Initiatives in Landmark TraPac Lease to Boost Economy, Improve LA Basin Air Quality

SAN PEDRO, Calif. — August 13, 2009 — The The Los Angeles Board of Harbor Commissioners today approved a long-term lease for the TraPac, Inc. container terminal at the Port of Los Angeles, a precedent-setting action that demonstrates the long-term commitment of TraPac and their parent company Mitsui O.S.K. Lines, Ltd. (MOL), to the Southern California market.  The agreement paves the way for the completion of the TraPac terminal expansion project, creating thousands of jobs in Southern California over the coming decades, while reducing emissions and improving regional air quality.

Expansion of the TraPac facilities is projected to generate 300 new terminal jobs, 2,800 construction jobs at the peak of construction and as many as 5,433 regional jobs annually that will be related to terminal operations at full build-out.

“We commend TraPac for making this long-term commitment to the Port of Los Angeles and our neighboring communities during these most difficult economic times.  We value MOL as a business partner and look forward to a long and beneficial relationship,” said Geraldine Knatz, Ph.D., the Port’s executive director.  “For years before the Board certified and adopted the environmental impact report for the TraPac expansion, green growth at the Port of Los Angeles was just a concept. TraPac’s new terminal and lease permit puts us on a very real course to cleaner air and economic growth.”

“TraPac is pleased that the lease negotiations with the Port of Los Angeles over the last four years have culminated in an agreement which will transform one of the most obsolete container terminals on the west coast into a state-of-the-art facility by which TraPac will be able to implement cutting edge environmental mitigation technologies.  The improvements to TraPac’s terminal in the Port of Los Angeles will finally allow TraPac to compete on an even playing field with the other terminals in the San Pedro Bay and position our company to continue its leadership of efficient land use and container terminal operations in the most environmentally friendly manner possible.” said Hideyuki Sadamatsu, president of TraPac “However, continued support and cooperation from the Port of Los Angeles, local government, and the community are needed if the economic benefits of the shipping industry, which have been enjoyed for so long by the region, have any chance of returning to their previous levels.” 

The 30-year lease, a model for future terminal expansions under the San Pedro Bay Ports Clean Air Action Plan, is an agreement between the City of Los Angeles and TraPac wherein TraPac will implement a variety of mitigation measures in addition to its current efforts to reduce the environmental impact of its operations at Berths 136-147. These additional measures include efforts to reduce air emissions, greenhouse gas emissions and energy use. 

TraPac’s additional efforts in the area of environmental stewardship include the following mitigation measures:

  • Use of Alternative Maritime Power (“AMP,” also known as cold-ironing) for container ships that call at TraPac;
  • Participation in the Port’s Vessel Speed Reduction Program to reduce emissions from ships transiting within 40 miles of the San Pedro Bay;
  • Use of engines ensuring fuel efficiency level equivalent to that by using slide valves, to reduce emissions from their main engines;
  • Use of clean yard tractors and equipment in the movement of cargo containers; and
  • Compliance with the Clean Trucks Program, an initiative currently underway to replace or retrofit port drayage trucks to meet 2007 EPA emission standards by 2012.

When fully completed, the environmental measures to be implemented by TraPac during its terminal expansion will reduce emissions of nitrogen oxide (NOx) by 62 percent, sulfur oxide (SOx) emissions by 62 percent and particulate matter (PM) emissions by 57 percent below 2003 baseline levels.  At the same time, the terminal expansion and modernization effort will increase TraPac’s space from 172 acres to approximately 226 acres, including 4,600 linear feet of wharf area.  By 2025, the modernized facilities will have capacity up to 2.4 million twenty-foot equivalent units.

The five-year, $245 million TraPac expansion will deepen the waterside at Berths 144-147, upgrade approximately 50 additional acres of existing land to modern container handling backland standards, and construct a new on-dock rail facility. Surface road improvements and a new main gate configuration will also improve traffic flow into and out of the terminal facilities, and an energy-efficient administration building will be constructed to meet LEED “Gold” standards. 

TraPac will be eligible to receive $1.5 million from the Port’s Technology Advancement Program to implement emissions treatment technologies that will capture ship emissions in lieu of AMP for container ships that call at the terminal but are not retrofitted to plug into shore-side electric power.  The cost of retrofitting ships is a major challenge at a time when the steamship industry has been hit especially hard by recession-driven declines in cargo volume and revenue.

Founded in 1985, TraPac opened its current operations at the Port of Los Angeles in 1987.  TraPac’s parent company, MOL, has 125 years experience in shipping industry since 1884. Its business relationship with the USA dates back to 1909, when it opened the Hong Kong/Tacoma service with the TACOMA MARU. MOL currently operates a fleet of approximately 860 vessels, which includes container ships, dry bulk carriers, tankers, LNG vessels and car carriers.   

The TraPac terminal expansion and related improvements will be performed in three phases to ensure that terminal operations continue throughout construction.  The first phase of construction, currently underway, includes wharf extension, backland development and the creation of a one-mile, open-space Buffer area between the TraPac terminal and the Wilmington community. 

The Port of Los Angeles, also known as “America’s Port,” has a strong commitment to developing innovative strategic and sustainable operations that benefit the economy and the quality of life for the region and the nation it serves. A recipient of numerous environmental awards, including the U.S. Environmental Protection Agency's 2007 Clean Air Excellence Award, the Port of Los Angeles is committed to innovating cleaner, greener ways of doing business. As the leading seaport in North America in terms of shipping container volume and cargo value, the Port generates 919,000 regional jobs and $39.1 billion in annual wages and tax revenues. A proprietary department of the City of Los Angeles, the Port is self-supporting and does not receive taxpayer dollars. The Port of Los Angeles - A cleaner port. A brighter future.