The Port of Los Angeles is reporting robust growth so far this year, with a 29% gain in cargo traffic in March over the same month in 2016 and overall first quarter growth of 10%.
“Those numbers look spectacular,” Gene Seroka, executive director of the Port of Los Angeles, told the Long Beach Business Journal in an interview at the port’s headquarters. “So we’re very excited about that.”
A major shift kicked off the second quarter when the four alliances of major shipping companies reshuffled into three alliances. Any impacts to the port have yet to shake out, as vessels operating under the new structure have not yet arrived at the San Pedro Bay ports.
In considering the future of the Port of Los Angeles, Executive Director Gene Seroka is focused on legislative advocacy, revisiting land use, adapting to the changing needs of the supply chain, and investing in informational and green technology. (Port of Los Angeles photograph)
“We have been in close contact with the liner/shipping companies [and] the alliance leads to try to ascertain a disposition as to how the cargo will move to what terminals on what services, dates and times,” Seroka said. “And not necessarily to keep score but [to determine] how we best prepare. And that information has been slow in coming out, to say the least.”
The new alliances could cause cargo that would typically go to the Port of Los Angeles to instead be routed to the Port of Long Beach, and vice versa, according to Seroka. “[We] have not gotten enough official information from the three alliances and compared it between the two ports to really make a full disclosure on that yet,” he said. “We have shown our best service capability and put that forward, and hopefully we [will] do well.”
Shipping companies continue to contend with low rates for service, which is creating a financial struggle within the industry, Seroka noted. “That has created mergers, new partnerships, one unfortunate exit from the industry and an announcement on a planned cooperation that will be announced sometime during the next year,” he said. The partnership Seroka referred to is the planned merger of three Japanese shipping lines: K Line, NYK Line and MOL.
Seroka sits on four federal committees, enabling him to advocate for policies beneficial to the Port of Los Angeles and national competitiveness in trade. “A lot of the work we’re trying to do is to ensure our nation is competitive on the platform of global trade, and that’s really key,” Seroka said of his work on the committees.
Seroka visits Washington, D.C., about once a month and often takes trips to Sacramento as well, he noted. “We continue to try to speak about the virtues of the port [and] what is necessary to advance our infrastructure development, which is no longer just bricks and mortar but also . . . digital infrastructure,” Seroka said of legislative advocacy efforts. Another priority is advancing the port’s environmental infrastructure to comply with state mandates, he noted.
The Port of Los Angeles and the Port of Long Beach often jointly advocate for the needs of the port complex. Seroka and Duane Kenagy, interim chief executive of the Port of Long Beach, recently traveled to Washington, D.C., for that reason. “John Wolfe [CEO of the Port of Tacoma and the Northwest Seaport Alliance] was with us on a couple of appointments to legislators on Capitol Hill talking about the importance of the West Coast ports and the San Pedro Bay ports,” Seroka said. “I was very pleased to join those two gentlemen and [with] the expertise that they bring in talking to our elected officials.”
When advocating for investments or policies that would benefit the ports, Seroka said he makes it a point to emphasize their collective impact. The ports support one in nine jobs in the region and more than one million in Southern California, he said.
“The cargo and passengers that traverse this port touch each of the 435 congressional districts in the nation. And there are more than 3.3 million jobs nationwide directly tied to the cargo that moves through this complex,” Seroka said. “So in working with legislators, lawmakers, policy- and decision-makers, all of this is put into context. That is why we are so fortunate to have a meaningful seat at these tables to help discuss and bring about the necessary effect that would be advantageous to the port complex.”
The ports are working together on their own initiatives, including the next iteration of their Clean Air Action Plan (CAAP) and efforts to optimize the supply chain.
In November, the ports released a draft discussion document on the CAAP update. “It’s designed to get the conversation started among stakeholders,” Seroka said. “We have had more than 40 public meetings to date, I believe.”
Seroka said the meetings were “all in an effort to try to make sure we elicit as much feedback as we can on what this next iteration should be [and] what technology is available to us and commercially available in mass production state.” The goal is to identify “better ways to create efficiencies and move cargo” and “what our communities would like to see from their port in the areas of environmental stewardship and technology development.”
In 2015, the ports were granted permission by the U.S. Federal Maritime Commission to convene stakeholders and hold joint meetings on supply chain optimization. “Since we started, we have had over 100 or 125 different public meetings [with] more than 200 stakeholders,” he said.
The Port of Los Angeles is about to launch a unique pilot project in partnership with GE Transportation that will leverage data from U.S. Customs and Border Protection and the U.S. Department of Homeland Security that could also ultimately create supply chain solutions.
“The real idea here is that most of the terminal operators get information on the cargo that is coming within 24 or 36 hours of vessel arrival. With our plan, we’ll be able to see that information 14 days before the vessel gets here,” Seroka said of the pilot. “And that will allow us to share what types of containers, how many [and] where they are going with the service providers so they can better prepare both their assets and their talent to be around where we need them for the movement of cargo.”
Seroka noted that the two largest shipping lines in the world, Maersk and Mediterranean Shipping Company, are participating in the pilot, which is slated to launch in about one month.
Two capital improvement projects are slated for completion at the Port of Los Angeles this year. The $510 million expansion of the TraPac Container Terminal, which includes extended wharves, deeper water, new cranes, a new on-dock rail facility and other improvements, will be capped off with the completion of a crane maintenance building this year, according to port documents.
Yusen Container Terminal improvements, which include berth deepening, wharf improvements, new cranes and more, are also scheduled for completion this year. The port invested more than $67 million in the project, and Yusen invested more than $60 million.
Also underway is the realignment of Harbor Boulevard into Ports O’ Call Village. The project includes adding a signaled intersection at Harbor Boulevard and Miner Street, creating crosswalks and more. It should be completed in 2018, according to port documents.
A project to transform Ports O’ Call Village into a new San Pedro Public Market is currently in the design phase, as is an initiative to create a waterfront promenade in Wilmington. Various other projects, including container terminal improvements for Everport and Yang Ming, are under environmental review.
In the future, Seroka is focused on identifying ways to better leverage the port’s 7,500 acres of property and 43 miles of waterway. For example, the port recently accepted a bid to transform an 80-acre vacant parcel into a “harbor performance enhancement center,” he said.
“This idea would be to augment the terminal capacity here at the Port of Los Angeles insomuch that it could help move containers off of terminal properties almost the moment they’re available for movement,” he said of the proposal. “This facility, although very aspirational at this juncture, will also have the use of alternative fuels and energy concepts, even potentially battery storage of these alternative fuels and energies, [and] solar power possibly coming from renewable energy.”
Also part of the bid is the creation of a training center for those interested in various supply chain certifications, according to Seroka. The plan has yet to go before the harbor commission for approval.