Port an exporting king | Recordnet.com

Port an exporting king | Recordnet.com

Port an exporting king
Stockton facility puts a dent in U.S. trade deficit
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A large pile of sulfur grows at the Port of Stockton on Thursday morning. It is a major export commodity at the port.
MICHAEL MCCOLLUM/The Record

By Reed Fujii
Record Staff Writer
December 18, 2011 12:00 AM
STOCKTON - While the United States runs a perennial trade deficit, the cause of much hand-wringing among economic experts, the Port of Stockton looks to put a small dent in that with a trade surplus for 2011.

Due largely to the emergence this year of a significant cargo - iron ore mined in Utah and destined for smelters in China - the port reports handling 1.36 million metric tons of export products vs. 1.29 million metric tons of imports through the first 11 months of the year.

It's already a record year for export shipments out of the past 20 years, Port Director Richard Aschieris said.

"I believe we're the only (West Coast) port that is now exporting more than we're importing, and the trends look to continue well into the future," he said.

Iron ore leads

"Iron ore right now is the dominant export," Aschieris said. "We've had a nice year in some of the other commodities, but iron ore by far is more than triple No. 2."

Through Nov. 30, iron ore shipments that began in January totaled more than 777,000 metric tons, while sulfur and rice, the port's second- and third-largest commodities, respectively, were tallied at 216,000 and nearly 207,000 metric tons.

A metric ton is a little more than 2,200 pounds.

Aside from iron ore, the port did a strong business in exports. Other commodities totaled nearly 587,000 metric tons through Nov. 30, more than any full year in the previous five years.

"It's another bit of good news for us," said Jeff Michael, director of the Business Forecasting Center at University of the Pacific.

"It's certainly unusual ... in the U.S. to be exporting more than it's importing," he said.

"To some extent, it reflects trends in the global economy," Michael said. "Exports have grown more rapidly than imports."

A changing world

The switch also reflects global construction trends, he noted.

Before the U.S. housing bubble burst, the Port of Stockton in 2006 recorded a record year for shipping volume, including nearly 2.2 million metric tons of cement imports.

Now, even as America's construction industry remains stagnant, China continues to build and import ore to feed its need for nails, screws and reinforcing steel.

"If these materials are going to be going to China from the U.S., let's ship them from the Port of Stockton. It's great," Michael said.

One factor contributing to the port's export boom has been railroad improvements, particularly since the acquisition of the former Rough and Ready Island naval base in 2000, Aschieris said.

The port has the capacity to handle up to three so-called unit trains - mile-long trains usually carrying a single commodity such as coal, iron ore or wheat.

And the port is investing in additional capacity.

"We have one under construction right now," Aschieris said. "The overall project is valued at $1.4 million. The port is investing about $600,000 of bond money, and then the railroads are contributing the other half."

When completed, the port's rail capacity should rise to five unit trains per week.

And Aschieris expects another boost when a planned barge service begins to shuttle cargo containers - which account for the greatest volume of maritime shipping - between Stockton and the Port of Oakland.

Giant cranes to handle the cargo containers are due to arrive at the port early next month, and what's been called the marine highway project should go into operation in February.

"I think we'll do very well in the export side of the barge trips that will go on initially," Aschieris said. "In the first phase of the marine highway, we'll be handling products that are developed in the San Joaquin Valley. Then those products will come here and be exported via barge to the Port of Oakland.

"We already have a couple of tenants that have located to the port that export commodities that are intent on using the marine highway," he said.

"Over time, you'll probably see the barges come back from Oakland with import containers."

Port officials have been considering such a container shuttle service - receiving containers carried by truck and then shifting them to rail or barge for the final trip to Oakland - for nearly a decade.

The 2009 federal recovery act, which provided a $13 million Transportation Investment Generating Economic Recovery grant, and $750,000 from state clean-air officials are turning that long-held dream into a reality, Aschieris said.

"We were never able to afford the investment up front. But with the TIGER grant and with the grant from the air board and with the ... cooperation between the Port of Stockton and Port of Oakland, ... that service is going to be able to happen," he said.

Pacific's Michael said he expects the marine highway project to help boost the region's economy.

"It has a lot of potential, ... not transformative of the economy, but it certainly adds a new capability to the region," he said. "It could become a more diverse group of products moving both in and out of the port."

The barge shipping could also supplant trucking to the Port of Oakland, helping ease highway congestion and air pollution, which helped attract the clean-air funds.

"It's an investment that could yield a whole lot of benefits, both economically and environmentally, and otherwise," Michael said.

Contact reporter Reed Fujii at (209) 546-8253 or rfujii@recordnet.com.