Oakland – Insight Terminal Solutions and Phil Tagami’s Oakland Bulk and Oversized Terminal or “OBOT“, has been the focus of City of Oakland claims that a newly surfaced report shows are completely false. The City of Oakland’s City Attorney has asserted in writing that it did not know coal was to be one of the commodities handled in the planned facility until 2015.
But a report called the Tioga Report (because it was written by Stephen C. Nieman Principle with The Tioga Group, an American freight and logistics transportation consulting firm still active today) which was under contract with the City of Oakland in 2012 and hired specifically to evaluate the market potential for OBOT) that was provided to Zennie62Media by a source associated with content client Insight Terminal Solutions shows the following (Zennie62Media was hired by ITS to get out content on OBOT that was and has been ignored by the mainstream media):
1. That not only did the City of Oakland know the Insight Terminal Solutions Oakland Bulk and Oversized Terminal was to handle commodities including coal, the City of Oakland was directly involved in the pre-development planning for OBOT as far back as 2011.
The point in number one above ads to the Oakland News Now news of another document presented by a source and about the City of Oakland in the form of Elizabeth “Betsy” Lake signing off on a 2013 development agreement that specifically referred to coal as one of the commodities the OBOT was expected to handle.
Signs that the City of Oakland knew coal would be one of the many bulk commodities to be handled by the Oakland Bulk and Oversized Terminal are all over. The idea that even the Oakland City Council didn’t know that coal and iron ore were part of the plan is countered by this 2012 interview this vlogger conducted with then CEDA Director Fred Blackwell. Listen to the part where Mr. Blackwell says that iron ore, which is used with coal to make steel, is one of the commodities to be shipped:
It was not until after 2014, and when now U.S. Presidential Candidate and Billionaire Hedge Fund Investor Tom Steyer (who’s also a noted coal industry and private prison investor) started spending part of his fortune on altering the California political climate (including Oakland’s starting with Mayor Libby Schaaf) to go against traditional industry, that Oakland took the stance against the Insight Terminal Solutions CCIG OBOT that was presented by the City Attorney.
What follows is the text of the actual TIOGA study. Keep in mind that it was really designed to measure CCIG’s ability to build and run OBOT. The report set the bar for Phil Tagami, and in securing Insight Terminal Solutions, Tagami surpassed the bar – much to the surprise of the City of Oakland.
Never under-estimate Phil Tagami;The City of Oakland has done that, and on too many occasions – that in total disregard for the many ways Phil has helped Oakland. Here’s the Insight Terminal Solutions / Phil Tagami video:
And on the matter of coal itself, Insight Terminal Solutions CEO John Siegel explains why there’s no such thing as “dirty coal”:
The Tioga Report By Stephen C. Nieman of The Tioga Group For The City of Oakland
Here’s some excerpts from the actual Insight Terminal Solutions OBOT market potential report called the Tioga Report and written by Steve Nieman of The Tioga Group for the City of Oakland’s Community and Economic Development Agency (CEDA) and its project manager Pat Cashman. The entire report is a Scribd file embed here at Oakland News Now.
Here are the Tioga Report excerpts (a note that the paragraph breaks were installed by this author for better readability over the original document):
The City of Oakland expects to become the owner, but not the operator, of new facilities that will occupy the space presently owned and operated by the Port of Oakland in the new, West Oakland Gateway development.
In particular, the facilities that are the topic of this report are what are presently known as Wharfs 6-1/2 and 7 plus the railroad right of way currently known as the Oakland Terminal Railroad (OTR) spur between Wharfs 6-1/2 and 7 and a) its rail connection with the Union Pacific Railroad (UPRR) and b) to/from a proposed new rail yard (not yet named) to be constructed by the Port of Oakland (Port) as part of the site of the former Oakland Army Terminal as recently acquired by the Port.
Five parties have created a development project for the space in West Oakland. The project is known as West Oakland Gateway with Oakland Global as the trade name for the activities on the site, and the project participants are known as the CCIG Team. They include California Capital and Investment Group (CCIG), the City of Oakland through its Community and Economic Development Agency (CEDA), the Port of Oakland (Port, also technically a City of Oakland department), ProLogis (formerly AMB), and Ports America (PA). Concurrent with this development in the West Gateway region of the City, the Port and PA are implementing a complimentary development at the Port.
Hence, the CCIG Team development (Oakland Global) and the Port’s development are interdependent including a proposed, new (unnamed) rail storage yard on the Port’s property. As for the portion being developed by the CCIG team, Oakland Global, the two key components that are the topic of this report are the facility at Wharf’s 6-1/2 and 7 to be known as Oakland Bulk and Oversize Terminal (OBOT) and the switching railroad to be known as Oakland Global Rail Enterprise (OGRE).
Apparently, CCIG’s business model for both OBOT and ORGE involves hiring management (as either employees or independent contractors) for both enterprises. Apparently it has already selected advisors and/or companies to provide the management of these services e.g. Stone, IRC, HDR, Kinder Morgan, etc.
Similarly, apparently CCIG and its advisors have made some inquiries and maybe some commitments to such manager/contractors. The services that might be provided by OBOT and OGRE could be import, export, or domestic. Domestic includes either to/from a) U.S. states and territories that are off-shore, accessible by a deep sea ocean carrier operating either barges or deep draft vessels, or b) states that are accessible by coastwise barge and vessel services.
The presumption here is that only international (export/import) cargos will be involved due to the OBOT facility having deep-draft, deep-sea capability. There will likely be opportunities for domestic services, too, but those are not contemplated here, at this time, because such is not the stated purpose of Oakland Global.
