|Ultra Large Infrastructure Appears to be the Game!|
|Tuesday, 14 August 2012 12:41|
Ports of Los Angeles and Long Beach building at furious pace
Los Angeles Times; July 19, 2012
At the edge of San Pedro Bay, home of North America’s largest cargo complex, they’re building new piers, wharves and rail yards at a furious pace to further dwarf the competition.
The most expensive and extensive upgrades in the history of both ports will cost nearly $6 billion. The improvements are getting underway as international trade rebuilds ever so slowly from the devastating global recession, but experts say the building binge is necessary to keep the roughly 40% share of Asian imports that the two ports handle.
“Complacency would be our biggest enemy,” said freight specialist Gill V. Hicks, director of Southern California operations for Cambridge Systematics Inc., a transportation consulting firm. “And infrastructure is an important aspect of maintaining that advantage. If that is not handled correctly, shippers will find other places for their cargo.”
The American Assn. of Port Authorities said recent survey results show that U.S. ports have $46 billion in upgrades planned over the next five years, partly to jockey for new business from the widening of the Panama Canal, which is slated for completion in 2014.
The nation’s ports are competing for tens of thousands of new jobs that are among the best-paying blue-collar positions in the U.S.
International trade is important to the Southern California economy.
About 640,000 people work in trade-related jobs in Los Angeles, Orange, Ventura, Riverside, San Bernardino, San Diego and Imperial counties, economist John Husing said. That’s up from a low of fewer than 600,000 during the recession, but still far short of the 709,000 trade jobs in pre-recession 2007.
“The competitive environment is about to get a lot tougher,” said Husing, of consulting firm Economics & Politics Inc. “When you move to increase capacity and efficiency you are in a position to say to your customers, ‘You really still want to be using us.’ Throughput is the name of the game, getting the cargo in and out, in a hurry.”
At the ports of Los Angeles and Long Beach, new cargo terminals will cut air pollution by half compared with the current facilities. More containers will be loaded directly onto trains; handling equipment will run on electricity instead of diesel. Ships will hook to the electric grids so that they can turn off their diesel engines while in port.
The only thing that isn’t clear is the amount of automation the new terminals will have, which probably will be a subject of intense longshore union contract talks.
The Middle Harbor project also involves increasing the port’s landmass by filling in two water channels. It will have a capacity to handle 3 million cargo containers a year.
Also in May, the Long Beach Board of Harbor Commissioners approved another part of the $4.5 billion the port will spend on improvements over the next 10 years. The board accepted a bid to replace the Gerald Desmond Bridge with a more modern structure. Total cost to tear down the old bridge and build the new one is put at about $1 billion. Commissioners will vote on the $649.5-million “design-build” phase of the project Monday.
“We feel very strongly that this is the best time to do it,” said J. Christopher Lytle, executive director of the Port of Long Beach. “You really don’t want to build when you are congested and out of space. Better to do it now when our volumes are not as high.”
An added benefit in a weak economy, Lytle said, was the fact that the contractors were bidding low to earn the business. “We are seeing bids for these contracts coming back 25% or so under engineer estimates,” Lytle said.
At the Port of Los Angeles, executive director Geraldine Knatz says that “the biggest issue is the competitive landscape,” later adding, “How do we protect the amount of discretionary cargo that the port handles? So, over the next five years, we will be focused on that.”
Los Angeles is spending $1.2 billion over the next five years — or about $1 million a day — on capital projects. Its TraPac Inc. container terminal will receive an on-dock rail facility, an improved wharf, electric rail mounted runways, new terminal buildings and a new main gate, shore-to-ship electric power connections to allow dock ships to plug and turn off diesel engines, landfill additions, electrical system upgrades and new automatic stacking crane infrastructure.
Another project, due to begin at the Los Angeles port this year, will modernize the container terminal operated by longtime tenant Eagle Marine Services, a subsidiary of ocean carrier APL Ltd.
“We have already done about a third of the landfill for Pier 500,” which remains underwater at this point, said Michael R. Christensen, deputy executive director for development for the Los Angeles port. “This would be the furthest out into the harbor that we’ve ever been,” about 500 feet short of the breakwater, which is 2,500 feet from shore.
With competing ports also building furiously, harbors will be vying even more vigorously for one another’s customers, said Wally Baker, president of Jobs1stAlliance, a Southern California trade group.
“They will try to take business away from Los Angeles and Long Beach,” Baker said. “That is how they will have to pay for those projects. They will have to do something to pay for it.”
Billion Dollar Bridge To Start Next Year
The Port of Long Beach Harbor Commission unanimously approved a $649.5 million contract July 23, to rebuild the failing Gerald Desmond Bridge, handing the job to an international joint venture design-build team that includes Shimmick Construction Co. Inc. (Hayward, CA), FCC Construction S.A.(Spain) , Impregilo S.p.A. (Italy), Arup North America Ltd.,(Great Britain) and Biggs Cardosa Associates Inc., (San Jose, CA).
