Feb 142008

Maritime facilities face toughest challenges

By Francine Brevetti, Staff Writer

OAKLAND — From his corner office at the Port of Oakland headquarters in Jack London Square, Omar Benjamin can keep tabs on the scurry of activity below.The terminals, huge ocean-going ships, trucks and Star Wars-like cranes at the port have been his dominion since he was appointed executive director last year.

Omar Benjamin, Executive Director, Port of Oakland

But Benjamin’s background is not in transportation, it is in hospitality chains and hotel real estate. Possibly the one common thread between his hotel experience and the Port of Oakland is that he has always had to orchestrate the interests of diverse communities and clients.

“When I was appointed … I called for action,” he said.

That’s a directive the port — the fourth largest in the nation — will be fulfilling for a while, considering its challenges.

Before being named executive director, Benjamin served 10 years as the port’s director of commercial real estate — the smallest sector of the port’s operations. Aside from shipping operations, the port also maintains the Oakland International Airport, its largest installation.

A year into the job, Benjamin is just this side of effervescently expressing his prospects for turning the financial fortunes of the port around.

Truly, the port’s finances are in a pickle.

First, it costs importers, exporters and vessel owners more to use Oakland’s maritime terminals than it does to ship through ports in Southern California and Seattle.

To make matters even more challenging, Oakland’s port is repaying a lot of debt while revenue is not keeping pace with its needs.

Benjamin, however, is bullish on the port’s prospects. “It isn’t so dire as it looks because we have strategies in place,” he said.

Still, he acknowledged that changes must be made to improve operations at the airport and maritime facilities. The maritime side is facing the biggest challenges.

Benjamin has already made some administrative changes so shippers face less paperwork and fewer approvals to get the services they need.

In addition, the port is going to place a bigger push on marketing, adjusting its pricing and tailoring services to clients’ particular needs.

Port officials also hope a new maritime director will help turn fortunes.

James Kwon was president and chief executive officer of Total Terminals International in Long Beach until he was appointed maritime director of the Oakland port in September.

At TTI, Kwon increased total revenue by 250 percent — from $2 million to $10 million annually — and container volume by 30 percent for privately held TTI terminals in Long Beach, Oakland and Seattle.

Kwon said congestion at the ports of Los Angeles and Long Beach is high and thinks Oakland could benefit from the overflow.

But it’s going to take a while to turn the Oakland port around. Oakland is losing in the competition for shipper traffic from California’s southern ports, as well as Seattle, in large part because those locations have easy access to rail routes, which helps facilitate ground shipping of products flowing into the ports.

A 1997 report to the Oakland Metropolitan Chamber of Commerce said the port was not performing up to its full potential because transcontinental connections for rail and carrier transport was constrained. A remedy for these limitations has not been addressed, the report said.

The Oakland port — which Oakland officials often call the city’s “economic engine” — has poor rail connections through Donner Pass, Martinez and Tehachapi, the gateways the local cargo depends on.

Benjamin is hoping funds from a 2006 infrastructure bond will help fund construction of better connections, including raising the tunnel through Donner Pass to allow larger trains to pass through. Additional money could also help expand the single-track Tehachapi connection and improve tracks connecting Richmond and Martinez.

In November, the California Transportation Commission devised a formula to allocate as much as $840 million in bond money to the Bay Area and Northern California.

Still, Benjamin said, there is a lengthy application and approval process for the money, and it’s unknown how much money the port may receive — if it receives anything all.

The port also faces challenges regulating emissions from trucks that idle daily outside its gates. Neighbors have complained of higher rates of asthma, and activists say air quality is poor near the port. Port officials are working on a plan they say will help reduce emissions, although that plan — which calls on trucking companies to hire drivers rather than use them as independent contractors — is opposed by trucking companies.

Meanwhile, Benjamin said the airport, which draws 50 percent of port revenues, is also ripe for change.

“We have 15 million people moving through a facility built for 5 million,” said Benjamin, who has proposed improvements to customer service, roadways, and parking and terminal facilities.

Despite the challenges, he said the port is well-positioned to meet the future.

“I would be concerned if we were not taking a proactive approach about addressing the challenges we face and meeting the opportunities,” he said.

Early in his administration, however, some criticized Benjamin for being overzealous with some of his proposed changes. Now, though, those voices appear to have quieted.

“He has the capacity to create change,” said Commissioner Darlene Ayers-Johnson, an early critic.

 Posted by at 2:23 pm

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