2019 was a tough year for the Port of Long Beach. The Ports of Long Beach and Los Angeles collectively lost business to other U.S. ports. Critics says the cost of doing business at Long Beach and Los Angeles is high and due in part to tough regulations on diesel emissions. The Canadian Port of Prince Rupert took business away from U.S. Pacific coast ports. Finally, the U.S. trade dispute with China hurt imports and exports at U.S. ports in 2019. California ports, including the Port of Long Beach, were particularly hard hit.
Nevertheless, Mario Cordero, executive director of the Port of Long Beach remains optimistic.
Cordero noted that the Port’s automated Long Beach Container Terminal is now handling 19,000 TEU (twenty-foot unit) mega-container ships.
In the interview, Cordero discussed important issues facing the Port as it enters 2020:
- Cordero, who addressed the December “Storms, Flooding and Sea Level Defense” conference organized by the Propeller Club of Northern California in Oakland, noted “this was the first time the major California ports had gotten together to discuss our plans to deal with sea level rise and in so doing we have established a framework for other U.S. ports.”
- Despite criticisms by some maritime executives about the high cost of air quality regulation, the Ports of Long Beach and Los Angeles support their “Clean Air Action Plan” which Cordero says is supporting development of battery and hydrogen fuel cell trucks that “will soon become industry standards and will not only reduce air pollution at ports but also lower transportation costs compared to current diesel-powered trucks.” He added that “if you saw the number of dilapidated trucks accessing the Port back in 2006 and the high level of air pollution compared with today you would see how far we have come with the Clean Air Action Plan.”
- The automated Long Beach Container Terminal “has the lowest wait time for trucks of any terminal in San Pedro Bay” due to automated and electrified systems that have reduced wait times for pick-ups and deliveries compared to older less automated and diesel-powered terminals.
- Long Beach Container Terminal has “intermittently handled 19,000 TEU ships” which is a cargo-handling capacity currently beyond the capability of ports on the U.S. Atlantic and Gulf coasts. As market forces increase deployment of these mega-container ships in the trade between Asia and the United States, the investment will provide the Port of Long Beach with a competitive advantage.
- The Port is also investing in new capacity at the International Transportation Services container facility at Pier G, a 258-acre terminal currently operated with 15 gantry cranes and 18 transtainers.
- Cordero noted there has been five years of labor peace since the 2014-2015 longshore labor dispute caused a slow-down and disruption of U.S. Pacific coast port operations. Cordero expressed the hope that the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) will work collaboratively to ensure that the next contract negotiation ends on a positive and non-disruptive basis.
- Cordero agreed with concerns expressed by Pacific Merchant Shipping Association (PMSA) president John McLaurin about loss of Port market share to Atlantic and Gulf coast ports. Cordero says Port stakeholders “need to come together” to address the issue of regaining lost market share.
- He hailed the improvement in trade relations between the Trump administration and China. This will improve Port volumes for both imports and exports: “China is an important trading partner for the United States and improved relations will improve our exports including for grains that will benefit the American farmer.” Future exports in agricultural goods can only expand in China and Asia with their growing middle classes and the United States needs good relations to increase its exports.
- Cordero noted that the Ports of Long Beach and Los Angeles are moving toward 24/7 operations that will further improve productivity as well as reduce trucking congestion on the critical 710 and other major Southern California freeways: “This isn’t going to happen overnight but we are gradually moving in this direction.” Cordero noted that as ships get bigger, cargo-handling and trucking operations need to change as well.
- He noted the growing threat of Canada’s Pacific coast port complex at Prince Rupert, which posted a 29.7% increase in import loads for the first ten months of 2019, according to the December issue of PMSA’s ‘West Coast Trade Report.’
- PMSA also reported that “loaded and empty TEUS handled” by the Ports of Long Beach and Los Angeles declined by 1.52% in 2019 compared to the same ten months of 2018. The two Southern California ports saw their market share decline from 35.4% in 2018 to 33.8% for the same period of 2019 in terms of total container traffic compared with 16 major U.S. ports.
- Cordero says California and other U.S. ports face a cost disadvantage because they pay the U.S. Harbor Maintenance Fee on imported ocean freight while containers entering the United States from Canada via Prince Rupert do not have a similar assessment.
- Cordero praised the assertiveness of the American Association of Port Authorities (AAPA) and particularly its president, Chris Connor, the former president of Wallenius Wilhelmsen Logistics: “Under his leadership and thanks to his industry background, AAPA has lobbied Congress to ensure Harbor Maintenance funds be used for port maintenance such as dredging and also to ensure that donor ports such as Long Beach are getting a more equitable return on their tax assessment than occurred in the past.” The result is a reduction in the cost disadvantage with Prince Rupert.
- Cordero said that a key element in improving exports and imports will be continued close collaboration with Burlington Northern Santa Fe and Union Pacific railroads that transport import and export containers between the Port and destinations in the Midwest: “Our Class 1 railroads are key partners,” he said.
