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Agricultural 

Marketing 

Service

June 2023

This is a summary of “The Prospects for Developing Inland Logistics Ports in California” by Cyrus Ramezani 

and Chris Carr.1 This research and analysis received funding from USDA’s Agricultural Marketing Service 

(AMS) through cooperative agreement number 21-TMTSD-CA-0003. The opinions and conclusions 

expressed are the authors’ and do not necessarily reflect the views of USDA or AMS. The full paper is 

available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4175841.

WHAT IS THE ISSUE?

Beginning in 2020, cargo flows through the Ports of Los Angeles and Long Beach in California, which comprise the San 

Pedro Bay (SPB) port complex, exceeded capacity, contributing to nationwide supply chain challenges. In addition, container 

volumes through SPB ports are expected to continue rising in coming years, alongside growth in both international trade 

and the use of mega-ships. Widely embraced to help solve seaport congestion in general, the development of inland ports 

has, likewise, long been seen as a solution to SPB’s specific problems.

The primary objective in developing inland ports is to streamline freight movement and reduce congestion and pollution at 

the seaports. Projects to directly expand the seaport—such as adding warehouse space or improving vessel, rail, or truck 

transportation systems—can achieve the same aims. However, expansion at the seaport can cost more than building inland 

ports. Excessive traffic congestion, high land prices, and increased environmental and zoning regulations all make it costly 

to directly expand the seaport. Inland ports offer a potential way to store and distribute products in lower cost and less 

congested areas, while enhancing seaports’ productivity through improved intermodal logistics.

The ideal inland port location must balance a host of considerations, including the benefits of proximity to the seaport and 

population centers, proximity to food production and manufacturing areas, and the ability to generate enough right-size 

containers at the right times. Because the promise of lower transportation costs is a key factor in inland ports’ feasibility, 

the ideal inland port location must also balance various transportation cost tradeoffs. Tradeoffs include issues of rates and 

competition, traffic congestion, equipment availability, and cost savings from intermodal competition. 

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 Cyrus Ramezani and Chris Carr are professors in California Polytechnic State University’s Orfalea College of Business.

The Prospects for Developing Inland Logistics Ports 

in California (Summary)

Alexis Heyman and Jesse Gastelle

REPORT SUMMARY
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Several inland port facilities have been proposed to complement SPB logistics, with prospective locations in California, 

Arizona, Nevada, and Utah. While inland ports have been a common solution to seaport congestion problems around 

the country, substantial hurdles to developing inland ports near the SPB complex have delayed these projects.

WHAT DID THE STUDY FIND?

The researchers conducted a survey of existing feasibility studies for proposed inland ports to assess the prospects 

and to determine the challenges of developing such facilities.

California. The authors first consider the potential for inland ports in the region around Los Angeles called the 

Inland Empire, as well as in California’s Central Valley, which stretches diagonally across the center of the State. 

The Inland Empire would be well suited to an inland port because of its proximity to large population centers and 

major logistics hubs. Additionally, the area is well connected, with two existing intermodal rail services and access 

to several interstate highways. The region also processes high volumes of e-commerce, which the authors deem 

crucial for the economic viability of a new inland port. Another attractive inland port location, the Central Valley, 

would provide an inland port with access to a major agricultural production center. An inland port in the Central 

Valley could potentially reduce transportation and shipping costs and increase the number of empty containers near 

production and processing facilities. Despite the manifold benefits the completed ports would bring, major regulatory 

barriers face any development of an inland port facility in the Inland Empire or Central Valley. The authors found that 

environmental regulations are the most binding constraint for these California projects—as distinct from the proposed 

projects in other States, which have less environmental regulation. Additionally, the public input period, permitting 

processes, and zoning and land-use regulations can also delay development and increase project costs. Regulatory 

costs and delays may deter private investment in inland ports as the authors’ analysis suggests the proposed California 

inland ports may take as long as 10 years to be operational. 

Utah. The authors also examined the role of inland ports in States near California. For instance, their analysis suggests 

a proposed inland port in Salt Lake City, UT, which has secured key private investors and public funding, is likely to 

improve fluidity at SPB ports. The facility’s attributes include population density (projected to rise from 3.3 million in 

2020 to 5.8 million by 2065) and large, logistics-dependent industries. Salt Lake City is well connected to SPB ports by 

both rail and highway. The region is served by Union Pacific Railroad (UP) and BNSF Railway (BNSF), as well as short 

line and switching railroads. By enabling truckers to pick up cargo locally, rather than from the SPB ports, the inland 

port would provide quick access to the Mountain West region and help alleviate congestion. However, a Utah inland 

port may have limited benefits for agricultural shippers.

Arizona and Nevada. The authors examined the strengths and weaknesses of other inland ports in Arizona and 

Nevada. Arizona has an inland port in operation and a potential facility under development. The Port of Tucson is 

a full-service inland port, rail yard, and intermodal facility. However, its rail service is limited to one railroad, and 

the volume of goods coming from SPB is relatively small (1.04 million tons). Inland Port Arizona, a new facility 

being developed near Phoenix, has the advantages of a large population base, growing warehouse and distribution 

centers, and access to major highways and rail. However, while served by both UP and BNSF, the facility is not on 

UP’s mainline. The study noted that recently proposed inland ports in Nevada face significant challenges from 

environmental groups and have relatively small volumes originating from SPB ports.

Summary Findings. The critical challenge for agricultural exporters is timely access to containers near their 

operations, and affordable (stable) shipping freight rates. Inland facilities must be in proximity to food production 

and manufacturing areas to assist agricultural shippers, but past attempts at developing these sites in California 

and other Western states have historically been impeded by five main challenges. These challenges persist and 

must be addressed for any proposal. Broadly, these challenges involve a balancing act with: 1) environmental 

regulations, 2) the economics of rail and truck transportation (traffic density), 3) coordination and competition 

among service providers, 4) sufficient public and private investment in supporting infrastructure, and 5) navigating 

volatile macroeconomic risks. Among these, many regulations require a lengthy permitting process that can delay 

development for many years. Furthermore, these projects require participation by major stakeholders, especially 

marine terminals and railroad companies. Together, these challenges can delay or derail the implementation of 

otherwise highly feasible projects.
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HOW WAS THE STUDY CONDUCTED?

The researchers identified existing and planned inland ports in California, Arizona, Nevada, and Utah. They relied 

on existing feasibility studies and input from SPB stakeholders to catalog the financial, economic, and institutional 

prospects and challenges to the development of new inland facilities.

PREFERRED CITATION

Heyman, Alexis, and Jesse Gastelle. June 2023. The Prospects for Developing Inland Logistics Ports in California 

(Summary). U.S. Department of Agriculture, Agricultural Marketing Service. 

Web. <http://dx.doi.org/10.9752/TS390.06-2023>

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