CEDA has asked The Tioga Group, Inc. (Tioga) to provide this report as its assessment of the business prospects for OBOT and OGRE, a market overview. The scope is to provide a very broad, but not deep analysis, for the purpose of isolating factors that are a threat to the success of OBOT and OGRE and which may require additional analysis. Tioga’s scope is to do this without creating new data or analyses but with the cooperation of the CCIG team as protected by a Non-Disclosure Agreement (NDA).
Proof that Insight Terminal Solutions Oakland OBOT was to handle commodities, including coal, far before 2015
This is a very long list, not fully enumerated here, of conditions that prevail in international trade. They run from the very political and self-serving considerations of local taxes to international relations between countries that may have a history for aggressive trade wars.
Some of these are: Dealing in worldwide commodities. So-called “place utility” is a key consideration. The availability of an alternate supply of a commodity will always create a cap on the delivered cost for fear of losing the movement to an alternative source location even if the same BCO.
It also involves the risk of “missing the market” whereby the local price/sale of the goods involved is lost. Vulnerability to international rules and regulations. Understanding and complying with multitudes of foreign (and foreign language) laws, rules, regulations, and interpretations is a special skill that requires constant, on the ground updates and advisories.
Vulnerability to international relations between countries ranging from armed conflicts to retaliatory tariffs and abusive administrative practices. The need to have a local, connected agent that will have to cope with local conditions, to and including bribery.
Awareness of the availability of capacity of the correct/best type of ships to make an international voyage. For instance, for lack of participation in bulk and oversized cargos at any port in Northern California, the lack of such ships arriving in northern California ports inhibits the availability of capacity for exports.
Similarly, prices for ship capacity can fluctuate wildly based on international conditions and to the point that the ship cannot be procured on either a long-term contract rate or a daily spot rate at a price that allows a profit on the sale by the BCO.
Participating in an industry that because of a multi-step activity chain has a history of cross-subsidizing local services with the “big money” of operating the ship. Not being able to access project financing due to international monetary controls; and/or having to rely on an agency of the U.S. government to secure competitive terms for its assistance in obtaining financing through some agency such as the U.S. Import-Export Bank.
U.S. politics, as examples: o The current emphasis on the economic benefit of exporting locally produced goods is politically popular; such is not always the case. o Conversely, federal funding for channel dredging is fraught with personalities and national budget complications much less local biases. The Jones Act that requires that transportation by the water mode between two U.S. ports must move in ships built in the U.S. and crewed by U.S. citizens is simply so costly (rates, not efficiency) that it is a protected business where entry is virtually impossible and certainly impractical.
For this report, the point is: this will be a business dependent on favorable terms which are completely out of the control of the principals involved. Economics of scope (reach, by mode) Moving to the specifics of this opportunity, the concept of geographical scope is exceptionally important. It is the most basic measure of how a given location can be competitive based on the mode of transportation involved and the local geography. It is intuitive once explained. But, it must come from an operator, not a customer or third party provider.
Size or scale can be measure in a number of metrics. For practical purposes here, the four involving the OBOT site that are most important are operating hours of the day, length of the wharf, acreage of usable backlands, and interchangeability of loading devices and storage space.
The two involving the OGRE are switching moves required and speed of dumping a railcar load. The count of switching movements gets complex. Hence, a comparison to optimal helps. For unit trains of bulk commodities if the rail switching service to/from the OBOT wharfs were ideal it would have two characteristics.
One would be that for bulk commodities the train movement would involve a large loop track over which the individual railcars (whether in a mixed train or in a unit train) could be push over the unloading/loading site and each dumped/filled in a single action. Hence, the time OGRE spent switching and spotting cars would be minimized. Yes, this would require unloading/loading equipment on the wharf that was exceptionally efficient, too. Also, it would require a sufficiently long lead track that could hold a whole unit train while it awaits shuttle to/from the OBOT site.
Instead the planned OGRE switching activity is much longer in cycle time and the lack of a tail track extending west from the OBOT shed on the wharf is a severe limitation as to the location of the dumping/filling equipment. Subject to more information it would appear that such a tail track is not contemplated and if it were to be added could be no more than ten cars in length thereby limiting the number of cars in a cut to be shuttled by OGRE between the dump site and the new rail storage yard being erected by the port to about ten in a cycle.
This contrasts with coal and grain trains of up to 121-125 cars in length being handled in one move with road locomotives only (no local switching engines but with local crews. The activity of accumulating bulk inventory in an on-dock storage device (bin, silo, elevator, even a pile on the ground) prior to loading for export or after unloading for subsequent movement beyond (import) is known as dwell.
Dwell is an inventory buffering technique that must be available alongside the ship. It serves to minimize the time the ship is at the wharf, hence minimize the cost of loading/unloading the ship. For unit trains of wheeled vehicles, the ideal configuration likely would be a set of short stub end tracks, maybe 8-10 of them that could hold 6-10 railcars each so that the wheeled vehicles on the railcars could be unloaded (export) or loading (import) from auto rack rail cars through the end of the cars off the back end of the last/first car with a set of vehicle ramps permanently in spot.
If the wheeled vehicles were oversized, then they would not be capable of moving over a bridge between cars. Hence only the first/last car could be place on the last car spot position on each of the 8-10 stud end tracks.
But, more importantly, there would be a need for considerable acreage on which to place the wheeled vehicles (of whatever type) awaiting enough for a full load for a roll-on, roll-off (RO-RO) vessel that loads/unloads by driving the vehicles onto (export) off of (import) the decks in the ship. Two points are important, there is not sufficient acreage at OBOT for this activity unless there was no other activity occurring and one land of Burma Road could be available for parking vehicles. The activity of accumulating vehicles prior to loading for export or after unloading for subsequent movement beyond (import) is known as dwell. Dwell is an inventory buffering technique that must be available alongside the ship.