Western Railroad Discussion > Alameda Corridor article, LA Times

Rail Plan Raises Hopes, Concerns

By JAMES FLANIGAN

A new economy is emerging in the 26 communities from Long Beach to Vernon known as the Gateway Cities, but not without doubts and anxieties over what it means for the quality of life--and work--in the area.
It's an economy heavily based on international trade, which continues to grow at the ports of Los Angeles and Long Beach. And it's an economy that will be spurred and changed by the nation's largest public works project, the $2.4-billion Alameda Corridor, which is proceeding toward an on-schedule opening next April.
The corridor is expected to speed more than $100 billion a year in imports from the ports to rail yards near downtown Los Angeles, or to San Bernardino and Riverside, and on to points across the United States and to Mexico. By putting trains below ground along part of its Alameda Street route, the railway project should ease the traffic jams caused by cars and trucks waiting for trains to pass by.
That will help business at the growing number of warehouses being built in the area to handle the $150 billion worth of imports bound for California destinations and exports coming through Los Angeles.
Modern industry, with its sourcing of parts production in many lands, has spawned an industry called logistics, or the management of chains of supplies from producers overseas right through to consumers in the U.S.
Southern California is the U.S. center for this new business. Recognizing this, Cal State Long Beach is introducing a master of arts degree in global logistics. And Boeing's real estate division is turning some of its old McDonnell Douglas property in Long Beach and Lakewood into an industrial park for information sciences and transportation called Pacific Center.
Yet local city managers and economic development officials are more skeptical than enthusiastic about the Alameda Corridor and the warehouse construction boom.
These officials ask whether the billions of dollars invested to build the corridor, not to mention the more than $5 billion invested to deepen and enlarge the ports themselves, can bring back the kind of jobs that aerospace used to provide in the Gateway Cities.
"We don't want the Alameda Corridor to go through our communities like a straw, leaving us with more truck traffic but few good jobs," says Gerald Caton, city manager of Downey.
The officials' reservations are understandable because the area had a rough decade because of the decline of aerospace defense work. A total of 108,000 jobs were lost in Downey, Pico Rivera, Lakewood, Compton, Lynwood and other cities from 1987 to 1997, says Richard Powers, executive director of the Gateway Cities Council of Governments. Those good-paying jobs have never come back to the area, Powers says.
Instead, the logistics industry, which combines transport, warehousing, freight forwarding and Internet tracking of cargo, has grown tremendously. Logistics employs at least 52,000 workers in Los Angeles County and probably many more among the 275,000 workers engaged in wholesale trade, reports the Los Angeles Economic Development Corp.
Many logistics jobs are demanding and highly paid, but there are fewer jobs than in traditional manufacturing.
For example, New Age Electronics in Carson handles distribution of computers and printers from their points of production in Asia to Costco Wholesale and Sam's Club stores, meeting just-in-time delivery schedules and minimizing inventory costs. New Age employs 108 people in this region, moving about $500 million a year in merchandise through its Carson warehouse. Lee Perlman, company founder and chairman, says he "pays forklift operators $15 an hour, because I need good people."
But operations and wages vary greatly in the area's warehouses. Hudd Distribution, a subsidiary of the Maersk Sealand shipping line, has a sorting warehouse in Carson with 20 loading bays on each side of the building. Freight from the ports is unloaded at one set of doors and bar-coded boxes move on a web of conveyors past computers that assign each box not only to a specific truck but to a specific department at, say, Macy's Lakewood or Bloomingdale's Century City.
"A piece of freight spends one minute inside this warehouse," says Nick Pazdemik, facility manager.
Operations such as Hudd's are partly why merchandise prices have risen so slowly, and why the economy keeps making gains in productivity. But it is not a big employer. The firm employs 15 workers permanently and hires as many as 250 contract loaders and handlers on busy days at wages of about $8 an hour for forklift operators.
So officials of the Gateway Cities, with a work force of more than 800,000, many lacking a high school education, want to attract manufacturing businesses, which tend to offer more jobs, often at higher pay.
The officials point to Pico Rivera's redevelopment of the property where Northrop Grumman built B-2 bombers (and Ford in an earlier era assembled Thunderbirds). The city insisted on some manufacturing tenants on the site. As a result, Pacific Coast Feather, a manufacturer of pillows and mattresses, and Lagosse Bros., a maker of janitorial supplies, will have facilities at the Pico Rivera project.
But such small manufacturers do not employ thousands of workers at wages as high as government-supported aerospace firms did. Larger space in Pico Rivera's project will be occupied by a Boise Cascade paper warehouse and retail facilities--which all cities love because sales taxes pay for city services. Developers also are breaking ground in Pico Rivera on two logistics buildings worth $28 million.
Nearby Downey is seeking manufacturing industry for the site where North American Rockwell built the space capsule, but the best use the unique site has attracted is as a sound stage for movie studios making films, such as "Evolution" and "Spider-Man."
The bottom line is that, if the Gateway Cities are going to get new jobs and major new development, it's going to be tied to trade and the Alameda Corridor. And that's why, despite their reservations, local officials are banking on the corridor and related street improvements to make the area a magnet for logistics operations.
"We recognize that the ports are a great asset and the flow of traffic can be a competitive advantage," Downey's Caton says.
Behind the need for an Alameda Corridor is the growth of trade at Long Beach and Los Angeles.
In the late 1990s, volumes of containers through the ports grew from 3.2 million a year to more than 7 million. Value of trade surged from about $120 billion to $250 billion in the last decade. And the years ahead promise more such growth, even though trade is expected to be restrained this year by the global slowdown.
The Alameda Corridor will open next April to accommodate trains 1.5 miles long. To move containers rapidly from the ports, containers with cargo for the rest of the United States will be sent on special trains directly to Riverside for unloading and sorting. With even average growth of trade, the corridor will be at capacity by 2006, says Jim Hankla, manager of the Alameda Corridor project.
A third rail line can be added at that time to extend capacity, Hankla says. But a third line is not part of the $2.4-billion project that is being funded by revenue bonds, a federal loan, the ports themselves, the Metropolitan Transportation Authority, the railroads and other sources.
The future will see other changes. The ports will work longer hours, adding a second shift, which means warehouse operators also must keep their receiving bays open longer. Container ships will grow more massive and begin to transship cargo, unloading freight at Los Angeles and Long Beach into smaller ships that will sail to other U.S. West Coast ports and to Manzanillo, Mexico, which is shaping up as that country's main west coast port.
International trade now accounts directly and indirectly for more than 1 million jobs in this region, ranging from longshore workers to bankers to forklift operators. All those occupations will grow in number.
And growing global trade will engender other business, say developers of industrial property. Watson Land is erecting multipurpose buildings at its Dominguez Technology Park in Carson. The buildings, served by fiber-optic communications systems, can operate as warehouses today but be converted to office space or research laboratories in the future if need be. "The buildings have a 30-year life," says Richard Cannon, president of Watson Land. "We can't predict their use tomorrow but we can be prepared."
Mike Russell, who is overseeing development of Boeing's Long Beach property, envisions Pacific Center as a place where high-tech firms such as Sun Microsystems and Intel can locate facilities to connect the information sciences to the emerging field of global logistics.
Is such a vision realistic? Anyone who thinks of the history of other great port cities--London, New York, Tokyo--knows that no vision of Los Angeles and Southern California is really far-fetched.


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"To move containers rapidly from the ports, containers with cargo for the rest of the United States will be sent on special trains directly to Riverside for unloading and sorting."

Where is this facility in Riverside?

Isn't there a study being done to possibly extend the corridor to Riverside/San Bernardino County as well?

Fred