Tuesday, February 2, 2010

Long Beach "State of the Port" Speech Looks Past a Grim 2009

The storm clouds are starting to recede and sunshine may be just around the corner.

This was the basic message from Port of Long Beach Executive Director Richard Steinke during his annual "State of the Port" speech on Friday.

Steinke pulled no punches in describing how bad 2009 was at the port:
- A 22 percent drop for 2009 total cargo containers moved compared to 2008.
- 5.1 million TEUs for 2009 compared to a peak of 7.3 million in 2007 (a 33 percent drop).
- A 50 percent drop in total vehicles handled in 2009.
- A 35 percent decline in steel shipments during 2009.
- And a 30 percent decrease in lumber shipments for the year.

Steinke added that these statistics do not include the thousands of jobs the port could not provide due to the economic downturn. He also did not mention that the port's truck plan, which began implementation on Oct. 1, 2008 by banning older model trucks and their drivers, also forced more than 2,000 drivers out of the port’s local drayage fleet. A second ban implemented on Jan. 1, 2010 forced out hundreds more.

Despite the harrowing year, Steinke pointed to some good news.

While port officials in the past have been hesitant to portray changes in container traffic for a single month as indicative of a trend, Steinke said that based on the monthly December traffic numbers, he believes "the rebound has started and the worst is behind us."

He pointed out that while December is typically one of the weakest months at the port for traffic, imports in December were up just over 13 percent and exports jumped more than 30 percent, compared to December 2008.

It is worth noting, however, that when compared to the peak December, in 2007, both imports and exports during December 2009 remain well down. December imports remain down 17.1 percent compared to December 2007, monthly exports were down 13.9 percent and total monthly traffic remained down 18.8 percent.

Even considering the good news in December, Steinke warned that any recovering is going to take time and not come quickly.

But helping this along will be increased development activity at the port totaling more than $3 billion over the next 10 years. According to port estimates, these projects (which include a new terminal and the redevelopment of several others) would generate 50,000 new jobs, or more than 1.6 times the total number of local jobs now supported directly by the port.

"For me, the sound of pile-driving equipment is the sound of progress," said Steinke.
Steinke also highlighted many of the port's environmental and sustainability projects, including terminal efficiency efforts, ship-to-shore electrification, on-dock rail development, a low-sulfur fuel program, and the use of low-emission locomotives.

In the past several years, port officials have taken the line that there was plenty of traffic to feed not just the ports of Long Beach and Los Angeles but also new ports in Canada, Mexico and expansions at East Coast ports and the Panama Canal.

Steinke broke with this perspective, saying that competition from these sources represents one of the major threats to the Long Beach port.

"We are certainly not afraid of competition," said Steinke. "But we need to take it very seriously. There is a real urgency here."

The bottom line, said Steinke, is that customers are shopping around.

"We need to be the best, most cost-effective port for meeting the needs of our customers," said Steinke. "We need to develop our infrastructure to move cargo more efficiently and reliably if we are to continue to support the economy and create new jobs."

To this end, Steinke announced two new projects that will be announced soon--the replacement of the Gerald Desmond Bridge and the completion of the Pier S terminal.
The five-year $1.1 billion bridge project will replace the current bridge, which opened in the late 1960s, with a wider and higher design that will adequately accommodate future levels of goods movement.

The Pier S terminal, long associated with ocean carrier Evergreen, has sat partially completed for nearly a decade. The new $650 million project would complete the roughly 160-acre terminal and feature on-dock rail and three modern berths with room for a dozen large gantry cranes.

Steinke stresses, though, that none of the port's efforts can be done without support from the public, the industry, the unions and elected officials.

"It will take a tremendous team effort to keep goods movement in this region competitive, and our Port of Long Beach as a major economic engine that helps us all to prosper," said Steinke.