THE PORT OF REDWOOD CITY DREDGING ISSUES

1
THE PORT OF REDWOOD CITYDREDGING ISSUES IMPACTS

• June 2005

2
The Port of Redwood City

• Critical Bulk Cargo Port
• Imports Serving the South Bay Construction
  Industry
• Aggregates (British Columbia)
• Bauxite (Australia)
• Cement (China Indonesia)
• Gypsum (Mexico)
• Scrap Steel Exports
• Over 75 Growth in Tonnage Since 2000 (1.8 M Tons
  in 2004)
• Expected to Grow to over 2.2 M Tons in 2005
• Limited Channel Depth is a Severe Constraint

3
The Port of Redwood City The Demand for a
Deeper Channel

• Most vessels calling at the port require 33 of
  draft or more (on top of pilot-required 2
  under-keel clearance)
• Channel authorized at 30, but currently only
  27.7 deep
• Vessels cannot come to port fully-loaded
• Logistical challenges and added cost as a result

4
Coping Strategies for Limited Channel Depth
Redirecting to Other Bay Ports is NOT an Option

• Ports of Richmond and San Francisco serve their
  own markets
• Trucking would add tremendous cost (one customer
  estimates 1.8 million annually).
• Trucking would clog already-congested Bay Area
  freeways with over 4000 daily trucks
• Rail service not economical from north bay to
  south bay

5
Coping Strategies for Limited Channel Depth

• Riding the Tides
• Lightering
• Light-Loading
• Topping Off

6
Estimated Cost of Coping In 2005

• Gypsum 210,000
• Cement, Aggregate, and Bauxite 1,788,000
• TOTAL 1,998,000
• Scrap Metal Potential additional dockage
  4,000/day
• 14 voyages at 31 ft. instead of 13 voyages at
  33 ft.
• All tenants, for each commodity, liable for
  approximately
• 1,000/hour demurrage for any delays to ships

7
The Cost of Coping

• Port tenants use various coping strategies but
  still incur excess shipping costs.
• Long-term growth dependant upon these bulk
  commodities may be limited
• The port is less attractive to new tenants
• As the silting continues the costs will rise

8
Dredging Is Cost-Beneficial

• Restoring the 30 draft would cost roughly 3.5
  million, with 800,000 in annual maintenance
  thereafter.
• Dredging costs would be quickly offset by
  shipping cost benefits.
• A dredging program would yield benefits with Net
  Present Value of roughly 10.8 million over the
  next ten years.
• The estimated benefit-cost ratio would be 2.17.

9
The Port Of Redwood City Depends On Dredging

• To Serve its Tenants
• To Serve the Construction Industry
• To Support the Economy
• To Keep Trucks Off the Freeways