California's MTS -- Vital Link in U.S. Logistics Chain

Prepared by CALMITSAC

January 17, 2003

American prosperity depends on a healthy and robust Marine Transportation System (MTS). Unfortunately, investments in freight transportation infrastructure have not kept pace with demand. The capabilities of critical cargo handling facilities and intermodal links are being stretched well beyond their capacities.

The California Marine and Intermodal Transportation System Advisory Council (CALMITSAC) and the Southern and Northern California MTS Councils are responding to this challenge by developing a comprehensive MTS infrastructure development plan.

CALMITSAC’s mission is “to foster development of a Marine Transportation System in California that is safe, secure, efficient, environmentally sound, and capable of expanding to meet the demands of the global economy.”

California is the fifth largest economy in the world. Waterborne commerce through California’s ports accounts for 40% of the national total. Three of the four largest container ports in the U.S. are located in California (Los Angeles, Long Beach and Oakland). The value of bilateral trade between California and all other states in 2000 totaled over $453 billion. This is on top of the $1.3 trillion in intrastate trade in California in 2000. California is the nation’s leading freight destination in the United States by value, and second only to Texas in overall freight movements by tonnage. The ability to move cargo efficiently through the ports of California is crucial to the overall economic vitality of the state and the nation.

The benefits of trade are threatened, however, by growing congestion. Managing growth will be a major challenge. Containerized cargo through the ports of Los Angeles and Long Beach is expected to grow from 9.6 million twenty-foot equivalent units (TEUs) in 2001 to over 36 million TEUs by 2020. The Port of Oakland handled 1.6 million TEUs in 2001 and expects 4.8 million TEUs by 2020. This growth will place great strain on I-710, I-580, I-880 and other major port access routes.

The railroad system is also facing major capacity and congestion challenges. Los Angeles area rail yards are operating at near capacity. The main lines east of Los Angeles need triple tracking and grade separations. The economic benefits of Alameda Corridor will be jeopardized until the major rail yards and the main lines east of downtown Los Angeles are improved. If not solved these problems will adversely affect the competitiveness of the MTS, hurt economic growth and threaten national security.

In response to the 9-11 attacks, the Southern California MTS Advisory Council has created port security guidelines for terminals and vessels in port. These guidelines have now been adopted throughout the U.S. Coast Guard’s Pacific Area Command covering Hawaii, Guam, Alaska, Washington, Oregon, and California.

CALMITSAC believes that MTS stakeholders should take an aggressive role in promoting additional funding for freight security and infrastructure projects in the upcoming TEA-3 legislation. Distinct goods movement and security funding programs are needed. Greater flexibility in the use of funds for goods movement is also a high priority. TEA-3 should be an excellent opportunity to showcase the importance of the MTS to the national economy as well as the preservation of the environment.

CALMITSAC looks forward to a strong partnership with MTSNAC and other regional MTS and goods movement organizations. We stand united in our efforts to promote the MTS and the network of global gateways.

CALMITSAC’s members include U.S. Maritime Administration, U.S. Coast Guard, California State Assembly Select Committee on Ports, Senate Office of Research, Caltrans, California State Lands Commission, Center for International Trade and Transportation, California Maritime Academy, California Association of Port Authorities, Pacific Merchant Shipping Association, Pacific Maritime Association, California Maritime Infrastructure Authority, Marine Exchange of Los Angeles/Long Beach, Marine Exchange of the San Francisco Bay Region, California Marine Affairs and Navigation Conference.