Mario Cordero, the executive director of Port of Long Beach, welcomed President Joe Biden’s $1.2 trillion infrastructure bill, adding that “we have an administration who talks about ports”. While presenting the infrastructure plan, President Biden had announced that the plan would also include ports besides building highways and bridges.
However, Cordero, who addressed foreign journalists at the New York Foreign Press Center, also asked in the same vein: “Now, of course, is it sufficient funding?” adding that “we could argue that we need so much more dollars to really remain competitive here in terms of the maritime port infrastructure”.
But he applauded the plan, calling it “welcome news and it’s a breath of fresh air to have an administration that not only talks about infrastructure in terms of bridges and highways but also what that means to the maritime port authority”.
Cordero who welcomed the appointment of John Porcari to the Administration Supply Chain Disruptions Task Force, highlighted the record-breaking cargo volumes, starting in July 2020, at the San Pedro Bay Port Complex which includes the neighboring Port of Los Angeles and the Port of Long Beach, the nation’s largest port complex.
“After the slow start due to the COVID-19 pandemic, 2020 turned out to be a record year for the Port of Long Beach. We moved 8.1 million containers in 2020. And as you know, 2021 has also been challenging, but we have persevered,” he maintained.
The Port of Long Beach had “some remarkable numbers”, including its best ever volume of over 900,000 containers in May 2021. Indeed, the port also had its best-ever August figure with over 807,000 containers, which is up 11.3% from the same month in 2020. It is the 13th time in the last 14 months that Port of Long Beach achieved a monthly record. Indeed, the port has forecast that 2021 will be another record-breaking traffic year.
Cordero attributed the record volume of cargo to a surge in imports and consumer spending. With the upcoming peak season and the continuing rising volume, the numbers of ships waiting outside the ports around the world also increased. “The San Pedro Bay ports of Long Beach and Los Angeles just last week (first September week) hit a new high of 44 ships at anchor outside the harbor. By the end of last week, it was down to 37. The previous high was in February of this year at 40 ships. Keep in mind that’s a number that was reduced to only nine this past June,” he said. Economists and supply chain experts predict the cargo surge to continue into the summer of 2022.
Container Trade in August 2021
A number of initiatives have been taken to reduce the backlog, including close partnership with the maritime terminal operators. The recent completion of the Long Beach Container Terminal construction project will help meet the rising demand. Aside from a few finishing touches, the third and final phase of the 300-acre terminal is now complete. The $ 1.49 billion project took 10 years to construct. Cordero said that the terminal will have zero emission operation and is an “environmental model”.
“We have electrified with 100% clean shore power for ships at berth, expanded the on-dock railyard to minimize truck trips, and constructed green buildings. The 300-acre property is now able to move 3.5 million containers a year. That throughput would rank this terminal alone as the sixth busiest port in the United States. The 4,200-foot-long deep-water wharf can accommodate three mega-vessels at once,” he said, claiming the newly completed third phase added one million containers for annual capacity.
The port also launched in August 2020 a COVID-19 testing site in the port complex to test the port workforce. The site was closed after a year; the health departments continue with the testing at various sites in the city. Since mid-May, more than 4,500 international sailors on 300 ships received the Johnson & Johnson vaccine at both ports.
The San Pedro Bay ports are forecast to have a cargo volume in 2021 to exceed 19 million containers. “And that will be a record surpassing 2020’s 17.3 million containers with the nation’s two busiest port complex authorities at this complex,” Cordero said, adding that the answer to meet the increased traffic lay in providing 24/7 operations. This is a long-term vision, although high-performing terminals in Asia already operate 24/7.
Responding to questions about a hike in fees, Cordero denied that the terminals had increased the fees, adding that there was also no labor shortage at the docks, though there were “issues with regard to labor at the warehouse and distribution centers in the region”… Explaining the delays in shipments from China, he attributed this to the closure of the Meishau terminal in Ningbo which moves around 23 to 25 million containers. “You shut a terminal down (In China), it’s going to have impact in southern California,” he said.
The Port of Long Beach, touted as the “gateway to China”, has become heavily dependent on trade with China, and some suggest that it would be strategically prudent to look at other players in the region as well.
Explaining that this was because China had been the epicenter of manufacturing for many years and will continue to be so in the short term, Cordero told the American Journal of Transportation that “we have seen that manufacturing base move to Southeast Asia, more specifically (to) Vietnam”. “… India has been talked about for many years about that potential (which) India does have. So, I think as the years come, I think, you’re going to see the manufacturing movement – that is the global manufacturing movement – start shifting.”
He said that this whole question really commenced with the U.S.-China trade war that the prior administration of President Donald Trump took on and when that trade war occurred – and is still on – through the imposition of tariffs, shippers started thinking “China plus one”, implying that while the manufacturing base was China, one also had an alternative like Vietnam.