Ports digging deep to service bigger ships.

The Port of Los Angeles might pride itself on handling more container cargo than any other facility in the nation, but its smaller neighbor and rival in Long Beach has a head start in accommodating a new generation of larger steamships.

Last month, the Port of Long Beach became the first facility on the West Coast to handle a steamship with a capacity of 8,000 20-foot equivalent units, or TEUs--one-third larger than the more common 6,000 TEU ships.

The largest ships that Los Angeles has handled to date are 7,200 TEUs, and that port won't be able to accommodate the largest ships until late spring or summer 2004, alter a $160 million dredging project that began in January is partially completed.

Right now, waterways in L.A.'s port are only 45 feet deep, and the dredging project, slated for completion in late 2004, will enlarge them to 53 feet. (The new ships need about 50 feet of depth.) Long Beach has a 76-foot-deep main channel, constructed years ago to accommodate oil tankers.

"Long Beach could have handled these in the early 1990s," said Art Wong, spokesman for the Port of Long Beach. "But (ship yards) didn't start building these until right now."

The first ship, aptly name "Long Beach" for its port of call by owner Orient Overseas Container Line, docked at the Long Beach Container Terminal on July 25.

Impact unclear

It's not known whether Long Beach's higher capacity will help make a dent in L.A.'s large and growing lead in handling cargo volume. Steamship lines and terminals want to keep their business plans confidential as long as possible.

In terms of the overall container cargo industry, L.A. remains dominant, handling 615,714 TEUs (20-foot equivalent units) in July, nearly 50 percent more than the 430,687 TEUs moved in Long Beach.

Still, the 8,000 TEU class ships are expected to flood the market over the next three years, and Long Beach is already making moves to capitalize on the trade.

Steamship lines already have 61 more ships on order, with delivery dates scheduled for 2004 through 2006. The ships cost $70 million to $80 million each and take at least 12 months to construct.

The two 8,000 TEU ships now operating primarily work routes between Asia and Europe because U.S. ports don't have the infrastructure to handle them.

Total Terminals International, a joint Long Beach venture of Hanjin Shipping Co. and Marine Terminal Corp., just signed a service agreement to provide stevedore and terminal services with China Shipping Group, which will begin trans-Pacific service using the 8,000 TEU ships next summer.

The agreement also provides a temporary safety net for the steamship line, which is mired in environmental litigation over its yet-to-be-completed L.A. terminal.

"It (ultimately) gives them the flexibility of calling on the Port of L.A. and the Port of Long Beach," said Y.M. Kim, chief executive of Total Terminals. "Their need is greater than the Port of L.A. terminal can handle."

Maersk Sealand's APM Terminals facility is the only one of L.A.'s six terminals ready to handle the largest ships. That's in part because it exists on the outer portion of the harbor at Berth 300.

But the steamship line has delayed ordering any of those vessels and has yet to invite other careers to unload cargo at its terminal.

Generally, ports like larger vessels because they deliver more cargo while emitting roughly the same amount of pollutants into the air as 6.800 and 7,200 TEL ships. Steamship lines also like larger vessels because they deliver a higher amount of cargo in relation to fuel costs.

Ships' drawbacks

However, the move toward 8,000 TEU ships has been slowed by what many say is a pattern of being unloaded a day or two after smaller ships in order to avoid backups. Such a delay is not favorable for importers relying on a just-in-time delivery system.

The larger ships also require terminals with cranes that can reach across 22 containers stacked side by side and have 130 acres of backland to store the containers until they are hauled away.

Most of Long Beach's seven terminals have the infrastructure in place to handle these requirements. However, the Gerald Desmond Bridge, which stands 150 to 155 feet above water, might not allow some of the tallest ships to reach the terminals in the back portion of the port operated by Mediterranean Shipping Co. and Zim-American Israeli Shipping Co.

Meanwhile, the world's biggest shipyards in China, South Korea and Japan already have the next class of ships, with 12,000 and 15,000 TEU capacities, on the drawing board.

"There is an explosion of international trade and commerce," said Capt. Manny Aschemeyer, executive director of the Marine Exchange of Los Angeles/Long Beach Harbor, which tracks vessel dockings. "Everybody in the logistics chain is trying to get economies of scale. It's all driven by the consumer."

In the L.A. port, terminals run by Evergreen America Corp. and Trans Pacific Container Service Corp. will begin accepting the ships next spring or summer if the main channel phase of the dredging project is complete by then.

China Shipping Group's L.A. terminal already has the 22-foot wide cranes in place, but it must resolve a lawsuit won by environmental groups over the lack of an adequate environmental impact report on Berth 100 before any of the equipment can be used.

The L.A. port, which was the target of the suit, does not anticipate the report being completed for another year. (It has also offered a $61 million settlement, with the money earmarked toward pollution mitigation programs, in hopes of helping to resolve the matter.)