Both the Los Angeles and Long Beach sides of America’s
largest port complex had their share of significant and noteworthy events in
2002, from highs in monthly container volumes to first-time visits by
largest-ever container vessels to a labor strike that wiped out more than a
week’s worth of productivity.
So it’s interesting that at least one leading figure at one
of the ports thinks the most significant occurrence at the Port of Los Angeles
during 2012 had more to do with the port’s future than its recent past or
present: the adoption of a new five year strategic plan last April.
“Doesn’t sound like a big deal, but it really impacted us,”
Port of LA Executive Director of Business Development Kathryn McDermott said.
“The strategic plan really looked at the three key areas that we need to focus
on for the next five years: customer relationships, our infrastructure and
financial strength.”
“Strategic plans are rarely the highlight,” she says, but
notes that in this instance, “In all our decision making – in our budget, in
our prioritization within every group within this port – we look at that
strategic plan and that guides us in how we make every decision.”
The strategic plan, which covers the years 2012 to 2017,
maps out the port’s priorities, objectives and various initiatives for
developing infrastructure, enhancing overall competitiveness, growing market
share, optimizing land use, advancing maritime technologies and sustainability
efforts. It includes about $1.2 billion for the port’s capital improvement
program, with more than half of that to be disbursed this year and in 2014.
“It’s all about competition, competitiveness and our
business, our facilities and how we make decisions, so we’re really excited
about the strategic plan,” McDermott said. “It’s one that every person in this
building can relate to: competitive operations, financial strength, customer
relationships, and so we have initiatives within each of those key results
areas.”
Over at the Port of Long Beach, managing Director of Trade
Development and Trade Operations Sean Strawbridge has a very different answer
regarding his port’s most significant event of 2012. He cited CMA CGM, the
world’s third-largest container shipping line, buying a stake in the port’s
Pier J terminal.
Pier J is the site of Pacific Container Terminal, which has
been operated as a joint venture between global maritime services company SSA
Marine and the China Ocean Shipping Co. (COSCO). Last November the Marseille,
France-based ocean carrier became a partner in the lease and operations of the
256-acre terminal, thereby marking CMA CGM’s first investment in a port on
North America’s West Coast.
“From a business development standpoint, our biggest
achievement would probably be their decision to invest in terminals at the Port
of Long Beach,” he said. “All of their Southern California cargoes will be
coming to the Port of Long Beach, so we’re proud of that accomplishment.”
One of the shipping lines with operations at Pier J is
Mediterranean Shipping Co. (MSC), which was responsible for another of the more
noteworthy occurrences at Long Beach in 2012: the first-ever call at a North
American terminal by the MSC Beatrice, the second-largest
capacity container ship in the world. The ship, which is more than 1,200 feet
long and 167 feet wide, can be loaded with up to about 13,800 TEUs. On the
morning of Sept. 30, the ship became the largest-ever container vessel to dock
at the Port of Long Beach when it arrived at Pier T.
The MSC Beatrice, which was built in
South Korea in 2009, is the latest of the new generation of big container ships
to be put into service on U.S.-Asia trade routes. Until this year, the largest
container ships serving North America had capacities of about 10,000 TEUs.
Ships carrying up to 12,500 TEUs began calling at the Port of Long Beach in
early 2012.
The MSC Beatrice's journey into the
harbor was aided by the fact that the Port of Long Beach’s main channel is 76
feet deep, the deepest in North America. The Port of Los Angeles, however,
mostly finished the deepening of its own main channel in 2012. In September,
the LA Harbor Commission approved the final phase of funding – $7.5 million –
for the project, which included dredging of the channel and main basins to a
53-foot depth. The full project, which was begun 15 years ago, cost a total of
$370 million.
“We are essentially complete,” port spokesman Phillip
Sanfield said of the deepening. “We’re also working on a shallow habitat that’s
going to extend into January and February, but for all intents and purposes,
the actual dredging is complete, and the deepening.”
The project, McDermott said, is a testament to the foresight
of the port’s leadership.
“It’s a credit in my mind to the Port of LA that we started
this dredging project 15 years ago, when we didn’t know we were going to have
15,000 TEU ships coming here,” she said.” That’s kind of the theme: not just
thinking about today, but thinking down the line.”
In addition to the channel dredging, the port saw several
other construction projects move forward in 2012, particularly work at TraPac’s
Berth 136 facility, which consists of 170 acres of container yard and three
vessel berths.
“Our board has approved $127 million in contracts that will
provide grade separated access to our TraPac terminal, and also involve
building new buildings and gate entrances to TraPac,” McDermott explained. “It
includes an EIR (environmental impact report) that was certified for APL’s
expansion on Pier 300; we expect construction to start on that in 2013.”
