Posted on: October 21st, 2015 by Stas



A new state-of-the-art shipyard located in the Stockton area could have a transformational effect in establishing Stockton as an international trade center as well as reducing long-hauling trucking costs and emissions in California’s San Joaquin Valley (SJV).

New ships can shift long-haul containerized truckloads off freeways such as California’s I-5 freeway. The construction of new Marine Highway ships will reduce taxpayer spending on freeways and thus command state support by establishing an alternative maritime Goods Movement system.

A new Stockton shipyard might cost $75 million, but if it were built on a site that is already zoned for heavy industrial use, the permitting and environmental impact process will be streamlined. The shipyard could generate 250 direct jobs and 500 indirect jobs.

The investment benefits the SJV because new ships can reduce costs and improve connections to mega-container ships arriving at the Ports of Los Angeles and Long Beach.

The projected import and export market to and from the SJV could be as high as 500,000 forty-foot containers per year.[1] In addition, Swift Transportation says it moves 500 fifty-three foot truckloads per day of primarily imported freight from Southern California distribution centers to Northern California, Oregon and Washington. Some of this freight could go by Marine Highway ships.

Problems at the Port of Oakland have led ocean carriers to pick up and drop off more SJV containers at the Ports of Los Angeles and Long Beach so that truck trips to and from the SJV are now longer and costlier.

The construction of a fleet of Marine Highway ships regularly sailing between Stockton and the Ports of Los Angeles and Long Beach would create benefits for SJV importers and exporters:

1) Create new container business for the Port of Stockton so that truckers can make faster pick ups and deliveries as opposed to Oakland, Los Angeles and Long Beach.

2) Encourage more trains transporting more containers based on existing tracks at the Port of Stockton helping out of state shippers

3) Increase refrigerated container loads and support new warehousing to handle imports and exports of fruits, vegetables and meat

4) Allow shippers to increase weights in containers that would otherwise face weight limits on freeways

5)  Support the efforts of importers and exporters to negotiate better volume rates from ocean carriers

6) A possible spin-off might be export trading companies to help smaller farmers get better prices in Asia negotiating as a group

7) Create new opportunities for investment and banking

Marine Highway ships will generate other benefits:

* A Port of Stockton report found that each container transported by waterborne transport reduces emissions by 80% compared to truck transport.

*The cost of transporting a container by water is cheap. The now discontinued M580 tug/barge service between the Port of Stockton and the Port of Oakland was increasingly competitive with trucks traveling the 75 miles between the two ports. The service was discontinued in 2014 in a move some SJV shippers regret.

* An ocean-going container ship built with the most recent fuel-efficiencies and capable of carrying 350 forty-foot containers or more will be even more competitive than a tug/barge because of better hydrodynamics. Ships can also better avoid delays from stormy seas than tug/barges.

* Long-haul truckers are increasingly receptive to the Marine Highway concept because the service would provide faster pick ups and deliveries at the Port of Stockton which has container handling- cranes. Meanwhile, there have been growing delays picking up and delivering containers at the Ports of Oakland, Los Angeles and Long Beach. New Marine Highway ships operating from Stockton can save SJV truckers and shippers time and money.


The problem is that few modern ships exist in the United States to support a Marine Highway fleet. By law, ships transporting cargoes between two U.S. ports must be built in the United States. Existing U.S. shipyards are older and not as efficient as a new shipyard.

The rationale for the San Joaquin Valley Shipyard is that there would be a market for 10-20 new ships to transport containers between the SJV and the Ports of Los Angeles/Long Beach providing a major benefit to the Goods Movement infrastructure by relieving long-haul trucking and emissions on the I-5/99 freeway corridors.


A new SJV shipyard could also generate 250 direct shipbuilding jobs in the Stockton area that pay $75,000 – $100,000 a year. New jobs would be generated for welders, fitters, painters, electricians, pipe fitters, designers and systems software integrators. Indirect employment would add about 500 jobs, but some of these will be generated out of state.


The immediate product of the shipyard would be a fleet of 10 – 20 ocean-going container ships that operate between the Ports of Stockton and Los Angeles/Long Beach. Depending on size, each ship would have the capacity to shift 23,000 to 46,000 forty-foot containerized long-haul truckloads per year off the I-5 / 99 freeways. The market for new ships could be as large as 500,000 forty foot containers per year.


The new shipyard would also allow for a California based entity to bid on new projects such as ferries for the Bay Area and new low emission tugboats. One possibility that requires further study is whether floating desalination vessels could be built for deployment in the San Francisco Bay for the filtration of sea water to fresh water which could be transported by pipeline to Stockton. This fresh water could supplement water supplies to the Stockton area and beyond. The technology and the permit approval process will be daunting challenges but chronic shortages of water due to drought require that California take a new look at floating desalination plants.


The prospect of building a new shipyard to achieve these goals is an ambitious project that the Goods Movement situation in the SJV requires us to consider. A new shipyard will have the benefit of incorporating the most advanced robotics and systems integration software so as to make the cost of building a ship substantially less than the cost of ships built at older existing U.S. shipyards.

A new shipyard would not only reduce costs, but it would also allow for incorporation of the latest emission reduction technology that is now just beginning to be deployed on container ships.  The result is that the shipyard could be producing some of the most low emission container ships available on the shipbuilding market. This prospect could be expanded if new lithium-ion batteries produced by makers, such as Tesla, can be incorporated into the marine propulsion system.

New efficient shipyard and shipbuilding designs in the Netherlands allow for ships to be built primarily indoors and to be launched in a way that is compatible with the river conditions in the Stockton area.


[1] Freight forwarder estimates, UC Davis and California ports data

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