Archive for Wednesday, March 23, 2005

K.C. seeks to serve as hub for cargo

Plan would cut shipping times for Asian imports

March 23, 2005


— Despite sitting more than 1,300 miles from the Pacific Ocean, Kansas City is looking to become a new U.S. gateway for Asian imports.

Representatives of the Mexican port city of Lazaro Cardenas pledged their support Tuesday for a plan to develop an "inland port" in Kansas City, which would process cargo containers unloaded in Mexico and transported to Kansas City by rail.

The idea is to help shippers avoid the bottlenecks at the leading Pacific ports of Los Angeles and Long Beach, Calif., which are struggling to keep up with Americans' growing taste for goods made in China and elsewhere.

"If you look at the big picture, you have capacity issues, congestion issues, time delays -- all these things are facing us," said Chris Gutierrez, president of Kansas City SmartPort Inc., a nonprofit organization pushing to establish the inland port. "What Kansas City offers is great infrastructure that is not at capacity and is directly connected to Lazaro Cardenas."

Lazaro Cardenas handles about 250,000 cargo containers a year, making it one of the smaller ports in Mexico. But experts say current expansion efforts could increase that capacity to 2 million containers annually within the next five years.

By comparison, 9 million containers move through Los Angeles/Long Beach and that amount is expected to grow at least 10 percent this year.

Cargo now takes more than a week to move from Lazaro Cardenas to Kansas City by rail, but the company that plans to own those lines says it can speed that up as more freight moves through the system.

"Fortunately for us, (capacity) has not been a major problem," said Warren Erdman, vice president of corporate affairs for Kansas City Southern, which is in the process of buying the formerly state-owned Mexican rail line Transportacion Ferroviaria Mexicana.

The quest for an inland port began in the late 1990s as Kansas City leaders looked to take advantage of the city's historic role as a major transportation hub. It is the second-largest rail center in the country, and U.S. Customs agents already clear more than $9 billion in imports a year moving through the city.

Officials plan to build a processing center for breaking the containers into smaller loads to be taken to their final destinations by truck, plane or rail. Mexican officials also plan to build their own customs office to check shipments headed from the United States into Mexico, a move that could come this fall, Gutierrez said.

He added that the first pilot shipments for the inland port system could begin next month, although local leaders are working with the U.S. Department of Homeland Security to complete procedures to make sure containers can't be tampered with between the port and Kansas City.

Marc Hershman, of the University of Washington School of Marine Affairs, said shippers increasingly were interested in alternative shipping locations as a hedge against cost increases, labor shortages and delays.

"It's not just the congestion in the Los Angeles/Long Beach area," he said. "It's also to have as many options as possible."

But some are not yet sold on the idea. Ezra Finkin, a spokesman for The Waterfront Coalition, a Washington, D.C.-based group that represents retailers and manufacturers, said the system sounded slow.

Mexican ports are farther from Asia than California, the Mexican transportation infrastructure is spotty in places and processing in Kansas City would take time, he said.

"You'll have a very hard time convincing the big cargo owners that they'll save any money doing this," he said.

Chris Kuehl, of Kansas City-based international trade consultant Armada Corporate Intelligence, said predictability of shipments was valuable, too. He expects resistance to the longer route to diminish as long as California ports continue to see delays of up to two weeks.

"Even though it may take a week to get to Kansas City, you know it's going to take seven days, not 10, not 15," he said. "You can plan on it."

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