Port of Oakland gets good news on terminal expansion and bond ratings

Two recent developments signal a healthy future for the Port of Oakland.

According to port spokesmen, intermediate lien revenue bonds have been upgraded by Fitch Ratings to A from A-.  Fitch has also affirmed the A+ rating on the Port’s senior lien revenue bonds.  The rating outlook for both liens is stable.

Fitch issued its rating update October 14.  It said the ratings reflect diverse revenues from the port's aviation, maritime, and commercial real estate operations.

It also stated that the port benefits from its sizeable enplanement base and maritime cargo operations within the large, economically diverse, and wealthy San Francisco Bay Area.  Fitch said the upgrade of the intermediate bonds also reflects the port's progressive deleveraging and debt service coverage ratios having exceeded the rating agency’s base case expectations.

In an earlier development, the port announced that TraPac, LLC has reached agreement to nearly double its marine terminal size at the Port of Oakland.  Wilmington, Ca-based TraPac said it plans to lease an additional 57 acres and two vessel berths on the Port’s Outer Harbor.   

If the deal is approved, it would greatly strengthen TraPac’s position as the second-largest terminal operator in Oakland. 

TraPac disclosed its plans at a meeting of Oakland’s Board of Port Commissioners last week.  The proposed 14-year lease agreement with the Port becomes final if the Board approves it at a meeting Oct. 27.

“This is a significant step forward for TraPac and the port,” said Port Maritime Director John Driscoll. “TraPac gets room to expand its thriving business and the Port gets to revitalize valuable property with a highly respected tenant.”

Marine terminals load and unload containerships in Oakland.  They release containerized imports to cargo owners.  They also accept exports for overseas shipment.

TraPac handles 20 percent of the containerized cargo moving through the Port of Oakland.  It manages two vessel berths and 66 acres of land.  Under the new agreement, it would have four berths and 123 acres.   Much of the land would be used for cargo handling.  That’s expected to be increasingly important as volume grows at the Port.  With more acreage, the terminal can implement new procedures to improve efficiency and get containers in-and-out of Oakland faster.

“Our business is growing and placing new demands on our operations,” said TraPac Oakland General Manager Mike Porte.  “With this new agreement we can meet the demands and the service expectations of our customers.”

TraPac is one of the nation’s best-known terminal operators.   It began Oakland operations in 1991.  It manages other terminals in Los Angeles and Jacksonville, Florida. 

According to the port, TraPac will invest to upgrade and modernize the new terminal acreage under its control in Oakland.  Among other things, TraPac plans to construct a new gate to give harbor truckers better access to the terminal. 

“With this expansion, we’re demonstrating our long-term commitment to Oakland,” said Porte.  “TraPac and the port share a common value – good customer service – so we see this partnership growing even stronger over time.”