Friday, May 17, 2013

SoCal Ports’ Efficiency Deliberated at Town Hall Meeting

The efficiency of the Los Angeles/Long Beach port complex and how that efficiency – or lack thereof -- effects its competitiveness were the subject of a town hall-style meeting on the campus of California State University Long Beach on May 15.

The meeting was the latest in a series of annual events hosted by the university’s Center for International Trade & Transportation. The theme: “Efficiency & Competiveness: Securing Cargo & Jobs,” was chosen as the topic since it is one of the more pressing issues of the day for the San Pedro Bay ports.

“What’s going to happen to the ports when we have 18,000 TEU ships? The answer is that it depends. It depends on how well we can compete,” Genevieve Giuliano, a professor and senior associate dean with the University of Southern California said. “The task is to discuss how each of us as industry stakeholders can improve our practices to contribute to a more efficient supply chain.”

One of the major issues of the evening was the LA/Long Beach ports’ market share. In years past, the San Pedro Bay ports combined were the third-busiest port in the world regarding container volumes, but their ranking has now fallen to fifth, behind surging ports in China and South Korea that individually see significantly higher volumes than the combined 14 million TEUs at LA and Long Beach.

Regarding the issue of how the ports can possibly regain some of their lost global market share, members of the meeting’s five-member panel said LA and Long Beach are poised for a comeback.
“Look, I know there’s a lot of concern and it’s a concern for us too. We’ll have to see.” Mike Podue, president of International Longshore & Warehouse Union Local 63, which represents marine clerks, said. “Personally, I think the infrastructure of the San Pedro Bay ports outshines any other port in the nation.”

Growth initiatives like BNSF’s proposed $500 million, 185-acre Southern California International Gateway (SCIG) intermodal rail yard and Long Beach’s in-progress $1.2 billion Middle Harbor terminal redevelopment are expected to help the ports remain competitive.

“People who are shipping cargo want a low cost and they want consistent, reliable service at low cost. And at the end of the day, if we can do that, we’ll get the cargo back,” Alan McCorkle, senior vice president of APM Terminals Pacific said. “We’ve got to find a way to increase efficiency in an effort to lower costs. If we do that consistently for a long period of time, then we’ll get the cargo back.”

Another panelist, Jeff Coppersmith of Coppersmith Global Logistics, said cost and efficiency were the two biggest issues for his customers and that some of the ports’ practices and policies – such as the PierPass program, an anti-pollution initiative that charges a per-container fee during peak weekday hours, are causes of concern. He also said demurrage fees and labor actions all play a part in his customers’ decisions whether or not to go through LA/Long Beach.

“To make it more efficient to bring (cargo) into Los Angeles, you have to bring it at night with a clean truck when you have your own chassis,” Coppersmith said. “I agree with why we do it – I breathe the air in Long Beach as well, so I don’t have a problem with that.

“But if it’s not an efficient port and it’s costing me too much, I have to look somewhere else,” he said. “I can’t blame the customers for doing that.”