Last June, the harbor board approved a $196 million
expansion of the 347-acre APL terminal on what’s commonly called Pier 300 and
is operated by long-time tenant Eagle Marine Services. The Pier 300 expansion
adds 1,250 feet of new wharf and 41 acres of backlands on existing fill. It’s
expected to enable APL to handle nearly 58 percent more ship calls and
accommodate more than 65 percent more cargo, increasing annual capacity to more
than 3.2 million TEUs.
Also falling within the five-year span of the strategic plan
is the completion of additions to LA’s China Shipping terminal; a second berth
and additional backlands are being added to the China Shipping area.
“Our capital improvement program really is focused on
expansion and modernization,” McDermott said. “TraPac is going to be the first
terminal on the US West Coast that will have automation as a part of the
terminal operation. And we’re also going to build the APL terminal so that they
also will have automation in their expanded area. We are going to see cranes
that can pick up not one, but two boxes at a time.”
McDermott said 2012 marked the start of a renewed focus for
the port.
“We’re seeing a new era start where we have to make sure our
terminals are competitive and that they’re ready to handle the large vessels
that are coming in,” she said. “We have the depth and now we’re making sure we
have the backlands that can support these huge ships.”
Combined, LA/Long Beach is the largest, busiest port complex
in North America, handling about 40 percent of all containerized imports in the
US But separately, the LA side has typically handled larger cargo volumes than
its competitor in recent years. Both sides had their ups and downs as far as
month-over-month volumes compared to 2011, but while the Port of Long Beach
particularly suffered losses during the first half of the calendar year, it
began to rebound during 2012’s second half. Strawbridge attributed the losses
to construction taking place as part of the nine-year, $1.2 billion Middle
Harbor project, which consists of the upgrading of wharfs, water access and
storage areas and the expansion of on-dock rail.
“We went from seven terminals to six while we’re doing the
first phase of Middle Harbor,” he explained. “It’s like if you’ve ever
remodeled your house and you’re redoing your bathroom, but while you’re living
in the house you’re down a bathroom, you’ve got a little less capacity. That’s
what our (container volume) numbers were reflective of.”
Strawbridge seems confident, however, that Long Beach has
rebounded well so far and is poised to make even greater gains, thanks to
various occurrences during the year. In April the port signed a 40-year, $4.6
billion lease with Orient Overseas Container Line (OOCL) for the new Middle
Harbor terminal, and in July awarded of a $649.5 million contract for the
design and construction of a replacement for Long Beach’s obsolete and
deteriorating Gerald Desmond Bridge.
“In the second half of 2012, a lot of the business
development initiatives that we had been working on started to really come to
the fore. So what you’re seeing is significant growth even though we’re down one
terminal,” he said. “But once Middle Harbor starts coming online you’re going
to see a significant increase, and we actually think we’re positioned to
overtake Los Angeles as the nation’s No. 1 container port, and we think that’s
clearly a result of the investments that we’re making in our infrastructure
today.”
But no matter how strong an infrastructure is, it can’t
succeed without an equally strong workforce, something both ports were reminded
of in late November, when members of the International Longshore and Warehouse
Union went on strike. During the labor action, cargo containers sat stacked on
docks and cargo ships sat idle offshore for over a week, bringing nearly all
terminals at the complex to a standstill.
Striking ILWU Local 63, which represents about 800
dockworkers at the port complex reached a contract agreement with the LA/Long
Beach Harbor Employers Association eight days after walking off the job.
The strike, which began at noon on Nov. 27, was launched
after more than two years of negotiations. The clerical staffers had been
working without a contract since their previous three-year pact with management
expired June 30, 2010. The dispute, which centered on technology and job
outsourcing, was settled Dec. 4.
McDermott acknowledged that the strike may have had an
impact on the ports’ image of reliability and dependability, but also said that
after it was all over, all sides managed to put the dispute behind them quickly
for the good of the port.
“I’m proud of how each side found a way to get enough of
what they needed and then everybody went back to work,” she said.
Strawbridge said he believes the labor dispute won’t have a
lasting negative effect on his port.
“I think it’s quite the contrary. The strike, I think, was
more of an anomaly,” he said.” I’m glad it came to a head at the time that it
did, because most of our (holiday) seasonal shipping had already occurred.”
He said the labor issues at ports elsewhere in the US are
more significant than those at LA/Long Beach, such as those between the
International Longshoremen’s Association and 15 ports from Maine to Texas that
came to a head late in 2012.
“I think we have one of the best waterfront workforces in
the country,” Strawbridge said, “and I think what’s happening on the East Coast
and Gulf Coast will likely result in even more business coming our way.”
