many of those routes infeasible. The downside is that there are fewer ships available to move goods out of the country, and US exports are scrambling to send their goods overseas. If Oakland can position itself to take market share away from LA / Long Beach, it will be able to ride out this export wave and create local jobs and boost the local economy. Oakland has a greater chance of doing in, because of its smaller size and the expansion plans that have been made in the last several years that can allow it to compete better against other US ports.