In September 2018, California Governor Jerry Brown signed State Senator and US Senate candidate Kevin de León’s SB 100, which mandates that the state obtain all of its electricity from zero-carbon sources by 2045. Governor Brown also issued an executive order calling for the entire California economy to become carbon-neutral by 2045.
To put this into an international perspective, to stay below the Paris climate threshold of 2°C global warming above pre-industrial temperatures, the world must become carbon-neutral by 2060 or 2070. If California can meet Brown’s target, it will be providing the rest of the world with a blueprint for meeting the Paris target. As the world’s fifth-largest economy, California can provide a powerful roadmap for others to follow.
To this end, Toyota plans to bring a large and powerful fuel cell plant, of some 2.3 megawatts and has chosen the Port of Long Beach to site the facility. I ask Mario Cordero, Executive Director of Port of Long Beach how this groundbreaking deal was negotiated and approved.
"This is a project that Toyota Logistics Services applied for and was granted a harbour development permit for here at the port, back in 2016. On the port side, this drove us to move forward with an initial study and mitigated negative declaration, which is pursuant to the California Environmental Quality Act. The Port's role was to make sure that the proper documentation process was followed, as required by the State of California."
The cost of this novel type of infrastructure will be considerable, and Cordero explains that Toyota is funding the whole project. "It is totally funded by Toyota; the Port has no investment in the development. The footprint of the new facility will take up some of Toyota's existing space, with its one large building."
The Port of Long Beach already has processing buildings, a body shop and a car wash for Toyota, built by The Pasha Group and Toyota, and I ask Cordero if the fuel cell facility will prompt any further preparation areas for the Japanese
carmaker. He says there are no immediate plans for expansion. "There are no plans for further facilities. We have no capacity issues at this particular terminal now and we do not foresee any lack of capacity."
I ask Cordero if he can foresee some sharing of the fuel cell facility but he says it is completely in Toyota's hands. "This operation will be totally Toyota at present, what the future will bring, with more and more fuel cell vehicles coming through the port, I cannot predict!"
After many years of speculation, it seems that fuel cell vehicles are moving towards being the 'vehicles of tomorrow' and I ask Cordero if the Port of Long Beach has plans to offer this type of facility to other carmakers or service
companies. "We have no other terminals with other carmakers so this project is in isolation at present. Of course, the State of California has a very aggressive fuel cell programme; by 2020 it hopes to have 200 fuelling stations
across the state. By 2030 the goal is to have 1,000 stations and currently the state is the leader in fuel cell vehicles; at present there are 5,000 on the road.
"There certainly is the potential for the Port of Long Beach to roll out similar facilities for other carmakers; as you may know, the port is considered to be an advanced environmental steward and we have a goal of zero emissions, both in regard to our cargo handling equipment and trucks for container transportation. In calendar terms, we aim to have zero emissions on the cargo handling side by 2030 and by 2035 all the container trucks will be zero emission and fuel cell technology is a vital component to meeting that objective."
I ask Cordero to sum up what makes a port attractive to a demanding customer like Toyota, is it the size of the berths, the depth of water available, the proliferation and location of processing areas? He says that there are four strong points in the Port of Long Beach's favour. "Number one is our effort to provide outstanding customer service; number two, we pride ourselves on having world-class facilities; number three, we believe we have the best rail infrastructure on the West Coast, particularly in the southern California region, and number four is that California is one the largest, if not the largest, car market in the US. I think those four factors are very attractive to OEMs and in the case of Toyota we have a very long-term partnership with them and this is one of the longest-lasting partnerships in the industry."
I ask Cordero about the rail companies that Port of Long Beach works with and what improvements to railhead infrastructure might we see in the future. "We have here two Class 1 railroad companies, BNSF and Union Pacific, who move freight from the port across the state and across the US. The Port of Long Beach has prioritised railroad infrastructure in order to further improve our on-dock capability. Our harbour commission has appropriated approximately $1 billion for this and the first project is what we call the Pier B rail project. Our goal is to move 50% of containers that come in by rail. I would admit that this is a long-term goal and I cannot give a precise timescale but given the high cargo numbers we have had, for example in 2017 we moved 7.5 million containers, the most in our 107-year history and we have continued that growth trend in 2018."
While some vehicles are containerised, the majority are roll-on roll-off and I ask Cordero about the numbers in this segment and how speed and capacity of unloading at the port can be improved. "The Pier B project is intended to improve
speed and efficiency in finished vehicle handling, to build on our position as already having the largest and best rail infrastructure in the US; we are not resting on our laurels, we will continue to invest.
"One of the ways we will do this is to invest in on-dock rail to allow vehicles to load almost straight from the ship into a railcar."
Many industry insiders have mooted the greater use of short sea shipping to relieve some of the pressure on rail and road networks all over the world and, with California's vigorous truck and other emissions initiatives in mind, I ask Cordero if he sees advantages in this. "Looking at finished vehicle transport in the US, I do not see any real trend towards short sea shipping and the reason for that is the influence and effects of the Jones Act. Due to this legislation, international carriers have to transload their cargo to US-registered vessels and I am not sure that the industry is ready to make that change, for cost and convenience reasons. However, short sea shipping is an attractive way to move cargo but given the Jones Act I don't see more of it happening any time in the future."
As a general question, I ask Cordero what he sees as the greatest challenges facing ports and port operators in North America and he talks of how volumes are moving beyond the capacity of most ports to handle the workload in a single
daytime shift. Port of Long Beach has had a two-shift operation for more than 12 years, while other ports in the US tend to opt for a partial extension of their gates. "I would like to see some solutions to the issue of moving
containers faster and around the clock. I would like to see an industry-wide 24 hour, seven days a week mindset. I would admit that as with on-dock rail, I don't see this happening any time in the near future but I do see that
we will expand night gates in order to move cargo faster and more efficiently. So, in two words, the solution catchphrase could be 'maximise efficiencies' as ultimately every cargo owner wants a gateway to be fast, reliable and
predictable. One of the most interesting topics to emerge recently for the industry overall has been digital transformation, which is exactly what we are doing at the Port of Long Beach."
With issues such as the Jones Act in my mind, I ask Cordero where he sees legislative change and help coming from; from Capitol Hill or from the state legislature of California. He says that he wants to see change and help to come
from state and federal level. "We have great partnerships in Washington and here in Sacramento (the state capital of California), over the years we have seen support in moves such as grants that we have received from the state
and from the federal funds, we have seen environmental technology initiatives that have helped us and some operational improvements. The more governing bodies assist us in improving efficiencies in rail, the better everything is,
for stakeholders and for moving cargo generally both in the state of California and across the US."