The bridge construction would provide an immediate and significant economic boost to Long Beach and the region. The nearly $1 billion in spending would generate economic activity of more than $2 billion in Southern California over the five years of the project. Construction will gain, on average, 3,000 jobs a year for the same period.
The Gerald Desmond is a vital part of the nation’s infrastructure, with nearly 15 percent of the U. S.’s waterborne cargo trucked across the bridge. It is a critical access route for the Port of Long Beach, downtown Long Beach, San Pedro and surrounding communities.
But the bridge, which opened in 1968, is nearing the end of its intended lifespan. It was not designed to handle today’s traffic volumes. The last major repair work on the bridge was a 2000 project performed by SCCA contractor Brutoco Engineering and Construction.
The SFI joint venture submitted a design-build proposal earlier this year that was selected by the Port and Caltrans as the “best-value” proposal.
“The new Gerald Desmond Bridge will be an essential part of the region’s infrastructure that will play a vital role in California’s transportation and economic future,” said Caltrans District 7 Director Mike Miles. “A design-build approach will expedite this project and helps us improve mobility for goods, people and services.”
While the contract for the joint venture is about $650 million, the total cost of the overall bridge replacement project is estimated at about $1 billion, including site preparation, demolition and other considerations. Over the four years of construction and demolition, the work is expected to employ nearly 3,000 people a year on average.
The Gerald Desmond Bridge Replacement Project is the eighth design-build project authorized by the California Transportation Commission under state design-build legislation (SBX2 4) signed in 2009. This legislation created a transportation design-build demonstration program which authorizes best-value procurements for a limited number of design-build projects. The design-build method combines design and construction work into one contract to expedite the project and potentially reduce costs.
The new bridge will be built with a cable-stayed design. With 200 feet of clearance over the water, the new bridge will be high enough to accommodate the newest generation of the most-efficient cargo ships. And with three lanes in each direction plus safety lanes it will be wider and better able to serve the thousands of cars and trucks that use the bridge each day. A reduction in the bridge’s steep grades for further improvements to traffic flow. Additional improvements include reconstruction of the Terminal Island East Interchange and the I-710/Gerald Desmond Bridge Interchange.
Air Quality Requirements
Anybody who works in the port districts knows they have some of the toughest environmental standards of all southern California construction projects. Here are the rules for this job:
The Los Angeles Times article —“Harbor building boom fueling construction comeback” caught our attention.
Great news, right? Did any of you catch the part about the twin ports of Los Angeles and Long Beach are engaged in a massive $6 billion building binge, getting ready to fend off the competition from Gulf Coast and Atlantic ports who hope to cash in on the expansion of the Panama Canal.
This is on top of the $649.5 million dollar replacement of the Gerald Desmond Bridge. All great news for southern California contractors, so why did the following sentence make us grit our teeth, “We are seeing bids for these contracts coming back 25 percent or so under engineer estimates,” said J. Christopher Lytle, executive director of the Port of Long Beach.
The work at the harbors should be going for a premium—their environmental and equipment requirements alone make work in this compact area the most capital intensive projects for contractors and their suppliers. In addition, all work in the harbor is covered by master project labor agreements, so there is no wiggle room in terms of labor costs.
Included in the project list for Long Beach and Los Angeles ports are major earth-moving and hauling activities such as filling in two abandoned shipping channels to provide additional dry footing for logistics operations; the site work for the bridge project which is separate from the actual bridge construction; the building of three new wharf areas to provide additional docking space and electrification of all of the existing docks…it’s billions and billions and billions times two in new construction. Our fear is it will go for such low prices that contractors and their suppliers will come out of this boom with no more, in terms of profit, than they went into it with.
This harbor work is coming at an odd time. Factories across all economies are witnessing activity declines, as export orders dropped due to the recession in Europe and the overall slowdown in the global economy. Manufacturing in China reached an eight month low in July. Taiwan, South Korea, Japan, and India all experienced the same trend. In fact, the Taiwanese economy is now only expected to expand by 2% versus 3% due to the slump in exports. Manufacturing activity was at its lowest level since last year in most economies. All of the Los Angeles region’s top trading partners across the Pacific Rim have been negatively impacted. The consequences for the local economy will become evident in the San Pedro ports of Los Angeles and Long Beach. It is important for contractors to strike while the iron is hot here…it won’t stay that way.
The ports aren’t the only place where low bidding, low margin work is the rule. Municipal work, which is slowing due to declining local tax bases, is still seeing higher than normal levels of competition. This trend has shown some improvement in recent months with fewer bidders showing up, but as the U.S. economy possibly slips back into recession this will change as well.
CCTA supports the steady work of the Construction Industry Force Account Council (CIFAC) in keeping local government within the bounds of state law regarding force account work.